Darling International Inc. (Darling International), a US based food processing by-products recycling company, has reported net sales of $807.5 million for the year 2008, compared with the net sales of $645.3 million in the previous year-end. It has also reported a net income of $54.6 million, or $0.66 per diluted share, for the year 2008, compared with the net income of $45.5 million, or $0.56 per diluted share, in the previous year-end.
Darling International reported a fourth quarter net loss of $13.9 million, or $0.17 per share for its year ended January 3, 2009. The net loss for the fourth quarter of 2008 included a non-cash pre-tax goodwill impairment charge of $15.9 million. Excluding the goodwill impairment charge, the company would have reported a net loss of $3.7 million, or $0.04 per share. The impairment charge did not affect the company’s cash position, cash flows from operating activities or availability and compliance under its credit facility.
Fourth Quarter 2008:
For the fourth quarter of 2008, the company reported net sales of $148.5 million as compared to $175.4 million for the fourth quarter of 2007. Lower finished product prices, reduced purchases of finished product for resale and decreased raw material volume accounted for the majority of the $26.9 million decrease.
For the fourth quarter of 2008, the company reported a net loss of <$13.9> million, or <$0.17> per share, as compared to a net income of $14.4 million, or $0.18 per share, for the 2007 comparable period. The $28.3 million decrease in net income for the fourth quarter resulted primarily from: (i) a $15.9 million goodwill impairment charge related to a single reporting unit; (ii) significantly lower prices for finished products; (iii) a $3.2 million charge related to a probable mass termination withdrawal liability arising from a multi-employer pension plan; (iv) decreases in both volume and yield of raw material; (v) market value write-down on product inventories and on customer non-performance of finished product sale contracts; and (vi) higher energy prices.
Darling International chairman and chief executive officer, Randall Stuewe, said, “We are very pleased with our record earnings for fiscal 2008. Our fourth quarter results were significantly impacted by the global economic downturn. We witnessed a significant collapse in demand for our finished products which resulted in lower market values and reduced raw material from our suppliers who were also impacted. Early 2009 has seen a partial recovery in market values. We remain focused on adjusting our business model and managing operating costs during these volatile economic times.”
The $162.2 million increase in sales is primarily attributable to higher finished product prices.
The $9.1 million increase in net income for year 2008, resulted primarily from higher finished product prices, which was partially impacted by: (i) a $16.6 million increase in energy costs related to natural gas and diesel fuel; (ii) a $15.9 million goodwill impairment charge related to a single reporting unit; and (iii) decreases in both volume and yield of raw material.