Darling Ingredients Inc. (NYSE:DAR) Q3 2018 Earnings Conference Call Transcript
Nov 07, 2018 • 08:30 am ET
Good morning, everyone, and welcome to the Darling Ingredients Incorporated conference call to discuss the Company's Third Quarter 2018 Financial Results. On the call today are Mr. Randall Stuewe, Chairman and CEO; Mr. Brad Phillips, EVP and CFO; and Ms. Melissa Gaither, VP of IR and Global Communications. After the speakers' opening remarks, there will be a question-and-answer period and instructions to ask a question will be given at that time. Today's call is being recorded.
I would now like to turn the call over to Melissa Gaither. Ms. Gaither, please go ahead.
Thank you, Danielle; and good morning, everyone. Thank you for joining us to discuss Darling Ingredients' earning results for the third quarter ended September 29th, 2018. To augment management's formal presentation, please refer to the Presentation section of our IR website for the earnings slide presentation.
Randall C. Stuewe, our Chairman and CEO will begin today's call with an overview of our third quarter operational and financial results, focusing on year-over-year comparisons and will discuss some of the trends impacting our business. Brad Phillips, EVP and CFO will then provide additional details about our financial results. Finally, Randy will conclude the prepared portion of the call with some general remarks about the business and the remainder of the year, after which we'll be happy to answer your question. Please see the full disclosures on our non-US GAAP measures in both our earnings release and earnings slide presentation.
(Forward-Looking Cautionary Statements)
Now, I'll turn the call over to Randy.
Thanks, Melissa. Good morning, everyone, and thanks for joining us. As referenced in our press release last night, our third quarter delta has many challenges. Specifically, the third quarter was negatively influenced by our extended downtime at Diamond Green Diesel, along with an unplanned catalyst replacement. In addition, our global feed segment saw margin pressure from declining finished product prices throughout the quarter, along with our decision to revalue our plasma inventory in China due to African swine fever. Finally, as any of you are aware, we ship a significant amount of our fat and used cooking oil to Diamond Green Diesel, the extended an unplanned downtime disrupted the supply chain significantly and forced us to move, sell, and store product in non-traditional markets.
As we've discussed in the past, each penny of discount or increase results in approximately $4 million to $5 million of annual EBITDA. In this case, we had to divert nearly a one month supply. So before we review the segment details, let me make some quick comments about Diamond Green. As of October 1, post-catalyst replacement in one of our reactors, the facility restarted and quickly ramped up to full capacity of 275 million gallons annually. The plant has operated well during October and we can say it produced in excess of 22 million gallons.
Our Phase III Diamond Green Diesel expansion called Super Diamond, adding a new parallel 400 million gallon plant and taking annual production to 675 million gallons of renewable diesel was