Darling Ingredients Inc. (NYSE:DAR) Q2 2020 Earnings Conference Call - Final Transcript

Aug 06, 2020 • 09:00 am ET

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Darling Ingredients Inc. (NYSE:DAR) Q2 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good morning, and welcome to the Darling Ingredients Inc. conference call to discuss the company's second quarter 2020 results. [Operator Instructions]

I would now like to turn the call over to Mr. Jim Stark. Please go ahead.

Executive
Jim Stark

Thank you, and welcome to the Darling Ingredients earnings call. Participants on the call this morning are Randall C. Stuewe, our Chairman and Chief Executive Officer; Brad Phillips, our Chief Financial Officer; and John Bullock, our Chief Strategy Officer. There is a slide presentation available, and you can find that presentation on the Investor page under the Events and Presentations link on our corporate website. During this call, we will be making forward-looking statements, which are predictions, projections or other statements about future events. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could materially differ because of factors discussed in yesterday's press release and the comments made during this conference call and in the Risk Factors section of our Form 10-K 10-Q and other reported filings with the Securities and Exchange Commission. We do not undertake any duty to update any forward-looking statement.

Now I'd like to turn the call over to Randy.

Executive
Randall C. Stuewe

Thanks, Jim. Good morning, everybody. Thanks for joining us. When we were hosting our first quarter earnings call in May, we were in the middle of some of the most uncertain times I have witnessed in my career. And I have to say that our global management team pulled together and orchestrated a solid operational and financial performance for the second quarter. The quarter's results would not have been achieved without all our essential workers globally doing their part as well. While COVID-19 continues to be a significant threat, our team has adopted operating procedures and tactics that allow us to service our suppliers, ship our customers and keep our employees safe. For the second quarter of 2020, combined adjusted EBITDA of $195.2 million was admirable given the volatility in our health, nutrient fuel and service markets. Driving this performance were strong results in our Feed segment. The $85.2 million in EBITDA was the best quarter we have had in the last three years and was done flat raw material volumes to a year ago and volumes 4% lower than Q1 of this year. For most of the quarter, we had higher fat and protein prices, which were mostly the results of disruptions in slaughterhouses. Fat and protein prices have pulled off their highs now from the second quarter. The Food segment, despite COVID-19 causing disruptions to both consumer purchasing and production capabilities, turned in a good performance, similar to a year ago period when you remove the gain on the sale of assets in 2019. As you saw our announcement in mid-July, we have commissioned the collagen peptide production facility at Gent, Belgium and commissioned the expansion project at Angelo, France. We have seen a pickup in collagen peptide or Peptan sales and anticipate a better second half 2020 for