Darling Ingredients Inc. (DAR) has reported a 51.98 percent plunge in profit for the quarter ended Dec. 31, 2016. The company has earned $40.54 million, or $0.25 a share in the quarter, compared with $84.43 million, or $0.52 a share for the same period last year. Revenue during the quarter grew 9.58 percent to $887.28 million from $809.68 million in the previous year period. Gross margin for the quarter contracted 48 basis points over the previous year period to 21.72 percent. Total expenses were 96.01 percent of quarterly revenues, up from 95.96 percent for the same period last year. That has resulted in a contraction of 5 basis points in operating margin to 3.99 percent.
Operating income for the quarter was $35.38 million, compared with $32.72 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $112.85 million compared with $102.65 million in the prior year period. At the same time, adjusted EBITDA margin improved 4 basis points in the quarter to 12.72 percent from 12.68 percent in the last year period.
Randall C. Stuewe, chairman and chief executive officer of Darling Ingredients Inc., said, "We closed out 2016 with a solid performance across all product lines. We executed on our strategy of de-levering and growing, paying down $169.7 million in debt while commissioning four new factories and expanding five others. We carry nice momentum and a larger platform into 2017."
Operating cash flow declines
Darling Ingredients Inc. has generated cash of $391.04 million from operating activities during the year, down 7.11 percent or $29.92 million, when compared with the last year. The company has spent $243.19 million cash to meet investing activities during the year as against cash outgo of $229.67 million in the last year. It has incurred net capital expenditure of $236.22 million on net basis during the year, up 2.77 percent or $6.36 million from year ago.
The company has spent $183.87 million cash to carry out financing activities during the year as against cash outgo of $139.59 million in the last year period.
Cash and cash equivalents stood at $114.56 million as on Dec. 31, 2016, down 26.98 percent or $42.32 million from $156.88 million on Jan. 02, 2016.
Debt comes down
Darling Ingredients Inc. has recorded a decline in total debt over the last one year. It stood at $1,750.94 million as on Dec. 31, 2016, down 9.33 percent or $180.07 million from $1,931.02 million on Jan. 02, 2016. Total debt was 37.27 percent of total assets as on Dec. 31, 2016, compared with 40.32 percent on Jan. 02, 2016. Debt to equity ratio was at 0.84 as on Dec. 31, 2016, down from 0.98 as on Jan. 02, 2016. Interest coverage ratio improved to 1.58 for the quarter from 1.40 for the same period last year.
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