Darling International Inc. reported net income of $28.6 million, or $0.24 per share, for the first quarter, compared to $46.6 million, or $0.43 per share, for the 2011 comparable period. The $18 million decrease in net income for the first quarter was attributed to lower raw material volumes and lower finished product prices.
Compared to the fourth quarter of fiscal 2011, finished product prices continued to decline through most of the first quarter before recovering rapidly beginning in March. Mild winter weather also provided historically low rendering volumes from mortalities, the company said.
Net sales were $387.1 million, as compared to $439.9 million for the first quarter of 2011. The company attributed the $52.8 million decrease in sales to lower finished product selling prices for proteins and fats and lower raw material volumes. Also, export volumes declined sharply compared to first quarter of 2011, which added further downward pressure to finished product prices, the company said.
“First-quarter results were solid but lower as compared to the record setting first quarter of fiscal 2011 due primarily to a substantial drop in finished product prices for fats and proteins,” said Randall Stuewe, Darling International chairman and chief executive officer. “The company built significant inventories in fats and proteins with export volumes all but coming to a standstill, and the bakery business processed lower volumes as commercial bakeries took abnormally longer winter shutdowns with markets remaining flat.
“Lower natural gas costs continue to positively influence earnings," he added.
Darling International is the largest and only publicly traded provider of rendering and bakery waste recycling services to the food industry. The company recycles beef, pork and poultry waste into useable ingredients such as tallow, feed-grade fats, meat and bone meal, poultry meal and hides. The company also recovers and converts used cooking oil and commercial bakery waste into valuable feed and fuel ingredients.
