XML 20 R10.htm IDEA: XBRL DOCUMENT
v3.24.3

Summary of Significant Accounting Policies | 9 Months Ended
--- | ---
Sep. 28, 2024
Accounting Policies [Abstract] |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies (a)Basis of Presentation The consolidated financial statements include the accounts of Darling and its consolidated subsidiaries. Noncontrolling interests represent the outstanding ownership interest in the Company’s consolidated subsidiaries that are not owned by the Company. In the accompanying Consolidated Statements of Operations, the noncontrolling interest in net income of the consolidated subsidiaries is shown as an allocation of the Company’s net income and is presented separately as “Net income attributable to noncontrolling interests.” In the Company’s Consolidated Balance Sheets, noncontrolling interests represent the ownership interests in the Company’s consolidated subsidiaries' net assets held by parties other than the Company. These ownership interests are presented separately as “Noncontrolling interests” within “Stockholders' Equity.” All intercompany balances and transactions have been eliminated in consolidation. (b)Fiscal Periods The Company has a 52/53 week fiscal year ending on the Saturday nearest December 31. Fiscal periods for the consolidated financial statements included herein are as of September 28, 2024, and include the 13 and 39 weeks ended September 28, 2024, and the 13 and 39 weeks ended September 30, 2023. (c) Cash and Cash Equivalents The Company considers all short-term highly liquid instruments, with an original maturity of three months or less, to be cash equivalents. Cash balances are recorded net of book overdrafts when a bank right-of-offset exists. All other book overdrafts are recorded in accounts payable and the change in the related balance is reflected in operating activities on the Consolidated Statement of Cash Flows. In addition, the Company has bank overdrafts, which are considered a form of short-term financing with changes in the related balance reflected in financing activities in the Consolidated Statement of Cash Flows. Restricted cash shown on the Consolidated Balance Sheet as of September 28, 2024, primarily represents the current portion of acquisition consideration hold-back amounts that are part of the purchase price set aside in escrow in the Company’s name for possible indemnification claims by the Company, which amounts will be paid to the sellers in the future if no claims arise. At December 30, 2023, restricted cash primarily represents amounts set aside as collateral for foreign construction projects and U.S. environmental claims and was insignificant to the Company. Restricted cash included in other long term assets on the Consolidated Balance Sheet as of September 28, 2024 and December 30, 2023, primarily represents the long term acquisition consideration hold-back amounts that are part of the purchase price set aside in escrow in the Company’s name for possible indemnification claims by the Company, which amounts will be paid to the sellers in the future if no claims arise. A reconciliation of cash, cash equivalents, and restricted cash reported within the Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Consolidated Statement of Cash flows is as follows (in thousands):
|  | September 28, 2024 | December 30, 2023
Cash and cash equivalents |  | $ | 114,778 |  | $ | 126,502 |
Restricted cash |  | 39,387 |  | 292 |
Restricted cash included in other long-term assets |  | 106,775 |  | 137,656 |
Total cash, cash equivalents and restricted cash shown in the statement of cash flows |  | $ | 260,940 |  | $ | 264,450 |
(d) Accounts Receivable Factoring The Company has entered into agreements with third party banks to factor certain of the Company’s trade receivables in order to enhance working capital by turning trade receivables into cash faster. Under these agreements, the Company sells certain selected customers’ trade receivables to third party banks without recourse for cash less a nominal fee. For the three months ended September 28, 2024 and September 30, 2023, the Company sold approximately $125.1 million and $110.2 million of its trade receivables and incurred approximately $1.8 million and $1.7 million in fees, respectively, which are recorded as interest expense. For the nine months ended September 28, 2024 and September 30, 2023, the Company sold approximately $420.7 million and $402.2 million of its trade receivables and incurred approximately $6.3 million and $5.4 million in fees, respectively, which are recorded as interest expense. (e) Revenue Recognition The Company recognizes revenue on sales when control of the promised finished product is transferred to the Company’s customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for the finished product. Service revenues are recognized when the service occurs. Certain customers may be required to prepay prior to shipment in order to maintain payment protection related to certain foreign and domestic sales. These amounts are recorded as unearned revenue in accrued expenses and recognized when control of the promised finished product is transferred to the Company’s customer. See Note 20 (Revenue) to the Company’s Consolidated Financial Statements included herein. (f) Earnings Per Share Basic income per common share is computed by dividing net income attributable to Darling by the weighted average number of common shares including non-vested and restricted shares outstanding during the period. Diluted income per common share is computed by dividing net income attributable to Darling by the weighted average number of common shares outstanding during the period increased by dilutive common equivalent shares determined using the treasury stock method.
| Net Income per Common Share (in thousands, except per share data)
| Three Months Ended
|  |  | September 28, 2024 |  |  |  |  |  | September 30, 2023 |  |
| Income |  | Shares |  | Per Share |  | Income |  | Shares |  | Per Share
Basic: |  |  |  |  |  |  |  |  |  |  |
Net Income attributable to Darling | $ | 16,949 |  |  | 159,200 |  |  | $ | 0.11 |  |  | $ | 125,026 |  |  | 159,727 |  |  | $ | 0.78 |
Diluted: |  |  |  |  |  |  |  |  |  |  |
Effect of dilutive securities: |  |  |  |  |  |  |  |  |  |  |
Add: Option shares in the money and dilutive effect of non-vested stock awards |  |  | 2,875 |  |  |  |  |  |  | 3,409 |  |  |
Less: Pro forma treasury shares |  |  | (1,084) |  |  |  |  |  |  | (711) |  |  |
Diluted: |  |  |  |  |  |  |  |  |  |  |
Net income attributable to Darling | $ | 16,949 |  |  | 160,991 |  |  | $ | 0.11 |  |  | $ | 125,026 |  |  | 162,425 |  |  | $ | 0.77 |
| Net Income per Common Share (in thousands, except per share data)
| Nine Months Ended
|  |  | September 28, 2024 |  |  |  |  |  | September 30, 2023 |  |
| Income |  | Shares |  | Per Share |  | Income |  | Shares |  | Per Share
Basic: |  |  |  |  |  |  |  |  |  |  |
Net Income attributable to Darling | $ | 176,972 |  |  | 159,609 |  |  | $ | 1.11 |  |  | $ | 563,210 |  |  | 159,894 |  |  | $ | 3.52 |
Diluted: |  |  |  |  |  |  |  |  |  |  |
Effect of dilutive securities: |  |  |  |  |  |  |  |  |  |  |
Add: Option shares in the money and dilutive effect of non-vested stock awards |  |  | 2,937 |  |  |  |  |  |  | 3,378 |  |  |
Less: Pro forma treasury shares |  |  | (1,012) |  |  |  |  |  |  | (735) |  |  |
Diluted: |  |  |  |  |  |  |  |  |  |  |
Net income attributable to Darling | $ | 176,972 |  |  | 161,534 |  |  | $ | 1.10 |  |  | $ | 563,210 |  |  | 162,537 |  |  | $ | 3.47 |
For the three months ended September 28, 2024 and September 30, 2023, respectively, no outstanding stock options were excluded from diluted income per common share as the effect would be antidilutive. For the three months ended September 28, 2024 and September 30, 2023, respectively, 578,342 and 382,404 shares of non-vested stock and stock equivalents were excluded from diluted income per common share as the effect was antidilutive. For the nine months ended September 28, 2024 and September 30, 2023, respectively, no outstanding stock options were excluded from diluted income per common share as the effect would be antidilutive. For the nine months ended September 28, 2024 and September 30, 2023, respectively, 585,511 and 470,213 shares of non-vested stock and stock equivalents were excluded from diluted income per common share as the effect was antidilutive. (g) Out-of-Period Adjustment During the quarter ended March 30, 2024, the Company determined the inventory balance at its recently acquired Gelnex subsidiary was overstated by approximately $25.1 million at December 30, 2023. The overstatement was the result of an error in calculating the elimination of deferred profit in inventory on intercompany product sales from South America. During the first quarter of fiscal 2024, the Company recorded an adjustment to earnings of approximately $17.9 million, net of tax. The Company assessed the impact of this out-of-period adjustment and concluded that it was not material to the financial statements previously issued for any interim or annual period during 2023, and the adjustment during the quarter ended March 30, 2024 is not expected to be material to the annual financial statements for fiscal 2024. The out-of-period adjustment is included in the Food Ingredients segment results. (h) Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. If it is at least reasonably possible that the estimate of the effect on the financial statements of a condition, situation, or set of circumstances that exist at the date of the financial statements will change in the near term due to one or more future confirming events, and the effect of the change would be material to the financial statements, the Company will disclose the nature of the uncertainty and include an indication that it is at least reasonably possible that a change in the estimate will occur in the near term. If the estimate involves certain loss contingencies, the disclosure will also include an estimate of the probable loss or range of loss or state that an estimate cannot be made. As a result of the Russia-Ukraine war, the Israeli-Palestinian conflict, other associated or emerging conflicts in the Middle East and the current inflationary environment we have evaluated the potential impact to the Company’s operations and for any indicators of potential triggering events that could indicate certain of the Company’s assets may be impaired. Through the nine months ended September 28, 2024, the Company has not observed any impairments of the Company’s assets or a significant change in their fair value due to the Russia-Ukraine war, the Israeli-Palestinian conflict, other associated or emerging conflicts in the Middle East or inflation.

X
- References No definition available. + Details
Name: | us-gaap_AccountingPoliciesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for all significant accounting policies of the reporting entity. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org/1943274/2147483426/235-10-50-1 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 235 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/235/tableOfContent + Details
Name: | us-gaap_SignificantAccountingPoliciesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration