Darling Ingredients Inc.

Good morning and welcome to the Darling Ingredients, Inc. conference call to discuss the company's third quarter 2020 results. After the speaker's prepared remarks, there will be a question and answer period and instructions to ask questions will be given at that time. Today's call is being recorded. I would like now to turn the call over to Mr. Jim Stark. Please go ahead.

Thanks, Matt. Welcome to the Darling Ingredients earnings call. Participants on the call this morning are Randall C. Stewie, our chairman and chief executive officer, Brad Phillips, chief financial officer, and John Bullock, our chief strategy officer, and a few other senior executives of Darling Ingredients. 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 statements. Now, I would like to turn the call over to Randy.

Thanks, Jim. Good morning, everyone, and thanks for joining us on the day after the election. First off, let me thank our 10,000 plus darling employees around the world. COVID-19 remains a constant in our daily work and home lives. Our team has been able to rapidly adapt to a very dynamic situation, and I sincerely appreciate their ongoing efforts to deliver the products and services we provide to our customers around the world for the third quarter of 2020 our combined adjusted eva doll was 218.5 million as our global ingredients platform continues to be resilient our health nutrient and bioenergy businesses continue to prosper and make the necessary adjustments to keep our momentum for a record 2020 and set the stage for even a better 2021. Our fuel segment and our food segment showed improvement year over year and growth sequentially to the second quarter of 2020. Overall, we continued to see an improving and positive trend on our gross margin percentages across our business lines. As I talked with you back in May, we continue to work diligently on cost control measures and widening our gross margins, thus improving our returns. Our USA team has done an exceptional job. As expected, our feed segment for the third quarter declined from the strong performance we had in the second quarter as protein prices in the third quarter moved lower sequentially compared to Q2, and prices for Q3 2020 were also lower when you compare them to 2019. With the positive upward movement in the grain and oilseed complex, we're experiencing a better pricing environment for our protein products and for our fats and oil products in the fourth quarter, And this should provide a positive catalyst heading into 2021. In the food segment, there was a nice recovery of hydrolyzed collagen sales for the quarter. We're in the process of commissioning our third new collagen peptide production facility in Presidente Epitácio, Brazil, as we speak, which broadens our ability to supply this on-trend food ingredient to our customers worldwide. The food segment, led by Ruslo, the number one collagen provider in the world, is poised to provide meaningful earnings growth in 2021. The fuel segment performance was significantly better than a year ago, both in our international green energy businesses and at Diamond Green Diesel. Diamond Green Diesel achieved a 241 per gallon EBITDA margin on record sales of 80 million gallons for the quarter. We recorded 96.4 million of EBITDA, which is Darling's share of the joint venture. The energy market did show some improvements from a demand standpoint during the quarter, although oil and diesel prices remained significantly lower than the same time a year ago. Diesel is currently trading 80 cents a gallon under Q4 of 2019. On the positive side, the green premium we are able to capture for the renewable diesel has offset the majority of this downward price in the current environment. As we noted in our press release yesterday, the turnaround at Diamond Green Diesel was completed on time and the plant is running at full capacity. And we expect that Diamond Green will sell between 55 and 60 million gallons of renewable diesel in the fourth quarter and should average between 230 and 240 a gallon for those gallons sold. On a year-to-date basis, Darling has generated $627 million of combined adjusted EBITDA for the company. putting us on pace to finish what most everyone considers to be a challenging year with record results. We currently believe that we can finish 2020 with combined adjusted EBITDA between 800 and 810 million. We certainly believe this gives us a solid platform as we move into 2021 for what we believe will be a transformative year as the 400 million gallon expansion, or what's known as DGD2, comes online in late 2021. If you've not had a chance to look at our refreshed corporate website or read our 2020 ESG report, I encourage you to do so. Our ESG team did an excellent job in publishing our 2020 fact sheet, which gives us an exciting story to build on as we move forward. It outlines our goals and initiatives and how Darling will play a significant role in the decarbonization of our planet. For Darling, We take great pride in our green leadership position in the world, and we plan to do our part in conserving water, energy, and reducing greenhouse gas emissions directly and indirectly by our DGD business producing more low-carbon renewable fuels for the world to consume. So that completes my comments, and I'd like to turn it over to Brad to give us a few financial highlights. Brad?