Darling Ingredients Inc.

Good morning and welcome to the Darling Ingredients Incorporated conference call to discuss the company's first quarter 2024 financial results. After the speaker's prepared remarks, there will be a question and answer period and instructions to ask a question will be given at that time. Today's call is being recorded. I would like to turn the call over to Ms. Sue Ann Guthrie. Please go ahead.

Thank you. Thank you for joining the Darling Ingredients first quarter 2024 earnings call. Here with me today are Mr. Randall C. Stewie, Chairman and Chief Executive Officer, Mr. Brad Phillips, Chief Financial Officer, Mr. Bob Day, Chief Strategy Officer, and Mr. Matt Jansen, Chief Operating Officer of North America. Our first quarter 2024 earnings news release and slide presentation are available on the Investor page under Events and Presentations tab on our corporate website, and will be joined by a transcript of this call once it is available. During this call, we will be making forward-looking statements, which are predictions, projections, and other statements about future events. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results can materially differ because of factors discussed in yesterday's press release and the comments made during this conference call and 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 will hand the call over to Randy.

Thanks, Sue Ann. Good morning, everyone. Thanks for joining us for our first quarter 2024 earnings call. As I mentioned to you during our last earnings call in February, The global ingredients markets are facing challenges due to replenished global oil seed and grain stocks, slower global consumer demand for premium ingredients, and most importantly, delayed or canceled renewable diesel startups. For the quarter, our combined adjusted EBITDA was $280.1 million, but it included a $25 million out-of-period inventory adjustment within the food segment. As you can see on the slides, this is the third quarter in a row we have dealt with deflationary pricing, but we now feel strongly we are seeing the winds begin to change in a positive direction. Now, turning to the feed ingredient segment. Global raw material volumes remain strong, and we are seeing fat prices slowly improve. Palm and soy oil continues to hold a strong premium over waste fats, and imported fats are now a premium to North America. This shows me that we are still waiting for renewable diesel capacity and pretreatment to ramp up. Global fat prices illustrate that these announced renewable diesel producers are not yet taking advantage of the economics and lower carbon intensity of waste fats and feedstocks. Also during the quarter, we completed the Mirapaz acquisition on January 30th, adding three poultry rendering plants to our portfolio. The plants are performing quite well, and I expect them to be accreted this year. And after 481 days offline, our Ward, South Carolina rendering plant is operational, providing us much-needed capacity in the eastern United States. Now turning to our food segment. Our Russolo sales volumes remain robust. Segment revenue is lower quarter over last year, Q1 over last year. due to a decline in selling price in collagen, gelatin, and our edible fats business. Adjusting for the 25 million out-of-period adjustment related to the Gelnex inventory, gross margins in the food segment actually widened to around 30%. This is a testament to our laser focus on spread management in a declining price environment. Now, we announced earlier this month that we have identified a portfolio of collagen peptide profiles that are believed to provide targeted health and wellness benefits. During scientific trials, these active collagen peptide profiles have demonstrated that collagen can be beneficial in reducing the post-meal blood sugar spike in a very natural way. This is a game-changing discovery that opens the door for many new product launches worldwide. Our first active peptide will be available this fall in 2024. Turning to our fuel segment, Feedstock prices tended to trend lower and improve DGD earnings compared to Q4 2023. However, weak RINs and LCFS prices and a lower of cost to market adjustment impacted DGD earnings. The margin outlook remains favorable due to lower fat prices and our competitive advantage plus an optimistic view we have on the LCFS. Our sustainable aviation unit construction is running ahead of schedule and on budget and is planned to start up in the fourth quarter of 2024. We continue to work with a number of interested parties on SAF purchases and remain confident in our outlook for SAF. Now I'd like to hand the caller to Brad to go through the financials, then I'll come back and give you my views on 2024. Okay, thanks, Randy.