Darling Ingredients Inc.

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

Great. Thank you for joining the Darling Ingredients second 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 second quarter 2024 earnings news release and slide presentation are available on the investor page under the events and presentations tab on our corporate website. And we'll be joined by a transcript of this call once it's available. 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 today'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 statement. Now I will hand the call over to Randy.

Thanks, Luann. Good morning, everybody, and thanks for joining us for our second quarter earnings call. In our last earnings call, I mentioned that the team is focused on making the necessary adjustments to adapt to a deflationary and volatile global ingredients market and a renewable diesel market that continues to suffer from perceived overcapacity and an uncertain regulatory environment. I challenged the team to accomplish several things during the second quarter, and I'm pleased to report on their successes. Since the first quarter, we were able to improve gross margins, control capital spending without sacrificing operational excellence, pay down debt, repurchase common stock, and most importantly, we received a much-anticipated dividend from DGD. For the quarter, our combined EBITDA was $273.6 million. While slightly lower sequentially, our performance reflected a nice improvement in our core ingredients business. Turning to the feed ingredient segment, global raw material volumes remain strong, and we are seeing global fat pricing improve, indicating more demand for low-carbon intensity feedstocks for renewable diesel. Our feed business showed sequential improvement in margins, as we made adjustments in raw material procurement arrangements and our operational excellence and cost-cutting programs are beginning to deliver. With fat prices on the rise, our continued focus on operational excellence and effective cost-cutting and spread management, I feel confident we should see improved earnings in the feed segment for the back half of the year. Turning to our food segment, our Ruslo business continues to benefit from being a supplier of choice in the gelatin and hydrolyzed collagen market. While we have seen several quarters of customer destocking, we are starting to see signs of that beginning to slow. As I've mentioned in previous earnings calls, we are preparing to launch next TIDA GC, a natural collagen solution for managing glucose moderation. We are having a number of conversations with customers and look forward to more discussions at Supply Side West and Food Ingredients North America trade show in October. Turning to our fuel segment, Diamond Green Diesel continues to prove it's the best in class. Demand for our products remains robust, but margins remain challenged given the lack of clarity in the regulatory markets for RIMS and LCFS. Last quarter, we mentioned that cash was rapidly building at Diamond Green Diesel, and I'm pleased to report on July 18th, Darling Ingredients received a $77.1 million cash dividend from the joint venture. Our sustainable aviation fuel unit continues to move ahead of schedule and on budget, with an anticipated startup in the fourth quarter of 2024. We continue to work. to build out a strong sales book with both domestic and international supply opportunities. Now with that, I'd like to hand the call to Brad to take us through some financials, and then I'll come back and discuss my thoughts for the rest of 2024. Brad? Thank you, Randy.