v3.25.1
Business Segments
 3 Months Ended
Mar. 29, 2025
Segment Reporting [Abstract]  
Business Segments Business Segments
In 2024, the Company adopted Accounting Standards Update (“ASU”) No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, on a retrospective basis.

The Company sells its products through a global network of over 260 locations across five continents within three industry segments: Feed Ingredients, Food Ingredients and Fuel Ingredients. The Company's segments are determined as those operations whose results are reviewed regularly by the chief operating decision maker (“CODM”), who is the Company's Chief Executive Officer, in deciding how to allocate resources and assess performance. Each segment is organized and managed based upon the nature of the Company's markets and customers and consists of similar products and services.

The following is a description of each segment's business operations.

Feed Ingredients
Feed Ingredients consists principally of (i) the Company’s U.S. ingredients business, including the Company’s fats and proteins, used cooking oil, trap grease, the Company's Canada ingredients business, and the ingredients and specialty products businesses conducted by Darling Ingredients International under the Sonac and FASA names (proteins, fats, and blood products) and (ii) the Company’s bakery residuals business. Feed Ingredients operations process animal by-products and used cooking oil into fats, proteins and hides.

Food Ingredients
Food Ingredients consists principally of (i) the collagen business conducted by Darling Ingredients International under the Rousselot and Gelnex names, (ii) the natural casings business conducted by Darling Ingredients International under the CTH name and (iii) certain specialty products businesses conducted by Darling Ingredients International under the Sonac name.

Fuel Ingredients
The Company’s Fuel Ingredients segment consists of (i) the Company’s investment in the DGD Joint Venture and (ii) the bioenergy business conducted by Darling Ingredients International under the Ecoson and Rendac names.

The performance of the operating segments is evaluated based on segment income (loss) which includes all revenues, operating expenses, and selling, general and administrative expenses incurred at all operating locations and excludes general corporate expenses. The CODM uses segment income (loss) as the measure to make resource (including financial or capital resources) allocation decisions for each segment, predominantly in the annual budget and forecasting process. The CODM considers budget-to-actual variances on a quarterly basis when evaluating performance for each segment and making decisions about capital allocation. Accounting policies have been applied consistently by all segments within the Company for all reporting periods. Intercompany revenue and expense amounts have been eliminated within each segment to report on the basis that management uses internally for evaluating segment performance. Our CODM is not provided with total assets by segment since we do not measure, evaluate the performance, or allocate capital resources on a segment basis. As a result, we have not disclosed any asset information by segment.
Business Segments (in thousands):
Feed IngredientsFood IngredientsFuel IngredientsCorporate (a)Total
Three Months Ended March 29, 2025
Total net sales$896,283 $349,240 $135,071 $— $1,380,594 
Cost of sales and operating expenses714,015 246,781 108,447 — 1,069,243 
Gross margin182,268 102,459 26,624 — 311,351 
Loss/(gain) on sale of assets115 55 (108)— 62 
Selling, general and administrative expenses71,571 31,472 8,541 9,972 121,556 
Acquisition and integration costs— — — 1,534 1,534 
Change in fair value of contingent consideration5,441 — — — 5,441 
Depreciation and amortization84,130 29,562 8,589 1,554 123,835 
Equity in net loss of Diamond Green Diesel— — (30,523)— (30,523)
Segment operating income/(loss)21,011 41,370 (20,921)(13,060)28,400 
Equity in net income of other unconsolidated subsidiaries2,628 — — — 2,628 
Segment income/(loss)23,639 41,370 (20,921)(13,060)31,028 
Total other expense (b)(55,996)
Loss before income taxes$(24,968)

(a)    Included in corporate activities are general corporate expenses.

(b)    Total other expense includes interest expense, foreign currency gain (loss) and other income (expense). Interest expense and foreign currency gain (loss) are separately disclosed on our Consolidated Statements of Operations. Other income/(expense) consists of interest income of approximately $7.6 million, casualty loss of approximately $(0.5) million, other pension expense excluding service cost of approximately $(0.4) million and other expense of approximately $(3.4) million.

Feed IngredientsFood IngredientsFuel IngredientsCorporateTotal
Three Months Ended March 30, 2024
Total net sales$889,848 $391,282 $139,169 $— $1,420,299 
Cost of sales and operating expenses705,769 298,145 112,752 — 1,116,666 
Gross margin184,079 93,137 26,417 — 303,633 
Loss/(gain) on sale of assets132 (294)(412)— (574)
Selling, general and administrative expenses77,138 31,744 8,745 21,516 139,143 
Acquisition and integration costs— — — 4,054 4,054 
Change in fair value of contingent consideration(25,249)— — — (25,249)
Depreciation and amortization87,569 28,868 8,667 2,405 127,509 
Equity in net income of Diamond Green Diesel— — 78,419 — 78,419 
Segment operating income/(loss)44,489 32,819 87,836 (27,975)137,169 
Equity in net income of other unconsolidated subsidiaries2,310 — — — 2,310 
Segment income/(loss)46,799 32,819 87,836 (27,975)139,479 
Total other expense (c)(53,984)
Income before income taxes$85,495 

(c)    Total other expense includes interest expense, foreign currency gain (loss) and other income (expense). Interest expense and foreign currency gain (loss) are separately disclosed on our Consolidated Statements of Operations. Other income (expense) consists of interest income of approximately $6.6 million, casualty gain of approximately $7.8 million, other pension expense excluding service cost of approximately $(0.4) million and other expense of approximately $(5.3) million.