DARHIGH SIGNALFINANCIAL10-K

DAR experienced a severe 77.5% decline in net income to $62.8M despite revenue growth, driven by a dramatic 106% increase in interest expense to $259.2M.

The massive doubling of interest expense suggests either significant new debt issuance or rising rates on existing variable debt, creating substantial financial pressure on the company. Despite operational improvements evidenced by higher gross profit and strong cash flow generation, the interest burden has essentially wiped out most of the company's profitability, raising concerns about debt sustainability and financial flexibility.

Comparing 2026-03-03 vs 2025-02-25View on EDGAR →
FINANCIAL ANALYSIS

DAR shows a concerning financial picture with mixed operational performance but severe profitability pressure. While gross profit increased 15.3% to $1.5B and operating cash flow grew strongly by 26.3% to $1.1B, the company's bottom line collapsed due to interest expense more than doubling to $259.2M, causing net income to plummet 77.5% to just $62.8M. The combination of higher accounts receivable (+44%) and elevated SG&A expenses (+12%) alongside the interest burden suggests the company is struggling with working capital management and cost control despite underlying revenue growth.

FINANCIAL STATEMENT CHANGES
Interest Expense
P&L
+106.4%
$125.6M→$259.2M

Interest expense surged 106.4% — significant debt increase or rising rates materially impacting earnings.

Net Income
P&L
-77.5%
$278.9M→$62.8M

Net income declined 77.5% — review whether driven by operations, interest costs, or non-recurring items.

Accounts Receivable
Balance Sheet
+44.2%
$469.1M→$676.6M

Receivables surged 44.2% — revenue recognized but not yet collected; watch for collection issues or channel stuffing.

Operating Income
P&L
-41.6%
$468.2M→$273.4M

Operating income deteriorated sharply — investigate whether driven by one-time charges or structural cost issues.

Operating Cash Flow
Cash Flow
+26.3%
$839.3M→$1.1B

Operating cash flow grew 26.3% — strong conversion of earnings to cash, healthy business fundamentals.

Cash & Equivalents
Balance Sheet
+16.7%
$76.0M→$88.7M

Cash grew 16.7% — improving liquidity position supports investment and shareholder returns.

Gross Profit
P&L
+15.3%
$1.3B→$1.5B

Gross profit expanding — improving pricing power or product mix shift toward higher-margin offerings.

SG&A Expense
P&L
+12%
$492.1M→$551.2M

SG&A increased modestly — likely reflects growth-related hiring or sales expansion investment.

LANGUAGE CHANGES
NEW — 2026-03-03
PRIOR — 2025-02-25
ADDED
This determination of affiliate status is not necessarily a conclusive determination for other purposes.) There were 158,603,548 shares of common stock, $0.01 par value, outstanding at February 26, 2026.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 55 Item 7A.
In fiscal year 2025, the Company generated $6.1 billion in revenues and $62.8 million in net income attributable to Darling.
Darling sells these products in North America and throughout the world, primarily to producers of animal feed, pet food, agriculture-based biofuels (such as renewable diesel and Sustainable Aviation Fuel ( SAF )), fertilizer and other consumer and industrial products, including oleo-chemicals, soaps and leather goods, for use as ingredients in their products or for further processing.
In the United States, Darling is a partner with Valero Energy Corporation in Diamond Green Diesel, a renewable fuel producer, which converts used cooking oils, animal fats and other feedstocks into valuable renewable fuels/products, such as renewable diesel and SAF.
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REMOVED
This determination of affiliate status is not necessarily a conclusive determination for other purposes.) There were 158,873,042 shares of common stock, $0.01 par value, outstanding at February 20, 2025.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 56 Item 7A.
In fiscal 2022 and fiscal 2023, the Company completed several acquisitions including two significant rendering operations, Valley Proteins in North America and the FASA Group in South America and a significant collagen operation, Gelnex, with processing located in South America and North America.
See Note 3 to the Company s Consolidated Financial Statements for more information.
In fiscal year 2024, the Company generated $5.7 billion in revenues and $278.9 million in net income attributable to Darling.
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