Darling Ingredients

None of the warning signs we check for were found.

We look for five warning signs: doubt it can keep going, weak checks on its own accounts, a notice that its past accounts can't be relied on, a change of auditor, and one customer bringing in a big share of sales. We don't check lawsuits, investigations or debt yet.

We checked the auditor's report, internal controls, restatement notices, auditor changes and big customers in the 10-K filed 3 Mar 2026, plus the 10-Q filed 7 Aug 2026 and 5 later 8-Ks.

Cheap for a reason is the question the numbers cannot answer.

Whether the price already reflects the risks is what the deep dive is for.

• Our renewable energy businesses, including the DGD Joint Venture, are highly dependent on government programs, incentives and regulatory frameworks, which are subject to change and uncertainty.

  Could happen

  In January 2025, the Clean Fuels Production Credit (“CFPC”) introduced under the IR Act became effective through 2027, and replaced the blender tax credit that was in effect in prior years. Under the CFPC, non-aviation transportation fuel receives a tax credit equal to either $0.20/gallon or $1.00/gallon (adjusted for inflation each calendar year) multiplied by the fuel’s emission reduction percentage. In order to start with the $1.00 per gallon baseline, the fuel must be produced at a qualifying facility that meets the prevailing wage and apprenticeship requirements before being sold in a certain manner. Under the CFPC, SAF receives a tax credit equal to either $0.35/gallon or $1.75/gallon (adjusted for inflation each calendar year) multiplied by the fuel’s emission reduction percentage. In order to start with the $1.75 per gallon baseline, SAF must be produced in the United States at a qualifying facility that meets the prevailing wage and apprenticeship requirements before being sold for use in an aircraft. In contrast to the blender tax credit, the CFPC requires that production of eligible fuels must take place in the United States. On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted in the U.S. The OBBBA extended the CFPC for two years through 2029 and, beginning in 2026, reduces the maximum credit rate for SAF to $1.00/gallon (adjusted for inflation each calendar year) and specifies that transportation fuels must be derived from feedstocks produced or grown in the U.S., Mexico or Canada to be eligible.

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• We face risks associated with our international activities, which could negatively affect our sales to customers in foreign countries and our operations and assets in such countries.

  Could happen

  • issues associated with intellectual property protections for the Company’s products and operations, such as defense of our intellectual property in foreign countries and/or, as the Company expands globally, use of our intellectual property on competing products in certain countries where our intellectual property is not registered;

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• We may not successfully identify and complete acquisitions or joint ventures on favorable terms or achieve anticipated synergies relating to any acquisitions or joint ventures, and such acquisitions or joint ventures could result in unknown liabilities, unforeseen operating difficulties and expenditures and require significant management resources.

  Could happen

  We regularly review potential acquisitions of complementary businesses, services or products and evaluate joint venture opportunities, including the announced and proposed joint venture with Tessenderlo Group NV to combine the Company’s and Tessenderlo Group NV’s respective collagen and gelatin business units. However, we may be unable to identify suitable acquisition candidates or joint venture partners in the future. Even if we identify appropriate acquisition candidates or joint venture partners, we may be unable to complete or finance such acquisitions or joint ventures on favorable terms, if at all. In addition, the process of integrating an acquired business, service or product into our existing business and operations or forming a joint venture may result in unforeseen operating difficulties and expenditures. Integration of an acquired company or formation of a joint venture also may require significant management resources that otherwise would be available for the ongoing development of our business. Moreover, we may not realize the anticipated benefits of any acquisition, joint venture or strategic alliance and such transactions may not generate anticipated financial results. Future acquisitions could also require us to incur indebtedness, assume contingent liabilities or amortize expenses related to intangible assets, any of which could harm our business and/or negatively impact our results of operations. Finally, acquisitions and joint ventures may be structured in such a manner that would result in the assumption of unknown liabilities not disclosed by the counterparty or uncovered during pre-acquisition due diligence.

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• The DGD Joint Venture subjects us to a number of risks.

  Could happen

  • U.S. and foreign tariffs on biofuels and biofuel feedstocks could also have an inverse effect where biofuel imports into certain countries could be beneficially positioned from a margin standpoint over local production;

• Seasonal factors and weather, including the physical impacts of climate related changes, can impact the availability, quality and volume of raw materials that we process and negatively affect our operations.

  Could happen

  Furthermore, there is legislation (and additional legislation has been introduced) regulating practices related to the causes and impacts of climate change as well as supply chain control and compliance with human rights. For example, in December 2022 the EU adopted Directive (EU) 2022/2464, also known as the Corporate Sustainability Reporting Directive (“CSRD”), which requires reporting on sustainability-related issues. In addition, in June 2024 the EU adopted Directive (EU) 2024/1760, also known as the Corporate Sustainability Due Diligence Directive (“CSDDD”), which requires risk-based supply chain due diligence and certain activities in the supply chain. In addition, there has been increased state-level legislation in the U.S., like California’s SB 261, which mandates certain companies doing business in California to disclose climate-related financial risks, and SB 253, which requires reporting of corporate greenhouse gas emissions. In both the EU and California the regulations have been delayed pending amendments and legal challenges, which increases the uncertainty around final impacts to the Company. The Company continues to monitor proposed changes to these and other proposed legislative and regulatory requirements related to sustainability issues in state and national jurisdictions. Compliance with CSRD, CSDDD, California’s SB 261 and SB 253, and other proposed or adopted legislative and regulatory requirements related to sustainability issues may require expenditures that could materially adversely affect our business, results of operations and financial condition. There has also been increased focus from our stakeholders, including consumers, customers, suppliers, employees and investors, on our sustainability practices. We expect that stakeholder expectations with respect to sustainability will continue to progress, which may necessitate additional resources to monitor, report on, and adjust our operations.

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