Brian Sharma's questions to Darling Ingredients Inc (DAR) leadership • Q1 2025
Question
Brian Sharma of Stephens Inc. inquired about capital allocation priorities, the timeline to reach the 2.5x leverage target, and the sustainability of the Food segment's strong margin performance.
Answer
CFO Bob Day reiterated that the primary focus is on debt paydown, and he expects the company to get very close to its 2.5x leverage target by year-end 2025 or early 2026. On the Food segment's strength, Day explained that margins have improved as high-cost global competitors have shut down production. He also noted that the innovative Nextida product is undergoing larger trials, which should lead to higher volumes with major CPG companies by the end of 2025.