UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q (Mark One) /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 4, 1998 OR / / TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission File Number 0-24620 DARLING INTERNATIONAL INC. (Exact name of registrant as specified in its charter) DELAWARE 36-2495346 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 251 O'CONNOR RIDGE BLVD., SUITE 300, IRVING, TEXAS 75038 (Address of principal executive offices) (972) 717-0300 (Registrant's telephone number) Not applicable (Former name, address and fiscal year, if changed since last report) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months or for such shorter period that the Registrant was required to file such report(s)), and (2) has been subject to such filing requirements for the past 90 days. YES /X/ NO / / The number of shares outstanding of the Registrant's common stock, $0.01 par value, as of 15,580,152, was May 15, 1998.
DARLING INTERNATIONAL INC. AND SUBSIDIARIES FORM 10-Q FOR THE THREE MONTHS ENDED APRIL 4, 1998 TABLE OF CONTENTS Page No. PART I: Financial Information Item 1. FINANCIAL STATEMENTS Consolidated Balance Sheets. . . . . . . . . . . . . 3 April 4, 1998 (unaudited) and January 3, 1998 Consolidated Statements of Operations (unaudited). . . . . . 4 Three Months Ended April 4, 1998 and March 29, 1997 Consolidated Statements of Cash Flows (unaudited). . . . . . 5 Three Months Ended April 4, 1998 and March 29, 1997 Notes to Consolidated Financial Statements (unaudited). . . . 6 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. . . . . . . 9 PART II: Other Information Item 1. LEGAL PROCEEDINGS. . . . . . . . . . . . . . . . 13 Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. . . . . . . . . . . . . . . . 13 Item 6. EXHIBITS AND REPORTS ON FORM 8-K . . . . . . . . . . 13 Signatures. . . . . . . . . . . . . . . . . . . 14 Index to Exhibits. . . . . . . . . . . . . . . . . 15
DARLING INTERNATIONAL INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS April 4, 1998 and January 3, 1998 (in thousands, except shares and per share data) April 4, January 3, 1998 1998 ---------- --------- (unaudited) ASSETS Current assets: Cash and cash equivalents $ 3,494 $ 2,955 Accounts receivable 23,913 32,459 Inventories 12,828 13,897 Prepaid expenses 2,418 3,459 Deferred income tax assets 4,252 4,006 Other 682 383 -------- -------- Total current assets 47,587 57,159 Property, plant and equipment, less accumulated depreciation of $88,659 at April 4, 1998 and $81,552 at January 3, 1998 169,160 170,636 Collection routes and contracts, less accumulated amortization of $10,312 at April 4, 1998 and $8,700 at January 3, 1998 59,776 58,715 Goodwill, less accumulated amortization of $1,191 at April 4, 1998 and $949 at January 3, 1998 20,747 20,902 Other assets 5,256 5,565 -------- -------- $ 302,526 $ 312,977 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ 5,113 $ 5,113 Accounts payable, principally trade 17,872 22,426 Accrued expenses 24,549 25,385 Accrued interest 933 911 -------- -------- Total current liabilities 48,467 53,835 Long-term debt, less current portion 138,208 142,181 Other non-current liabilities 22,304 21,391 Deferred income taxes 25,145 25,814 --------- -------- Total liabilities 234,124 243,221 -------- -------- Stockholders' equity Common stock, $.01 par value; 25,000,000 shares authorized; 15,580,152 and 15,563,037 shares issued and outstanding at April 4, 1998 and at January 3, 1998, respectively 156 156 Preferred stock, $0.01 par value; 1,000,000 shares authorized, none issued - - Additional paid-in capital 34,830 34,780 Retained earnings 33,416 34,820 Accumulated other comprehensive income - - -------- -------- Total stockholders' equity 68,402 69,756 -------- -------- Contingencies (note 3) $ 302,526 $ 312,977 ======== ======== The accompanying notes are an integral part of these consolidated financial statements.
DARLING INTERNATIONAL INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS Three months ended April 4, 1998 and March 29, 1997 (in thousands, except per share data) Three Months Ended ------------------ April 4, March 29, 1998 1997 ------------ ------------ (unaudited) Net sales $ 108,084 $ 125,809 Costs and expenses: Cost of sales and operating expenses 87,432 102,365 Selling, general and administrative expenses 10,774 11,196 Depreciation and amortization 9,089 7,975 -------- -------- Total costs and expenses 107,295 121,536 -------- -------- Operating income 789 4,273 -------- -------- Other income (expense): Interest expense (3,108) (3,656) Other, net 77 104 -------- ------- Total other income (expense) (3,031) (3,552) -------- ------- Income (loss) before income taxes (2,242) 721 Income tax expense (benefit) (838) 335 ------- ------- Net earnings (loss) $ (1,404) $ 386 ======= ======= Basic earnings (loss) per common share $ (0.09) $ 0.02 ======= ======= Diluted earnings (loss) per common share $ (0.09) $ 0.02 ======= ======= The accompanying notes are an integral part of these consolidated financial statements.
DARLING INTERNATIONAL INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Three months ended April 4, 1998 and March 29, 1997 (in thousands) Three Months Ended April 4, March 29, 1998 1997 --------- --------- (unaudited) Cash flows from operating activities: Net earnings (loss) $ (1,404) $ 386 Adjustments to reconcile net earnings (loss) to net cash provided by operating activities: Depreciation and amortization 9,089 7,975 Deferred income tax (915) (194) Loss on sales of assets 27 5 Changes in operating assets and liabilities: Accounts receivable 8,546 8,174 Inventories and prepaid expenses 2,110 (4,711) Accounts payable and accrued expenses (5,389) (7,748) Accrued interest 22 (2,335) Other (394) (208) -------- ------- Net cash provided by operating activities 11,692 1,344 -------- ------- Cash flows from investing activities: Recurring capital expenditures (5,913) (4,253) Capital expenditures related to acquisitions - (1,825) Gross proceeds from sale of property, plant and equipment and other assets 87 73 Payments related to routes and other intangibles (407) (2,352) -------- ------- Net cash used in investing activities (6,233) (8,357) -------- ------- Cash flows from financing activities: Proceeds from long-term debt 23,499 27,724 Payments on long-term debt (27,472) (30,773) Contract payments (997) 316 Issuance of common stock 50 175 ------- ------- Net cash used in financing activities (4,920) (2,558) -------- ------- Net increase (decrease) in cash and cash equivalents 539 (9,571) Cash and cash equivalents at beginning of period 2,955 12,956 ------- ------- Cash and cash equivalents at end of period $ 3,494 $ 3,385 ======= ======= The accompanying notes are an integral part of these consolidated financial statements.
DARLING INTERNATIONAL INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements April 4, 1998 (unaudited) (1) General The accompanying consolidated financial statements for the three month periods ended April 4, 1998 and March 29, 1997 have been prepared by Darling International Inc. (Company) without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). The information furnished herein reflects all adjustments (consisting only of normal recurring accruals) which are, in the opinion of management, necessary to present a fair statement of the financial position and operating results of the Company as of and for the respective periods. However, these operating results are not necessarily indicative of the results expected for full fiscal year. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to such rules and regulations. However, management of the Company believes that the disclosures herein are adequate to make the information presented not misleading. The accompanying consolidated financial statements should be read in conjunction with the audited consolidated financial statements contained in the Company's Form 10-K for the fiscal year ended January 3, 1998. (2) Summary of Significant Accounting Policies (a) Basis of Presentation The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. (b) Fiscal Periods The Company has a 52/53 week fiscal year ending on the Saturday nearest December 31. Fiscal periods for the consolidated financial statements included herein are as of January 3, 1998, and include the 13 weeks ended April 4, 1998 and the 13 weeks ended March 29, 1997. (c) Earnings Per Common Share In February, 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No.128, "Earnings Per Share" ("SFAS No. 128"). SFAS No. 128 revised the previous calculation methods and presentations of earnings per share and requires that all prior-period earnings (loss) per share data be restated. The Company adopted SFAS No. 128 in the fourth quarter of 1997 as required by this Statement. Basic earnings per common share are computed by dividing net earnings attributable to outstanding common stock by the weighted average number of common stock shares outstanding during the year. Diluted earnings per common share are computed by dividing net earnings attributable to outstanding common stock by the weighted average number of common shares outstanding during the year increased by dilutive common equivalent shares (stock options) determined using the treasury stock method, based on the average market price exceeding the exercise price of the stock options. All prior-period earnings per share amounts have been restated in accordance with SFAS No. 128.
The weighted average common shares used for basic earnings per common share was 15,567,000 and 15,477,000 for 1998 and 1997 respectively. The effect of dilutive stock options added 1,068,000 shares for 1997 for the computation of diluted earnings per common share. (3) Contingencies (a) ENVIRONMENTAL Chula Vista The Company is the owner of an undeveloped property located in Chula Vista, California (the "Site"). A rendering plant was operated on the Site until 1982. From 1959 to 1978, a portion of the Site was used as an industrial waste disposal facility, which was closed pursuant to Closure Order No. 80-06, issued by the State of California Regional Water Quality Control Board for the San Diego Region (the "RWQCB"). The Site has been listed by the State of California as a site for which expenditures for removal and remedial actions may be made by the State pursuant to the California Hazardous Substances Account Act, California Health & Safety Code Section 25300 et seq. Technical consultants retained by the Company have conducted various investigations of the environmental conditions at the Site, and in 1996, requested that the RWQCB issue a "no further action" letter with respect to the Site. The RWQCB has not yet taken any formal action in response to such request. (b) LITIGATION Other Litigation The Company is also a party to several other lawsuits, claims and loss contingencies incidental to its business, including assertions by regulatory agencies related to the release of unacceptable odors from some of its processing facilities. The Company has established loss reserves for environmental and other matters as a result of the matters discussed above. Although the ultimate liability cannot be determined with certainty, management of the Company believes that reserves for contingencies are reasonable and sufficient based upon present governmental regulations and information currently available to management. The Company estimates the range of possible losses related to environmental and litigation matters, based on certain assumptions, is between $3.9 million and $12.9 million at April 4, 1998. The accrued expenses and other noncurrent liabilities classifications in the Company's consolidated balance sheets include reserves for insurance, environmental and litigation contingencies of $15.1 million and $15.7 million at April 4, 1998 and January 3, 1998, respectively. There can be no assurance, however, that final costs will not exceed current estimates. The Company believes that any additional liability relative to such lawsuits and claims which may not be covered by insurance would not likely have a material adverse effect on the Company's financial position, although it could potentially have a material impact on the results of operations in any one year.
(4) Changes in Accounting Principles (c) Effective January 4, 1998, the Company adopted Statement of Financial Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive Income." This Statement requires that all items recognized under accounting standards as components of comprehensive earnings be reported in an annual financial statement that is displayed with the same prominence as the other annual financial statements. This Statement also requires that the Company classify items of other comprehensive earnings by their nature in an annual financial statement. Comprehensive income did not differ from net income for the periods ended April 4, 1998 and March 29, 1997.
DARLING INTERNATIONAL INC. AND SUBSIDIARIES FORM 10-Q FOR THE THREE MONTHS ENDED APRIL 4, 1998 PART I Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion summarizes information with respect to the liquidity and capital resources of the Company at April 4, 1998 and factors affecting its results of operations for the three months ended April 4, 1998 and March 29, 1997. RESULTS OF OPERATIONS Three Months Ended April 4, 1998 Compared to Three Months Ended March 29, 1997 GENERAL The Company recorded a net loss of $1.4 million for the first quarter of the fiscal year ending January 2, 1999 ("Fiscal 1998"), as compared to net earnings of $0.4 million for the first quarter of the fiscal year ended January 3, 1998 ("Fiscal 1997"). Operating income decreased $3.5 million to $0.8 million in the first quarter of Fiscal 1998 from $4.3 million in the first quarter of Fiscal 1997. The decrease in operating income was primarily due to: 1) Declines in overall finished goods prices; 2) Declines in the volume of raw materials processed; and 3) Approximately $1.1 million in increased depreciation and amortization expense related to acquisitions and capital expenditures. These were partially offset by a $1.1 million decrease in steam expense. Interest expense decreased from $3.7 million in Fiscal 1997 to $3.1 million in Fiscal 1998, primarily due to the refinancing of all outstanding debt on June 5, 1997, resulting in a lower overall interest rate. NET SALES The Company collects and processes animal by-products (fat, bones and offal), used restaurant cooking oil, and bakery by-products to produce finished products of tallow, meat and bone meal, yellow grease and dried bakery product. In addition, the Company provides grease trap collection services to Restaurants. Sales are significantly affected by finished goods prices, quality of raw material, and volume of raw material. Net sales include the sales of produced finished goods, trap grease services, and finished goods purchased for resale, which constitute less than 10% of total sales. During the first quarter of Fiscal 1998, net sales decreased 14.1%, to $108.1 million as compared to $125.8 million during the first quarter of Fiscal 1997 primarily due to the following: 1) Decreases in overall finished goods prices resulted in a $15.2 million decrease in sales in the first quarter of Fiscal 1998 versus the first quarter of Fiscal 1997. The Company's average yellow grease prices were 24.4% lower, average tallow prices were 16.6% lower, average meat and bone meal prices were 26.8% lower, and average corn prices were 8.3% lower; 2) Decreases in the volume of raw materials processed resulted in a $3.1 million decrease in sales, offset by $1.6 million in yield gains; and 3) Decreases in finished hides sales accounted for $1.4 million in sales decreases.
COST OF SALES AND OPERATING EXPENSES Cost of sales and operating expenses includes prices paid to raw material suppliers, the cost of product purchased for resale, and the cost to collect and process raw material. The Company utilizes both fixed and formula pricing methods for the purchase of raw materials. Fixed prices are adjusted where possible as needed for changes in competition and significant changes in finished goods market conditions, while raw materials purchased under formula prices are correlated with specific finished goods prices. During the first quarter of Fiscal 1998, cost of sales and operating expenses decreased $14.9 million (14.6%) to $87.4 million as compared to $102.4 million during the first quarter of Fiscal 1997 primarily as a result of the following: 1) Lower raw material prices paid, correlating to decreased prices for fats and oils, meat and bone meal and corn resulted in decreases of $11.7 million in cost of sales; 2) Decreases in the volume of raw materials collected and processed resulted in a decrease of approximately $2.7 million in cost of sales and operating expenses; and 3) Decreases in steam cost resulted in a $1.1 million decrease in operating expenses. SELLING, GENERAL AND ADMINISTRATIVE COSTS Selling, general and administrative costs were $10.8 million during the first quarter of Fiscal 1998, a $0.4 million decrease from $11.2 million for the first quarter of Fiscal 1997. The repurchase of stock options held by the former president of the Company in the first quarter of 1997 resulted in a decrease of $1.7 million, somewhat offset by approximately $0.5 million in increased expenses related to the functional reorganization of the Company by line of business and other expenses related to legal and environmental matters. DEPRECIATION AND AMORTIZATION Depreciation and amortization charges increased $1.1 million to $9.1 million during the first quarter of Fiscal 1998 as compared to $8.0 million during the first quarter of Fiscal 1997. This increase was primarily due to additional depreciation on fixed asset additions and amortization on intangibles acquired as a result of various acquisitions. The Company adopted Fresh Start Accounting in 1994. Under this method of accounting, the assets acquired prior to December 1994 were restated at fair market value and depreciated over estimated remaining lives of 5-15 years. INTEREST EXPENSE Interest expense decreased $0.6 million from $3.7 million during the first quarter of Fiscal 1997 to $3.1 million during the first quarter of Fiscal 1998, primarily due to the refinancing of all outstanding debt on June 5, 1997 at a lower overall rate of interest. INCOME TAXES The income tax benefit of $0.8 million for the first quarter of Fiscal 1998 consists of federal tax benefit and various state and foreign taxes. This is a decrease of $1.2 million from $0.3 million income tax expense during the first quarter of Fiscal 1997. CAPITAL EXPENDITURES The Company made capital expenditures of $5.9 million during the first quarter of Fiscal 1998 compared to capital expenditures of $6.1 million during the first quarter of Fiscal 1997.
LIQUIDITY AND CAPITAL RESOURCES Effective June 5, 1997, the Company entered into a Credit Agreement (the "Credit Agreement") which provides for borrowings in the form of a $50,000,000 Term Loan and $175,000,000 Revolving Credit Facility. As of April 4, 1998 the Company was in compliance with all provisions of the Credit Agreement. The Term Loan provides for $50,000,000 of borrowing. The Term Loan bears interest payable monthly at LIBOR (5.6875% at April 4, 1998), plus a margin (the "Credit Margin") (1.25% at April 4, 1998) which floats based on the achievement of certain financial ratios. The Term Loan is payable by the Company in quarterly installments of $1,250,000 commencing on June 30, 1997 through March 31, 1999: $2,500,000 commencing on June 30, 1999 through March 31, 2002; and an installment of $10,000,000 due on June 5, 2002. As of April 4, 1998, $45,000,000 was outstanding under the Term Loan. The Revolving Credit Facility provides for borrowings up to a maximum of $175,000,000 with sublimits available for letters of credit and a swingline. Outstanding borrowings on the Revolving Credit Facility bear interest, payable monthly, at various LIBOR rates (ranging from 5.6211% to 5.6875% at April 4, 1998) plus the Credit Margin as well as portions at a Base Rate (8.50% at April 4, 1998) or, for swingline advances, at the Base Rate. Additionally, the Company must pay a commitment fee equal to 0.25% per annum on the unused portion of the Revolving Credit Facility. The Revolving Credit Facility matures on June 5, 2002. As of April 4, 1998, $98,180,000 was outstanding under the Revolving Credit Facility. As of April 4, 1998, the Company had outstanding irrevocable letters of credit aggregating $8,373,000. The Credit Agreement contains certain terms and covenants, which, among other matters, restrict the incurrence of additional indebtedness, the payment of cash dividends and the annual amount of capital expenditures, and requires the maintenance of certain minimum financial ratios. As of April 4, 1998 no cash dividends could be paid to the Company's stockholders pursuant to the Credit Agreement. The Company has only very limited involvement with derivative financial instruments and does not use them for trading purposes. Interest rate swap agreements are used to reduce the potential impact of increases in interest rates on floating-rate long-term debt. At April 4, 1998, the Company was party to three interest rate swap agreements, each with a term of five years (all maturing June 27, 2002). Under terms of the swap agreements, the interest obligation of $70 million of Credit Agreement floating-rate debt was exchanged for fixed rate contracts which bear interest, payable quarterly, at an average rate of 6.6% plus a credit margin. On April 4, 1998, the Company had a working capital deficit of $0.9 million and its working capital ratio was 0.98 to 1 compared to working capital of $3.3 million and a working capital ratio of 1.06 to 1 on January 3, 1998. This decrease in working capital is mainly attributable to decreases in accounts receivable due to lower finished goods prices. Net cash provided by operating activities has increased $10.4 million from $1.3 million during the first quarter of Fiscal 1997 to $11.7 million during the first quarter of Fiscal 1998. The Company believes that cash from operations and current cash balances, together with the undrawn balance from the Company's loan agreements, will be sufficient to satisfy the Company's planned capital requirements.
ACCOUNTING MATTERS In June 1997, the Financial Accounting standards Board issued SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information. SFAS No. 131 is effective for annual periods beginning after December 15, 1997. This Statement established standards for the way that public business enterprises report information about operating segments in annual financial statements. The Statement defines operating segments as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company anticipates that this Statement will require additional disclosure regarding operating segments in Fiscal 1998. OTHER As a result of computer programs being written using two digits rather than four to define the applicable years, there is a concern by the business community as to whether these systems will be able to process information beginning in the year 2000. To deal with this concern, the Company has initiated programs and information systems reviews in an attempt to ensure that key systems and processes will remain functional. This objective is to be achieved either by modifying present systems or by installing new systems. While there can be no assurance that all modifications will be successful, management does not expect that costs of modifications or consequences of any unsuccessful modifications will have a material adverse effect on the Company. FORWARD LOOKING STATEMENTS This Quarterly Report on Form 10-Q includes "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts included in the Quarterly Report on Form 10-Q, including, without limitation, the statements under the sections entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Legal Proceedings" and located elsewhere herein regarding industry prospects and the Company's financial position are forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable; it can give no assurance that such expectations will prove to be correct. Important factors that could cause actual results to differ materially from the Company's expectations include: the Company's continued ability to obtain sources of supply for its rendering operations; general economic conditions in the European and Asian markets; and prices in the competing commodity markets which are volatile and are beyond the Company's control. Future profitability may be effected by the Company's ability to grow its restaurant services business and the development of its value-added feed ingredients, all of which face competition from companies which may have substantially greater resources than the Company.
DARLING INTERNATIONAL INC. AND SUBSIDIARIES FORM 10-Q FOR THE THREE MONTHS ENDED APRIL 4, 1998 PART II: Other Information Item 1. LEGAL PROCEEDINGS The information required by this item is included on pages 7 and 8 of this report and is incorporated herein by reference. Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matters were submitted to a vote of security holders during the fiscal quarter ended April 4, 1998. Item 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) Exhibits Exhibits No. Description 3.1* Restated Articles of Incorporation. 3.2 Amended and Restated Bylaws, dated March 10, 1994 and March 31, 1995. 10.13 Master Lease Agreement between NBD and Darling International Inc. dated as of February 17, 1998. 11 Statement re-computation of per share earnings. 27 Financial Data Schedule * Incorporated by reference to the Registrant's Registration Statement on Form S-1 (Registration No. 33-79478). (b) REPORTS ON FORM 8-K There were no reports filed on Form 8-K during the three months ended April 4, 1998.
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. DARLING INTERNATIONAL INC. Registrant Date: May 18, 1998 By: /s/ Dennis B. Longmire -------------------------------- Dennis B. Longmire Chairman and Chief Executive Officer Date: May 18, 1998 By: /s/ John O. Muse -------------------------------- John O. Muse Vice President and Chief Financial Officer (Principal Financial Officer)
DARLING INTERNATIONAL INC. AND SUBSIDIARIES FORM 10-Q FOR THE THREE MONTHS ENDED APRIL 4, 1998 INDEX TO EXHIBITS Exhibits No. Description Page No. 3.1* Restated Articles of Incorporation 3.2 Amended and Restated Bylaws, dated March 10, 1994 and March 31, 1995. 10.13 Master Lease Agreement between NBD and Darling International Inc. dated as of February 17, 1998. 17 11 Statement re-computation of per share earnings. 16 27 Financial Data Schedule * Incorporated by reference to the Registrant's Registration Statement on Form S-1 (Registration No. 33-79478).
EXHIBIT 11 STATEMENT RE COMPUTATION OF PER SHARE EARNINGS The following table details the computation of basic and diluted earnings (loss) per common share, in thousands except per share data. Three Months Ended ----------------------------- April 4, March 29, 1998 1997 ------------------------------------------- ----------------- ------------ Earnings (Basic): Net earnings (loss) available to common stock $ (1,404) $ 386 ======== ======= Shares (Basic): Weighted average number of common shares outstanding 15,567 15,477 ======= ======= Basic earnings (loss) per common share $ (0.09) $ 0.02 ======= ======= ------------------------------------------- ----------------- ------------ Earnings (Diluted): Net earnings (loss) available to common stock $ (1,404) $ 386 ======= ======= Shares (Diluted): Weighted average number of common shares outstanding 15,567 15,477 Additional shares assuming exercise of stock options - 1,068 ------- ------ Average common shares outstanding and equivalents 15,567 16,545 ======= ====== Diluted earnings (loss) per common share $ (0.09) $ 0.02 ======= ======= =========================================== ================= ============