(Mark One)/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2001
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)
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 May 15, 2001 was 15,589,077.
DARLING INTERNATIONAL INC. AND SUBSIDIARIESFORM 10-Q FOR THE THREE MONTHS ENDED APRIL 1, 2000
TABLE OF CONTENTS
PART I: FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS Consolidated Balance Sheets. . . . . . . . . . . . . 3 March 31, 2001 (unaudited) and December 30, 2000 Consolidated Statements of Operations (unaudited). . . . . . 4 Three Months Ended March 31, 2001 and April 1, 2000 Consolidated Statements of Cash Flows (unaudited). . . . . . 5 Three Months Ended March 31, 2001 and April 1, 2000 Notes to Consolidated Financial Statements (unaudited). . . . 6 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. . . . . . . 13 Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS . . . . . . . . . . . . . . . . 18 PART II: OTHER INFORMATION Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. . . . . . . . . . . . . . . . . 19 Item 6. EXHIBITS AND REPORTS ON FORM 8-K . . . . . . . . . . . . 19 Signatures. . . . . . . . . . . . . . . . . . . 20
DARLING INTERNATIONAL INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETSMarch 31, 2001 and December 30, 2000(in thousands, except shares and per share data)
March 31, December 30, 2001 2000 ----------- ------------ ASSETS (unaudited) Current assets: Cash and cash equivalents ............................................. $ 2,853 $ 3,509 Accounts receivable ................................................... 22,306 21,837 Inventories ........................................................... 7,443 8,300 Prepaid expenses ...................................................... 4,508 3,046 Deferred income taxes ................................................. 3,081 3,081 Assets held for sale .................................................. 2,660 3,161 Other current assets .................................................. 280 2,923 -------- -------- Total current assets .............................................. 43,131 45,857 Property, plant and equipment, less accumulated depreciation of $145,563 at March 31, 2001 and $140,944 at December 30, 2000 ........................................... 84,397 88,242 Collection routes and contracts, less accumulated amortization of $20,159 at March 31, 2001 and $18,828 at December 30, 2000 ............................................ 31,276 32,140 Goodwill, less accumulated amortization of $925 at March 31, 2001 and $883 at December 30, 2000 ......................... 4,581 4,632 Other noncurrent assets .................................................... 3,596 3,634 -------- -------- $166,981 $174,505 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt ..................................... $109,018 $109,528 Accounts payable, principally trade ................................... 10,874 14,341 Accrued expenses ...................................................... 24,632 23,160 Accrued interest ...................................................... 2,681 3,038 Deferred income ....................................................... - 2,599 -------- -------- Total current liabilities ......................................... 147,205 152,666 Other non-current liabilities .............................................. 15,642 16,247 Deferred income taxes ...................................................... 2,868 2,868 -------- -------- Total liabilities ................................................. 165,715 171,781 Stockholders' equity: Preferred stock, $0.01 par value; 1,000,000 shares authorized, none issued ............................................ - - Common stock, $0.01 par value; 25,000,000 shares authorized; 15,589,077 shares issued and outstanding ........................... 156 156 Additional paid-in capital ............................................ 35,063 35,063 Accumulated other comprehensive loss .................................. (309) - Accumulated deficit ................................................... (33,644) (32,495) Total stockholders' equity ........................................ 1,266 2,724 -------- -------- Contingencies (note 3) $166,981 $174,505 ======== ======== The accompanying notes are an integral part of these consolidated financial statements.
DARLING INTERNATIONAL INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONSThree months ended March 31, 2001 and April 1, 2000(in thousands, except per share data)(unaudited)
Three Months Ended ---------------------- March 31, April 1, 2001 2000 ---------- --------- Net sales ................................................... $ 63,634 $ 62,818 Costs and expenses: Cost of sales and operating expenses ................... 48,312 49,360 Selling, general and administrative expenses ........... 7,005 6,559 Depreciation and amortization .......................... 6,814 6,705 -------- --------- Total costs and expenses .......................... 62,131 62,624 -------- --------- Operating income .................................. 1,503 194 -------- --------- Other income (expense): Interest expense ....................................... (3,227) (3,431) Other, net ............................................. 575 211 -------- --------- Total other income (expense) ...................... (2,652) (3,220) -------- --------- Loss before income tax benefit .................... (1,149) (3,026) Income tax benefit .......................................... - - -------- --------- Net loss .......................................... $ (1,149) $ (3,026) ======== ======== Basic and diluted loss per share ............................ $ (0.07) $ (0.19) ======== ======== The accompanying notes are an integral part of these consolidated financial statements.
DARLING INTERNATIONAL INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSThree Months ended March 31, 2001 and April 1, 2000(in thousands)(unaudited)
Three Months Ended --------------------- March 31, April 1, 2001 2000 --------- --------- Cash flows from operating activities: Net loss ............................................................ $ (1,149) $ (3,026) Adjustments to reconcile net loss to net cash provided (used) by operating activities: Depreciation and amortization ................................... 6,814 6,705 Gain on sales of assets ......................................... (74) (442) Changes in operating assets and liabilities: Accounts receivable ............................................. (469) (1,340) Inventories and prepaid expenses ................................ (605) (1,788) Accounts payable and accrued expenses ........................... (2,724) (6,135) Accrued interest ................................................ (357) (28) Other ........................................................... 343 864 ------- ------- Net cash provided (used) by operating activities ............. 1,779 (1,614) ------- ------- Cash flows from investing activities: Capital expenditures ................................................ (1,532) (884) Gross proceeds from sale of property, plant and equipment and other assets ................................................. 112 715 Payments related to routes and other intangibles .................... - (185) ------- ------- Net cash used by investing activities ...................... (1,420) (354) ------- ------- Cash flows from financing activities: Proceeds from long-term debt ........................................ 53,042 45,872 Payments on long-term debt .......................................... (53,552) (43,275) Contract payments ................................................... (505) (474) ------- ------- Net cash provided (used) by financing activities ........... (1,015) 2,123 ------- ------- Net increase (decrease) in cash and cash equivalents ..................... (656) 155 Cash and cash equivalents at beginning of period ......................... 3,509 1,828 ------- ------- Cash and cash equivalents at end of period ............................... $ 2,853 $ 1,983 ======= ======= Supplemental disclosure of cash flow information: Cash paid during the period for: Interest ........................................................ $ 3,584 $ 3,459 ------- ------- Income taxes, net of refunds .................................... $ - $ (49) ------- ------- The accompanying notes are an integral part of these consolidated financial statements.
DARLING INTERNATIONAL INC. AND SUBSIDIARIES
Notes to Consolidated Financial StatementsMarch 31, 2001(unaudited)
GOING CONCERN RISK
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the Consolidated Balance Sheet at March 31, 2001, the Company has $109.0 million of debt due under its bank credit facilities classified as a current liability because it matures in June, 2001. If the Company is unable to consummate the debt financing discussed herein, then, in the absence of another business transaction or debt agreement, the Company cannot make the principal payment due at maturity and, accordingly, the lenders could declare a default, and attempt to realize upon the collateral securing the debt (which comprises substantially all the Company’s assets). As a result of this material uncertainty, there is doubt about the Company’s ability to continue as a going concern for a reasonable period of time. See the Company’s Form 10-K for the fiscal year ended December 30, 2000, for disclosures related to Going Concern Risk contained therein, and Note 6 – Liquidity, contained herein.
Three Months Ended ----------------------------------- March 31, April 1, 2000 2001 ----------------------------------- Rendering: Trade $ 49,762 $ 47,639 Intersegment 6,188 7,573 -------- -------- 55,950 55,212 -------- -------- Restaurant Services: Trade 13,872 15,179 Intersegment 1,799 2,278 -------- -------- 15,671 17,457 -------- -------- Eliminations (7,987) (9,851) -------- -------- Total $ 63,634 $ 62,818 ======== ======== Business Segment Profit (Loss) (in thousands): Three Months Ended -------------------------------- March 31, April 1, 2001 2000 -------------------------------- Rendering $ 2,500 $ 2,581 Restaurant Services 935 1,275 Corporate Activities (1,357) (3,451) Interest expense (3,227) (3,431) -------- ------- Loss before income taxes $ (1,149) $ (3,026) ======= =======
March 31, December 30, 2001 2000 ------------------------------ Rendering $63,632 $64,199 Restaurant Services 18,782 17,290 Combined Rend./Rest. Svcs. 72,774 72,722 Corporate Activities 11,793 20,294 ------- ------- Total $166,981 $174,505 ======= =======
Transition adjustment on December 31, 2000 to accumulated other comprehensive income $ 2,220 Net change arising from current period hedging transactions 376 Reclassifications into earnings (2,905) --------- Accumulated other comprehensive loss at March 31, 2001 $ (309) =========
Loss to interest expense related to interest rate swap agreements $ (178) Gain to operating expenses related to natural gas swap agreements (effective portion) 2,568 Gain to other income related to natural gas swap agreements (ineffective portion) 515 --------- Total reclassifications into earnings for the three months ended March 31, 2001 $ 2,905 =========
DARLING INTERNATIONAL INC. AND SUBSIDIARIESFORM 10-Q FOR THE THREE MONTHSENDED MARCH 31, 2001
PART I
The following discussion summarizes factors affecting the Company's results of operations for the three months ended March 31, 2001 and April 1, 2000, and information with respect to the liquidity and capital resources of the Company at March 31, 2001.
Three Months Ended April 1, 2000 Compared to Three Months Ended April 3, 1999
The Company recorded a net loss of $1.1 million for the first quarter of the fiscal year ending December 29, 2001 ("Fiscal 2001"), as compared to a loss of $3.0 million for the first quarter of the fiscal year ended December 30, 2000 ("Fiscal 2000"), an improvement of $1.9 million. Interest expense decreased from $3.4 million in Fiscal 2000 to $3.2 million in Fiscal 2001, primarily due to a $11.6 million decrease in debt and interest rate decreases.
The Company collects and processes animal by-products (fat, bones and offal) and used restaurant cooking oil to produce finished products of tallow, meat and bone meal, and yellow grease. 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 10% of total sales for both the first quarter of Fiscal 2001 and the first quarter of Fiscal 2000.
During the first quarter of Fiscal 2001, net sales increased by $0.8 million (1.3%), to $63.6 million as compared to $62.8 million during the first quarter of Fiscal 2000 primarily due to the following: 1) Increases in collection fees (to offset a portion of the cost incurred in collecting raw material) of $2.3 million; 2) Increases in finished hides sales of $0.6 million; 3) Increases in the volume of raw materials processed resulted in a $0.3 million increase in sales; partially offset by 4) Decreases in products purchased for resale resulted in a $1.1 million sales decrease; 5) Decreases in overall finished goods prices resulted in a $1.0 million decrease in sales in the first quarter of Fiscal 2001 versus the first quarter of Fiscal 2000. Average market prices for yellow grease were 5.5% lower, tallow prices were 5.3% lower, and meat and bone meal prices were 9.5% higher; and 6) Decreased yields on processing of raw material resulted in a sales decrease of $0.3 million.
Cost of sales and operating expenses include 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 2001, cost of sales and operating expenses decreased $1.1 million (2.2%) to $48.3 million as compared to $49.4 million during the first quarter of Fiscal 2000 primarily as a result of the following: 1) Lower raw material prices paid resulted in a decrease of $1.8 million in cost of sales; 2) Decreases in products purchased for resale resulted in a $1.1 million decrease in cost of sales; 3) Decreases in payroll of $0.6 million; 4) Decreases of $0.3 million in hide cost; 5) Decreases in leased truck expense of $0.2 million; 6) Decreases in gasoline and oil expenses of $0.1 million; 7) Decreases in repairs and maintenance of $0.1 million; and 8) Decreases in other costs and expenses of $0.3 million, partially offset by 9) Increased natural gas expense of $2.7 million,; and 10) Increased fuel oil expenses of $0.7 million.
Selling, general and administrative costs were $7.0 million during the first quarter of Fiscal 2001, a $0.4 million increase from $6.6 million for the first quarter of Fiscal 2000, due to 1) Increases in bad debt expense of $0.3 million, and 2) Increases in other expenses of $0.1 million.
Depreciation and amortization charges increased $0.1 million to $6.8 million during the first quarter of Fiscal 2001 as compared to $6.7 million during the first quarter of Fiscal 2000.
Interest expense decreased $0.2 million from $3.4 million during the first quarter of Fiscal 2000 to $3.2 million during the first quarter of Fiscal 2001, primarily due to a $11.6 million decrease in debt and decreases in interest rates.
Other income increased $0.4 million from a net other income of $0.2 million during the first quarter of Fiscal 2000 to net other income of $0.6 million during the first quarter of Fiscal 2001. This increase was primarily due to the ineffective portion of gains on derivative natural gas hedges of $0.5 million recognized under Statement of Financial Accounting Standard No. 133, which was adopted December 31, 2000, the first day of the Company's 2001 fiscal year. See Note 7 to the Consolidated Financial Statements and Accounting Matters elsewhere herein.
The Company recorded a $0.4 million increase in the valuation allowance to reduce the carrying value of deferred tax assets during the first quarter of Fiscal 2001 with the result that no deferred tax benefit was recorded attributable to the Fiscal 2001 first quarter loss.
LIQUIDITY, GOING CONCERN RISK, AND CAPITAL RESOURCES
At March 31, 2001, the Company's borrowings under the Amended and Restated Credit Agreement ("Credit Agreement") were classified as a current liability because the agreement expires on June 30, 2001. As of March 31, 2001, the Company believes it is in compliance with all provisions of the Credit Agreement, and has made all interest and principal payments as they have come due since the Credit Agreement's inception on January 22, 1999. Lenders who are parties to the Credit Agreement with Darling notified Darling on April 9, 2001, that an "Event of Default" had occurred under a section of the Credit Agreement (which appears to relate to Darling's solvency) and unilaterally limited a revolving credit commitment to $125,000,000, or $6,920,000 less than the $131,920,000 specified in the Credit Agreement, while reserving the right to lend more, at the agent bank's discretion. Darling is confident that no Event of Default under the Credit Agreement in fact occurred (including any default relating to solvency).
As discussed in Note 6, the Company’s management has been in discussions with the Company’s lenders regarding obtaining either new financing or extending the Credit Agreement, but no agreement has been consummated. The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. If the Company is not successful in obtaining new financing or extending the Credit Agreement, the lenders could declare a default and attempt to realize upon the collateral securing the debt, (which comprises substantially all the Company’s assets). The absence of a new financing agreement or extension of the existing Credit Agreement, creates a material uncertainty regarding the ability of the Company to continue as a going concern. Management is not able to predict what the outcome or consequences of these matters might be.
Effective June 5, 1997, the Company entered into the original Credit Agreement which originally provided for borrowings in the form of a $50,000,000 Term Loan and $175,000,000 Revolving Credit Facility. On October 3, 1998, the Company entered into an amendment of the Credit Agreement whereby BankBoston, N.A., as agent, and the other participant banks in the Credit Agreement (the "Banks") agreed to forbear from exercising rights and remedies arising as a result of several existing events of default of certain financial covenants (the "Defaults") under the Credit Agreement, as amended, until November 9, 1998.
On November 6, 1998, the Company entered into an extension of the Credit Agreement whereby the Banks agreed to forbear from exercising rights and remedies arising as a result of the Defaults until December 14, 1998. The forbearance period was subsequently extended to January 22, 1999. On January 22, 1999, the Company and the banks entered into an Amended and Restated Credit Agreement.
The Credit Agreement provides for borrowings in the form of a $36,702,000 Term Loan and $135,000,000 Revolving Credit Facility. As of December 30, 2000, the Term Loan was paid in full.
The Revolving Credit Facility provides for borrowings up to a maximum of $131,920,000 with sublimits available for letters of credit and a swingline. Under the Credit Agreement, the Revolving Credit Facility bears interest, payable quarterly, at a Base Rate (8.25% at March 31, 2001) plus a margin of 1%. Additionally, the Company must pay a commitment fee equal to 0.375% per annum on the unused portion of the Revolving Credit Facility. Under the Credit Agreement, the Revolving Credit Facility provides for a mandatory reduction of $2,500,000 on March 31, 2001, with the remaining balance due at maturity on June 30, 2001. As of March 31, 2001, $109,003,000 was outstanding under the Revolving Credit Facility, and the Company had outstanding irrevocable letters of credit aggregating $10,961,000.
Substantially all assets of the Company are either pledged or mortgaged as collateral for borrowings under the Credit Agreement. The Credit Agreement contains certain terms and covenants, which, among other matters, restrict the incurrence of additional indebtedness, the payment of cash dividends, the retention of certain proceeds from sales of assets, and the annual amount of capital expenditures, and requires the maintenance of certain minimum financial ratios. As of March 31, 2001, no cash dividends could be paid to the Company's stockholders pursuant to the Credit Agreement.
The Company has interest rate swap agreements which are used to reduce the potential impact of increases in interest rates on floating-rate long-term debt. At March 31, 2001, the Company was party to three interest rate swap agreements. Under the terms of the swap agreements, the interest obligation on $70 million of Credit Agreement floating-rate debt was exchanged for fixed rate contracts which bear interest, payable quarterly. One swap agreement for $25 million matures June 27, 2002, bears interest at 6.5925% and the Company's receive rate is based on the three-month LIBOR. A second swap agreement for $25 million matures June 27, 2001, bears interest at 9.83% and the Company's receive rate is based on the Base Rate. The third swap agreement for $20 million matures on June 27, 2002, with a one-time option for the bank to cancel at June 27, 2001, bears interest at 9.17% and the Company's receive rate is based on the Base Rate. See Note 7 of Notes to the Consolidated Financial Statements for a description of the accounting treatment for these interest rate swap agreements.
On March 31, 2001, the Company had a working capital deficit of $104.1 million and its working capital ratio was 0.29 to 1 compared to a working capital deficit of $106.8 million and a working capital ratio of 0.30 to 1 on December 30, 2000.
CAPITAL EXPENDITURES
The Company made capital expenditures of $1.5 million during the first quarter of Fiscal 2001 compared to capital expenditures of $0.9 million during the first quarter of Fiscal 2000.
ACCOUNTING MATTERS
Statement of Financial Accounting Standard No. 133, Accounting for Derivative Instruments and Hedging Activities (Statement 133), was issued by the Financial Accounting Standards Board in June, 1998. The Company adopted Statement 133 on December 31, 2000 (the first day of Fiscal 2001). Statement 133, as amended by Statement 137, standardizes the accounting for derivative instruments, including certain derivative instruments embedded in other contracts. Under the standard, entities are required to report all derivative instruments in the statement of financial position at fair value. The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, if so, on the reason for holding the instrument. If certain conditions are met, entities may elect to designate a derivative instrument as a hedge of exposures to changes in fair values, cash flows, or foreign currencies. The Company held no fair value hedge or foreign currency hedge derivative instruments at December 30, 2000 or March 31, 2001. If the hedged exposure is a cash flow exposure, the effective portion of the gain or loss on the derivative instrument is reported initially as a component of other comprehensive income (outside of earnings) and is subsequently reclassified into earnings when the forecasted transaction affects earnings. Any amounts excluded from the assessment of hedge effectiveness as well as the ineffective portion of the gain or loss are reported in earnings immediately. If the derivative instrument is not designated as a hedge, the gain or loss is recognized in earnings in the period of change.
Upon adoption, the provisions of Statement 133 must be applied prospectively.
A description of the effect of adopting Statement 133 on December 31, 2000 (the first day of Fiscal 2001), and the effect on consolidated financial position and results of operations as of and for the three months ended March 31, 2001, is included in Note 7 to the Consolidated Financial Statements included elsewhere herein.
The Company expects that the adoption of Statement 133 will increase the volatility of reported earnings and other comprehensive income. In general, the amount of volatility will vary with the level of derivative activities during any period.
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 section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations" 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. In addition to those factors discussed elsewhere in this report, important factors that could cause actual results to differ materially from the Company's expectations include: the Company's ability to refinance its Credit Agreement which expires June 30, 2001; 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. Among other things, future profitability may be affected by the Company's ability to grow its business which faces competition from companies which may have substantially greater resources than the Company.
The principal market risks affecting the Company are exposures to changes in interest rates on debt and the price of natural gas used in the Company's plants. The Company uses interest rate and, through March, 2001, natural gas swaps to manage these risks. Beginning in April, 2001, the Company is using natural gas forward purchase agreements with its suppliers to manage the price risk of natural gas used in its facilities. While the Company does have international operations, and operates in international markets, it considers its market risks in such activities to be immaterial.
The Company uses interest rate swaps to hedge adverse interest rate changes on a portion of its long-term debt. At March 31, 2001, the Company was party to three interest rate swap agreements. Under the terms of the swap agreements, the interest obligation on $70 million of Credit Agreement floating-rate debt was exchanged for fixed rate contracts which bear interest, payable quarterly. One swap agreement for $25 million matures June 27, 2002, bears interest at 6.5925% and the Company's receive rate is based on the three-month LIBOR. A second swap agreement for $25 million matures June 27, 2001, bears interest at 9.83% and the Company's receive rate is based on the Base Rate. The third swap agreement for $20 million matures on June 27, 2002, with a one-time option for the bank to cancel at June 27, 2001, bears interest at 9.17% and the Company's receive rate is based on the Base Rate. A one-hundred basis point change in interest rates on borrowing under the Revolving Credit Facility would impact net interest expense by $1.1 million, net of the effect of swaps, for Fiscal 2001.
As of March 31, 2001, the Company has forward purchase agreements in place for purchases of 206,000 mmbtu's of natural gas per month for April, May and June, 2001, with an average purchase price of $5.22/mmbtu. These agreements are not subject to the requirements of Statement 133 because they qualify as normal purchases as defined in Statement 133.
DARLING INTERNATIONAL INC. AND SUBSIDIARIESFORM 10-Q FOR THE THREE MONTHS ENDED APRIL 1, 2000PART II: Other Information
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.