(Mark One)/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 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 August 13, 2001 was 15,589,077.
DARLING INTERNATIONAL INC. AND SUBSIDIARIESFORM 10-Q FOR THE THREE MONTHS ENDED JUNE 30, 2001
TABLE OF CONTENTS
PART I: FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS Consolidated Balance Sheets. . . . . . . . . . . . . 3 June 30, 2001 (unaudited) and December 30, 2000 Consolidated Statements of Operations (unaudited). . . . . . 4 Three Months and Six Months Ended June 30, 2001 and July 1, 2000 Consolidated Statements of Cash Flows (unaudited). . . . . . 5 Three Months Ended June 30, 2001 and July 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 . . . . . . . . . . . . 20 Signatures. . . . . . . . . . . . . . . . . . . 21
DARLING INTERNATIONAL INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETSJune 30, 2001 and December 30, 2000(in thousands, except shares and per share data)
June 30, December 30, 2001 2000 --------- ------------ ASSETS (unaudited) Current assets: Cash and cash equivalents ....................................... $ 3,107 $ 3,509 Accounts receivable ............................................. 20,388 21,837 Inventories ..................................................... 6,794 8,300 Prepaid expenses ................................................ 3,461 3,046 Deferred income taxes ........................................... 3,081 3,081 Assets held for sale ............................................ 2,678 3,161 Other current assets ............................................ 284 2,923 --------- --------- Total current assets ........................................ 39,793 45,857 Property, plant and equipment, less accumulated depreciation of $150,634 at June 30, 2001 and $140,944 at December 30, 2000 ..................................... 81,399 88,242 Collection routes and contracts, less accumulated amortization of $20,394 at June 30, 2001 and $18,828 at December 30, 2000 ...................................... 29,765 32,140 Goodwill, less accumulated amortization of $976 at June 30, 2001 and $883 at December 30, 2000 .................... 4,530 4,632 Other noncurrent assets .............................................. 4,518 3,634 --------- --------- $ 160,005 $ 174,505 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities: Current portion of long-term debt ............................... $ 125,371 $ 109,528 Accounts payable, principally trade ............................. 9,278 14,341 Accrued expenses ................................................ 18,828 23,160 Accrued interest ................................................ 119 3,038 Deferred income ................................................. - 2,599 --------- --------- Total current liabilities ................................... 153,596 152,666 Other non-current liabilities ........................................ 7,669 16,247 Deferred income taxes ................................................ 2,886 2,868 --------- --------- Total liabilities ........................................... 164,151 171,781 --------- --------- Stockholders' Equity (Deficit) 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 deficit ............................................. (39,365) (32,495) --------- -------- Total stockholders' equity (deficit) ........................ (4,146) 2,724 --------- -------- Contingencies (note 3) $ 160,005 $ 174,505 ========= ========= The accompanying notes are an integral part of these consolidated financial statements.
DARLING INTERNATIONAL INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONSThree and Six Months Ended June 30, 2001 and July 1, 2000(in thousands, except per share data)
Three Months Ended Six Months Ended ---------------------- ---------------------- June 30, July 1, June 30, July 1, 2001 2000 2001 2000 --------- --------- --------- --------- (unaudited) (unaudited) Net sales ....................................... $ 58,614 $ 61,557 $ 122,248 $ 124,374 --------- --------- --------- --------- Costs and expenses: Cost of sales and operating expenses ....... 46,690 49,014 95,002 98,374 Selling, general and administrative expenses 6,778 6,934 13,783 13,492 Depreciation and amortization .............. 6,488 6,809 13,302 13,514 --------- --------- --------- --------- Total costs and expenses ................ 59,956 62,757 122,087 125,380 --------- --------- --------- --------- Operating income (loss) ................. (1,342) (1,200) 161 (1,006) --------- --------- --------- --------- Other income (expense): Interest expense ........................... (3,267) (3,497) (6,494) (6,913) Other, net ................................. (1,112) (69) (537) 126 --------- --------- --------- --------- Total other expense .................... (4,379) (3,566) (7,031) (6,787) --------- --------- --------- --------- Loss from continuing operations before income taxes .................... (5,721) (4,766) (6,870) (7,793) Income tax benefit .............................. - - - - --------- --------- --------- --------- Loss from continuing operations ......... (5,721) (4,766) (6,870) (7,793) Discontinued operations: Gain on disposal of discontinued operations, net of tax ............. - 121 - 121 --------- --------- --------- --------- Net loss ................................ $ (5,721) $ (4,645) $ (6,870) $ (7,672) ========= ========= ========= ========= Basic and diluted loss per share: Continuing operations ................... $ (0.37) $ (0.31) $ (0.44) $ (0.50) Discontinued operations: Gain on disposal ....................... - 0.01 - 0.01 --------- --------- --------- --------- Total ............................. $ (0.37) $ (0.30) $ (0.44) $ (0.49) ========= ========= ========= ========= The accompanying notes are an integral part of these consolidated financial statements.
DARLING INTERNATIONAL INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSSix Months Ended June 30, 2001 and July 1, 2000(in thousands)
Six Months Ended June 30, July 1, 2001 2000 ---------- ---------- (unaudited) Cash flows from operating activities: Loss from continuing operations ............................ $ (6,870) $ (7,793) Adjustments to reconcile net loss from continuing operations to net cash provided (used) by operating activities: Depreciation and amortization ........................... 13,302 13,514 Gain on sales of assets ................................. (244) (494) Changes in operating assets and liabilities: Accounts receivable .................................... 1,449 (856) Inventories and prepaid expenses ....................... 1,091 (323) Accounts payable and accrued expenses .................. (11,994) (2,666) Accrued interest ....................................... (2,919) (33) Other .................................................. (2,847) 155 --------- --------- Net cash provided (used) by continuing operations ......... (9,032) 1,504 Net cash provided by discontinued operations .............. - 121 --------- --------- Net cash provided (used) by operating activities .......... (9,032) 1,625 --------- --------- Cash flows from investing activities: Recurring capital expenditures ............................. (3,782) (3,374) Gross proceeds from sale of property, plant and equipment and other assets ........................................ 141 920 Payments related to routes and other intangibles ........... - (37) --------- --------- Net cash used by investing activities ............. (3,641) (2,491) --------- --------- Cash flows from financing activities: Proceeds from long-term debt ............................... 125,371 87,973 Payments on long-term debt ................................. (109,498) (86,097) Contract payments .......................................... (3,292) (897) Net cash used in discontinued operations ................... (310) - --------- --------- Net cash provided by financing activities ......... 12,271 979 --------- --------- Net increase (decrease) in cash and cash equivalents ............ (402) 113 Cash and cash equivalents at beginning of period ................ 3,509 1,828 --------- --------- Cash and cash equivalents at end of period ...................... $ 3,107 $ 1,941 ========= ========= Supplemental disclosure of cash flow information: Cash paid during the period for: Interest ............................................... $ 9,413 $ 6,032 ========= ========= Income taxes, net of refunds ........................... $ 28 $ 120 ========= ========= The accompanying notes are an integral part of these consolidated financial statements.
DARLING INTERNATIONAL INC. AND SUBSIDIARIES
Notes to Consolidated Financial StatementsJune 30, 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 June 30, 2001, the Company has $125.4 million of debt due under its bank credit facilities classified as a current liability because the underlying Credit Agreement had an expiration date of June 30, 2001. The Company entered into a four-month forbearance agreement effective June 29, 2001, with the parties to its existing Credit Agreement that extends the existing Credit Agreement to October 31, 2001. The forbearance agreement, among other things, raises the interest rate under the Credit Agreement from 1% over prime to 3% over prime, requires the payment of a fee of $1.3 million to the lenders with respect to the forbearance agreement and related matters, and limits financial covenants to certain minimum cash flows based upon the Company’s own projected cash flow for certain periods during the four-month forbearance period. If the Company is unable to consummate a new financing arrangement as 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, Going Concern Risk and Capital Resources, contained herein.
Business Segment Net Sales (in thousands): Three Months Ended Six Months Ended --------------------------------------------------- June 30, July 1, June 30, July 1, 2001 2000 2001 2000 ------------------------ --------------------- Rendering: Trade $ 43,464 $ 48,234 $ 93,226 $ 95,873 Intersegment 6,630 6,495 12,818 14,068 --------- --------- -------- -------- 50,094 54,729 106,044 109,941 -------- -------- ------- ------- Restaurant Services: Trade 15,150 13,323 29,022 28,501 Intersegment 1,558 2,209 3,357 4,487 --------- --------- --------- --------- 16,708 15,532 32,379 32,988 -------- -------- -------- -------- Eliminations (8,188) (8,704) (16,175) (18,555) --------- --------- -------- ------- Total $ 58,614 $ 61,557 $122,248 $124,374 ======== ======== ======= ======= Business Segment Profit (Loss) (in thousands): Three Months Ended Six Months Ended ----------------------------------------------------- June 30, July 1, June 30, July 1, 2001 2000 2001 2000 ----------------------- --------------------- Rendering $ 2,413 $ 2,135 $ 4,913 $ 4,717 Restaurant Services 2,304 537 3,239 1,812 Corporate Activities (7,171) (3,941) (8,528) (7,409) Interest expense (3,267) (3,497) (6,494) (6,913) ------- ------- ------- ------- Loss before income taxes $ (5,721) $ (4,766) $ (6,870) $ (7,793) ======= ======= ======= =======
June 30, December 30, 2001 2000 ---------------------------------- Rendering $59,579 $64,199 Restaurant Services 17,770 17,290 Combined Rend./Rest. Svcs. 65,888 72,722 Corporate Activities 16,768 20,294 -------- -------- Total $160,005 $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 (2,596) --------- Accumulated other comprehensive income at March 31, 2001 $ - =========
Loss to interest expense related to interest rate swap agreements $ (487) 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 six months ended June 30, 2001 $ 2,596 =========
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 and six months ended June 30, 2001 and July 1, 2000, and information with respect to the liquidity and capital resources of the Company at June 30, 2001.
Three Months Ended June 30, 2001 Compared to Three Months Ended July 1, 2000
The Company recorded a net loss of $5.7 million for the second quarter of the fiscal year ending December 29, 2001 ("Fiscal 2001"), as compared to a loss of $4.6 million for the second quarter of the fiscal year ended December 30, 2000 ("Fiscal 2000"), an increased loss of $1.1 million. Interest expense decreased from $3.5 million in the second quarter of Fiscal 2000 to $3.3 million in the second quarter of Fiscal 2001, primarily due to 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 9.9% of total sales in the second quarter of Fiscal 2001 and 13.0% of total sales in the second quarter of Fiscal 2000.
During the second quarter of Fiscal 2001, net sales decreased by $3.0 million (4.8%), to $58.6 million as compared to $61.6 million during the second quarter of Fiscal 2000, primarily due to the following: 1) Decreases in finished goods prices resulted in a $4.2 million decrease in sales in the second quarter of Fiscal 2001, compared to the second quarter of Fiscal 2000. Average market prices for yellow grease were down 4.1%, tallow prices were up 1.5%, and meat and bone meal prices were down 18.9%; 2) Decreases in products purchased for resale of $2.2 million; 3) Decreases in raw material inage volume of $0.4 million; partially offset by 4) Increases in collection fees of $2.6 million; 5) Increases in finished hide sales of $1.0 million; and 6) Other increases of $0.2 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 second quarter of Fiscal 2001, cost of sales and operating expenses decreased $2.3 million (4.7%) to $46.7 million as compared to $49.0 million during the second quarter of Fiscal 2000 primarily as a result of the following: 1) Lower raw material prices paid resulted in a decrease of $3.4 million in cost of sales; 2) Decreases in products purchased for resale resulted in a $2.2 million decrease in cost of sales; 3) Decreases in payroll of $0.4 million; partially offset by 4) Increased energy expenses of $2.7 million; 5) Increases in hide cost of $0.3 million; and 6) Other increases of $0.7 million.
Selling, general and administrative costs were $6.8 million during the second quarter of Fiscal 2001, a $0.1 million decrease from $6.9 million for the second quarter of Fiscal 2000, primarily due to decreases in payroll expense of $0.1 million.
Depreciation and amortization charges decreased $0.3 million to $6.5 million during the second quarter of Fiscal 2001 as compared to $6.8 million during the second quarter of Fiscal 2000.
Interest expense decreased $0.2 million from $3.5 million during the second quarter of Fiscal 2000 to $3.3 million during the second quarter of Fiscal 2001, primarily due to decreases in interest rates.
Other expense increased $1.0 million from net other expense of $0.1 million during the second quarter of Fiscal 2000 to net other expense of $1.1 million during the second quarter of Fiscal 2001. This increase was primarily due to loss on the early retirement of a noncompete liability of $0.4 million and loss on fair value adjustments on the interest rate swap agreements which extend beyond the June, 2001, maturity date of the Credit Agreement of $0.5 million.
The Company recorded a $2.0 million increase in the valuation allowance to reduce the carrying value of deferred tax assets during the second quarter of Fiscal 2001 with the result that no deferred tax benefit was recorded attributable to the Fiscal 2001 second quarter loss.
The Company made capital expenditures of $2.3 million during the second quarter of Fiscal 2001 compared to capital expenditures of $2.2 million during the second quarter of Fiscal 2000, an increase of $0.1 million.
Six Months Ended June 30, 2001 Compared to Six Months Ended July 1, 2000
The Company recorded a loss of $6.9 million for the first six months of Fiscal 2001, as compared to a net loss of $7.7 million for the first six months of Fiscal 2000, an improvement of $0.8 million. The decrease in the operating loss was primarily due to increases in collection fees and finished hide prices, reductions in depreciation, and interest expense, partially offset by higher energy expenses in Fiscal 2001. Interest expense decreased from $6.9 million in Fiscal 2000 to $6.5 million in Fiscal 2001, primarily due to interest rate reductions.
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 constitutes 9.2% of total sales for the first six months of Fiscal 2001 and 11.5% of total sales for the first six months of Fiscal 2000.
During the first six months of Fiscal 2001, net sales decreased $2.1 million (1.7%), to $122.3 million as compared to $124.4 million during the first six months of Fiscal 2000, primarily due to the following: 1) Decreases in overall finished goods prices resulted in a $5.2 million decrease in sales in the first six months of Fiscal 2001 versus the first six months of Fiscal 2000. Average market prices for yellow grease were 4.7% lower, tallow prices were 1.9% lower, and meat and bone meal prices were 5.3% lower; 2) Decreases in products purchased for resale resulted in a $3.4 million sales decrease; 3) Decreases in yield on production of finished product resulted in a $0.4 million sales decrease; and 4) Other decreases of $0.1 million; partially offset by 5) Increases in collection fees of $5.4 million; and 6) Increases in finished hide sales of $1.6 million.
During the first six months of Fiscal 2001, cost of sales and operating expenses decreased $3.4 million (3.5%) to $95.0 million as compared to $98.4 million during the first six months of Fiscal 2000 primarily as a result of the following: 1) Lower raw material prices paid resulted in a decrease of $5.3 million; 2) Decreases in products purchased for resale resulted in a $3.4 million decrease; 3) Decreases in payroll of $0.9 million; partially offset by 4) Increased energy expenses of $5.6 million; and 5) Other increases of $0.6 million.
Selling, general and administrative costs were $13.8 million during the first six months of Fiscal 2001, a $0.3 million increase from $13.5 million for the first six months of Fiscal 2000. The increase results from higher bad debt expense of $0.4 million and higher legal expense of $0.3 million, net of decreases in various expenses of $0.4 million.
Depreciation and amortization charges decreased $0.2 million to $13.3 million during the first six months of Fiscal 2001 as compared to $13.5 million during the first six months of Fiscal 2000.
Interest expense decreased $0.4 million from $6.9 million during the first six months of Fiscal 2000 to $6.5 million during the first six months of Fiscal 2001, primarily due decreases in interest rates.
The Company recorded a $2.4 million increase in the valuation allowance to reduce the carrying value of deferred tax assets during the first six months of Fiscal 2001, with the result that no deferred tax benefit was recorded attributable to the Fiscal 2001 loss for the first six months.
The Company made capital expenditures of $3.8 million during the first six months of Fiscal 2001 compared to capital expenditures of $3.4 million during the first six months of Fiscal 2000.
The operations of the Bakery By-Products Recycling segment is classified as discontinued operations. The Company recorded a $0.1 million gain during the first six months of Fiscal 2000. The sale of this business segment was closed on April 5, 1999.
The Company generated a net loss of $6.9 million for the six months ended June 30, 2001 compared to a net loss of $7.7 million in the six months ended July 1, 2000.
Cash used by operating activities was $9.0 million in the six months ended June 30, 2001, compared to cash provided by operating activities of $1.6 million in the prior year comparable period. This decline is primarily due to payment on drawn letters of credit and accrued interest. Prices for the products the Company sells decreased approximately 15% during the six months ended June 30, 2001. Increases in collection fees partially offset this decline.
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.
On June 30, 2001, the Company had a working capital deficit of $113.8 million and its working capital ratio was 0.26 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.
In July, 2001, the Financial Accounting Standards Board (FASB) issued Statements of Financial Accounting Standards No. 141 "Business Combinations" and No. 142 "Goodwill and Other Intangible Assets." Statement 141 requires that all business combinations initiated after June 30, 2001, be accounted for under the purchase method and Statement 142 requires that goodwill no longer be amortized to earnings, but instead be reviewed for impairment. The pronouncement of Statement No. 142 will be effective for fiscal years beginning after December 15, 2001. Also, the FASB has voted to issue Statement No. 143 "Accounting for Asset Retirement Obligations" which establishes requirements for the accounting of removal-type costs associated with asset retirements. Statement No. 143 is effective for fiscal years beginning after June 15, 2002, with earlier application encouraged. The Company is currently assessing the impact of these standards on its financial 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 expired June 30, 2001, and was extended by a four-month forbearance agreement to October 31, 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.
Market risks affecting the Company are exposures to changes in prices of the finished products the Company sells, interest rates on debt, and the price of natural gas used in the Company's plants. Predominantly all of the Company's finished products are commodities which are generally sold at prices prevailing at the time of sale. The Company uses interest rate and, through March, 2001, natural gas swaps to manage these related 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.
At June 30, 2001, the Company was party to two interest rate swap agreements. Under the terms of the swap agreements, the interest obligation on $45 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. The second swap agreement for $20 million matures on June 27, 2002, with a one-time option for the bank to cancel at June 27, 2001, which the bank has declined to exercise, bears interest at 9.17% and the Company's receive rate is based on the Base Rate. A third swap agreement for $25 million matured June 27, 2001, bore interest at 9.83% and the Company's receive rate was based on the Base Rate.
As of June 30, 2001, the Company has forward purchase agreements in place for purchases of approximately 195,800 mmbtu's of natural gas per month for July through December, 2001, with an average purchase price of $4.98/mmbtu.
DARLING INTERNATIONAL INC. AND SUBSIDIARIESFORM 10-Q FOR THE THREE MONTHS ENDED APRIL 1, 2000PART II: Other Information
Joe Colonnetta -------------- For 13,592,696 Against/Withheld 8,547 Fredric J. Klink ---------------- For 13,592,496 Against/Withheld 8,747 Dennis B. Longmire ------------------ For 13,244,981 Against/Withheld 356,262 James A. Ransweiler ------------------- For 13,592,396 Against/Withheld 8,847 Denis J. Taura -------------- For 13,592,696 Against/Withheld 8,547 Bruce Waterfall --------------- For 13,360,096 Against/Withheld 241,147
For 9,869,511 Against/Withheld 3,731,732
For 9,371,494 Against/Withheld 4,229,749
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.