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New Opportunities for Operators in the Blended Reality Era

- Ensuring Relevance in a Mobile, Quantified, and Augmented World

LONDON, Aug. 29, 2014 /PRNewswire/ -- Frost & Sullivan will share insights on the most important trends in the European mobile industry and how they will affect existing value chains and business models. We highlight important developments and what they mean for your business.

The conference will be followed by a live question-and-answer session that will take place on Tuesday, 9 September 2014 at 3 p.m. BST

Frost & Sullivan's Information and Communication Technologies experts Senior Analyst Sheridan Nye and Consultant Lawrence Lundy will highlight the critical developments, the changing value, and growth in the Europe's mobile industry. This online conference will:

  • Explore advancements in mobile devices, including health monitoring and wireless transactions
  • Identify the disruptive threats and opportunities
  • Recommend strategies on how operators can adapt and remain relevant 

"Mobile operators face multiple challenges in an intensely competitive environment where once-reliable sources of profit are fast evaporating. One way to fend off the threats is to emulate their fiercest competitors. This means looking 'inside-out' to become more agile digital businesses," explains Sheridan Nye

Mobile ecosystem participants need to prepare for the quantified and automated world. "When data is the currency of the future, the only sustainable competitive advantage is trust," emphasizes Lawrence Lundy.

To participate in this complimentary web conference, please email Edyta Grabowska Corporate Communications, at edyta.grabowska@frost.com  with your full contact details. Upon receipt of the above information, a registration link will be e-mailed to you. You may also register to receive a recorded version of the briefing at anytime by submitting the aforementioned contact details.

About Frost & Sullivan

Frost & Sullivan, the Growth Partnership Company, works in collaboration with clients to leverage visionary innovation that addresses the global challenges and related growth opportunities that will make or break today's market participants.

Our "Growth Partnership" supports clients by addressing these opportunities and incorporating two key elements driving visionary innovation: The Integrated Value Proposition and The Partnership Infrastructure.

The Integrated Value Proposition provides support to our clients throughout all phases of their journey to visionary innovation including: research, analysis, strategy, vision, innovation and implementation.

The Partnership Infrastructure is entirely unique as it constructs the foundation upon which visionary innovation becomes possible. This includes our 360 degree research, comprehensive industry coverage, career best practices as well as our global footprint of more than 40 offices.

For more than 50 years, we have been developing growth strategies for the global 1000, emerging businesses, the public sector and the investment community. Is your organization prepared for the next profound wave of industry convergence, disruptive technologies, increasing competitive intensity, Mega Trends, breakthrough best practices, changing customer dynamics and emerging economies?

Contact Us:     Start the discussion

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Contact:

Edyta Grabowska

Corporate Communications – Europe
P: +48 22 481 62 03
E: edyta.grabowska@frost.com

http://www.frost.com

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China Cord Blood Corporation Reports First Quarter Fiscal 2015 Financial Results

1Q15 Added 15,548 New Subscribers

1Q15 Revenue Up 19.1% YOY to RMB153.3 Million ($24.7 Million)

1Q15 Operating Income Up 31.1%YOY to RMB60.2 Million ($9.7 Million)

Conference Call to be Held August 29, 2014 at 8:00 a.m. ET

HONG KONG, Aug. 29, 2014 /PRNewswire/ -- China Cord Blood Corporation (NYSE: CO) ("CCBC" or the "Company"), China's leading provider of cord blood collection, laboratory testing, hematopoietic stem cell processing, and stem cell storage services, today announced its preliminary unaudited financial results for the first quarter of fiscal year 2015 ended June 30, 2014.

First Quarter of Fiscal 2015 Highlights

  • Revenues for the first quarter of fiscal 2015 increased to RMB153.3 million ($24.7 million) from RMB128.7 million in the prior year period.
  • 15,548 new subscribers were added, resulting in an accumulated subscriber base of 392,171.
  • Gross profit increased to RMB123.6 million ($19.9 million) from RMB104.2 million in the prior year period.
  • Gross margin was 80.6%, compared to 81.0% in the prior year period.
  • Operating income increased to RMB60.2 million ($9.7 million), from RMB45.9 million in the prior year period, despite an RMB2.8 million increase in depreciation expense.
  • Interest expense increased to RMB24.9 million ($4.0 million), compared to RMB14.8 million in the prior year period, due to less interest expense capitalization.
  • Net income attributable to the Company's shareholders was RMB29.7 million ($4.8 million), compared to RMB32.9 million in the prior year period.
  • Operating cash flow for the quarter was RMB124.6 million ($20.1 million).

"We began fiscal 2015 with another solid quarter, adding 15,548 new subscribers which represented a modest year-over-year increase," stated Ms. Ting Zheng, Chief Executive Officer of CCBC. "Through the implementation of sound marketing strategies that focus on service quality and premium branding, we continued to seize opportunities in the high-end segment of the market. As the majority of our new subscribers selected the one-time upfront payment option, our cash-flow generation remained robust and consistent."

Ms. Zheng further commented, "With our new facilities in Guangdong and Zhejiang largely completed, we are working through the final stages of their development to ensure they are fully operational as soon as possible. The new processing and storage capacity will effectively resolve our processing bottleneck in Zhejiang and allow us to gradually scale up our operations in this under-penetrated region. The additional capacity will also allow us to further develop and penetrate the Guangdong market, the area in which the majority of our new subscribers in the first quarter are located."

Summary - First Quarter Ended June 30, 2013 and 2014


Three Months Ended
June 30,



2013


2014

(in thousands)

RMB


RMB

US$

Revenues

128,721


153,331

24,716

Gross Profit

104,229


123,555

19,916

Operating Income

45,880


60,167

9,698

Net Income Attributable to the Company's Shareholders

32,906


29,736

4,793

 

Earnings per Ordinary Shares

– Basic[1] and Diluted (RMB/US$)

0.40


0.37

0.06






Revenue Breakdown (%)





Processing Fees

69.5%


69.2%


Storage Fees

30.5%


30.8%







New Subscribers (persons)

15,260


15,548


Total Accumulated Subscribers (persons)

327,242


392,171



[1] The terms of the convertible notes issued to KKR China Healthcare Investment Limited ("KKR") and Golden Meditech Holdings Limited ("Golden Meditech") provide each party with the ability to participate in any excess cash dividend. Therefore, the calculation of basic EPS has taken into consideration the effect of such participating rights of RMB0.04 ($0.01) for the three months ended June 30, 2014.

Summary - Selected Cash Flow Statement Items




Three Months Ended

June 30, 2014

(in thousands)




RMB

US$

Net cash provided by operating activities




124,643

20,091

Net cash used in investing activities




(18,397)

(2,965)

Net cash used in financing activities




-

-

First Quarter of Fiscal 2015 Financial Results

REVENUES. Revenues increased by 19.1% to RMB153.3 million ($24.7 million) in the first quarter of fiscal 2015 from RMB128.7 million in the prior year period. The increase in revenues resulted from solid growth in both processing and storage revenue.

Revenues generated from storage fees increased by 20.1% to RMB47.2 million ($7.6 million), from RMB39.3 million in the prior year period. The increase was mainly due to the steady growth of the Company's accumulated subscriber base, which has expanded to 392,171 as of the end of June 2014. Revenues generated from storage fees as a percentage of total revenues edged up to approximately 30.8%, from 30.5% in the prior year period.

The difference in processing fees between the first quarter of fiscal 2015 and 2014, combined with the year-over-year growth in subscriber number, contributed to the increase in revenues generated from processing fees to RMB106.1 million ($17.1 million) from RMB89.4 million in the prior year period. As a percentage of total revenues, revenues from processing fees accounted for 69.2%, compared to 69.5% in the prior year period.

GROSS PROFIT. Gross profit for the first quarter of fiscal 2015 increased by 18.5% to RMB123.6 million ($19.9 million). Gross margin decreased slightly to 80.6% from 81.0% in the prior year period primarily due to increased material costs.

OPERATING INCOME. Operating income for the first quarter of fiscal 2015 increased to RMB60.2 million ($9.7 million), resulting in an operating margin of 39.2%, which is a 3.6% improvement from 35.6% in the prior year period. Depreciation and amortization expenses for the first quarter were RMB11.4 million ($1.8 million), compared to RMB8.6 million in the prior year period.

Research and Development Expenses. Research and development expenses remained stable at RMB2.5 million ($0.4 million).

Sales and Marketing Expenses. During the quarter, the Company's sales and marketing expenses increased to RMB31.7 million ($5.1 million) from RMB28.4 million in the prior year period. However, as a percentage of revenues, sales and marketing expenses decreased to 20.7% from 22.1%. The improvement is a result of the Company's focus on resource allocation and sales efficiency while further penetrating markets across the Company's operating regions. While the new facilities in Zhejiang are expected to be operational in the near future, management continues to carefully plan and execute its marketing strategy and ensure that expenses are kept in check in that region.

General and Administrative Expenses. General and administrative expenses increased to RMB29.1 million ($4.7 million) from RMB27.4 million in the prior year period. This increase was primarily due to increased depreciation expenses and administrative overhead stemming from preparation for the full commercial launch of the Company's new facilities. However as a percentage of revenues, G&A expenses decreased to 19.0% from 21.3%, as the overall increase in revenues exceeded the rise in depreciation and administrative expenses.

OTHER INCOME AND EXPENSES

Interest Expense. Interest expense incurred in the three months ended June 30, 2014 amounted to RMB24.9 million ($4.0 million), which primarily relates to the Company's outstanding convertible notes. For the prior year period, interest expense was RMB14.8 million due to the RMB8.5 million capitalization of interest expense for the construction of the Company's new facilities in Zhejiang and Guangdong.

Other. For the first quarter of fiscal 2015, the Company recorded dividend income of RMB1.2 million ($0.2 million), which was derived from the Company's equity investment in Cordlife Group Limited ("Cordlife"). During the first quarter of fiscal 2014, the Company received dividend income of RMB8.7 million from its equity investments in both the Shandong Cord Blood Bank and Cordlife.  

NET INCOME ATTRIBUTABLE TO THE COMPANY'S SHAREHOLDERS. Profit before tax for the first quarter of fiscal 2015 decreased by 6.5% to RMB41.5 million ($6.7 million). The Company's improved operating income was offset by the increase in interest expense and decrease in dividend income. As a result, net income attributable to the Company's shareholders for the first quarter of fiscal 2015 decreased by 9.6% to RMB29.7 million ($4.8 million).

EARNINGS PER SHARE. The terms of the convertible notes issued to KKR and Golden Meditech provide each party with the ability to participate in any Excess Cash Dividend[2]. Therefore, the calculation of basic and diluted EPS has taken into consideration the effect of such participating rights of RMB0.04 ($0.01) for the first quarter of fiscal 2015. Basic and diluted earnings per ordinary share for the first quarter of fiscal 2015 were RMB0.37 ($0.06).

[2] "Excess Cash Dividend" means any cash dividend to holders of shares that, together with all other cash dividends previously paid to holders of shares in the same financial year, exceeds, on a per share basis, an amount equal to the interest that has accrued and shall accrue at 7% in such financial year divided by the number of shares into which the note is convertible at the conversion price then in effect on the relevant record date.

LIQUIDITY. As of June 30, 2014, the Company had cash and cash equivalents of RMB1,989.5 million ($320.7 million) compared to RMB1,882.9 million as of March 31, 2014. The Company had total debt of RMB848.0 million ($136.7 million) as of June 30, 2014. Operating cash inflow for the first quarter of fiscal 2015 amounted to RMB124.6 million ($20.1 million).

Conference Call

The Company will host a conference call at 8:00 a.m. ET on Friday, August 29, 2014 to discuss its financial performance and give a brief overview of recent developments, followed by a question and answer session. Interested parties may access the audio webcast through the Company's IR website at http://ir.chinacordbloodcorp.com. A replay of the webcast will be accessible two hours after the presentation and available for three weeks at the same URL link above. Listeners may also access the call by dialing 1-631-514-2526 or 1-855-298-3404 for US callers or +852-5808-3202 for Hong Kong callers, access code: 1856118.

About China Cord Blood Corporation

China Cord Blood Corporation is the first and largest umbilical cord blood banking operator in China in terms of geographical coverage and the only cord blood banking operator with multiple licenses. Under current PRC government regulations, only one licensed cord blood banking operator is permitted to operate in each licensed region and only seven licenses have been authorized as of today. China Cord Blood Corporation provides cord blood collection, laboratory testing, hematopoietic stem cell processing and stem cell storage services. For more information, please visit our website at http://www.chinacordbloodcorp.com.

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. These statements relate to future events or the Company's future financial performance. The Company has attempted to identify forward-looking statements by terminology including "anticipates", "believes", "expects", "can", "continue", "could", "estimates", "intends", "may", "plans", "potential", "predict", "should" or "will" or the negative of these terms or other comparable terminology. These statements are only predictions; uncertainties and other factors may cause the Company's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. The information in this press release is not intended to project future performance of the Company. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company does not guarantee future results, levels of activity, performance or achievements. The Company expectations are as of the date this press release is issued, and the Company does not intend to update any of the forward-looking statements after the date this press release is issued to conform these statements to actual results, unless required by law.

The forward-looking statements included in this press release are subject to risks, uncertainties and assumptions about the Company's businesses and business environments. These statements reflect the Company's current views with respect to future events and are not a guarantee of future performance. Actual results of the Company's operations may differ materially from information contained in the forward-looking statements as a result of risk factors some of which include, among other things: continued compliance with government regulations regarding cord blood banking in the People's Republic of China, or PRC and any other jurisdiction in which the Company conducts its operations; changing legislation or regulatory environments (including revisions to China's One Child Policy) in the PRC and any other jurisdiction in which the Company conducts its operations; the acceptance by subscribers of the Company's different pricing and payment options and reaction to the introduction of the Company's premium-quality pricing strategy; demographic trends in the regions of the PRC in which the Company is the exclusive licensed cord blood banking operator; labor and personnel relations; the existence of a significant shareholder able to influence and direct the corporate policies of the Company; credit risks affecting the Company's revenue and profitability; changes in the healthcare industry, including those which may result in the use of stem cell therapies becoming redundant or obsolete; the Company's ability to effectively manage its growth, including implementing effective controls and procedures and attracting and retaining key management and personnel; changing interpretations of generally accepted accounting principles; the availability of capital resources, including in the form of capital markets financing opportunities, in light of industry developments affecting issuers that have pursued a "reverse merger" with an operating company based in China, as well as general economic conditions; compliance with restrictive debt covenants under our senior convertible notes; and other relevant risks detailed in the Company's filings with the Securities and Exchange Commission in the United States.

This announcement contains translations of certain Renminbi amounts into U.S. dollars at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from Renminbi to U.S. dollars as of and for the periods ending June 30, 2014 were made at the noon buying rate of RMB6.2036 to $1.00 on June 30, 2014 in the City of New York for cable transfers in Renminbi per U.S. dollar as certified for customs purposes by the Federal Reserve Bank of New York. China Cord Blood Corporation makes no representation that the Renminbi or U.S. dollar amounts referred to in this press release could have been or could be converted into U.S. dollars or Renminbi, at any particular rate or at all.

For more information, please contact:

China Cord Blood Corporation
Investor Relations Department
Tel: (+852) 3605-8180
Email: ir@chinacordbloodcorp.com

ICR, Inc.
Mr. William Zima
Tel: (+86) 10-6583-7511
U.S. Tel: (646) 405-5185
Email: William.Zima@icrinc.com

EXHIBIT 1


CHINA CORD BLOOD CORPORATION

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

As of March 31 and June 30, 2014



March 31,


June 30,


2014


2014


RMB


    RMB


  US$


(in thousands except share data)







ASSETS






Current assets






Cash and cash equivalents

1,882,901


1,989,506


320,702

Accounts receivable, less allowance for doubtful accounts

(March 31, 2014: RMB20,322; June 30, 2014: RMB22,145)

95,273


101,900


16,426

Inventories

31,583


29,008


4,677

Prepaid expenses and other receivables

37,010


27,339


4,407

Debt issuance costs

3,616


3,615


583

Deferred tax assets

7,664


7,948


1,281

Total current assets

2,058,047


2,159,316


348,076

Property, plant and equipment, net

626,632


618,553


99,709

Non-current prepayments

208,894


214,825


34,629

Non-current accounts receivable, less allowance for doubtful
accounts (March 31, 2014: RMB42,703; June 30, 2014:
RMB43,722)

225,496


220,924


35,612

Inventories

48,385


51,256


8,262

Intangible assets, net

120,549


119,394


19,246

Available-for-sale equity securities

144,247


148,711


23,972

Other investment

189,129


189,129


30,487

Debt issuance costs

7,854


6,951


1,120

Deferred tax assets

1,789


1,893


305

Total assets

3,631,022


3,730,952


601,418







LIABILITIES






Current liabilities






Bank loan

60,000


60,000


9,672

Accounts payable

10,422


14,957


2,411

Accrued expenses and other payables

102,559


68,567


11,053

Deferred revenue

196,432


198,717


32,033

Amounts due to related parties

21,453


16,820


2,711

Income tax payable

2,571


1,525


246

Deferred tax liabilities

3,900


5,200


838

Total current liabilities

397,337


365,786


58,964

Convertible notes

777,753


787,988


127,021

Non-current deferred revenue

823,921


897,363


144,652

Other non-current liabilities

164,077


177,551


28,621

Deferred tax liabilities

27,938


27,639


4,455

Total liabilities

2,191,026


2,256,327


363,713


EQUITY






Shareholders' equity of China Cord Blood Corporation






Ordinary shares






- US$0.0001 par value, 250,000,000 shares authorized, 73,140,147
shares issued and 73,003,248 shares outstanding as of March 31 and
June 30, 2014, respectively

50


50


8

Additional paid-in capital

798,221


798,221


128,671

Treasury stock, at cost (March 31 and June 30, 2014: 136,899 shares,
respectively)

 

(2,815)


 

(2,815)


 

(454)

Accumulated other comprehensive income

84,263


89,298


14,395

Retained earnings

555,323


585,059


94,309

Total equity attributable to China Cord Blood Corporation

1,435,042


1,469,813


236,929

Non-controlling interests

4,954


4,812


776

Total equity

1,439,996


1,474,625


237,705

Total liabilities and equity

3,631,022


3,730,952


601,418


EXHIBIT 2


CHINA CORD BLOOD CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the Three Months ended June 30, 2013 and 2014



Three months ended June 30,


2013


2014


RMB


RMB


US$


(in thousands except share data)







Revenues

128,721


153,331


24,716

Direct costs

(24,492)


(29,776)


(4,800)

Gross profit

104,229


123,555


19,916

Operating expenses






Research and development

(2,523)


(2,499)


(403)

Sales and marketing

(28,424)


(31,743)


(5,117)

General and administrative

(27,402)


(29,146)


(4,698)

Total operating expenses

(58,349)


(63,388)


(10,218)

Operating income

45,880


60,167


9,698

Other expense, net

Interest income

4,182


4,266


688

Interest expense

(14,758)


(24,895)


(4,013)

Exchange (loss)/gain

(124)


180


29

Dividend income

8,722


1,196


193

Others

530


617


99

Total other expense, net

(1,448)


(18,636)


(3,004)

Income before income tax

44,432


41,531


6,694

Income tax expense

(11,373)


(11,937)


(1,924)

Net income

33,059


29,594


4,770

Net income attributable to non-controlling interests

(153)


142


23

Net income attributable to China Cord Blood
  
Corporation's shareholders

32,906


29,736


4,793


Net income per share:

Attributable to ordinary shares

- Basic

0.40


0.37


0.06

- Diluted

0.40


0.37


0.06


Other comprehensive income






- Net effect of foreign currency translation, net of nil tax

6,805


529


85

- Net unrealized gain in available-for-sale equity
securities, net of nil tax

24,338


4,506


726

Comprehensive income

64,202


34,629


5,581







Comprehensive income attributable to non-controlling
interests

(153)


142


23

Comprehensive income attributable to China Cord
Blood Corporation's shareholders

64,049


34,771


5,604

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AMRI CEO to Present at the Morgan Stanley Global Healthcare Conference

ALBANY, N.Y., Aug. 26, 2014 /PRNewswire/ -- Albany Molecular Research Inc. (NASDAQ: AMRI) announced today that William S. Marth, President and Chief Executive Officer at AMRI, will present at the Morgan Stanley Global Healthcare Conference o...

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China Cord Blood Corporation to Report First Quarter of Fiscal 2015 Financial Results

Earnings Call Scheduled for 8:00 a.m. ET on August 29, 2014

HONG KONG, Aug. 21, 2014 /PRNewswire/ -- China Cord Blood Corporation (NYSE: CO) (the "Company") today announced its plan to release financial results for the first quarter of fiscal year 2015 on Thursday, August 28, 2014, after market close in the US. 

The Company will host a conference call at 8:00 a.m. ET on Friday, August 29, 2014 to discuss its financial performance and give a brief overview of the Company's recent developments, followed by a question and answer session.  Interested parties may access the audio webcast through the Company's IR website at http://ir.chinacordbloodcorp.com.  A replay of the webcast will be accessible two hours after the conference call and available for three weeks at the same URL link above.  Listeners may also access the call by dialing 1-631-514-2526 or 1-855-298-3404 for US callers or +852-5808-3202 for Hong Kong callers, access code: 1856118. 

Please dial in ten minutes prior to the conference call to ensure proper connection, and be prepared to provide your name and company name to the operator.

Supplemental financial information referenced in the conference call and the first quarter of fiscal 2015 earnings press release will be available at http://www.chinacordbloodcorp.com, in the section titled Investor Center/Press Release, after 4:00 p.m. ET on Thursday, August 28, 2014 and in the Company's Report on Form 6-K for the month of August 2014 available on the Securities and Exchange Commission's website at www.sec.gov.  

About China Cord Blood Corporation

China Cord Blood Corporation is the first and largest umbilical cord blood banking operator in China in terms of geographical coverage and the only cord blood banking operator with multiple licenses.  Under current PRC government regulations, only one licensed cord blood banking operator is permitted to operate in each licensed region and only seven licenses have been authorized as of today.  China Cord Blood Corporation provides cord blood collection, laboratory testing, hematopoietic stem cell processing and stem cell storage services.  For more information, please visit the Company's website at http://www.chinacordbloodcorp.com.  

For more information, please contact:

China Cord Blood Corporation
Investor Relations Department
Tel: (+852) 3605-8180
Email: ir@chinacordbloodcorp.com   

ICR, Inc.
Mr. William Zima
Tel: (+86) 10-6583-7511
U.S. Tel: (646) 405-5185
Email: william.zima@icrinc.com

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NSA Uses Private Sector Data Collection for Public Sector Purposes: Impacts on Big Data and Commerce

-- Frost & Sullivan finds "Trolling" communication highways in the interest of information threatens personal privacy

MOUNTAIN VIEW, Calif., Aug. 8, 2014 /PRNewswire/ -- The National Security Agency (NSA) now has access to virtually all online and mobile communications, as well as most credit card transactions, conducted in or through the U.S. The NSA is also tapping into the most popular smartphone applications, including Angry Birds, Google Maps, and Twitter. However, the NSA is far from the only entity treading on personal privacy to achieve its objectives; the private sector is teeming with examples of companies obtaining personal user data through questionable means and deploying it in even more questionable ways.

Frost & Sullivan's new analysis, Stratecast Confidential: The Impact of the NSA on the Big Data Market – and Global Communications, finds that the NSA obtains information related to 99 percent of the calls placed within or outside the U.S. This is because even when calls originate with another operator, they are carried, at least in part, over equipment owned by the U.S.-based carriers whose data the NSA obtains. The research goes on to analyze the issues and impacts resulting from the actions of the NSA, as well as commercial and research entities, both on the populace at large and particularly on the Big Data market.

For complimentary access to more information on this research, please visit: http://bit.ly/V4qSQK

"Since electronic communications are the lifeblood of commercial activities, the fact that the NSA is collecting data from companies in the private sector may begin to have a chilling effect on the U.S. economy," said the report's author, Jeff Cotrupe, Industry Director, Big Data & Analytics, Stratecast | Frost & Sullivan. "Also, by figuratively placing all relevant communications in the U.S. on a dashboard for at-a-glance monitoring, the NSA is creating a scenario where an outside entity that gained control of NSA systems could conceivably and swiftly do a great deal of damage."

Stratecast's research, however, finds that all is not lost, as pending legislation and research advancements from several places, including Harvard's Center for Research on Computation & Society, provide definitional, political, and ethical answers for a growing controversy that is no longer just technological.

"Initiatives in the private sector and academia may preserve personal privacy," noted Cotrupe. "If successful, this could persuade data hunter-gatherers across law enforcement, public policy, and private commerce to use applied technology to support things like a healthier population--while ensuring things like the U.S. Constitution are still breathing, too."

Stratecast Confidential: The Impact of the NSA on the Big Data Market – and Global Communications is available as part of Stratecast's (http://stratecast.frost.com) Big Data and Analytics Growth Partnership Service program. All research included in subscriptions evaluates market opportunities and industry trends following extensive interviews with market participants.

* Want to Learn More? - Sign-up for the Live Webinar*

On Tuesday, August 12, 2014 at 1:00 p.m. ET, Stratecast | Frost & Sullivan will host a complimentary live webinar discussing the impact and issues arising from NSA involvement on the Big Data market.

The brief presentation will be followed by a live audience Q&A.

Click the following link for complimentary registration: http://bit.ly/1p5fnoh

About Frost & Sullivan

Frost & Sullivan, the Growth Partnership Company, works in collaboration with clients to leverage visionary innovation that addresses the global challenges and related growth opportunities that will make or break today's market participants.

Our "Growth Partnership" supports clients by addressing these opportunities and incorporating two key elements driving visionary innovation: The Integrated Value Proposition and The Partnership Infrastructure.

  • The Integrated Value Proposition provides support to our clients throughout all phases of their journey to visionary innovation including: research, analysis, strategy, vision, innovation and implementation.
  • The Partnership Infrastructure is entirely unique as it constructs the foundation upon which visionary innovation becomes possible. This includes our 360 degree research, comprehensive industry coverage, career best practices as well as our global footprint of more than 40 offices.

For more than 50 years, we have been developing growth strategies for the global 1000, emerging businesses, the public sector and the investment community. Is your organization prepared for the next profound wave of industry convergence, disruptive technologies, increasing competitive intensity, Mega Trends, breakthrough best practices, changing customer dynamics and emerging economies?

Contact Us:     Start the discussion

Join Us:           Join our community

Subscribe:       Newsletter on "the next big thing"

Register:         Gain access to visionary innovation

Contact:
Clarissa Castaneda
Corporate Communications – North America
P: 210.477.8481
F: 210.348.1003
E: clarissa.castaneda@frost.com   

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Darling Ingredients Inc. Reports Second Quarter 2014 Financial Results

- Net income of $32.8 million or $0.20 per diluted share; Pro Forma Adjusted EBITDA of $158.0 million

- Solid performance of the new global business with sharp improvement in USA on a sequential basis

- Results include $9.2 million of Non-Cash Adjustments and Acquisition-Related Costs

IRVING, Texas, Aug. 8, 2014 /PRNewswire/ -- Darling Ingredients Inc. (NYSE: DAR), a global developer and producer of sustainable natural ingredients from edible and inedible bio-nutrients, creating a wide range of ingredients and customized specialty solutions for customers in the pharmaceutical, food, pet food, feed, technical, fuel, bioenergy, and fertilizer industries, today announced financial results for the second quarter ended June 28, 2014.

Net sales for the second quarter of 2014 increased to $1.0 billion, compared with $423.6 million in the same period of 2013, attributable to newly acquired operations. Operating income in the second quarter of 2014 was $75.5 million reflecting an increase of $24.7 million or 49% as compared to income for the same period of 2013. Results include a $5.0 million increase to cost of sales related to the inventory step-up associated with required purchase accounting for the VION Acquisition and $4.2 million associated with continued acquisition and integration costs of Rothsay and the VION Acquisition.

Comments on the Second Quarter

"We posted a respectable second quarter performance, which now reflects full contributions from our newly acquired operations around the world," said Randall Stuewe, Darling Ingredients Inc. Chairman and Chief Executive Officer.

"During the second quarter, the Feed Ingredients Segment delivered a solid performance lead by North American operations. Protein and fat values remained strong around the globe. Our Bakery Feeds unit delivered a nice performance sequentially but continues to feel the pressure of eroding corn prices. Canada delivered notable earnings and Europe remained a steady contributor to operating income," continued Mr. Stuewe. "In general, our raw material volumes were steady around the globe and margins remained healthy."

"The Food Ingredients Segment continued to perform as anticipated. Rousselot, a global leader in gelatin, turned in a solid performance. Demand remains steady however prices were marginally lower in some geographies due to competition and tight raw material supplies. Our European edible fat business delivered lower earnings driven by compressed margins as a result of the increased supplies of raw materials primarily in Germany due to ongoing trade restrictions with Russia. CTH, our casings business, improved marginally over the first quarter of 2014."

"Our Fuel Ingredients Segment, anchored by Diamond Green Diesel, reported a weaker performance compared to first quarter 2014 on low RIN (Renewable Identification Number) values due to the continued uncertainty of the U.S. mandated renewable fuel volume obligation (RVO) and whether there would be an extension of the existing federal alternative fuel blenders tax credit. The DGD Joint Venture operated at name plate capacity during the second quarter of 2014 and continues to be one of the lowest cost producers of biomass based renewable diesel in the world." Mr. Stuewe added, "Our European operations within the Fuel Ingredients Segment proved to be steady contributors with Rendac and Ecoson delivering solid returns. This quarter marked the starting of operations at our new biogas facility in Son, Netherlands; built to generate green electricity and bio-phosphate fertilizer."

"With respect to the incident at our DGD facility in Norco, LA on August 3rd, no one was injured and the firefighting teams and Valero emergency response teams responded rapidly. The fire was isolated and extinguished. Preliminary damage assessment is underway and we hope to have the facility operational within 60 days. Most notably, the downtime will allow us to perform additional maintenance and debottlenecking to increase name plate capacity by 10% when we start back up."

"Overall to date, we are pleased with the integration success of our new global ingredients company and look forward to bringing greater value to our customers and shareholders," concluded Mr. Stuewe.

Continued Quarter Results

Second quarter 2014 net income was $32.8 million, or $0.20 per diluted share, compared with net income of $26.4 million, or $0.22 per diluted share, in the second quarter of 2013. The Company's second quarter 2014 results include the following after tax costs:

  • $3.5 million ($0.02 per diluted share) related to a non-cash inventory step-up associated with the required purchase accounting for the VION Acquisition related to the portion of acquired inventory sold during the period; and
  • $2.6 million ($0.01 per diluted share) associated with the acquisition and integration of Rothsay and VION during the quarter.

Net income and diluted earnings per common share, adjusted to eliminate the one-time costs listed above, would have been $38.9 million and $0.24 per diluted share, respectively.

Reconciliation of Net Income to Adjusted EBITDA and Pro forma Adjusted EBITDA

Darling Ingredients Inc. reports Adjusted EBITDA results, which is a non-GAAP financial measure, as a complement to results provided in accordance with generally accepted accounting principles (GAAP). The Company believes that Adjusted EBITDA provides additional useful information to investors since certain financial covenants under the Company's Senior Secured Credit Facilities and Senior Unsecured Notes that were outstanding at June 28, 2014, are also measured based on an altered version of the Company's Adjusted EBITDA metric. As the Company uses the term, Adjusted EBITDA means:




Three Months Ended

Adjusted EBITDA


June 28,


June 29,

(U.S. dollars in thousands)

2014


2013






Net income


$ 32,757


$26,418

Depreciation and amortization

67,498


22,076

Interest expense


26,571


5,669

Income tax expense


15,503


16,335

Foreign currency gain


(11)


Other expense / (income), net

887


418

Equity in net (income)/ loss of unconsolidated subsidiaries

(2,040)


1,962

Net income attributable to noncontrolling interests

1,818



Adjusted EBITDA

$142,983


$72,878






Non-cash inventory step-up associated with VION Acquisition

4,971


Acquisition and integration-related expenses

4,165


DGD Joint Venture Adjusted EBITDA (Darling's share) (1)

5,902


(1,962)







Pro Forma Adjusted EBITDA

$158,021


$70,916


(1) Derived from the unaudited financial statements of the DGD Joint Venture.

For the second quarter of 2014, the Company generated Adjusted EBITDA of $143.0 million, as compared to $72.9 million in the same period a year ago. The increase was primarily attributable to the inclusion of the newly acquired businesses. On a Pro Forma Adjusted EBITDA basis, the Company would have generated $158.0 million in the second quarter 2014, as compared to a Pro Forma Adjusted EBITDA of $70.9 million in the year ago period. The increase in Pro Forma Adjusted EBITDA is attributable to the inclusion of the newly acquired businesses.

Second Quarter Segment Performance

Feed Ingredients

Three Months Ended

($ thousands)

June 28, 2014

June 29, 2013




Net Sales

$ 599,884

$ 421,366

Operating Income

$ 74,506

$ 58,397

  • Feed Ingredients operating income increased by $16.1 million to $74.5 million compared to the second quarter of 2013. Results reflect $1.5 million related to the non-cash inventory step-up associated with the required purchase accounting for the VION Acquisition. Adjusted operating income for the Feed Ingredient Segment without the inventory step-up costs would have been $76.0 million or $17.6 million higher than the second quarter 2013.
  • Higher earnings were predominantly related to earnings attributable to newly acquired operations. The U.S. operations contributed $2.7 million less in Feed Ingredients operating income relative to the second quarter of 2013. This reduction was principally related to lower earnings in the bakery feeds division and higher selling, general and administrative costs, depreciation and amortization expenses. Canada operations performed better than expected, while operations in Europe and China generally performed as expected.

Food Ingredients

Three Months Ended

($ thousands)

June 28, 2014

June 29, 2013




Net Sales

$ 329,541

-

Operating Income

$ 11,313

-

  • Food Ingredients operating income was $11.3 million for the second quarter of 2014 compared to no prior reporting segment or activity in the Food Ingredients business lines in the second quarter of 2013. Results reflect $3.4 million related to the non-cash inventory step-up associated with the purchase accounting for the VION Acquisition. Adjusted operating income for the Food Ingredients Segment without the inventory step-up costs would have been $14.7 million. On an adjusted sequential quarter basis, the Food Ingredients operating income decreased by $5.1 million from $19.8 million in the first quarter of 2014. This reduction from first quarter was principally related to the European edible fats business which was adversely impacted by the closure of the Russian trade border resulting in higher raw material supply and increased production that put pressure on selling prices and resulted in lower margins for the Company's finished products.
  • Global demand for gelatin was generally steady with the exception of China, which saw a slight reduction in demand. The Company's casing business improved marginally over the first quarter 2014 as a result of increased sales volume of sheep casings.

Fuel Ingredients

Three Months Ended

($ thousands)

June 28, 2014

June 29, 2013




Net Sales

$ 77,534

$ 2,227

Operating Income

$ 5,439

$ 422

  • Fuel Ingredients operating income increased by $5.0 million to $5.4 million, exclusive of the DGD Joint Venture, compared to second quarter 2013. Including the DGD Joint Venture, the Fuel Ingredients Segment income was $6.9 million in second quarter 2014. On an adjusted sequential quarter basis, the Fuel Ingredients operating income inclusive of the DGD Joint Venture decreased by $0.3 million, which was principally related to a reduction in the equity in net income inclusion from the DGD Joint Venture, which was substantially off-set by improved earnings in the European green energy and bio-phosphate operations.
  • Results for North America continue to be negatively impacted by lower RIN values, resulting from an uncertain regulatory environment with respect to the U.S. mandated RVO requirements for 2014 and uncertainty related to the possible extension of the blenders tax credit. For the quarter, the DGD Joint Venture operated at name plate capacity.

Subsequent Event

On August 3, 2014, a fire occurred at the Diamond Green Diesel facility in Norco, LA. The fire was isolated and extinguished and no one was injured. The preliminary assessment of the incident appears to indicate that no major damage occurred to any of the vessels. Damage appears to be relatively isolated and will require some piping, mechanical and electrical replacements. The cause of the fire remains unknown at this time. The facility is currently shut down and while it is early in the preliminary assessment phase, we believe that the facility may be operational within 60 days. The DGD Joint Venture is in the process of reviewing its insurance policies, including property damage and business interruption, for available coverage under such policies. Any claims made under such policies will be subject to the terms and conditions of the underlying policy, including applicable deductibles and waiting periods.

Additionally, a decision has been made to move forward with a limited turnaround during this downtime to replace some catalyst in the Eco-finer unit along with several debottlenecking and metallurgical upgrades that should result in approximately a 10% name plate capacity increase for winter production.

Six Months Ended June 28, 2014 Performance

For the six months ended June 28, 2014, the Company reported net sales of $1.9 billion, as compared to $869.0 million for the 2013 comparable period. The $1.1 billion increase in sales resulted primarily to the inclusion of the newly acquired businesses.

For the six months ended June 28, 2014, the Company reported a net loss of ($20.0) million, or ($0.12) per diluted share, as compared to net income of $58.8 million, or $0.50 per diluted share, for the 2013 comparable period. The results for the six months period include the following after-tax costs:

  • $34.8 million ($0.21 per diluted share) related to a non-cash inventory step-up associated with the required purchase accounting for the VION Acquisition related to the portion of acquired inventory sold during the period;
  • $20.2 million ($0.12 per diluted share) related to the redemption premium and write-off of deferred loan cost associated with the retirement of the Company's 8.5% Senior Notes on January 7, 2014;
  • $14.6 million ($0.09 per diluted share) associated with the acquisition and integration of Rothsay and VION Ingredients during the period;
  • $8.0 million ($0.05 per diluted share) related to certain euro forward contracts entered into to hedge against foreign exchange risks related to the closing of the VION Acquisition: and
  • $5.2 million ($0.03 per diluted share) associated with discrete tax items principally associated with the VION Acquisition.

Net income and diluted earnings per common share, adjusted to eliminate the one-time costs listed above, would have been $63.4 million and $0.38 per diluted share, respectively. As compared to the six months ended June 29, 2013, this would have resulted in a $4.6 million increase in net income and a 24% decline in diluted earnings per common share.

Operating income for the six months ended June 28, 2014 was $74.9 million, which reflects a decline of $34.5 million or 32% as compared to the six months ended June 29, 2013. The results for the six months include an increase to cost of sales of $49.8 million related to the inventory step-up associated with the required purchase accounting for the VION Acquisition. Without these costs, operating income would have been $124.7 million or 14% higher than 2013. Including the Company's share of net income of unconsolidated subsidiaries, primarily the DGD Joint Venture, operating income for the six months ended June 28, 2014, would have been $131.8 million or $22.4 million (20.5%) higher than 2013. The DGD Joint Venture has not yet distributed any earnings to its venture partners.

Reconciliation of Net Income to Adjusted EBITDA and Pro forma Adjusted EBITDA – Six Months Ended



Six Months Ended

Adjusted EBITDA


June 28,


June 29,

(U.S. dollars in thousands)

2014


2013






Net income/ (loss) allocable to Darling

$ (20,046)


$ 58,823

Depreciation and amortization

133,167


43,943

Interest expense


85,428


11,294

Income tax expense/ (benefit)

(2,787)


36,753

Foreign currency loss


13,803


Other expense/ (income), net

2,025


(649)

Equity in net (income)/ loss of unconsolidated subsidiaries

(7,117)


3,157

Net loss/ (income) attributable to noncontrolling interests

3,615



Adjusted EBITDA

$208,088


$153,321






Non-cash inventory step-up associated with VION Acquisition

49,803


Acquisition and integration-related expenses

20,113


DGD Joint Venture Adjusted EBITDA (Darling's share) (1)

14,975


(3,157)

Darling Ingredients International - 13th week (2)

4,100








Pro Forma Adjusted EBITDA

$297,079


$150,164


(1)

Derived from the unaudited financial statements of the DGD Joint Venture.

(2)

January 7, 2014 closed on VION Ingredients, thus the 13th week would be revenue adjusted for January 1, 2014 through January 7, 2014.

For the six months ended June 28, 2014, the Company generated Adjusted EBITDA of $208.1 million, as compared to $153.3 million in the same period a year ago. The increase was primarily attributable to the newly acquired businesses. On a Pro forma Adjusted EBITDA basis, the Company would have generated $297.1 million in the second quarter 2014, as compared to a Pro forma Adjusted EBITDA of $150.2 million in the year ago period. The increase in Pro forma Adjusted EBITDA is attributable to the inclusion of the newly acquired businesses.

About Darling

Darling Ingredients Inc. is the world's largest publicly-traded developer and producer of sustainable natural ingredients from edible and inedible bio-nutrients, creating a wide range of ingredients and customized specialty solutions for customers in the pharmaceutical, food, pet food, feed, technical, fuel, bioenergy and fertilizer industries. With operations on five continents, the Company collects and transforms all aspects of animal by-product streams into useable and specialty ingredients, such as gelatin, edible fats, feed-grade fats, animal proteins and meals, plasma, pet food ingredients, organic fertilizers, yellow grease, fuel feedstocks, green energy, natural casings and hides. The Company also recovers and converts used cooking oil and commercial bakery residuals into valuable feed and fuel ingredients. In addition, the Company provides grease trap services to food service establishments, environmental services to food processors and sells restaurant cooking oil delivery and collection equipment. For additional information, visit the Company's website at http://ir.darlingii.com.

Darling Ingredients Inc. will host a conference call to discuss the Company's second quarter 2014 financial results at 8:30 am Eastern Time (7:30 am Central Time) on Friday, August 8, 2014. To listen to the conference call, participants calling from within North America should dial 877-270-2148; international participants should dial 412-902-6510. Please refer to access code 10050348. Please call approximately ten minutes before the start of the call to ensure that you are connected.

The call will also be available as a live audio webcast that can be accessed on the Company website at http://ir.darlingii.com beginning two hours after its completion, a replay of the call can be accessed through August 14, 2014, by dialing 877-344-7529 domestically, or +1-412-317-0088 if outside North America. The access code for the replay is 10050348. The conference call will also be archived on the Company's website.

Cautionary Statements Regarding Forward-Looking Information:

{This media release contains "forward-looking" statements regarding the business operations and prospects of Darling Ingredients Inc. and industry factors affecting it. These statements are identified by words such as "believe," "anticipate," "expect," "estimate," "intend," "could," "may," "will," "should," "planned," "potential," "continue," "momentum," and other words referring to events that may occur in the future. These statements reflect Darling Ingredient's current view of future events and are based on its assessment of, and are subject to, a variety of risks and uncertainties beyond its control, each of which could cause actual results to differ materially from those indicated in the forward-looking statements. These factors include, among others, existing and unknown future limitations on the ability of the Company's direct and indirect subsidiaries to upstream their profits to the Company for payments on the Company's indebtedness or other purposes; general performance of the U.S. and global economies; disturbances in world financial, credit, commodities and stock markets; any decline in consumer confidence and discretionary spending, including the inability of consumers and companies to obtain credit due to lack of liquidity in the financial markets; volatile prices for natural gas and diesel fuel; climate conditions; unanticipated costs or operating problems related to the acquisition and integration of Rothsay and Darling Ingredients International (including transactional costs and integration of the new enterprise resource planning (ERP) system); global demands for bio-fuels and grain and oilseed commodities, which have exhibited volatility, and can impact the cost of feed for cattle, hogs and poultry, thus affecting available rendering feedstock and selling prices for the Company's products; reductions in raw material volumes available to the Company due to weak margins in the meat production industry as a result of higher feed costs, reduced consumer demand or other factors, reduced volume from food service establishments, reduced demand for animal feed, or otherwise; reduced finished product prices; changes to worldwide government policies relating to renewable fuels and greenhouse gas emissions that adversely affect programs like the National Renewable Fuel Standard Program (RFS2) and tax credits for biofuels both in the U.S. and abroad; possible product recall resulting from developments relating to the discovery of unauthorized adulterations to food or food additives; the occurrence of Bird Flu including, but not limited to H1N1 flu, bovine spongiform encephalopathy (or "BSE"), porcine epidemic diarrhea ("PED") or other diseases associated with animal origin in the U.S. or elsewhere; unanticipated costs and/or reductions in raw material volumes related to the Company's compliance with the existing or unforeseen new U.S. or foreign regulations (including, without limitation, China) affecting the industries in which the Company operates or its value added products (including new or modified animal feed, Bird Flu, PED or BSE or similar or unanticipated regulations); risks associated with the renewable diesel plant in Norco, Louisiana owned and operated by a joint venture between Darling Ingredients and Valero Energy Corporation, including possible unanticipated operating disruptions; risks relating to possible third party claims of intellectual property infringement; increased contributions to the Company's pension and benefit plans, including multiemployer and employer-sponsored defined benefit pension plans as required by legislation, regulation or other applicable U.S. or foreign law or resulting from a U.S. mass withdrawal event; bad debt write-offs; loss of or failure to obtain necessary permits and registrations; continued or escalated conflict in the Middle East, North Korea, Ukraine or elsewhere; and/or unfavorable export or import markets. Other risks and uncertainties regarding Darling Ingredients Inc., its business and the industries in which it operates are referenced from time to time in the Company's filings with the Securities and Exchange Commission. Darling Ingredients Inc. is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise.}

 

Darling Ingredients Inc.

Consolidated Operating Results

For the Periods Ended June 28, 2014 and June 29, 2013

(Dollars in thousands, except per share amounts)

(unaudited)








Three Months Ended


Six Months Ended







$ Change






$ Change



June 28,


June 29,


Favorable


June 28,


June 29,


Favorable



2014


2013


(Unfavorable)


2014


2013


(Unfavorable)

Net sales

$1,006,959


$423,593


$ 583,366


$1,938,394


$869,015


$ 1,069,379

Costs and expenses:













Cost of sales and

operating expenses

$ 747,966


$309,922


(438,044)


$1,492,945


$632,608


(860,337)


Selling, general and

administrative expenses

111,845


40,793


(71,052)


217,248


83,086


(134,162)


Depreciation and amortization

67,498


22,076


(45,422)


133,167


43,943


(89,224)


Acquisition and Integration costs

4,165


-


(4,165)


20,113


-


(20,113)

Total costs and expenses

931,474


372,791


(558,683)


1,863,473


759,637


(1,103,836)

Operating income

75,485


50,802


24,683


74,921


109,378


(34,457)

Other expense:













Interest expense

(26,571)


(5,669)


(20,902)


(85,428)


(11,294)


(74,134)


Foreign currency gain/(loss)

11


-


11


(13,803)


-


(13,803)


Other income/(expense), net

(887)


(418)


(469)


(2,025)


649


(2,674)

Total other expense

(27,447)


(6,087)


(21,360)


(101,256)


(10,645)


(90,611)














Equity in net income/(loss) of unconsolidated subsidiaries

2,040


(1,962)


4,002


7,117


(3,157)


10,274

Income/(loss) before income taxes

50,078


42,753


7,325


(19,218)


95,576


(114,794)

Income taxes expense/(benefit)

15,503


16,335


832


(2,787)


36,753


39,540

Net income/(loss)

$ 34,575


$ 26,418


$ 8,157


$ (16,431)


$ 58,823


$ (75,254)

Net (income)/loss attributable to noncontrolling interests

$ (1,818)


-


$ (1,818)


$ (3,615)


-


$ (3,615)

Net income/(loss) attributable to Darling

$ 32,757


$ 26,418


$ 6,339


$ (20,046)


$ 58,823


$ (78,869)














Basic income/(loss) per share:

$ 0.20


$ 0.22


$ (0.02)


$ (0.12)


$ 0.50


$ (0.62)

Diluted income/(loss) per share:

$ 0.20


$ 0.22


$ (0.02)


$ (0.12)


$ 0.50


$ (0.62)

 



Darling Ingredients Inc.

Condensed Consolidated Balance Sheets - Assets

For the Periods Ended June 28, 2014 and December 28, 2013

(Dollars in thousands)








June 28,


December 28,



2014


2013

Current assets:

(unaudited)




Cash and cash equivalents

$ 143,785


$ 870,857


Restricted cash

350


354


Accounts Receivable, net

467,392


112,844


Inventories

431,529


65,133


Prepaid expenses

26,296


14,223


Income taxes refundable

26,448


14,512


Other current assets

33,022


32,290


Deferred income taxes

18,955


17,289


Total current assets

1,147,777


1,127,502






Property, plant and equipment





less accumulated depreciation, net

1,697,058


666,573






Intangible assets





less accumulated amortization, net

1,037,479


588,664






Other assets:





Goodwill

1,442,299


701,637


Investment in unconsolidated subsidiaries

147,662


115,114


Other

76,077


44,643


Deferred income taxes

6,443



Total assets

$5,554,795


$3,244,133

 

Darling Ingredients Inc.

Condensed Consolidated Balance Sheets

Liabilities and Stockholders' Equity

For the Periods Ended June 28, 2014 and December 28, 2013

(Dollars in thousands)




June 28,


December 28,



2014


2013

Current liabilities:

(unaudited)




Current portion of long-term debt

$ 68,616


$ 19,888


Accounts payable, principally trade

313,171


43,742


Income taxes payable

7,830



Accrued expenses

167,552


113,174


Total current liabilities

557,169


176,804






Long-term debt, net of current portion

2,302,655


866,947

Other non-current liabilities

98,241


40,671

Deferred income taxes

472,863


138,759


Total liabilities

3,430,928


1,223,181






Commitments and contingencies




Total Darling's Stockholders' equity:

2,025,380


2,020,952


Noncontrolling interests

98,487



Total stockholders' equity

$2,123,867


$2,020,952



$5,554,795


$3,244,133

 







For More Information, contact:




Melissa A. Gaither, Director of Investor Relations

Email: mgaither@darlingii.com

251 O'Connor Ridge Blvd., Suite 300

Phone: +1-972-717-0300

Irving, Texas 75038


 

Read More »

SMIC Reports 2014 Second Quarter Results

SHANGHAI, Aug. 6, 2014 /PRNewswire/ -- Semiconductor Manufacturing International Corporation (NYSE: SMI; SEHK: 981) ("SMIC" or the "Company"), one of the leading semiconductor foundries in the world, today announced its consolidated results of operations for the three months ended June 30, 2014.

Second Quarter 2014 Highlights

  • Revenue was $511.3 million in 2Q14, an increase of 13.4% quarter over quarter.
  • Non-GAAP revenue excluding wafer shipments from Wuhan Xinxin reached a record high of $511.3 million in 2Q14, an increase of 1.9% year over year compared to $501.8 million in 2Q13.
  • Gross margin was 28.0% in 2Q14, compared to 21.3% in 1Q14.
  • Profit for the period attributable to SMIC was $56.8 million in 2Q14, compared to $20.3 million in 1Q14.
  • China-region revenue grew to 44.4% of overall revenue becoming the largest contributor to revenue regionally in 2Q14.

Third Quarter 2014 Guidance:

The following statements are forward looking statements which are based on current expectations and which involve risks and uncertainties, some of which are set forth under "Safe Harbor Statements" below.

  • Revenue is expected to increase 1% to 5% quarter over quarter.
  • Gross margin is expected to range from 24% to 26%.

Non-GAAP operating expenses excluding the effect of employee bonus accrual, government funding and gain from the disposal of living quarters are expected to range from $96 million to $101 million.

Dr. Tzu-Yin Chiu, SMIC's Chief Executive Officer and Executive Director, commented, "Excluding Wuhan's contribution, SMIC achieved record high revenue in the second quarter, which is our ninth consecutive profitable quarter. We reached a gross margin of 28%--our highest since 2005.

Compared to Q1 2014, utilization was up more than 10 percentage points; while revenue increased 13.4% sequentially. When comparing Q2 2014 to Q1 2014, gross margin increased 6.7 percentage points, profit from operations nearly doubled, and net profit tripled. We continue to emphasize the priority of sustained profitability and carefully planned growth. Overall, we are optimistic about 2015 as we prepare our capacity and technology for many new and exciting opportunities.

One of our growth drivers for 2015 will be 28nm. We are happy to work with our long-time customer as we ramp up this new technology. We are on track to have production ramp up in 2015. We are also working with other customers who are targeting to capture the LTE handset IC market in China, AP for tablets, and RF applications on 28nm.

Our other growth driver for this year and more so in 2015 is our differentiated product offering. SMIC continues to experience high demand for 8-inch production capacity for PMIC, CIS, e-NVM, and sensors. Our effort in 12-inch specialty process development has recently yielded the industry's leading 55nm embedded NVM solution. Our customer has entered into high volume production based on this technology.

The strong IC demand in China is continuing to drive our growth. For the first time in SMIC's history, our China revenue has exceeded all other regions in the second quarter. Revenue from China now accounts for more than 44% of our total revenue.

The second quarter recovery ended with strong financials and profitability for SMIC. We are optimistic about 2015 as we prepare for growth on 8-inch and 28nm. We continue to have confidence in our strategy to capture growth opportunities in China."

Conference Call / Webcast Announcement

Date: August 7, 2014



Time: 8:30 a.m. Shanghai time






Dial-in numbers and pass code:






China

400-620-8038

(Pass code: SMIC)

Hong Kong

852-2475-0994

(Pass code: SMIC)

Taiwan

886-2-2650-7825

(Pass code: SMIC)

United States, New York

1-845-675-0437

(Pass code: SMIC)

The call will be webcast live with audio at http://www.smics.com/eng/investors/ir_presentations.php or http://www.media-server.com/m/p/89si7vqg.

An archived version of the webcast, along with an electronic copy of this news release will be available on the SMIC website for a period of 12 months following the webcast.

About SMIC

Semiconductor Manufacturing International Corporation ("SMIC"; NYSE: SMI; SEHK: 981) is one of the leading semiconductor foundries in the world and the largest and most advanced foundry in mainland China. SMIC provides integrated circuit (IC) foundry and technology services at 0.35-micron to 28-nanometer. Headquartered in Shanghai, China, SMIC has a 300mm wafer fabrication facility (fab) and a 200mm mega-fab in Shanghai; a 300mm mega-fab in Beijing with a joint-venture 300mm fab that is currently under construction; a 200mm fab in Tianjin; and a 200mm fab project under development in Shenzhen. SMIC also has marketing and customer service offices in the U.S., Europe, Japan, and Taiwan, and a representative office in Hong Kong.

For more information, please visit www.smics.com .

Safe Harbor Statements

(Under the Private Securities Litigation Reform Act of 1995)

This press release contains, in addition to historical information, "forward-looking statements" within the meaning of the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements, including statements under "Third Quarter 2014 Guidance" and the statements regarding our optimism about our 2015 opportunities, our expected 2015 growth driver of 28nm technology, our expectation to have production ramp up in 2015, our expectation of differentiated products offering being another growth driver for this year and more so in 2015, our anticipation to experience high demand for 8-inch production capacity for PMIC, CIS, e-NVM, and sensors and our confidence in our strategy to capture growth opportunities in China, as well as the statements regarding future 2014 capital expenditures are based on SMIC's current assumptions, expectations and projections about future events. SMIC uses words like "believe," "anticipate," "intend," "estimate," "expect," "project," "target" and similar expressions to identify forward-looking statements, although not all forward-looking statements contain these words. These forward-looking statements involve significant risks, both known and unknown, uncertainties and other factors that may cause SMIC's actual performance, financial condition or results of operations to be materially different from those suggested by the forward-looking statements including, among others, risks associated with the global economic slowdown, orders or judgments from pending litigation and financial stability in end markets.

Investors should consider the information contained in SMIC's filings with the U.S. Securities and Exchange Commission (SEC), including its annual report on 20-F filed with the SEC on April 14, 2014, especially the consolidated financial statements, and such other documents that SMIC may file with the SEC or The Hong Kong Stock Exchange Limited ("SEHK") from time to time, including current reports on Form 6-K. Other unknown or unpredictable factors also could have material adverse effects on SMIC's future results, performance or achievements. In light of these risks, uncertainties, assumptions and factors, the forward-looking events discussed in this press release may not occur. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date stated, or if no date is stated, as of the date of this press release. Except as may be required by law, SMIC undertakes no obligation and does not intend to update any forward-looking statement, whether as a result of new information, future events or otherwise.

About Non-Generally Accepted Accounting Principles ("Non-GAAP") Financial Measures

To supplement SMIC's consolidated financial results presented in accordance with IFRS, SMIC uses in this press release measures of operating results that are adjusted to exclude wafer shipments from Wuhan Xinxin Semiconductor Manufacturing Corporation ("Wuhan Xinxin"), which SMIC began gradually phasing out in 3Q13. There were no wafer shipments from Wuhan Xinxin from 1Q14 onwards. This earnings release includes non-GAAP revenue, non-GAAP cost of sales, non-GAAP gross margin and non-GAAP operating expenses, which consists of total operating expenses as adjusted to exclude the effect ofemployee bonus accrual, government funding and gain from the disposal of living quarters. It also includes third quarter 2014 guidance for non-GAAP operating expenses. The presentation of non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with IFRS.

SMIC believes that use of these non-GAAP financial measures facilitates investors' and management's comparisons to SMIC's historical performance. The Company's management regularly uses these non-GAAP financial measures to understand, manage and evaluate the Company's business and make financial and operational decisions.

The accompanying table has more information and reconciliations of each non-GAAP financial measure to its most directly comparable GAAP financial measure. A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis.

For the full version of SMIC's second quarter financial results, please see:
http://photos.prnasia.com/prnk/20140806/0861405533-a

Contact:

Investor Relations

+86-21-3861-0000 ext. 12804

ir@smics.com

 

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