AG真人官方

BIODIESEL BLENDERS' TAX CREDIT

The biodiesel Blenders’ Tax Credit (“BTC”) provided a one dollar per gallon tax credit to the blender of biomass-based diesel with at least 0.1% petroleum-based diesel fuel. The Company recorded this credit as a reduction in the cost of goods sold as applicable sales were made. The BTC expired December 31, 2024.

SMALL AGRI-BIODIESEL PRODUCER TAX CREDIT

The Small Agri-Biodiesel Producer Tax Credit also expired  December 31, 2024. This tax credit was available to producers with production capacity not in excess of 60 million gallons and provided a $0.10 per gallon income tax credit on the first 15 million gallons of agri-biodiesel sold. The Company was eligible for this credit and recognized the credit in the same accounting period as the benefit from the BTC. The benefit of this credit was recognized as a component of income tax provision.

CLEAN FUEL PRODUCTION TAX CREDIT

The Inflation Reduction Act of 2022 (“IRA”) created the clean fuel production credit (“CFPC”) in August 2022 for qualifying transportation fuel produced and sold in the years 2025 through 2027.  The CFPC is a nonrefundable and transferable income tax credit structured on a sliding scale so that producers become eligible for larger credits as the greenhouse gas (“GHG”) emissions of the fuels they produce approach zero. For producers meeting the prevailing wage and registered apprenticeship requirements, the maximum credit is $1.00 per gallon of non-aviation fuel. For producers not meeting the prevailing wage and registered apprenticeship requirements, the maximum credit is $0.20 per non-aviation fuel gallon. The Company is a registered producer that meets the wage and apprenticeship requirements to receive the credit applicable to the level of GHG emissions for the fuel the Company produces. Due to the lack of a specific generally accepted accounting principle for the CFPC—a transferable, nonrefundable credit—the company has elected to follow the principles of International Accounting Standard 20 (IAS 20), "Accounting for Government Grants and Disclosure of Government Assistance." Accordingly, the credit has been recognized as a reduction in the cost of goods sold, net of estimated selling expenses, which management believes estimates fair value when generated.  In the three and six months ended June 30, 2025, the CFPC was $2.5 million.

See Note 13 Subsequent Events, regarding additional information related to the Small Agri-Biodiesel Tax Credit and the CFPC.

The majority of revenue is from short-term contracts with revenue recognized when a single performance obligation to transfer product under the terms of a contract with a customer is satisfied.

Certain of the Company's custom chemical contracts within the chemical segment contain a material right as defined by ASC Topic 606, Revenue from Contracts with Customers, from the provision of a customer option to purchase future goods or services at a discounted price as a result of upfront payments provided by customers. Each contract also has a performance obligation to transfer products with 30-day payment terms. The Company recognizes revenue when the customer takes control of the inventory, either upon shipment or when the material is made available for pick up. If the customer is deemed to take control of the inventory prior to pick up, the Company recognizes the revenue as a bill-and-hold transaction in accordance with ASC Topic 606. The Company applies the renewal option approach in allocating the transaction price to these material rights and transfer of product. As a basis for allocating the transaction price to the material right and transfer of product, the Company estimates the expected life of the contract, the expected contractual volumes to be sold over that life, and the most likely expected sales price. Each estimate is updated quarterly on a prospective basis.

The Company leases warehouse space under a short-term lease agreement with a term of twelve months. Lease revenue recognized under this agreement was $170 and $170 for the three months and $340 and $329 for the six months ended June 30, 2025 and 2024, respectively.

Contract Assets and Liabilities:

Contract assets consist of unbilled amounts typically resulting from revenue recognized through bill-and-hold arrangements. The contract assets at  June 30, 2025 and  December 31, 2024 consist of unbilled revenue from one customer and unbilled capital reimbursement from another customer and are recorded as accounts receivable in the consolidated balance sheets. Contract liabilities consist of advance payment arrangements related to material rights recorded as deferred revenue in the consolidated balance sheets. Increases to contract liabilities from cash received or due for a performance obligation of chemical segment plant expansions were $125 and $0 for the three months and $125 and $0 for the six months ended June 30, 2025 and 2024, respectively. Contract liabilities are reduced as the Company transfers product to the customer under the renewal option approach. Revenue recognized in the chemical segment from the contract liability reductions was $80 and $797 for the three months and $110 and $1,603 for the six months ended June 30, 2025 and 2024, respectively. These contract asset and liability balances are reported on the consolidated balance sheets on a contract-by-contract basis at the end of each reporting period.

The following table provides the balance of receivables, contract assets, and contract liabilities from contracts with customers.

*Exclusive of the BTC of $0, $6,683, and $11,381, respectively, and net of allowances for expected credit losses of $44, $29, and $55, respectively, as of the dates noted.

Transaction price allocated to the remaining performance obligations:

At June 30, 2025, approximately $4,005 of revenue is expected to be recognized from the remaining performance obligations. The Company expects to recognize this revenue ratably over the expected sales over the expected term of its long-term contracts ranging from two to six years. Approximately 23% of this revenue is expected to be recognized over the next 12 months, and 77% is expected to be recognized over the subsequent 54 months. These amounts are subject to change based upon changes in the estimated contract life and estimated quantities to be sold over the contract life.

The Company applies the practical expedient in ASC 606-10-50-14 and excludes the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less; and (ii) contracts for which the Company recognizes revenue at the amount to which it has the right to invoice for services performed.

The following tables provide revenue from customers disaggregated by the type of arrangement and by the timing of the recognized revenue.

Disaggregation of revenue - contractual and non-contractual:

Timing of revenue:

As of June 30, 2025 and  December 31, 2024, $6,309 and $7,301 of bill-and-hold revenue had not shipped, respectively. 

The carrying values of inventory were as follows as of:

There was $2,934 liquidation in the six months ended June 30, 2025 primarily from biodiesel related inventories.  A liquidation of $435 occurred in the twelve months ended December 31, 2024.

The Company records all derivative instruments at fair value. Fair value is determined by using the closing prices of the derivative instruments on the New York Mercantile Exchange at the end of an accounting period. Changes in the fair value of derivative instruments are recognized at the end of each accounting period and recorded in the statements of operations as a component of cost of goods sold. These instruments use inputs considered Level 1 holdings.

Fair value accounting pronouncements include a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability developed based on market data obtained from sources independent of FutureFuel. Unobservable inputs are inputs that reflect FutureFuel’s assumptions about the factors market participants would use in valuing the asset or liability developed based upon the best information available in the circumstances. The hierarchy is broken down into three levels. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

In order to manage commodity price risk caused by market fluctuations in biofuel prices, future purchases of feedstock used in biodiesel production, physical feedstock, finished product inventories attributed to the process, and other petroleum products purchased or sold, the Company may enter into exchange-traded commodity futures and options contracts. The Company accounts for these derivative instruments in accordance with ASC 815-20-25, Derivatives and Hedging. Under this standard, the accounting for changes in the fair value of a derivative instrument depends upon whether it has been designated as an accounting hedging relationship and, further, on the type of hedging relationship. To qualify for designation as an accounting hedging relationship, specific criteria must be met and appropriate documentation maintained. The Company had no derivative instruments that qualified under these rules as designated accounting hedges in 2025 or 2024. The Company has elected the normal purchase and normal sales exception for certain feedstock purchase contracts and supply agreements.

Total gains and losses on derivative instruments and changes in fair value of the derivative instruments are recorded in the consolidated statements of operations as a component of cost of goods sold and amounted to a net gain of $617 (including settlements of $77) and a net gain  of $450 (including settlements of $169) for the three and six months ended June 30, 2025, respectively, and a net gain of $1,414 (including settlements of $836) and a net loss  of $2,050 (including settlements of $354) for the three and six months ended June 30, 2024, respectively.

The volumes and carrying values of FutureFuel’s derivative instruments were as follows at: 

The margin account maintained with a broker to collateralize these derivative instruments carried an account balance of $18 and $877 at June 30, 2025 and  December 31, 2024, respectively, and was classified as other current assets in the consolidated balance sheets. The carrying values of the margin account and of the derivative instruments are included net in other current assets.

Accrued expenses and other current liabilities consisted of the following at:

On February 21, 2025, the Company, with FutureFuel Chemical Company as the borrower and certain of the Company’s other subsidiaries as guarantors, amended and restated its credit agreement with Regions Bank as administrative agent, collateral agent, and syndication agent (as amended, the "Credit Agreement"). The Credit Agreement consists of a five-year revolving credit facility in a dollar amount of up to $75,000, which includes a sublimit of $30,000 for letters of credit and $15,000 for swingline loans (collectively, the “Credit Facility”). The Credit Facility expires on February 21, 2030.

The interest rate floats at the following margins over Secured Overnight Financing Rate ("SOFR") or base rate based upon our leverage ratio.

The terms of the Credit Facility contain certain negative covenants and conditions including a maximum consolidated leverage ratio and a minimum consolidated interest coverage ratio.

There were no borrowings under the Credit Agreement at June 30, 2025 or December 31, 2024.

The following table summarizes the income tax provision.  

The Company’s income tax provision for the three and six months ended June 30, 2025, is comprised of an increase in its net deferred tax liability plus immaterial state taxes and miscellaneous items. The provision for the three months ended June 30, 2024, consists of immaterial state taxes and miscellaneous items. The provision for the six months ended June 30, 2024 includes immaterial state taxes and, primarily, the initial establishment of the net deferred tax liability reflecting the Company’s determination that its future reversing net deferred tax liabilities would not support full realization of its existing deferred tax assets.

In the three and six months ended June 30, 2025 and 2024, FutureFuel used the treasury method in computing earnings per share.

Basic and diluted earnings per common share were computed as follows:  

For the three and six months ended June 30, 2025, 50,000 and 45,000 options to purchase FutureFuel’s common stock were excluded, respectively, in the computation of diluted earnings per share as all options were anti-dilutive. In the three and six months ended June 30, 2024, 22,000 and 44,000 options, respectively, were excluded as all were anti-dilutive.

In addition, 750,000 restricted stock units (“RSUs”) were issued during the year ended December 31, 2024. These RSUs, and related dividends, vest in five equal installments on each anniversary of the award date, September 3, 2024. All of the prorated RSUs were excluded in the computation of diluted earnings per share for the three and six months ended June 30, 2025, as all were anti-dilutive.  There were no RSUs in the comparative periods.

FutureFuel enters into transactions with companies affiliated with or controlled by a director and significant shareholder. Expenses, prepaid amounts, and unpaid amounts related to these transactions are captured in the accompanying consolidated financial statements as related party line items.

Related party cost of goods sold and distribution are the result of net sales and purchases of blended biodiesel with these related parties along with the associated expense from storage and terminalling services provided by these related parties.

FutureFuel has two reportable segments organized along similar product groups – chemicals and biofuels. The chief operating decision maker ("CODM”) is Roeland Polet, our chief executive officer. The CODM reviews the significant components for each of our segments. The CODM evaluates the performance of each reportable segment and decides how to allocate resources based on segment gross profit (loss), which includes the revenue and expenses that are directly attributable to management of each segment. The CODM uses segment gross profit (loss) to assess the income generated by each reportable segment and to decide which reportable segment to reinvest profits or pay dividends. Segment gross profit (loss) is also used to analyze performance against the budget and the Company’s competitors.

Chemicals

FutureFuel’s chemical segment manufactures diversified chemical products that are sold externally to third party customers. This segment is composed of two components: “custom manufacturing” (manufacturing chemicals for specific customers) and “performance chemicals” (multi-customer specialty chemicals).

Biofuels

FutureFuel’s biofuel segment primarily manufactures and markets biodiesel. Biodiesel revenues are generated through the sale of biodiesel to customers through FutureFuel’s distribution network at its Batesville Plant, through distribution facilities available at leased oil storage facilities, and through a network of remotely located tanks. Biofuel revenues also include the sale of biodiesel blends with petrodiesel; petrodiesel with no biodiesel added; internally generated, separated Renewable Identification Numbers (“RINs”); biodiesel production byproducts; and revenue and profits from Legacy Regional Transport. Biodiesel selling prices and profitability can at times fluctuate based on the timing of unsold, internally generated RINs. FutureFuel does not allocate production costs to internally generated RINs, and from time to time, can enter into sales of biodiesel on a “RINs-free” basis, resulting in FutureFuel maintaining possession of the applicable RINs from the sale. The benefit derived from the eventual sale of the RINs is not reflected in results of operations until such time as the RINs sale has been completed, which may lead to variability in reported operating results.

As of June 30, 2025, FutureFuel held 0.5 million RINs with a fair market value of $604. Comparatively, at June 30, 2024, FutureFuel held 2.1 million RINs with a fair market value of $1,055 and at December 31, 2024, 3.1 million RINs were held with a fair market value of $1,831. The fair value of RINs is considered a Level 1 input and has no cost.  

Summary of business by segment

Depreciation is allocated to segment cost of goods sold based on plant usage. The total assets and capital expenditures of FutureFuel have not been allocated to individual segments as large portions of these assets are shared to varying degrees by each segment, causing such an allocation to be of little value.

From time to time, FutureFuel and its subsidiaries are parties to, or targets of, lawsuits, claims, investigations, regulatory matters, and proceedings, which are being handled and defended in the ordinary course of business. While FutureFuel is unable to predict the outcomes of these matters, it does not believe, based upon currently available facts, that the ultimate resolution of any such pending matters will have a material adverse effect on its overall financial condition, results of operations, or cash flows.

The Company evaluated subsequent events that would require an adjustment to the Company’s consolidated financial statements or require disclosure in the notes to the consolidated financial statements through the date of issuance of the consolidated financial statements. 

On July 4, 2025, the Budget Reconciliation Act of 2025 was signed into law which made significant changes to federal tax law.  The legislation did not affect the Company’s income tax balances as of June 30, 2025.  The most significant provisions affecting the Company include modification to the CFPC, including an extension of the expiration date from December 31, 2027 to December 31, 2029, and rules on foreign based feedstocks as well as affirmation on the transferability of the credits.   In addition, the tax law reinstated the extension of the Small Agri-Biodiesel Producers Tax Credit.  This tax credit is $0.20 per gallon on the first 15 million gallons produced for facilities with up to 60 million gallons of capacity eligible for fuel sold after July 1, 2025 and before December 31, 2026. The Budget Reconciliation Act includes other changes which the Company is evaluating.

The Company continues to experience extremely high feedstock prices resulting in negative profit margins for biodiesel.  As a result, on July 9, 2025, the Company completed a reduction in force of 75 employees following the idling of biodiesel manufacturing given these unfavorable market conditions.  The Company retained employees with expertise to facilitate the restart of biodiesel production upon the return of more favorable market conditions. The aggregate cost of separation agreements related to the reduction in force are estimated to be approximately $386.