FutureFuel Corp.

Previous wording

Our Company is managed and reported in two reporting segments: chemicals and biofuels. Within the chemical segment are two product groupings: custom chemicals and performance chemicals. The custom product group is composed of specialty chemicals manufactured for a single customer whereas the performance product group is composed of chemicals manufactured for multiple customers. The biofuel segment is composed of one product group. Management believes that the diversity of each segment strengthens the company in the ability to utilize resources and is committed to growing each segment.

Current wording

Our Company is managed and reported in two reportable segments: chemicals and biofuels. Within the chemical segment are two product groupings: custom chemicals and performance chemicals. The custom product group is composed of specialty chemicals manufactured for a single customer whereas the performance product group is composed of chemicals manufactured for multiple customers. The biofuel segment is composed of one product group. Management believes that the diversity of each segment strengthens the company in the ability to utilize resources and is committed to growing each segment.

Previous wording

Within the United States Environmental Protection Agency (“EPA”) Renewable Fuel Standard (“RFS”), we generate 1.5 Renewable Identification Numbers (“RINs”) for each gallon of biodiesel sold in the United States with a classification of a D4 or D6 RIN. RINs are used to monitor the level of renewable fuel traded in a given year in accordance with RFS within the EPA moderated transaction system. We do not assign cost of goods sold to the generation of RINs as the physical fuel generates the full cost. As of March 31, 2025, we held 2.3 million D4 RINs with a fair market value of $2,077. Comparatively, as of March 31, 2024, we held 2.0 million RINs with a fair market value of $1,624, and at December 31, 2024, we held 3.1 million RINs with a fair market value of $1,831.

Current wording

Within the United States Environmental Protection Agency (“EPA”) Renewable Fuel Standard (“RFS”), we generate 1.5 Renewable Identification Numbers (“RINs”) for each gallon of biodiesel sold in the United States with a classification of a D4 or D6 RIN. RINs are used to monitor the level of renewable fuel traded in a given year in accordance with RFS within the EPA moderated transaction system. We do not assign cost of goods sold to the generation of RINs as the physical fuel generates the full cost. As of June 30, 2025, we held 0.5 million D4 RINs with a fair market value of $604. Comparatively, as of June 30, 2024, we held 2.1 million RINs with a fair market value of $1,055.

Previous wording

Adjusted EBITDA allows our chief operating decision makers to assess the performance and liquidity of our business on a consolidated basis to assess the ability of our operating segments to produce operating cash flow to fund working capital needs, to fund capital expenditures, and to pay dividends. In particular, our management believes that adjusted EBITDA permits a comparative assessment of our operating performance and liquidity, relative to performance and liquidity based on GAAP results. This measure isolates the effects of certain items, including depreciation and amortization (which may vary among our operating segments without any correlation to their underlying operating performance), non-cash stock-based compensation expense (which is a non-cash expense that varies widely among similar companies), and non-cash gains and losses on derivative instruments (which can cause net income to appear volatile from period to period relative to the sale of the underlying physical product).

Current wording

Adjusted EBITDA allows our chief operating decision maker to assess the performance and liquidity of our business on a consolidated basis to assess the ability of our operating segments to produce operating cash flow to fund working capital needs, to fund capital expenditures, and to pay dividends. In particular, our management believes that adjusted EBITDA permits a comparative assessment of our operating performance and liquidity, relative to performance and liquidity based on GAAP results. This measure isolates the effects of certain items, including depreciation and amortization (which may vary among our operating segments without any correlation to their underlying operating performance), non-cash stock-based compensation expense (which is a non-cash expense that varies widely among similar companies), and non-cash gains and losses on derivative instruments (which can cause net income to appear volatile from period to period relative to the sale of the underlying physical product).

Previous wording

Gross profit in the three months ended March 31, 2025, decreased $19,570 as compared to the same period of 2024, due primarily to: (i) reduced throughput due to the issues noted above, (ii) increased spend on parts and contract labor for the turnaround and (iii) a reduced benefit from the change in the adjustment in the carrying value of our inventory as determined utilizing the LIFO method of inventory accounting. This adjustment increased gross profit $625 in the current three-month period as compared to an increase of $3,028 in the same period of the prior year.

Current wording

Gross profit in thesix months ended June 30, 2025, decreased $36,994 as compared to the same period of 2024, primarily from the reduced throughput given the issues noted above along with increased spend on parts and contract labor for the turnaround. Also reducing gross profit in the current six-month period was a benefit from the change in the adjustment in the carrying value of our inventory as determined utilizing the LIFO method of inventory accounting. This adjustment increased gross profit $1,857 in the current six-month period as compared to an increase of $4,341 in the prior six-month period. Partially offsetting these decreases in gross profit in the current six-month period was the effect of liquidation of biofuel inventory of $2,394.

Previous wording

Operating expenses increased $1,466 in the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. The increase was from separation compensation expense in the current period, equity compensation issued in 2024, increased board fees, and higher research and development expenses.

Current wording

Operating expenses decreased $45 in the three months ended June 30, 2025, as compared to the three months ended June 30, 2024. The net decrease was from reduced legal and board fees partially offset by increased compensation expense. Operating expenses increased $1,421 in the six months ended June 30, 2025, as compared to the six months ended June 30, 2024. The increase was from separation compensation (unrelated to any reduction in force) expense in the current period, equity compensation for grants issued in September 2024, increased board fees, and higher research and development expenses.

Previous wording

Other income decreased a net $1,563 in the three months ended March 31, 2025, as compared to the same period of 2024 from lower interest income of $1,237 compared to $2,800 in the prior period.

Current wording

Other income decreased a net $4,142 in the six months ended June 30, 2025, as compared to the same period of 2024 from the same reasons previously mentioned with interest income being $2,016 lower.

Previous wording

The Company’s income tax provision for the three months ended March 31, 2025, is comprised of immaterial state taxes and miscellaneous items. The provision for the three months ended March 31,2024, comprised primarily an increase in the valuation allowance against net deferred assets, plus immaterial state taxes and miscellaneous items.

Current wording

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.

Previous wording

The Company evaluates its deferred tax assets quarterly and records a valuation allowance to reduce these assets to the amount that is more likely than not to be realized. During the quarter ended March 31, 2024, the Company evaluated the available evidence and determined a discrete adjustment was required to increase its valuation allowance, resulting in a net deferred tax liability of $626 as of March 31, 2024.

Current wording

The Company evaluates its deferred tax assets quarterly and records a valuation allowance to reduce these assets to the amount that is more likely than not to be realized. Since March 31, 2024, the Company’s deferred tax assets have been reduced to zero and an additional net liability has been recognized.

Previous wording

Chemical revenue in the three months ended March 31, 2025, decreased 48.1% or $8,694 compared to the three months ended March 31, 2024. This decline was from weather related issues that extended the downtime of the plant turnaround. Revenue from custom chemicals for the three months ended March 31, 2025 totaled $8,409, a net decrease of $7,018 from the same period in 2024, resulting from lower sales volumes of $7,949 primarily from products sold in the energy markets, and lower prices of $745. Performance chemicals revenue was $956, a decrease of $1,676 from the three months ended March 31, 2024. This decrease was mostly from lower sales volumes of glycerin due to reduced production resulting from the plant turnaround.

Current wording

Chemical revenue in the six months ended June 30, 2025, decreased 30% or $11,311 compared to the six months ended June 30, 2024. This decline was due to weather related issues that extended the downtime of the plant turnaround and slower production rates as we restarted the plant. Revenue from custom chemicals for the six months ended June 30, 2025 totaled $22,659, a net decrease of $8,351 from the same period in 2024, resulting from lower sales volumes of $5,972 primarily from products sold in the energy markets, and lower price effect of $1,572 from less amortization of deferred revenue. Performance chemicals revenue was $3,325, a decrease of $2,960 from thesix months ended June 30, 2024. This decrease was mostly from lower sales volumes of glycerin, due to reduced production resulting from the plant turnaround, and polymer modifier chemicals.

Previous wording

Biofuels revenue in the three months ended March 31, 2025, decreased $32,049 as compared to the same period of 2024. This decrease resulted from the extended plant turnaround to improve plant reliability and product quality which was further extended due to inclement weather. The renewable fuel market continues to be negatively impacted by the expiration of the BTC and lack of clarity on the CFPC.

Current wording

Biofuels revenue in the three months ended June 30, 2025, decreased $34,119 as compared to the same period of 2024. This decrease resulted from the temporary idling of biodiesel production due to continued renewable fuel market uncertainty resulting from the lack of clarity regarding the CFPC and other market conditions.

Previous wording

No significant customers existed in the three months ended March 31, 2025, as compared to four in the three months ended March 31, 2024. No assurances can be given that we will continue to sell to such major refiners, or, if we do sell, the volume we will sell or the profit margin we will realize. We do not believe that the loss of these customers would have a material adverse effect on our biofuels segment or on us as a whole because: (i) we believe that we could readily sell our biodiesel to other customers on equivalent terms as potential demand from other customers for biodiesel exceeds our production capacity; (ii) our sales to these customers are not under fixed terms and the customers have no fixed obligation to purchase any minimum quantities except as stipulated by short-term purchase orders; and (iii) the prices we receive from these customers are based upon then-market rates, as would be the case with sales of this commodity to other customers.

Current wording

A significant portion of our biodiesel sold was to three and two major customers in the three and six months ended June 30, 2025, respectively, as compared to three major customers in both the three and six months ended June 30, 2024. No assurances can be given that we will continue to sell to such major refiners, or, if we do sell, the volume we will sell or the profit margin we will realize. We do not believe that the loss of these customers would have a material adverse effect on our biofuels segment or on us as a whole because: (i) we believe that we could readily sell our biodiesel to other customers on equivalent terms as potential demand from other customers for biodiesel exceeds our production capacity; (ii) our sales to these customers are not under fixed terms and the customers have no fixed obligation to purchase any minimum quantities except as stipulated by short-term purchase orders; and (iii) the prices we receive from these customers are based upon then-market rates, as would be the case with sales of this commodity to other customers.

Previous wording

Biofuel gross loss was $8,834 in the three months ended March 31, 2025, a decrease in gross profit of $9,820 from the comparative period in 2024. This decrease primarily resulted from reduced sales volumes, stemming from the extended plant turnaround mentioned above. Also reducing gross profit was a reduced benefit from the change in the adjustment in the carrying value of our inventory as determined utilizing the LIFO method of inventory accounting. This adjustment increased gross profit $339 in the current three-month period as compared to an increase in gross profit of $2,276 in the same period of the prior year. Partially increasing gross profit was the change in the activity of derivative instruments with a realized gain of $93 and an unrealized loss of $259 in the current three-month period as compared to a realized loss of $1,190 and an unrealized loss of $2,274 in the same period of the prior year.

Current wording

Biofuel gross loss was $19,268 in thesix months ended June 30, 2025, a decrease in gross profit of $24,234 from the comparative period in 2024. This decrease primarily resulted from reduced sales volumes, stemming from the extended plant turnaround and temporary idling described above. Partially offsetting these decreases was the change in the activity of derivative instruments with a realized gain of $169 and an unrealized gain of $281 in the current six-month period as compared to a realized loss of $354 and an unrealized loss of $1,696 in the same period of the prior year. Further impacting gross profit was the change in the adjustment in the carrying value of our inventory as determined utilizing the LIFO method of inventory accounting. This adjustment increased gross profit $1,018 in the current six-month period as compared to an increase in gross profit of $3,300 in the same period of the prior year. Lastly, benefiting gross profit was the effect of liquidation of biofuel inventory of $2,394.

Previous wording

Revenue from bill-and-hold transactions in which a performance obligation exists is recognized when the total performance obligation has been met and control of the product has transferred. Bill-and-hold transactions for the three months ended March 31, 2025 and 2024 were related to custom chemicals customers whereby revenue was recognized in accordance with contractual agreements based upon product being produced and ready for use by the customer. These sales were subject to written monthly purchase orders. The product was custom manufactured and stored at the customer’s request and could not be sold to another buyer. Credit and payment terms for bill-and-hold customers are similar to other custom chemicals customers. Revenues under bill-and-hold arrangements were$4,590 and for the three months ended March 31, 2025. As of March 31, 2025 and December 31, 2024, $5,628 and $7,301 of bill-and-hold revenue had not shipped, respectively.

Current wording

Revenue from bill-and-hold transactions in which a performance obligation exists is recognized when the total performance obligation has been met and control of the product has transferred. Bill-and-hold transactions for the three and six months ended June 30, 2025 and 2024 were related to custom chemicals customers whereby revenue was recognized in accordance with contractual agreements based upon product being produced and ready for use by the customer. These sales were subject to written monthly purchase orders. The product was custom manufactured and stored at the customer’s request and could not be sold to another buyer. Credit and payment terms for bill-and-hold customers are similar to other custom chemicals customers. Revenues under bill-and-hold arrangements were$9,845 and $14,435 for the three and six months ended June 30, 2025, respectively. As of June 30, 2025 and December 31, 2024, $6,309 and $7,301 of bill-and-hold revenue had not shipped, respectively.

Previous wording

Our net cash from operating activities, investing activities, and financing activities for the three months ended March 31, 2025 and 2024 is set forth in the following table.

Current wording

Our net cash from operating activities, investing activities, and financing activities for the six months ended June 30, 2025 and 2024 is set forth in the following table.

Previous wording

Cash used in operating activities was $5,395 in the three months ended March 31, 2025, as compared to $12,211 in the same period of 2024. This decrease in cash used was primarily attributable to the change in inventory of $16,737 and the change in accounts receivable, including accounts receivable - related parties, demonstrating a cash inflow of $9,928. Also contributing to the current period decrease in cash used was the change in accounts payable, including accounts payable - related parties, of $2,255, and the change in accrued expenses of $1,262. Partially offsetting these cash inflows was the change in net (loss) income of $21,973 and the change in the fair value of derivative instruments of $2,015.

Current wording

Cash used in operating activities was $183 in the six months ended June 30, 2025, as compared to cash provided by operating activities of $15,588 in the same period of 2024. This increase in cash used was primarily attributable to the change in net (loss) income resulting in a cash outflow of $41,960. Also contributing to the current period increase in cash used was the change in other assets of $3,156, and the change in accrued expenses of $2,924. Partially offsetting these cash outflows was the change in accounts receivable, including accounts receivable - related parties, resulting in a cash inflow of $15,937, the change in accounts payable, including accounts payable - related parties, of $9,186, the change in inventory of $7,221, and the change in deferred revenue of $1,617.

Previous wording

Cash used in investing activities was $4,082 in the three months ended March 31, 2025, as compared to $3,485 in the three months ended March 31, 2024. This $597 increase in cash used was primarily due to an increase in capital expenditure of $1,730 partially offset by the change in the collateralization of derivative instruments of $1,102.

Current wording

Cash used in investing activities was $8,585 in the six months ended June 30, 2025, as compared to $5,312 in the six months ended June 30, 2024. This $3,273 increase in cash used was primarily due to an increase in capital expenditure of $4,208 partially offset by the change in the collateralization of derivative instruments of $901.

Previous wording

Cash used in financing activities was $2,993 and $2,626 in the three months ended March 31, 2025 and 2024, respectively, primarily for payments of dividends on our common stock.

Current wording

Cash used in financing activities was $5,621 and $114,660 in the six months ended June 30, 2025 and 2024, respectively, primarily for payments of dividends on our common stock inclusive of a special dividend of $109,408 paid in the prior six-month period.

Previous wording

We have a credit agreement, as amended on February 21, 2025, with a syndicated group of commercial banks for $75,000. The loan is a revolving facility, the proceeds of which may be used for our working capital, capital expenditures, and general corporate purposes. The facility terminates on February 21, 2030. See Note 7 to our consolidated financial statements for additional information regarding our credit agreement.

Current wording

We have a credit agreement, as amended and restated on February 21, 2025, with a syndicated group of commercial banks for $75,000. The loan is a revolving facility, the proceeds of which may be used for our working capital, capital expenditures, and general corporate purposes. The facility terminates on February 21, 2030. See Note 7 to our consolidated financial statements for additional information regarding our credit agreement.

Previous wording

Regular cash dividends of $0.06 per share were paid on our common stock in each quarter of 2025 and 2024. The regular cash dividend amounted to $2,628 and $2,626 in 2025 and 2024, respectively. The declaration of these regular quarterly cash dividends was made in the three months ended December 31, 2024, and December 31, 2023, respectively.

Current wording

Regular cash dividends of $0.06 per share were paid on our common stock in each quarter of 2025 and 2024. The regular cash dividend amounted to $2,628 and $2,626 in 2025 and 2024, respectively. The declaration of these regular quarterly cash dividends was made in the three months ended December 31, 2024, and December 31, 2023, respectively. In addition, on April 9, 2024, we paid a special dividend of $2.50 per share on our common stock which amounted to $109,408. The declaration of this special dividend was made in the first quarter of 2024.