[PART I FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) Part I details the company's financial performance and condition, including statements, management analysis, market risk, and internal controls [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements.) The company reported a significant Q1 2023 turnaround with **$21.1 million** net income, **76%** revenue growth, and increased assets, despite negative operating cash flow Consolidated Statements of Operations (Q1 2023 vs Q1 2022) | Financial Metric | Three Months Ended March 31, 2023 ($) | Three Months Ended March 31, 2022 ($) | | :--- | :--- | :--- | | **Revenue** | 74,161 | 42,074 | | **Gross profit (loss)** | 21,623 | (7,155) | | **Income (loss) from operations** | 18,251 | (9,607) | | **Net income (loss)** | 21,081 | (12,398) | | **Diluted earnings (loss) per share** | 0.48 | (0.28) | Consolidated Balance Sheet Highlights | Balance Sheet Item | March 31, 2023 ($) | December 31, 2022 ($) | | :--- | :--- | :--- | | Cash and cash equivalents | 145,058 | 175,640 | | Inventory | 69,234 | 26,761 | | Total Assets | 373,278 | 355,969 | | Total Liabilities | 69,180 | 72,969 | | Total Stockholders' Equity | 304,098 | 283,000 | Consolidated Statements of Cash Flows | Cash Flow Activity | Three Months Ended March 31, 2023 ($) | Three Months Ended March 31, 2022 ($) | | :--- | :--- | :--- | | Net cash used in operating activities | (29,810) | (10,576) | | Net cash provided by (used in) investing activities | 1,868 | (3,335) | | Net cash used in financing activities | (2,640) | (2,626) | [Notes to Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Key notes detail revenue recognition, the impact of tax credits, derivative instrument accounting, the credit facility's LIBOR to SOFR transition, and strong Biofuels segment performance - The Biodiesel Blenders' Tax Credit (BTC) of **one dollar per gallon** is recorded as a reduction to cost of goods sold and is set to expire on **December 31, 2024**[19](index=19&type=chunk) - As of March 31, 2023, approximately **$13.95 million** of revenue is expected to be recognized from remaining performance obligations over the next three to four years[28](index=28&type=chunk) - The company recorded a gain of **$8.3 million** on derivative instruments in Q1 2023, compared to a loss of **$9.1 million** in Q1 2022, with these instruments not designated as accounting hedges[38](index=38&type=chunk) - On March 1, 2023, the company amended its credit agreement to transition its credit facility from **LIBOR** to the **Secured Overnight Financing Rate (SOFR)**, with no borrowings under the facility as of March 31, 2023[54](index=54&type=chunk)[56](index=56&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=18&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) MD&A highlights **75.5%** revenue growth driven by biofuels, a surge in gross profit due to derivative gains and LIFO adjustments, and strong liquidity despite negative operating cash flow Summary of Financial Results (Q1 2023 vs Q1 2022) | | 2023 ($) | 2022 ($) | Dollar Change ($) | % Change | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | 74,181 | 42,261 | 31,920 | 76% | | **Income (loss) from operations** | 18,251 | (9,607) | 27,858 | n/a | | **Net income (loss)** | 21,081 | (12,398) | 33,479 | n/a | | **Adjusted EBITDA** | 12,495 | 2,098 | 10,397 | 496% | - The increase in gross profit to **$21.6 million** from a loss of **$7.2 million** was primarily driven by a gain on derivative instruments of **$8.3 million** (vs. a **$9.1 million** loss in Q1 2022) and a positive LIFO inventory adjustment of **$3.8 million**[93](index=93&type=chunk) - Cash used in operating activities increased to **$29.8 million**, mainly due to a **$31.8 million** cash outflow for inventory changes and an **$11.0 million** outflow for accounts receivable changes[113](index=113&type=chunk) [Results of Operations by Segment](index=21&type=section&id=Results%20of%20Operations) Biofuels segment drove performance with **152.6%** revenue growth and a significant gross profit turnaround, while Chemicals saw modest revenue growth and strong gross profit improvement Chemicals Segment Performance (Q1 2023 vs Q1 2022) | Metric | 2023 ($) | 2022 ($) | Change ($) | % Change | | :--- | :--- | :--- | :--- | :--- | | **Revenues** | 21,881 | 21,561 | 320 | 1.5% | | **Gross Profit** | 8,623 | 5,418 | 3,205 | 59.2% | Biofuels Segment Performance (Q1 2023 vs Q1 2022) | Metric | 2023 ($) | 2022 ($) | Change ($) | % Change | | :--- | :--- | :--- | :--- | :--- | | **Revenues** | 52,300 | 20,700 | 31,600 | 152.6% | | **Gross Profit (Loss)** | 13,000 | (12,573) | 25,573 | n/a | [Quantitative and Qualitative Disclosures About Market Risk](index=27&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) The company manages commodity price risk for inputs and outputs through contracts and derivatives, with a **10%** adverse feedstock price change potentially decreasing gross profit by **$5.3 million** - The company uses derivative instruments to manage price risk in the biofuels segment, but these do not qualify for hedge accounting, leading to volatility in reported net income; the fair value of these instruments was a net asset of **$4.8 million** at March 31, 2023[127](index=127&type=chunk)[128](index=128&type=chunk) Market Risk Sensitivity Analysis (Q1 2023) | Item | Hypothetical Adverse Price Change | Decrease in Gross Profit ($) | Percentage Decrease in Gross Profit | | :--- | :--- | :--- | :--- | | **Biodiesel feedstocks** | 10% | 5,320 | 24.6% | | **Methanol** | 10% | 257 | 1.2% | [Controls and Procedures](index=29&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management concluded that disclosure controls and procedures were effective as of March 31, 2023, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that disclosure controls and procedures were **effective** as of the end of the reporting period, March 31, 2023[135](index=135&type=chunk) - **No changes** in internal control over financial reporting occurred during the quarter ended March 31, 2023, that have materially affected, or are reasonably likely to materially affect, internal controls[137](index=137&type=chunk) [PART II OTHER INFORMATION](index=30&type=section&id=PART%20II%20OTHER%20INFORMATION) Part II covers legal proceedings, risk factors, and other miscellaneous disclosures, confirming no material changes or significant new events [Legal Proceedings and Risk Factors](index=30&type=section&id=Item%201.%20Legal%20Proceedings.) The company is **not involved in material legal proceedings**, and **no material changes** to previously disclosed risk factors have occurred - The company is **not involved in any material pending legal proceedings** outside of ordinary business litigation[140](index=140&type=chunk) - There have been **no material changes** to the risk factors disclosed in the Annual Report for the year ended December 31, 2022[141](index=141&type=chunk) [Other Information (Items 2-6)](index=30&type=section&id=Other%20Items) No unregistered equity sales, senior security defaults, mine safety disclosures, or other material information were reported, with standard certifications and data files included - The company reported **no activity** under Item 2 (Unregistered Sales of Equity Securities), Item 3 (Defaults Upon Senior Securities), Item 4 (Mine Safety Disclosures), and Item 5 (Other Information)[142](index=142&type=chunk)[144](index=144&type=chunk)[146](index=146&type=chunk)[148](index=148&type=chunk)

Financial Performance - Total revenue for 2022 was $395,555,000, representing a 23.5% increase from $320,125,000 in 2021[312]. - Gross profit increased to $28,993,000 in 2022, up from $23,537,000 in 2021, reflecting a 23.5% growth[312]. - Net income for 2022 was $15,211,000, a decrease of 42.1% compared to $26,255,000 in 2021[312]. - Total revenue for 2022 was $396.014 million, an increase of 23.2% from $321.386 million in 2021[458]. - Biofuels revenue reached $315.121 million in 2022, up 24.1% from $253.844 million in 2021[458]. - Chemicals revenue increased to $80.893 million in 2022, a rise of 19.7% compared to $67.542 million in 2021[458]. - The company reported a net income of $14.933 million in Q4 2022, compared to a net loss of $12.398 million in Q1 2022[460]. Assets and Liabilities - Total assets increased to $355,969,000 in 2022, up from $344,330,000 in 2021, marking a growth of 3.8%[309]. - Total liabilities rose to $72,969,000 in 2022, compared to $55,402,000 in 2021, indicating a 31.7% increase[309]. - Cash and cash equivalents at the end of 2022 were $175,640,000, an increase of 27.7% from $137,521,000 in 2021[314]. - The carrying value of total inventory as of December 31, 2022, was $26,761 thousand, slightly down from $26,920 thousand in 2021[376]. - The Company’s trade receivables included in accounts receivable were $16,459 thousand as of December 31, 2022, down from $20,780 thousand in 2021[368]. - The total stockholders' equity as of December 31, 2022, was $283,000, down from $371,883 in 2021[326]. Cash Flow and Dividends - Net cash provided by operating activities was $52,451,000 in 2022, an increase from $44,084,000 in 2021[314]. - Dividends payable in 2022 amounted to $10,503,000, compared to no dividends in 2021[309]. - Cash dividends declared in 2022 amounted to $21,006, compared to $109,408 in 2021[326]. Market Risks - A hypothetical 10% adverse change in the average price of biodiesel feedstocks (51,675 GAL) would result in a decrease in gross profit of $26,437,000, representing a 91.2% decrease[296]. - The company seeks to mitigate market risks by entering into term sale contracts with price adjustment protections, although raw material price risk remains significant[291]. - The gross profit is significantly impacted by the prices paid for raw materials and conversion costs, which are subject to wide fluctuations[294]. - A hypothetical 10% adverse change in the price of methanol (8,630 GAL) would lead to a gross profit decrease of $1,102,000, representing a 3.8% decrease[296]. - The company considers its foreign currency risk to be immaterial due to the insignificance of transactions denominated in foreign currency[297]. Tax and Valuation - The company recorded a deferred income tax asset valuation allowance, which requires management's judgment regarding projected future taxable income[305]. - The income tax benefit for 2022 was $1,473, reflecting an effective tax rate of (10.7%), compared to a benefit of $10,325 and an effective rate of (64.8%) in 2021[407]. - The Company recorded a valuation allowance that reduces its net deferred tax asset to $0 in 2022[412]. - The total deferred tax assets as of December 31, 2022, were $20,664,000, slightly down from $20,961,000 in 2021[417]. - The company recorded a valuation allowance of $7,392,000 against its deferred tax assets as of December 31, 2022[417]. Research and Development - Research and development expenses were $3,415,000 in 2022, slightly down from $3,484,000 in 2021[312]. Derivative Instruments - The company had no derivative instruments that qualified as designated accounting hedges in 2022 or 2021[292]. - The Company reported a net loss on derivative instruments of $24,360 thousand for the year ended December 31, 2022, compared to a net loss of $10,377 thousand in 2021[377]. Environmental and Closure Costs - The company established reserves for closure/post-closure costs associated with environmental assets, estimating useful lives of up to 27 years[338]. - The liability for asset retirement obligations and environmental contingencies was $1,396 as of December 31, 2022, compared to $1,363 in 2021[397]. Employee Compensation - The company contributed $1,719,000 to its 401(k) matching savings plan in 2022, a decrease from $1,770,000 in 2021[443]. - The total share-based compensation expense for 2022 was $46,000, compared to $49,000 in 2020[435]. - As of December 31, 2022, there were 44,000 stock options outstanding with a weighted average exercise price of $10.74[439]. - The company has 4,310,167 options available for grant under the Incentive Plan as of December 31, 2022[438]. Customer Concentration - For the year ended December 31, 2022, sales to two biodiesel customers totaled $107,898, representing 27% of total revenue[325]. - Significant portions of the company's sales were made to a small number of customers, with one customer accounting for 12% of revenue in 2020[325].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to ___________ Commission file number: 0-52577 (Exact Name of Registrant as Specified in Its Charter) (314) 854-8352 (Registrant's Telephone Nu ...

PART I FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements.) This section presents the unaudited consolidated financial statements for the period ended June 30, 2022, including the balance sheets, statements of operations, stockholders' equity, and cash flows [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2022, total assets were $337.4 million, a slight decrease from $344.3 million at year-end 2021, while total liabilities increased to $74.6 million from $55.4 million Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Total Current Assets** | $252,843 | $255,833 | | **Total Assets** | **$337,386** | **$344,330** | | **Total Current Liabilities** | $60,816 | $35,056 | | **Total Liabilities** | **$74,580** | **$55,402** | | **Total Stockholders' Equity** | **$262,806** | **$288,928** | [Consolidated Statements of Operations and Comprehensive Income](index=4&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) For the six months ended June 30, 2022, the company reported a net loss of $15.5 million, or ($0.35) per share, a significant increase from the $5.3 million net loss in the prior-year period Six Months Ended June 30, (in thousands, except per share amounts) | Metric | 2022 | 2021 | | :--- | :--- | :--- | | **Revenue** | $159,714 | $114,971 | | **Gross Profit (Loss)** | $(6,178) | $(10,779) | | **Loss from Operations** | $(11,122) | $(15,061) | | **Net Loss** | **$(15,502)** | **$(5,292)** | | **Diluted Loss Per Share** | **$(0.35)** | **$(0.12)** | [Consolidated Statements of Stockholders' Equity](index=5&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) Stockholders' equity decreased from $288.9 million at the end of 2021 to $262.8 million at June 30, 2022, primarily due to a net loss of $15.5 million and cash dividends declared of $10.5 million Changes in Stockholders' Equity (Six Months Ended June 30, 2022, in thousands) | Description | Amount | | :--- | :--- | | **Balance - December 31, 2021** | **$288,928** | | Cash dividends declared | $(10,503) | | Net loss (Q1 + Q2) | $(15,502) | | Other comprehensive loss | $(117) | | **Balance - June 30, 2022** | **$262,806** | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2022, net cash used in operating activities was $1.9 million, resulting in a net decrease in cash and cash equivalents of $8.4 million Cash Flow Summary (Six Months Ended June 30, in thousands) | Activity | 2022 | 2021 | | :--- | :--- | :--- | | **Net cash used in operating activities** | $(1,910) | $(2,349) | | **Net cash (used in) provided by investing activities** | $(1,206) | $16,248 | | **Net cash used in financing activities** | $(5,251) | $(114,427) | | **Net change in cash and cash equivalents** | **$(8,367)** | **$(100,528)** | [Notes to Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail the company's accounting policies and financial components, including segment performance, revenue recognition, tax credits, and derivative instrument losses - The company operates in two segments: chemicals (custom manufacturing and performance chemicals) and biofuels (primarily biodiesel production and sales)[19](index=19&type=chunk)[20](index=20&type=chunk) - The Biodiesel Blenders' Tax Credit (BTC) provides a **$1.00 per gallon credit**, which the company records as a reduction to cost of goods sold. The credit is set to expire on December 31, 2022[23](index=23&type=chunk) - Losses on derivative instruments, recorded in cost of goods sold, amounted to **$26.6 million** for the six months ended June 30, 2022, compared to a loss of **$8.0 million** in the same period of 2021[43](index=43&type=chunk) Segment Performance (Six Months Ended June 30, in thousands) | Segment | Revenue 2022 | Revenue 2021 | Gross Profit (Loss) 2022 | Gross Profit (Loss) 2021 | | :--- | :--- | :--- | :--- | :--- | | **Chemicals** | $39,755 | $31,657 | $9,614 | $2,984 | | **Biofuels** | $120,302 | $83,977 | $(15,792) | $(13,763) | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=21&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management discusses the company's financial results, highlighting a 38% revenue increase for the first six months of 2022, offset by significant losses on derivative instruments and unfavorable LIFO inventory adjustments, leading to a wider net loss [Results of Operations](index=24&type=section&id=Results%20of%20Operations) Consolidated revenue for the six months ended June 30, 2022, increased by 38.4% to $160.1 million, primarily due to higher sales prices, but the net loss widened to $15.5 million from $5.3 million in the prior-year period Consolidated Results Summary (Six Months Ended June 30) | Metric | 2022 | 2021 | Change (%) | | :--- | :--- | :--- | :--- | | **Revenues** | $160,057 | $115,634 | 38.4% | | **Gross Profit (Loss)** | $(6,178) | $(10,779) | 42.7% | | **Net Loss** | $(15,502) | $(5,292) | (192.9%) | - The increase in gross profit for the six months ended June 30, 2022 was mostly offset by a significant loss of **$26.6 million** from derivative instruments, compared to an **$8.0 million** loss in the same period of 2021[117](index=117&type=chunk) - The Chemical segment's gross profit increased by **222.2%** to **$9.6 million** for the first six months of 2022, driven by higher sales and the absence of unusually high natural gas prices seen in the prior year[125](index=125&type=chunk)[126](index=126&type=chunk) - The Biofuels segment's gross loss increased to **$15.8 million** in the first six months of 2022 from **$13.8 million** in 2021, primarily due to larger losses on derivative instruments[128](index=128&type=chunk)[131](index=131&type=chunk) [Liquidity and Capital Resources](index=29&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintained a strong liquidity position with $129.2 million in cash and cash equivalents and no outstanding debt as of June 30, 2022, with sufficient resources to fund operations and capital requirements Cash Flow Summary (Six Months Ended June 30, in thousands) | Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(1,910) | $(2,349) | | Net cash (used in) provided by investing activities | $(1,206) | $16,248 | | Net cash used in financing activities | $(5,251) | $(114,427) | - The company has a **$100 million** revolving credit facility that terminates on March 30, 2025, with no borrowings outstanding as of June 30, 2022[146](index=146&type=chunk)[66](index=66&type=chunk) - Financing activities in the first six months of 2021 included a special cash dividend payment of **$109.4 million**, compared to regular dividend payments in 2022[144](index=144&type=chunk)[148](index=148&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=32&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) The company is primarily exposed to commodity price risk for raw materials and finished products in its chemicals and biofuels segments, mitigated by contracts and derivatives, with no interest rate risk as of June 30, 2022 - The company uses exchange-traded commodity futures and options contracts to manage price risk from market fluctuations in biofuels prices[157](index=157&type=chunk) Sensitivity Analysis: Impact of a 10% Adverse Price Change on Gross Profit | Item | Decrease in Gross Profit (in thousands) | Percentage Decrease in Gross Profit | | :--- | :--- | :--- | | **Biodiesel feedstocks** | $10,533 | 170.5% | | **Methanol** | $524 | 8.5% | | **Natural gas** | $449 | 7.3% | - The company had no borrowings at June 30, 2022, and therefore was not exposed to interest rate risk[164](index=164&type=chunk) [Item 4. Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management concluded that the company's disclosure controls and procedures were not effective as of the end of the period due to a material weakness in internal control over financial reporting related to an income tax valuation allowance calculation - A material weakness was identified in internal control over financial reporting related to an error in the income tax valuation allowance calculation that was not identified upon review[166](index=166&type=chunk) - To remediate the deficiency, the company plans to utilize a third party to review the valuation allowance for the life of the net operating losses[168](index=168&type=chunk) PART II OTHER INFORMATION [Item 1. Legal Proceedings](index=35&type=section&id=Item%201.%20Legal%20Proceedings.) The company is not a party to any material pending legal proceedings, other than routine litigation incidental to its business, and does not expect any current matters to have a material adverse effect on its financial condition or results of operations - The company is not involved in any material legal proceedings beyond ordinary routine litigation incidental to its business[173](index=173&type=chunk) [Item 1A. Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors.) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2021 - No material changes to the risk factors disclosed in the 2021 Form 10-K were reported[174](index=174&type=chunk) [Other Items (Items 2, 3, 4, 5, 6)](index=35&type=section&id=Other%20Items%20%28Items%202%2C%203%2C%204%2C%205%2C%206%29) This section confirms there were no unregistered sales of equity securities, defaults upon senior securities, mine safety disclosures, or other material information to report for the quarter, and lists the exhibits filed with the report - The company reported "None" for Item 2 (Unregistered Sales of Equity Securities), Item 3 (Defaults Upon Senior Securities), Item 4 (Mine Safety Disclosures), and Item 5 (Other Information), indicating no reportable events in these categories[176](index=176&type=chunk)[178](index=178&type=chunk)[181](index=181&type=chunk)[183](index=183&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to ___________ Commission file number: 0-52577 (Exact Name of Registrant as Specified in Its Charter) Delaware 20-3340900 (State or Other Jurisdict ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________ to ______________ Commission file number: 0-52577 (Exact Name of Registrant as Specified in Its Charter) 63105 (ZipCode) Delaware 2 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to ___________ Commission file number: 0-52577 (Exact Name of Registrant as Specified in Its Charter) (314) 854-8352 (Registrant's Telephone Nu ...

PART I FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Unaudited statements show decreased assets and equity from a large dividend, with a net loss driven by lower gross profit and negative operating cash flow [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheet Highlights (Unaudited) | Metric | June 30, 2021 ($ in thousands) | Dec 31, 2020 ($ in thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $97,594 | $198,122 | | Total current assets | $249,863 | $342,605 | | Total Assets | $342,420 | $441,304 | | Total current liabilities | $60,377 | $32,988 | | Total Liabilities | $85,006 | $69,421 | | Total stockholders' equity | $257,414 | $371,883 | - Total assets **decreased by approximately $99 million**, and stockholders' equity **decreased by about $114 million** from December 31, 2020, to June 30, 2021, largely driven by a significant reduction in cash used to pay a large special dividend[9](index=9&type=chunk)[13](index=13&type=chunk) [Consolidated Statements of Operations and Comprehensive Income](index=4&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) Q2 2021 vs Q2 2020 Performance (Unaudited) | Metric | Three Months Ended June 30, 2021 ($ in thousands) | Three Months Ended June 30, 2020 ($ in thousands) | | :--- | :--- | :--- | | Revenue | $73,813 | $47,310 | | Gross (loss) profit | $(43) | $911 | | (Loss) income from operations | $(2,003) | $(1,139) | | Net income | $3,481 | $15,159 | | Diluted EPS | $0.08 | $0.35 | H1 2021 vs H1 2020 Performance (Unaudited) | Metric | Six Months Ended June 30, 2021 ($ in thousands) | Six Months Ended June 30, 2020 ($ in thousands) | | :--- | :--- | :--- | | Revenue | $114,971 | $99,682 | | Gross (loss) profit | $(10,779) | $17,310 | | (Loss) income from operations | $(15,061) | $12,840 | | Net (loss) income | $(5,292) | $34,202 | | Diluted (Loss) EPS | $(0.12) | $0.78 | [Consolidated Statements of Stockholders' Equity](index=5&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) - A special cash dividend of **$2.50 per share** was declared, resulting in a payment of **$109.4 million**, which significantly reduced retained earnings in the second quarter of 2021[13](index=13&type=chunk) - Total stockholders' equity **decreased from $371.9 million at the end of 2020 to $257.4 million at the end of Q2 2021**, primarily due to the net loss and the large special dividend payment[13](index=13&type=chunk) [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary for Six Months Ended June 30 (Unaudited) | Cash Flow Category | 2021 ($ in thousands) | 2020 ($ in thousands) | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(2,349) | $84,201 | | Net cash from (used in) investing activities | $16,248 | $(2,753) | | Net cash used in financing activities | $(114,427) | $(136,956) | | **Net change in cash and cash equivalents** | **$(100,528)** | **$(55,508)** | - Cash used in financing activities was primarily for dividend payments, totaling **$114.7 million in the first six months of 2021**, compared to $136.5 million in the same period of 2020[17](index=17&type=chunk) [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) - The company operates in two segments: chemicals (custom and performance chemicals) and biofuels (primarily biodiesel)[20](index=20&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk) - The Biodiesel Blenders' Tax Credit (BTC) was retroactively reinstated for 2018/2019 and extended through 2022, with the benefit recorded as a reduction to cost of goods sold[25](index=25&type=chunk)[26](index=26&type=chunk) - In April 2021, the company sold a portion of its pipeline line space and recorded an **impairment charge of $1.315 million**, reducing the intangible asset's carrying value to zero[63](index=63&type=chunk) - The company is disputing its February 2021 natural gas bill following an extraordinary price increase, which is under investigation by the Attorney General of Arkansas[91](index=91&type=chunk) Segment Revenue and Gross Profit (Six Months Ended June 30) | Segment | Revenue 2021 ($ in thousands) | Revenue 2020 ($ in thousands) | Gross Profit (Loss) 2021 ($ in thousands) | Gross Profit (Loss) 2020 ($ in thousands) | | :--- | :--- | :--- | :--- | :--- | | Chemicals | $31,657 | $50,531 | $2,984 | $15,591 | | Biofuels | $83,977 | $49,973 | $(13,763) | $1,719 | | **Total** | **$115,634** | **$100,504** | **$(10,779)** | **$17,310** | [Management's Discussion and Analysis (MD&A)](index=21&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Revenue grew 15% YoY due to higher biofuel prices, but gross profit turned negative due to high natural gas costs and derivative losses [Results of Operations](index=24&type=section&id=Results%20of%20Operations) - Consolidated revenue for H1 2021 **increased by $15.1 million (15.1%) YoY**, driven by a $39.2 million positive price effect from the biofuels segment, partially offset by a negative volume effect from the chemicals segment[113](index=113&type=chunk) - **Gross loss for H1 2021 was $10.8 million** compared to a gross profit of $17.3 million in H1 2020, primarily caused by exorbitant natural gas prices, derivative losses, and unfavorable LIFO inventory adjustments[115](index=115&type=chunk) - Chemical segment revenue for H1 2021 **decreased by 37.4% ($18.9 million) YoY**, mainly due to the loss of two custom chemical products that contributed $15.6 million in revenue in the prior year period[124](index=124&type=chunk) - Biofuels segment revenue for H1 2021 **increased by 68.0% ($34.0 million) YoY**, driven by improved fuel and RIN prices; however, the segment recorded a **gross loss of $13.8 million** due to high natural gas costs and derivative losses[127](index=127&type=chunk)[130](index=130&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) - **Net cash used in operating activities was $2.3 million** in H1 2021, a **decrease of $86.6 million** from the $84.2 million provided by operations in H1 2020, due to a swing to a net loss and negative changes in accounts receivable[140](index=140&type=chunk)[141](index=141&type=chunk) - The company paid a **special dividend of $2.50 per share ($109.4 million)** in June 2021 and a regular quarterly dividend of $0.06 per share[147](index=147&type=chunk) - The company maintains a **$100 million revolving credit facility** that expires in March 2025, which was undrawn as of June 30, 2021[145](index=145&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=32&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces significant commodity price risk, particularly in biofuels, and uses non-hedge derivatives which create earnings volatility - The company's primary market risk is commodity price risk, which it attempts to mitigate in the chemicals segment through long-term contracts with price adjustment clauses[154](index=154&type=chunk)[155](index=155&type=chunk) - The company uses derivative instruments to manage biofuels price risk, but immediate recognition of gains and losses can cause significant volatility in net income; the fair value of these instruments was a **net liability of $1.1 million** at June 30, 2021[156](index=156&type=chunk)[157](index=157&type=chunk) Gross Profit Sensitivity to 10% Adverse Price Change in Key Commodities | Item | Decrease in Gross Profit ($ in thousands) | Percentage Decrease in Gross Profit | | :--- | :--- | :--- | | Biodiesel feedstocks | $8,388 | 77.8% | | Natural Gas | $898 | 8.3% | | Methanol | $619 | 5.7% | [Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period, June 30, 2021[165](index=165&type=chunk) - No material changes were made to the company's internal control over financial reporting during the most recent fiscal quarter[166](index=166&type=chunk) PART II OTHER INFORMATION [Legal Proceedings](index=35&type=section&id=Item%201.%20Legal%20Proceedings) The company is not party to any material legal proceedings beyond ordinary routine litigation - The company is not involved in any material pending legal proceedings outside of ordinary routine litigation[169](index=169&type=chunk) [Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) No material changes were reported to the risk factors previously disclosed in the annual Form 10-K - No material changes have been made to the risk factors disclosed in the Annual Report on Form 10-K for the year ended December 31, 2020[170](index=170&type=chunk) [Other Part II Items](index=35&type=section&id=Other%20Part%20II%20Items) The company reported no activity for unregistered equity sales, senior security defaults, or mine safety disclosures - The company reported 'None' for Item 2 (Unregistered Sales of Equity Securities), Item 3 (Defaults Upon Senior Securities), Item 4 (Mine Safety Disclosures), and Item 5 (Other Information)[171](index=171&type=chunk)[173](index=173&type=chunk)[175](index=175&type=chunk)[177](index=177&type=chunk)

PART I FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements.) FutureFuel Corp. reported a net loss of $8.8 million in Q1 2021, a reversal from a $19.0 million net income in Q1 2020, driven by decreased revenue and a $10.7 million gross loss [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Total Current Assets** | $340,093 | $342,605 | | **Total Assets** | **$436,422** | **$441,304** | | **Total Current Liabilities** | $43,027 | $32,988 | | **Total Liabilities** | $73,372 | $69,421 | | **Total Stockholders' Equity** | $363,050 | $371,883 | - Cash and cash equivalents decreased from **$198.1 million** at year-end 2020 to **$194.0 million** at the end of Q1 2021[6](index=6&type=chunk) - Inventory increased significantly from **$33.9 million** to **$45.3 million** during the quarter[6](index=6&type=chunk) [Consolidated Statements of Operations and Comprehensive Income](index=4&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) Q1 2021 vs. Q1 2020 Statement of Operations (in thousands, except per share) | Metric | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | **Revenue** | $41,516 | $53,082 | | **Gross (Loss) Profit** | **($10,736)** | **$16,399** | | **(Loss) Income from Operations** | ($13,058) | $13,979 | | **Net (Loss) Income** | **($8,773)** | **$19,043** | | **Basic & Diluted EPS** | **($0.20)** | **$0.44** | - The company experienced a significant reversal from a gross profit of **$16.4 million** in Q1 2020 to a gross loss of **$10.7 million** in Q1 2021, primarily due to a sharp increase in cost of goods sold[8](index=8&type=chunk) [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Q1 2021 vs. Q1 2020 Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | **Net Cash (Used in) Provided by Operating Activities** | **($14,347)** | **$4,034** | | Net Cash Provided by Investing Activities | $12,828 | $3,838 | | Net Cash Used in Financing Activities | ($2,624) | ($3,101) | | **Net Change in Cash** | **($4,143)** | **$4,771** | - Operating activities consumed **$14.3 million** in cash, a stark contrast to the **$4.0 million** generated in the prior-year period, driven by the net loss and an increase in inventory[14](index=14&type=chunk) [Notes to Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail chemical and biofuel segments, key accounting policies, the impact of the Biodiesel Blenders' Tax Credit, a $2.6 million derivative loss, and a dispute over a February 2021 natural gas bill - The company operates in two segments: chemicals (custom and performance chemicals) and biofuels (primarily biodiesel)[17](index=17&type=chunk)[18](index=18&type=chunk)[19](index=19&type=chunk) - The Biodiesel Blenders' Tax Credit (BTC) was retroactively reinstated in late 2019 and extended through 2022, benefiting the biofuels segment by reducing cost of goods sold[22](index=22&type=chunk)[23](index=23&type=chunk) Segment Revenue and Gross (Loss) Profit (in thousands) | Segment | Q1 2021 Revenue | Q1 2020 Revenue | Q1 2021 Gross (Loss) Profit | Q1 2020 Gross Profit | | :--- | :--- | :--- | :--- | :--- | | Chemicals | $16,110 | $27,693 | ($1,301) | $8,014 | | Biofuels | $25,406 | $25,389 | ($9,435) | $8,385 | | **Total** | **$41,516** | **$53,082** | **($10,736)** | **$16,399** | - The company is disputing its February 2021 natural gas bill following an extraordinary price increase, with payment pending investigation[84](index=84&type=chunk) - Subsequent to the quarter end, in April 2021, the company decided to exit its status as a shipper on a common carrier pipeline, which may lead to an impairment charge on an intangible asset valued at **$1.4 million**[86](index=86&type=chunk)[56](index=56&type=chunk) [Item 2. Management's Discussion and Analysis (MD&A)](index=21&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management attributes the financial decline to Winter Storm Uri's impact on natural gas prices, derivative losses, and LIFO adjustments, while maintaining strong liquidity [Results of Operations](index=24&type=section&id=Results%20of%20Operations) Consolidated Financial Performance Summary (in thousands) | Metric | Q1 2021 | Q1 2020 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | $41,516 | $53,082 | ($11,566) | (21.8%) | | Gross (Loss) Profit | ($10,736) | $16,399 | ($27,135) | (165.5%) | | Net (Loss) Income | ($8,773) | $19,043 | ($27,816) | (146.1%) | - The decline in gross profit was primarily driven by: exorbitant natural gas prices from Winter Storm Uri (increasing costs by **$7.8 million**), a loss on derivative instruments of **$2.6 million** versus a gain of **$6.9 million** in the prior year, and a negative LIFO inventory adjustment of **$3.9 million**[110](index=110&type=chunk) - Chemicals segment revenue decreased **41.8%** to **$16.1 million**, mainly due to lower sales volumes in custom chemicals from natural gas curtailment, COVID-19 impacts, and product discontinuation[118](index=118&type=chunk) - Biofuels segment revenue was flat at **$25.4 million**, as higher selling prices for fuel and RINs offset lower sales volumes, but reported a gross loss of **$9.4 million** compared to a gross profit of **$8.4 million** in Q1 2020, largely due to Winter Storm Uri and derivative losses[121](index=121&type=chunk)[123](index=123&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) - The company believes existing cash balances (**$194.0 million** at quarter-end) and its credit facility are sufficient to fund operations, dividends, and capital requirements[133](index=133&type=chunk)[6](index=6&type=chunk) - The company has a **$100 million** revolving credit facility that expires in March 2025, with no borrowings outstanding as of March 31, 2021[138](index=138&type=chunk)[62](index=62&type=chunk) - In Q1 2021, the company paid a regular quarterly cash dividend of **$0.06 per share**, totaling **$2.6 million**; in Q1 2020, a special cash dividend of **$3.00 per share** (**$131.2 million**) was also declared[140](index=140&type=chunk) [Market Risk](index=31&type=section&id=Market%20Risk) - The company is exposed to commodity price risk for both inputs (feedstock, natural gas) and outputs (chemicals, biofuels), mitigated by long-term contracts with price adjustment clauses and exchange-traded derivatives[148](index=148&type=chunk)[149](index=149&type=chunk)[150](index=150&type=chunk) Sensitivity Analysis of a 10% Adverse Price Change on Gross Profit | Item | Decrease in Gross Profit ($ thousands) | Percentage Decrease in Gross Profit | | :--- | :--- | :--- | | Biodiesel feedstocks | $3,115 | 29.0% | | Natural gas | $798 | 7.4% | | Methanol | $261 | 2.4% | | Electricity | $116 | 1.1% | PART II OTHER INFORMATION [Item 1. Legal Proceedings](index=33&type=section&id=Item%201.%20Legal%20Proceedings.) The company is not party to any material pending legal proceedings beyond routine litigation incidental to its business - There are no material pending legal proceedings against the company outside of ordinary business litigation[162](index=162&type=chunk) [Item 1A. Risk Factors](index=33&type=section&id=Item%201A.%20Risk%20Factors.) No material changes to risk factors were reported since the filing of the 2020 Form 10-K - No material changes to risk factors were reported since the filing of the 2020 Form 10-K[163](index=163&type=chunk)

Part I [Business](index=4&type=section&id=Item%201.%20Business) FutureFuel Corp. operates in chemicals and biofuels, with biofuels contributing 61% of 2020 revenue, influenced by incentives and competition, while chemicals face contract declines - The company's business is managed in two segments: chemicals (custom manufacturing and performance chemicals) and biofuels. The chemicals segment focuses on specialty chemicals for specific customers and multi-customer performance chemicals, while the biofuels segment primarily produces and sells biodiesel[14](index=14&type=chunk)[21](index=21&type=chunk) - In 2020, the company distributed quarterly cash dividends of **$0.06 per share** and a special dividend of **$3.00 per share**. Quarterly dividends of **$0.06 per share** have also been declared for 2021[13](index=13&type=chunk) 2020 Revenue Breakdown by Segment | Segment | Percentage of Revenue | | :--- | :--- | | Biofuels | 61% | | Custom Manufacturing | 31% | | Performance Chemicals | 8% | [Biofuels Business Segment](index=5&type=section&id=Biofuels%20Business%20Segment) The biofuels segment produces biodiesel, influenced by RFS2 and BTC, facing competition from renewable diesel and feedstock volatility - The one dollar per gallon Blenders' Tax Credit (BTC) was retroactively reinstated in late December 2019, covering the period from January 1, 2018, through December 31, 2022[37](index=37&type=chunk) - Renewable diesel is a rapidly growing competitor to biodiesel, trading at a premium due to its compatibility with existing petrodiesel infrastructure and better cold-weather performance. A significant capital investment would be required for FutureFuel to enter this market[57](index=57&type=chunk)[60](index=60&type=chunk) - In 2020, one customer accounted for approximately **20% of biofuel revenue** (12% of total revenue). The company does not have long-term contracts with biofuel customers, instead selling via short-term purchase orders at market rates[55](index=55&type=chunk) Finalized RFS2 Renewable Fuel Volumes | Fuel Type | 2019 | 2020 | 2021 | | :--- | :--- | :--- | :--- | | Cellulosic biofuel (million gallons) | 418 | 593 | n/a | | Biomass-based diesel (billion gallons) | 2.10 | 2.43 | 2.43 | | Advanced biofuel (billion gallons) | 4.92 | 5.09 | n/a | | Renewable fuel (billion gallons) | 19.92 | 20.09 | n/a | [Chemicals Business Segment](index=12&type=section&id=Chemicals%20Business%20Segment) The chemicals segment, comprising custom manufacturing and performance chemicals, faces declining legacy product demand and intensifying international competition - Demand for a key laundry detergent additive has ceased, and the customer will not require further production after 2020[75](index=75&type=chunk) - A significant chemical customer did not renew two product contracts at the end of 2019 and 2020, respectively. These contracts represented a combined **14% of total revenue in 2019** and **13% in 2018**[76](index=76&type=chunk) - Competition in the specialty chemicals market has intensified, primarily from manufacturers in India and China. FutureFuel competes based on price, customer service, technology, quality, and reliability[77](index=77&type=chunk) [Intellectual Property, R&D, and Environmental Matters](index=14&type=section&id=Intellectual%20Property%2C%20R%26D%2C%20and%20Environmental%20Matters) The company protects IP, invests in R&D for biofuels and chemicals, and manages significant environmental compliance costs under stringent regulations - The company's operations are subject to numerous complex environmental laws, including CERCLA, RCRA, the Clean Water Act, and the Clean Air Act, which can impose significant compliance costs and liability for contamination[87](index=87&type=chunk)[89](index=89&type=chunk)[90](index=90&type=chunk)[92](index=92&type=chunk)[93](index=93&type=chunk) Research & Development Expense | Year | Expense (in thousands) | | :--- | :--- | | 2020 | $2,988 | | 2019 | $3,191 | | 2018 | $3,524 | Environmental Protection Expenditures | Year | Expenditures (in thousands) | | :--- | :--- | | 2020 | $10,057 | | 2019 | $10,024 | | 2018 | $10,940 | [Risk Factors](index=18&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from economic conditions, COVID-19, reliance on government incentives, intense competition, customer concentration, and environmental regulations - The business is significantly affected by the COVID-19 pandemic, which could negatively impact raw material sourcing, product demand, and supply chain operations[110](index=110&type=chunk)[111](index=111&type=chunk)[112](index=112&type=chunk) - The biomass-based diesel industry relies heavily on government incentives, particularly the Blenders' Tax Credit (BTC). The BTC is set to expire after December 31, 2022, and there is no guarantee it will be reinstated, which would materially harm the business[114](index=114&type=chunk)[115](index=115&type=chunk)[116](index=116&type=chunk) - The company faces intense competition from other biodiesel producers, foreign imports, and rapidly growing renewable diesel, which has advantages in blending and transportation. U.S. biodiesel production capacity also exceeds the federal mandate, which could pressure prices[125](index=125&type=chunk)[128](index=128&type=chunk)[129](index=129&type=chunk) - The business is reliant on a small number of customers. The chemicals segment has five large customers representing over **70% of its sales**, while the biofuels segment had one customer accounting for **12% of total 2020 revenue**[150](index=150&type=chunk)[151](index=151&type=chunk) [Unresolved Staff Comments](index=31&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - None[207](index=207&type=chunk) [Properties](index=31&type=section&id=Item%202.%20Properties) The company's primary asset is a well-maintained, owned manufacturing plant in Batesville, Arkansas, with sufficient capacity for current needs - The company's main asset is a manufacturing plant on a 2,200-acre site in Batesville, Arkansas, which is owned by its subsidiary, FutureFuel Chemical Company[208](index=208&type=chunk) [Legal Proceedings](index=31&type=section&id=Item%203.%20Legal%20Proceedings) The company is not involved in any material pending legal proceedings beyond routine business litigation - The company is not a party to any material pending legal proceedings, other than ordinary routine litigation incidental to its business[209](index=209&type=chunk) [Mine Safety Disclosures](index=31&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - Not applicable[211](index=211&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=32&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on the NYSE, with 43.7 million shares outstanding, and it paid regular and special dividends in 2020 - The company's common stock is traded on the NYSE under the symbol "FF", with **43,743,243 shares outstanding** as of March 16, 2021[215](index=215&type=chunk) - The company paid regular cash dividends in 2020 and 2019, a special dividend in 2020, and has declared dividends for 2021. Future dividends are not guaranteed[217](index=217&type=chunk) Equity Compensation Plan Information (as of Dec 31, 2020) | Plan Category | Securities to be issued upon exercise of outstanding options (a) | Weighted-average exercise price of outstanding options (b) | Securities remaining available for future issuance (c) | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by security holders | 44,000 | $12.73 | 4,330,167 | [Selected Financial Data](index=35&type=section&id=Item%206.%20Selected%20Financial%20Data) This section provides a five-year summary of the company's key historical financial data, including revenue, net income, and cash flows Selected Financial Data (2018-2020) | Item (in thousands, except per share) | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | Operating Revenue | $204,505 | $205,226 | $291,018 | | Net income | $46,564 | $88,181 | $53,158 | | Diluted EPS | $1.06 | $2.02 | $1.22 | | Total Assets | $441,304 | $586,505 | $471,155 | | Dividends declared per share | $3.24 | $0.24 | $0.24 | | Net cash from operating activities | $96,403 | $34,638 | $85,613 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes financial performance, highlighting flat 2020 revenue, decreased net income due to a 2019 tax credit, and strong liquidity despite segment challenges - The significant decrease in 2020 gross profit was primarily due to a **$31.3 million benefit** recognized in 2019 from the retroactive reinstatement of the 2018 biodiesel BTC, lower biodiesel margins, and reduced chemical sales volumes due to COVID-19 and an expired contract[261](index=261&type=chunk) - The 2020 effective tax rate was positively impacted by the CARES Act, which allowed the company to carry back 2019 and 2020 net operating losses to years with a higher **35% tax rate**, resulting in a significant tax benefit[265](index=265&type=chunk) - Cash from operating activities increased to **$96.4 million in 2020** from **$34.6 million in 2019**, mainly due to a large decrease in accounts receivable which had been inflated in 2019 by the BTC receivable[309](index=309&type=chunk) Financial Summary: 2020 vs. 2019 (in thousands) | Metric | 2020 | 2019 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $204,505 | $205,226 | $(721) | (0.4%) | | Income from operations | $22,339 | $65,309 | $(42,970) | (65.8%) | | Net income | $46,564 | $88,181 | $(41,617) | (47.2%) | | Adjusted EBITDA | $29,157 | $78,697 | $(49,540) | (63.0%) | [Quantitative and Qualitative Disclosures About Market Risk](index=49&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces significant market risk from commodity price fluctuations, particularly in biofuels, with a 10% adverse feedstock price change impacting gross profit by 38.8% - The company uses exchange-traded commodity futures and options to manage price risk in its biofuels business, but these instruments do not qualify for hedge accounting treatment[342](index=342&type=chunk) Gross Profit Sensitivity to 10% Adverse Price Change in Key Commodities | Item | Decrease in Gross Profit ($ thousands) | Percentage Decrease in Gross Profit | | :--- | :--- | :--- | | Biodiesel feedstocks | $12,162 | 38.8% | | Methanol | $1,020 | 3.3% | | Electricity | $534 | 1.7% | | Sodium Methylate | $418 | 1.3% | [Financial Statements and Supplementary Data](index=50&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements and independent auditor reports for 2018-2020, along with detailed notes on accounting policies - The report includes an unqualified opinion on the financial statements for the years ended December 31, 2020 and 2019 from the independent auditor, RSM US LLP[353](index=353&type=chunk) - A critical audit matter identified was the recognition of **$8.35 million in other income** related to the legal resolution of a contractual matter, which required significant management judgment[358](index=358&type=chunk) - The retroactive reinstatement of the Blenders' Tax Credit (BTC) in December 2019 resulted in the company recognizing a gross profit of **$57.9 million** in its 2019 financial results, covering both the 2018 and 2019 periods[429](index=429&type=chunk) - As of December 31, 2020, the company expects to recognize approximately **$21.7 million of revenue** in the future from remaining performance obligations under its long-term contracts, with about **17% expected in the next 12 months**[442](index=442&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=82&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no disagreements with its principal accountants regarding accounting principles, financial disclosure, or auditing procedures - There were no disagreements with the company's accountants, RSM US LLP or RubinBrown LLP, on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure[554](index=554&type=chunk) [Controls and Procedures](index=82&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management and auditors concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2020 - Management concluded that as of December 31, 2020, the company's internal control over financial reporting was effective based on the COSO framework[558](index=558&type=chunk) - The independent registered public accounting firm, RSM US LLP, audited the effectiveness of the company's internal control over financial reporting as of December 31, 2020, and issued an unqualified opinion[559](index=559&type=chunk)[563](index=563&type=chunk) [Other Information](index=84&type=section&id=Item%209B.%20Other%20Information) The company confirms no required Form 8-K disclosures were omitted during the fourth quarter of 2020 - No information required to be disclosed in a report on Form 8-K was omitted during the fourth quarter of 2020[571](index=571&type=chunk) Part III [Directors, Executive Officers, and Corporate Governance](index=85&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%2C%20and%20Corporate%20Governance) This section identifies directors and executive officers, outlines corporate governance structures, and confirms the independence and expertise of the audit committee - The company's directors and executive officers are identified, including Chairman and CEO Paul A. Novelly, COO Thomas McKinlay, and CFO Rose M. Sparks[575](index=575&type=chunk)[576](index=576&type=chunk) - The company has adopted a code of business conduct and ethics, which is available on its website[606](index=606&type=chunk) - The Board of Directors has determined that each member of its audit committee is an audit committee financial expert and is independent[610](index=610&type=chunk) [Executive Compensation](index=91&type=section&id=Item%2011.%20Executive%20Compensation) This section details executive compensation, including base salary, bonuses, and equity awards, noting the CEO received no direct compensation in 2020 - Directors receive an annual stipend of **$30,000**, with committee chairs receiving an additional **$10,000**. They also receive fees for meeting attendance (**$2,000 for in-person**, **$1,000 for telephonic**)[612](index=612&type=chunk) - The company's pay ratio of its Principal Executive Officer (PEO) to the median employee was zero, as the PEO, Paul A. Novelly, received no compensation from the company[665](index=665&type=chunk) 2020 Summary Compensation (in thousands) | Name | Position | Salary | Bonus | Option Awards | All Other | Total | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Paul A. Novelly | Chairman & CEO | $0 | $0 | $0 | $0 | $0 | | Rose M. Sparks | CFO | $183 | $95 | $0 | $54 | $332 | | Paul M. Flynn (retired) | EVP | $226 | $69 | $0 | $40 | $335 | | Tom McKinlay | COO | $287 | $95 | $49 | $22 | $446 | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=99&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This section details beneficial ownership of common stock, with Chairman Paul A. Novelly holding 40.5% and institutional investors holding significant stakes - As of the report date, all directors and executive officers as a group beneficially owned **18,132,106 shares**, representing **41.5% of the outstanding common stock**[677](index=677&type=chunk) Security Ownership of Certain Beneficial Owners (>5%) | Name of Beneficial Owner | Amount of Beneficial Ownership | Percent of Common Stock | | :--- | :--- | :--- | | Paul A. Novelly | 17,725,100 | 40.5% | | BlackRock, Inc. | 4,043,313 | 9.2% | | Dimensional Fund Advisors LP | 2,811,492 | 6.4% | | The Vanguard Group | 2,726,360 | 6.2% | | Renaissance Technologies LLC | 2,263,800 | 5.2% | [Certain Relationships and Related Transactions, and Director Independence](index=102&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) The company conducts market-priced transactions with related parties, subject to disinterested board approval, and maintains a majority of independent directors - The company conducts transactions with Apex Oil Company, Inc. and its affiliates for buying and selling biofuels, petroleum products, and natural gas, and for administrative services. These transactions are priced at market rates[685](index=685&type=chunk) - The company has a formal policy requiring that any related party transaction exceeding **$120,000** be approved by a majority of disinterested directors as fair to the company and its shareholders[686](index=686&type=chunk) - The Board of Directors has determined that seven of its members are independent under SEC and NYSE rules: Edwin A. Levy, Donald C. Bedell, Paul M. Manheim, Terrance C.Z. Egger, Dale E. Cole, Jeffrey L. Schwartz, and Alain J. Louvel[688](index=688&type=chunk) [Principal Accountant Fees and Services](index=103&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) This section details fees paid to the principal accountant, RSM US LLP, for 2019-2020 services, all pre-approved by the audit committee - The audit committee pre-approves all audit and permissible non-audit services provided by the independent auditors[695](index=695&type=chunk) Accountant Fees (in thousands) | Fee Type | 2020 | 2019 | | :--- | :--- | :--- | | Audit Fees | $354 | $296 | | Audit-Related Fees | $12 | $12 | | Tax Fees | $0 | $0 | | All Other Fees | $0 | $0 | Part IV [Exhibits and Financial Statement Schedules](index=104&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all financial statements and exhibits filed with the Form 10-K, including governance documents and material contracts - Lists the financial statements filed with the report and provides a list of all exhibits required by Item 601 of Regulation S-K, including governance documents, material contracts, and certifications[700](index=700&type=chunk)[701](index=701&type=chunk) [Form 10-K Summary](index=105&type=section&id=Item%2016.%20Summary) The company has elected not to include a summary of information required by Form 10-K under this item - The Company has elected not to include a summary of information required by Form 10-K under this Item 16[703](index=703&type=chunk)