FutureFuel(FF) - 2025 Q1 - Quarterly Report

PART I FINANCIAL INFORMATION Item 1. Financial Statements Q1 2025 saw a significant downturn, with revenue at $17.5 million and a net loss of $17.6 million Consolidated Balance Sheet Summary (in thousands USD) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $97,071 | $109,541 | | Total current assets | $143,377 | $164,786 | | Total Assets | $227,669 | $247,691 | | Total current liabilities | $30,536 | $33,307 | | Total liabilities | $39,265 | $41,870 | | Total stockholders' equity | $188,404 | $205,821 | Consolidated Statement of Operations Summary (in thousands USD, except per share) | Account | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $17,538 | $58,281 | | Gross (loss) profit | $(14,563) | $5,007 | | (Loss) income from operations | $(18,838) | $2,198 | | Net (loss) income | $(17,643) | $4,330 | | Basic (Loss) earnings per share | $(0.40) | $0.10 | | Diluted (Loss) earnings per share | $(0.40) | $0.10 | Consolidated Statement of Cash Flows Summary (in thousands USD) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(5,395) | $(12,211) | | Net cash used in investing activities | $(4,082) | $(3,485) | | Net cash used in financing activities | $(2,993) | $(2,626) | | Net change in cash and cash equivalents | $(12,470) | $(18,322) | - The Biodiesel Blenders' Tax Credit (BTC) expired on December 31, 2024, and no Clean Fuel Production Credit (CFPC) was recognized in Q1 2025 due to pending rules, creating market uncertainty[24][26][27] - Both Chemicals and Biofuels segments reported significant gross losses in Q1 2025, with the Chemicals segment posting a gross loss of $5.7 million and Biofuels a gross loss of $8.8 million[67] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes significant revenue decline and net loss to operational disruptions and tax credit uncertainties, maintaining liquidity Financial Results Summary (in thousands USD) | Metric | Q1 2025 | Q1 2024 | Dollar Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | $17,538 | $58,281 | $(40,743) | (70)% | | (Loss) income from operations | $(18,838) | $2,198 | $(21,036) | na | | Net (loss) income | $(17,643) | $4,330 | $(21,973) | na | | Adjusted EBITDA | $(16,057) | $7,108 | $(23,165) | na | - The $40.7 million revenue decrease was primarily driven by lower sales volumes in the biofuel segment ($29.9 million) and chemical segment ($7.9 million) due to an extended plant turnaround prolonged by severe weather[83] - The renewable fuel market remains negatively impacted by the expiration of the BTC and uncertainty surrounding the new Clean Fuel Production Credit (CFPC)[83] - The company secured a five-year $75 million revolving credit facility on February 21, 2025, with no borrowings as of March 31, 2025[50][53][108] Results of Operations Consolidated revenue fell 70% to $17.5 million, resulting in a $14.6 million gross loss from reduced throughput Consolidated Results of Operations (in thousands USD) | | Q1 2025 | Q1 2024 | Change Amount | Change % | | :--- | :--- | :--- | :--- | :--- | | Revenues | $17,538 | $58,281 | $(40,743) | (70)% | | Gross (loss) profit | $(14,563) | $5,007 | $(19,570) | na | | Operating expenses | $(4,275) | $(2,809) | $(1,466) | (52)% | - The $19.6 million gross profit decrease was primarily due to reduced throughput from the plant turnaround, increased turnaround expenses, and a smaller LIFO inventory adjustment benefit[84] Chemical Segment Chemical segment revenue decreased 48.1% to $9.4 million, resulting in a $5.7 million gross loss from reduced volume Chemical Segment Performance (in thousands USD) | | Q1 2025 | Q1 2024 | Change Amount | Change % | | :--- | :--- | :--- | :--- | :--- | | Revenues | $9,365 | $18,059 | $(8,694) | (48)% | | Gross (loss) profit | $(5,729) | $4,021 | $(9,750) | na | - Custom chemicals revenue fell by $7.0 million to $8.4 million, and performance chemicals revenue decreased by $1.7 million to $1.0 million, both due to lower sales volumes from the plant turnaround[90] Biofuel Segment Biofuel segment revenue dropped 80% to $8.2 million, resulting in an $8.8 million gross loss from reduced volumes and tax credit issues Biofuel Segment Performance (in thousands USD) | | Q1 2025 | Q1 2024 | Change Amount | Change % | | :--- | :--- | :--- | :--- | :--- | | Revenues | $8,173 | $40,222 | $(32,049) | (80)% | | Gross (loss) profit | $(8,834) | $986 | $(9,820) | na | - The $9.8 million gross profit decrease was mainly due to reduced sales volumes from the plant turnaround and a smaller LIFO inventory adjustment benefit[94] - Derivative instrument activity partially offset the gross loss, with a net loss of $166 thousand in Q1 2025 compared to a net loss of $3.46 million in Q1 2024[46][94] Liquidity and Capital Resources Cash decreased by $12.5 million to $97.1 million in Q1 2025, with $5.4 million used in operations, maintaining liquidity with existing cash and credit facility Cash Flow Summary (in thousands USD) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(5,395) | $(12,211) | | Net cash used in investing activities | $(4,082) | $(3,485) | | Net cash used in financing activities | $(2,993) | $(2,626) | - The company paid regular cash dividends of $0.06 per share, totaling $2.6 million in Q1 2025[110] - The company has an undrawn $75 million revolving credit facility available for working capital, capital expenditures, and general corporate purposes, terminating in February 2030[108] Item 3. Quantitative and Qualitative Disclosures About Market Risk The company faces commodity price volatility, using non-hedge derivatives that may cause earnings volatility, with no interest rate risk - The company uses exchange-traded commodity futures and options to manage biofuel price risk, but these non-designated accounting hedges recognize gains and losses immediately, potentially causing earnings volatility[117] - The fair value of derivative instruments was a net liability of $494 thousand at March 31, 2025, compared to $235 thousand at December 31, 2024[118] - The company had no borrowings at March 31, 2025, and therefore was not exposed to interest rate risk[121] Item 4. Controls and Procedures Management concluded disclosure controls were effective, with no material changes in internal control over financial reporting - The CEO and CFO concluded that disclosure controls and procedures were effective for accurate and timely information reporting[122] - No material changes in internal control over financial reporting occurred during the quarter[123] PART II OTHER INFORMATION Item 1. Legal Proceedings The company is not a party to any material pending legal proceedings, anticipating no material adverse effects - The company is not involved in any material pending legal proceedings outside of ordinary routine litigation[126] Item 1A. Risk Factors No material changes to risk factors previously disclosed in the company's 2024 Annual Report on Form 10-K - No material changes to risk factors from the 2024 Form 10-K have been reported[127] Item 5. Other Information No Section 16 officer or director adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements - No adoptions or terminations of Rule 10b5-1 trading plans by any Section 16 officer or director occurred during the quarter[132]