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Note 12 - Segment Information
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

12)

SEGMENT INFORMATION

 

FutureFuel has two reportable segments organized along similar product groups – chemicals and biofuels.

 

Chemicals

 

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

 

Biofuels

 

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

 

As of September 30, 2024, FutureFuel held 5.0 million RINs with a fair market value of $2,556 and no cost. Comparatively, at September 30, 2023, FutureFuel held 4.2 million RINs with a fair market value of $6,971 and no cost and at December 31, 2023 4.3 million RINs were held with a fair market value of $6,567 and no cost. These fair values are considered Level 1 inputs.  

 

Summary of business by segment

 

   

Three Months Ended September 30,

    

Nine Months Ended September 30,

  
   

2024

    

2023

    

2024

    

2023

  

Revenue

                                

Custom chemicals

   $ 15,323     $ 14,454     $ 46,333     $ 46,650  

Performance chemicals

     2,605       3,393       8,890       11,834  

Chemical revenue

     17,928       17,847       55,223       58,484  

Biofuel revenue

     33,212       98,905       126,607       217,757  

Total Revenue

   $ 51,140     $ 116,752     $ 181,830     $ 276,241  
                                 

Segment gross profit (loss)

                                

Chemical

   $ 3,407     $ 6,878     $ 12,105     $ 21,917  

Biofuel

     (3,024 )     (3,008 )     1,942       (5,016 )

Total gross profit

   $ 383     $ 3,870     $ 14,047     $ 16,901  
                                 

Operating expenses

   $ 3,271     $ 3,573     $ 9,286     $ 9,936  

(Loss) income from operations

     (2,888 )     297       4,761       6,965  

Other income, net

     1,690       2,491       8,580       7,067  

(Loss) income before taxes

   $ (1,198 )   $ 2,788     $ 13,341     $ 14,032  

 

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