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Note 11 - Segment Information
 6 Months Ended
Jun. 30, 2025
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

11)

SEGMENT INFORMATION

 

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

 

Chemicals

 

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

 

Biofuels

 

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

 

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

 

Summary of business by segment

 

  

Three months ended June 30, 2025

  

Six months ended June 30, 2025

 
  

Chemical

  

Biofuel

  

Total

  

Chemical

  

Biofuel

  

Total

 

Revenue

 $16,619  $19,054  $35,673  $25,984  $27,227  $53,211 
                         

Less:

                        

Cost of goods sold

  14,658   29,104   43,762   29,512   45,812   75,324 

Distribution

  294   384   678   534   683   1,217 

Segment gross profit (loss)

 $1,667  $(10,434) $(8,767) $(4,062) $(19,268) $(23,330)
                         

Reconciliation of Segment gross profit (loss) to Net loss before income taxes:

                        

Selling, general, and administrative expenses

         $2,228          $5,112 

Research and development expenses

          933           2,324 

Other income, net

          (1,547)          (2,748)

Net loss before income taxes

         $(10,381)         $(28,018)

 

 

 

  

Three months ended June 30, 2024

  

Six months ended June 30, 2024

 
  

Chemical

  

Biofuel

  

Total

  

Chemical

  

Biofuel

  

Total

 

Revenue

 $19,236  $53,173  $72,409  $37,295  $93,395  $130,690 
                         

Less:

                        

Cost of goods sold

  14,357   48,443   62,800   28,192   87,327   115,519 

Distribution

  202   750   952   405   1,102   1,507 

Segment gross profit

 $4,677  $3,980  $8,657  $8,698  $4,966  $13,664 
                         

Reconciliation of Segment gross profit to Net income before income taxes:

                        

Selling, general, and administrative expenses

         $2,290          $4,193 

Research and development expenses

          916           1,822 

Other income, net

          (4,126)          (6,890)

Net income before income taxes

         $9,577          $14,539 

 

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.