GlobeNewswire Inc | Aug 9, 2021 04:15PM EDT

August 09, 2021

FutureFuel SecondQuarter Net Incomeof $3.5Million

Reports Net Incomeof $3.5Million or $0.08per Diluted Share, and Adjusted EBITDA of$4.7Million

CLAYTON, Mo., Aug. 09, 2021 (GLOBE NEWSWIRE) -- FutureFuel Corp. (NYSE:FF) (FutureFuel), a manufacturer of custom and performance chemicals and biofuels, today announced financial results for the secondquarter and the six months ended June30, 2021.

Second quarter 2021 Financial Highlights (all comparisons are with the secondquarter of 2020)

-- Revenues were $74.1 million, up56% from $47.4million -- Adjusted EBITDA was $4.7million, up 76% from $2.7million -- Net income was$3.5million, or $0.08per diluted share, down from net income of $15.2million, or $0.35per diluted share.

Six month2021 Financial Highlights (all comparisons are with the first halfof 2020)

-- Revenues were $115.6million, up15% from $100.5million -- Adjusted EBITDA was ($3.2) million, down from $12.8million -- Net losswas$5.3million, or ($0.12)per diluted share, down from net income of $34.2million, or $0.78per diluted share.

This quarter we saw resilient margin contribution from our biofuels segment, even in the face of record-high feedstock prices. This was made possible by a strong, consistent manufacturing performance since the disruption of Winter Storm Uri. Our effortsare againfully focused on recovering ground in our chemicals segment, which we are attacking on a number of fronts. said Tom McKinlay, Chief Operating Officer for FutureFuel Corp.

2021 Cash Dividends

FutureFuel paid a regular quarterly cash dividend in the amount of $0.06 per share on our common stock in the second quarter of 2021. In addition, we also declared a special cash dividend of $2.50 per share paid in June. The remaining quarterly dividends of $0.06 per share areexpected to be paid inSeptemberand December.

Financial Overview and Key Operating Metrics

Financial and operating metrics, which include non-GAAP financial measures, include dollars in thousands, except per share amounts:

FutureFuel Corp.Certain Financial and Operating Metrics (Unaudited)

Three Months Ended June 30, Dollar % 2021 2020 Change Change Revenue $ 74,118 $ 47,422 $ 26,696 56 %Lossfrom operations $ (2,003 ) $ (1,139 ) $ (864 ) (76 %)Net income $ 3,481 $ 15,159 $ (11,678 ) (77 %)Earningsper common share:Basic $ 0.08 $ 0.35 $ (0.27 ) (77 %)Diluted $ 0.08 $ 0.35 $ (0.27 ) (77 %)Adjusted EBITDA $ 4,668 $ 2,652 $ 2,016 76 %

Six Months Ended June 30, Dollar % 2021 2020 Change Change Revenue $ 115,634 $ 100,504 $ 15,130 15 %(Loss) income from $ (15,061 ) $ 12,840 $ (27,901 ) n/a operationsNet (loss) income $ (5,292 ) $ 34,202 $ (39,494 ) n/a (Loss) earnings per common share:Basic $ (0.12 ) $ 0.78 $ (0.90 ) n/a Diluted $ (0.12 ) $ 0.78 $ (0.90 ) n/a Adjusted EBITDA $ (3,157 ) $ 12,829 $ (15,986 ) n/a

Financial and Business Summary

Consolidated revenue in the three and six months endedJune 30, 2021 increased $26,696and $15,130,compared to the three and six months ended June 30, 2020. This increase primarily resulted from increased prices in the biofuels segment partially offset by lower sales volumes in the chemicals segment. Biofuels volume increased sales revenue in the current three-month period, but reduced revenue in the six-month period, as compared to the same periods of the prior year due to the unfavorable impact of winter storm Uri.

Income from operations in the three months ended June30, 2021 decreased$864compared to the three months ended June30, 2020. This decline primarily resulted from: i) reduced sales volumes of two custom chemicals we no longer sell; ii) the adjustment in the carrying value of our inventory as determined utilizing the LIFO method of inventory accounting which decreased gross profit $3,115 in the current three-month period as compared to an increase in gross profit of $1,575 in the same prior year period and iii) the change in the unrealized and realized positionsin derivative instruments with a loss of $5,404 in the current three month period as compared to a loss of $935 in the same prior year period. Mostly offsetting these declines was improved margins in the biofuel segment.

Income from operations in the six months ended June 30, 2021 decreased$27,901compared to the six months ended June 30, 2020. This decline primarily resulted from: i) exorbitant natural gas prices invoicedfrom Winter Storm Uri which resulted in an increase of $7,800 as compared to the prior year quarter;ii)a reduction in production volumes given the natural gas curtailment;iii) reduced sales volumes of two custom chemicals we no longer sale; iv) the change in the unrealized and realized positionsin derivative instruments with aloss of $8,029 in the six months ended June 30, 2021 as compared to a gain of $5,922 in the six months ended June 30, 2020 and iv) the change in the adjustment in the carrying value of our inventory as determined utilizing the LIFO method of inventory accounting. This adjustment decreased gross profit $7,028 in the six months ended June 30, 2021 as compared to an increase in gross profit of $2,894 in the same prior period. Partially offsetting these declines was improved margins in the biofuel segment.

Capital Expenditures

Capital expenditures were $488in the first halfof 2021, compared with $2,759in the same period in 2020.

Cash and Cash Equivalents and Marketable Securities

Cash and cash equivalents and marketable securities totaled $143,832as of June30, 2021. Aspecial dividend was paid on June 4, 2021 in the amount of $109,408. Cash and cash equivalents were$262,526 as of December 31, 2020.

About FutureFuel

FutureFuel is a leading manufacturer of diversified chemical products, specialty chemical products, and biofuel products. In its chemicals business, FutureFuel manufactures specialty chemicals for specific customers (custom chemicals) as well as multi-customer specialty chemicals (performance chemicals). FutureFuels custom chemicals product portfolio includes chlorinated polyolefin adhesion promoters and antioxidant precursors for a major chemical company. FutureFuels performance chemicals product portfolio includes polymer (nylon) modifiers and several small-volume specialty chemicals for diverse applications. FutureFuels biofuels segment primarily produces and sells biodiesel to its customers. Please visit www.futurefuelcorporation.com for more information.

Forward-Looking Statements

This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements deal with FutureFuels current plans, intentions, beliefs, and expectations, and statements of future economic performance. Statements containing such terms as believe, do not believe, plan, expect, intend, estimate, anticipate, and other phrases of similar meaning are considered to contain uncertainty and are forward-looking statements. In addition, from time to time FutureFuel or its representatives have made or will make forward-looking statements orally or in writing. Furthermore, such forward-looking statements may be included in various filings that the company makes with United States Securities and Exchange Commission (the SEC), in press releases, or in oral statements made by or with the approval of one of FutureFuels authorized executive officers.

These forward-looking statements are subject to certain known and unknown risks and uncertainties, including, but not limited to the COVID-19 pandemic and the response thereto, as well as assumptions that could cause actual results to differ materially from those reflected in these forward-looking statements. Factors that might cause actual results to differ include, but are not limited to, those set forth under the headings Risk Factors and Managements Discussion and Analysis of Financial Condition and Results of Operations in FutureFuels Form 10-K Annual Report for the year ended December 31, 2020 and in its future filings made with the SEC. An investor should not place undue reliance on any forward-looking statements contained in this document, which reflect FutureFuel managements opinions only as of their respective dates. Except as required by law, the company undertakes no obligation to revise or publicly release the results of any revisions to forward-looking statements. The risks and uncertainties described in this document and in current and future filings with the SEC are not the only ones faced by FutureFuel. New factors emerge from time to time, and it is not possible for the company to predict which will arise. There may be additional risks not presently known to the company or that the company currently believes are immaterial to its business. In addition, FutureFuel cannot assess the impact of each factor on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. If any such risks occur, FutureFuels business, operating results, liquidity, and financial condition could be materially affected in an adverse manner. An investor should consult any additional disclosures FutureFuel has made or will make in its reports to the SEC on Forms 10-K, 10-Q, and 8-K, and any amendments thereto. All subsequent written and oral forward-looking statements attributable to FutureFuel or persons acting on its behalf are expressly qualified in their entirety by the cautionary statements contained in this document.

Non-GAAP Financial Measures

In this press release, FutureFuel used adjusted EBITDA as a key operating metric to measure both performance and liquidity. Adjusted EBITDA is a non-GAAP financial measure. Adjusted EBITDA is not a substitute for operating income, net income, or cash flow from operating activities (each as determined in accordance with GAAP), as a measure of performance or liquidity. Adjusted EBITDA has limitations as an analytical tool, and should not be considered in isolation or as a substitute for analysis of results as reported under GAAP. FutureFuel defines adjusted EBITDA as net income before interest, income taxes, depreciation, and amortization expenses, excluding, when applicable, non-cash share-based compensation expense, public offering expenses, acquisition-related transaction costs, purchase accounting adjustments, loss on disposal of property and equipment, gains or losses on derivative instruments, other non-operating income or expense. Information relating to adjusted EBITDA is provided so that investors have the same data that management employs in assessing the overall operation and liquidity of FutureFuels business. FutureFuels calculation of adjusted EBITDA may be different from similarly titled measures used by other companies; therefore, the results of its calculation are not necessarily comparable to the results of other companies.

Adjusted EBITDA allows FutureFuels chief operating decision makers to assess the performance and liquidity of FutureFuels business on a consolidated basis to assess the ability of its operating segments to produce operating cash flow to fund working capital needs, to fund capital expenditures, and to pay dividends. In particular, FutureFuel management believes that adjusted EBITDA permits a comparative assessment of FutureFuels operating performance and liquidity, relative to a performance and liquidity based on GAAP results, while isolating the effects of depreciation and amortization, which may vary among its operating segments without any correlation to their underlying operating performance, and of non-cash stock-based compensation expense, which is a non-cash expense that varies widely among similar companies, and gains and losses on derivative instruments, whose immediate recognition can cause net income to be volatile from quarter to quarter due to the timing of the valuation change in the derivative instruments relative to the sale of biofuel.

A table included in this earnings release reconciles adjusted EBITDA with net income, the most directly comparable GAAP performance financial measure, and a table reconciles adjusted EBITDA with cash flows from operations, the most directly comparable GAAP liquidity financial measure.

FutureFuel Corp.Condensed Consolidated Balance Sheets(Dollars in thousands)

(Unaudited) June30, December 2021 31, 2020Assets Cash and cash equivalents $ 97,594 $ 198,122 Accounts receivable, inclusive of the blenders' taxcredit of $12,160and $8,300 and net of 31,354 22,813 allowances for bad debt of $50and $63,respectivelyInventory 53,514 33,889 Marketable securities 46,238 64,404 Other current assets 21,163 23,377 Total current assets 249,863 342,605 Property, plant and equipment, net 86,852 91,544 Other assets 5,705 7,155 Total noncurrent assets 92,557 98,699 Total Assets $ 342,420 $ 441,304 Liabilities and Stockholders? Equity Accounts payable, inclusive of the blenders' tax $ 44,521 $ 13,437 credit rebates due customers of $890 and $1,116Dividends payable 5,248 10,498 Other current liabilities 10,608 9,053 Total current liabilities 60,377 32,988 Deferred revenue ? long-term 19,129 21,861 Other noncurrent liabilities 5,500 14,572 Total noncurrent liabilities 24,629 36,433 Total liabilities 85,006 69,421 Preferred stock, $0.0001 par value, 5,000,000 - - shares authorized, none issued and outstandingCommon stock, $0.0001 par value, 75,000,000 sharesauthorized, 43,763,243 and 43,743,243, 4 4 issued and outstanding at June30, 2021 andDecember 31, 2020, respectivelyAccumulated other comprehensive income 208 208 Additional paid in capital 282,446 282,215 Retained (deficit) earnings (25,244 ) 89,456 Total Stockholders? Equity 257,414 371,883 Total Liabilities and Stockholders? Equity $ 342,420 $ 441,304

FutureFuel Corp.Condensed Consolidated Statements of Operations and Comprehensive Income(Dollars in thousands, except per share amounts)(Unaudited)

Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 Revenue $ 74,118 $ 47,422 $ 115,634 $ 100,504 Cost of goods sold 74,161 46,511 126.413 83,194 and distributionGross (loss) profit (43 ) 911 (10,779 ) 17,310 Selling, general, andadministrative 1,162 1,282 2,710 2,867 expensesResearch and 798 768 1,572 1,603 development expensesTotal operating 1,960 2,050 4,282 4,470 expenses(Loss) incomefrom (2,003 ) (1,139 ) (15,061 ) 12,840 operationsOther income, net 1,015 11,409 913 3,261 (Loss) income before (988 ) 10,270 (14,148 ) 16,101 income taxesIncome tax benefit (4,469 ) (4,889 ) (8,856 ) (18,101 )Net income (loss) $ 3,481 $ 15,159 $ (5,292 ) $ 34,202 Earnings (loss) per common shareBasic $ 0.08 $ 0.35 $ (0.12 ) $ 0.78 Diluted $ 0.08 $ 0.35 $ (0.12 ) $ 0.78 Weighted average shares outstandingBasic 43,754,232 43,743,243 43,748,768 43,743,243 Diluted 43,754,422 43,743,740 43,748,768 43,743,491 Comprehensiveincome (loss)Net income (loss) $ 3,481 $ 15,159 $ (5,292 ) $ 34,202 Other comprehensiveincome (loss) fromunrealized net gain 60 190 - (207 )(loss)on available-for-saledebt securitiesIncome tax effect (16 ) (40 ) - 44 Total othercomprehensive income 44 150 - (163 )(loss), net of taxComprehensiveincome $ 3,525 $ 15,309 $ (5,292 ) $ 34,039 (loss)

FutureFuel Corp.Consolidated Statements of Cash Flows(Dollars in thousands)(Unaudited)

Six Months Ended June 30, 2021 2020 Cash flows from operating activities Net (loss) income $ (5,292 ) $ 34,202 Adjustments to reconcile net income to net cash from operating activities:Depreciation 5,231 5,862 Amortization of deferred financing costs 47 60 (Provision) benefit for deferred income taxes (8,881 ) 699 Change in fair value of equity securities 222 7,405 Change in fair value of derivative instruments 1,136 198 (Gain) loss on the sale of investments (758 ) 1,080 Stock based compensation - 49 Loss on disposal of property and equipment - 2 Impairment of intangible asset 1,315 - Noncash interest expense 16 27 Changes in operating assets and liabilities: Accounts receivable (9,946 ) 81,029 Accounts receivable ? related parties 1,405 4,290 Inventory (19,625 ) (4,610 )Income tax receivable 801 (19,380 )Prepaid expenses 1,977 782 Prepaid expenses ? related parties (12 ) - Other assets 635 350 Accounts payable 23,074 (29,702 )Accounts payable ? related parties 7,959 220 Accrued expenses and other current liabilities 7 2,572 Accrued expenses and other current liabilities ? - (64 )related partiesDeferred revenue (1,318 ) (659 )Other noncurrent liabilities (342 ) (211 )Net cash (used in) provided by operating activities (2,349 ) 84,201 Cash flows from investing activities Collateralization of derivative instruments (2,060 ) (2,877 )Purchase of marketable securities (19,170 ) (2,359 )Proceeds from the sale of marketable securities 37,873 5,192 Proceeds from the sale of property and equipment - 50 Proceeds from the sale of intangible asset 93 - Capital expenditures (488 ) (2,759 )Net cash from (used in) investing activities 16,248 (2,753 )Cash flows from financing activities Loan proceeds - 8,180 Payment on loan - (8,180 )Deferred financing costs - (477 )Proceeds from the issuance of stock 231 - Payment of dividends (114,658 ) (136,479 )Net cash used in financing activities (114,427 ) (136,956 )Net change in cash and cash equivalents (100,528 ) (55,508 )Cash and cash equivalents at beginning of period 198,122 243,331 Cash and cash equivalents at end of period $ 97,594 $ 187,823 Cash paid for interest $ 43 $ 1 Cash paid for income taxes $ 79 $ 639 Noncash investing and financing activities: Noncash capital expenditures $ 51 $ 94 Noncash operating leases $ 269 -

FutureFuel Corp.Reconciliation of Non-GAAP Financial Measure to Financial Measure(Dollars in thousands)(Unaudited)

Reconciliation of Adjusted EBITDA to Net Income

Three Months Ended June Six Months Ended June 30, 30, 2021 2020 2021 2020 Netincome $ 3,481 $ 15,159 $ (5,292 ) $ 34,202 (loss)Depreciation 2,623 2,858 5,231 5,862 Non-cashstock-based - - - 49 compensationInterest and (790 ) (1,519 ) (1,795 ) (3,486 )dividend incomeNon-cash interestexpense andamortization of 31 31 63 87 deferredfinancing costsLosses ondisposal of - - - 2 property andequipmentLoss (gain)onderivative 5,404 935 8,029 (5,922 )instruments(Gain) loss onmarketable (1,612 ) (1,573 ) (537 ) 8,486 securitiesOther income - (8,350 ) - (8,350 )Income tax (4,469 ) (4,889 ) (8,856 ) (18,101 )benefitAdjusted EBITDA $ 4,668 $ 2,652 $ (3,157 ) $ 12,829

Reconciliation of Adjusted EBITDA to Net Cash Provided by Operating Activities

Six Months Ended June 30, 2021 2020 Net cash (used in) provided by operating $ (2,349 ) $ 84,201 activitiesBenefit for deferred income taxes 8,881 (699 )Interest and dividend income (1,795 ) (3,486 )Income tax benefit (8,856 ) (18,101 )Loss (gain) on derivative instruments 8,029 (5,922 )Change in fair value of derivative instruments (1,136 ) (198 )Change in operating assets and liabilities, net (4,615 ) (34,617 )Other income - (8,350 )Impairment of intangible asset (1,315 ) - Other (1 ) 1 Adjusted EBITDA $ (3,157 ) $ 12,829

FutureFuel Corp.Condensed Consolidated Segment Income(Dollars in thousands)(Unaudited)

Three Months Ended June Six Months Ended June 30, 30, 2021 2020 2021 2020 Revenue Custom chemicals $ 12,260 $ 18,041 $ 22,935 $ 41,801 Performance 3,287 4,797 8,722 8,730 chemicalsChemicals $ 15,547 $ 22,838 $ 31,657 $ 50,531 revenueBiofuels revenue 58,571 24,584 83,977 49,973 Total Revenue $ 74,118 $ 47,422 $ 115,634 $ 100,504 Segment gross (loss) profitChemicals $ 4,285 $ 7,577 $ 2,984 $ 15,591 Biofuels (4,328 ) (6,666 ) (13,763 ) 1,719 Total gross (43 ) 911 (10,779 ) 17,310 (loss) profit

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.

COMPANY CONTACTFutureFuel Corp.Tom McKinlay(314)854-8352www.futurefuelcorporation.com