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What changed in FutureFuel Corp.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of FutureFuel Corp.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+175 added−167 removedSource: 10-K (2025-03-31) vs 10-K (2024-03-14)

Top changes in FutureFuel Corp.'s 2024 10-K

175 paragraphs added · 167 removed · 139 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeRenewable Fuel Volumes (billion RINs)* 2023 2024 2025 Cellulosic biofuel 0.84 1.09 1.38 Biomass-based diesel 2.82 3.04 3.35 Advanced biofuel 5.94 6.54 7.33 Renewable fuel 20.94 21.54 22.33 * Units for all volumes are ethanol-equivalent, except for biomass-based diesel volumes, which are expressed as physical gallons. * See https://www.epa.gov/renewable-fuel-standard-program/final-renewable-fuels-standards-rule-2023-2024-and-2025. 4 Table of Contents Federal Blenders ’ and Producers ’ Credits Biodiesel tax incentives have been provided through various federal statutes, including the 2005 Act and the American Jobs Creation Act, and later, the Emergency Economic Stabilization Act of 2008.
Biggest changeSee https://www.epa.gov/renewable-fuel-standard-program/final-renewable-fuels-standards-rule-2023-2024-and-2025. ** EPA has not yet set the volume requirements for 2026 which were due by statute on or prior to October 31,2024. 4 Table of Contents Federal Blenders’ and Producers’ Credits Biodiesel tax incentives have been provided through various federal statutes, including the 2005 Act and the American Jobs Creation Act, and later, the Emergency Economic Stabilization Act of 2008.
Grade No. 1 provides for a maximum total monoglyceride content and a maximum cold soak filterability time and, in theory, would be used where the cloud point of No. 2 biodiesel does not provide adequate assurance of quality. Both grades of biodiesel qualify as “biodiesel” for purposes of the RFS2 mandate.
Grade No. 1 provides for a maximum total monoglyceride content and a maximum cold soak filterability time and, in theory, would be used where the cloud point of Grade No. 2 biodiesel does not provide adequate assurance of quality. Both grades of biodiesel qualify as “biodiesel” for purposes of the RFS2 mandate.
We do not believe that the loss of any of these customers would have a material adverse effect on our biofuels segment or on us as a whole in that: (i) biofuels are a commodity with a large potential customer base; (ii) we believe that we could readily sell biofuels to other customers; (iii) the prices we receive from these customers are based upon then-market rates; and (iv) our sales to the customers are not under fixed terms, and the customers have no obligation to purchase any minimum quantities except as stipulated by short term purchase orders. 7 Table of Contents Competition Renewable diesel continues to be a rapidly growing and competing biofuel with biodiesel.
We do not believe that the loss of any of these customers would have a material adverse effect on our biofuels segment or on us as a whole in that: (i) biofuels are a commodity with a large potential customer base; (ii) we believe that we could readily sell biofuels to other customers; (iii) the prices we receive from these customers are based upon then-market rates; and (iv) our sales to the customers are not under fixed terms, and the customers have no obligation to purchase any minimum quantities except as stipulated by short term purchase orders. 7 Table of Contents Competition Renewable diesel continues to be a rapidly growing biofuel competing with biodiesel.
The Company continues to operate under the most recently published version of ASTM D6751, Standard Specifications for Biodiesel Fuel Blend Stock (B100) for Middle Distillate Fuels. All biodiesel made in our continuous process meets the more stringent specifications for No. 1 biodiesel.
The Company continues to operate under the most recently published version of ASTM D6751, Standard Specifications for Biodiesel Fuel Blend Stock (B100) for Middle Distillate Fuels. All biodiesel made in our continuous process meets the more stringent specifications for Grade No. 1 biodiesel.
Significant customers for the years ended December 31, 2023, 2022, and 2021 varied from year to year, and were comprised of five customers. We do not have long term contracts with any biofuels customer, but rather sell on the basis of monthly or short-term, multi-month purchase orders at prices based upon then-prevailing market rates.
Significant customers for the years ended December 31, 2024, 2023, and 2022 varied from year to year, and were comprised of five customers. We do not have long-term contracts with any biofuels customer, but rather sell on the basis of monthly or short-term, multi-month purchase orders at prices based upon then-prevailing market rates.
The forecasted increases in renewable diesel capacity will require an increase in the supply chain to meet that demand. This was also the case in 2018 and new capacity was constructed to meet demand.
The increases forecasted for renewable diesel capacity will require an increase in the supply chain to meet that demand. This was also the case in 2018, and new capacity was constructed to meet demand.
No chemical customer represented greater than 10% of total sales revenue in 2023 or 2022. Competition Historically, there have been significant barriers to entry for competitors with respect to specialty chemicals, primarily due to the fact that the relevant technology and manufacturing capability has been held by a small number of companies.
No chemical customer represented greater than 10% of total sales revenue in 2024 or 2023. Competition Historically, there have been significant barriers to entry for competitors with respect to specialty chemicals, primarily due to the fact that the relevant technology and manufacturing capability has been held by a small number of companies.
Like the BTC, the small agri-biodiesel credit which provides for an annual tax incentive in the amount of $0.10 per gallon on the first 15 million gallons of qualified agri-biodiesel produced was also extended to December 31, 2024 by the Inflation Reduction Act of 2022 and has not been reinstated with the CFPC.
Like the BTC, the small agri-biodiesel credit which provides for an annual tax incentive in the amount of $0.10 per gallon on the first 15 million gallons of qualified agri-biodiesel produced was also extended to December 31, 2024, by the Inflation Reduction Act of 2022 and was not reinstated with the CFPC.
We are headquartered in St. Louis, Missouri, and our manufacturing operations are conducted at our facility in Batesville, Arkansas. Trading of our common stock on the New York Stock Exchange (“NYSE”) commenced on March 23, 2011 under the symbol “FF”. During 2023, we distributed normal quarterly cash dividends of $0.06 per share.
We are headquartered in St. Louis, Missouri, and our manufacturing operations are conducted at our facility in Batesville, Arkansas. Trading of our common stock on the New York Stock Exchange (“NYSE”) commenced on March 23, 2011, under the symbol “FF”. During 2024, we distributed normal quarterly cash dividends of $0.06 per share.
Operations personnel have received extensive training and are highly skilled. Additionally, all site manufacturing and infrastructure is fully automated and computer-controlled. Due to the lack of locally-available process industry infrastructure, the workforce is substantially self-sufficient in the range of required operational skills and experience. Voluntary attrition at the site has averaged 9.2% over the past five years.
Operations personnel have received extensive training and are highly skilled. Additionally, all site manufacturing and infrastructure is fully automated and computer-controlled. Due to the lack of locally-available process industry infrastructure, the workforce is substantially self-sufficient in the range of required operational skills and experience. Voluntary attrition at the site has averaged 10% over the past five years.
Such materials will be made available in print upon the written request of any shareholder to FutureFuel Corp., 8235 Forsyth Blvd., 4th Floor, Clayton, Missouri 63105, Attention: Investor Relations. 14 Table of Contents
Such materials will be made available in print upon the written request of any shareholder to FutureFuel Corp., 8235 Forsyth Blvd., 9th Floor, Clayton, Missouri 63105, Attention: Investor Relations. 14 Table of Contents
We believe that these core competencies, established in support of the legacy chemical business, are applicable to building a technology-based position in biofuels and associated bio-based specialty products and expanding our chemical segment product lines. Research and development expense incurred by us for the years ended December 31, 2023, 2022 and 2021 were $4,398,000, $3,415,000, and $3,484,000, respectively.
We believe that these core competencies, established in support of the legacy chemical business, are applicable to building a technology-based position in biofuels and associated bio-based specialty products and expanding our chemical segment product lines. Research and development expense incurred by us for the years ended December 31, 2024, 2023 and 2022 were $3,993,000, $4,398,000, and $3,415,000, respectively.
Combined with the synergies of operating a shared chemical manufacturing facility, this has allowed us to be consistently successful in a highly competitive market. 1 Table of Contents Narrative Description of Our Business Principal Executive Offices Our principal executive offices are located at 8235 Forsyth Blvd., 4th Floor, Clayton, Missouri 63105. Our telephone number is (314) 854-8352.
Combined with the synergies of running a shared chemical manufacturing facility, this has allowed us to be consistently successful in a highly competitive market. 1 Table of Contents Narrative Description of Our Business Principal Executive Offices Our principal executive offices are located at 8235 Forsyth Blvd., 9th Floor, Clayton, Missouri 63105. Our telephone number is (314) 854-8352.
In the case of our custom manufacturing business, the customers are typically the “brand owners” and, therefore, they control factors related to production demand, such as market development, patent expirations and their external manufacturing strategy. In such cases, we may be unable to increase or maintain our level of sales revenue for these products.
In the case of our custom manufacturing business, the customers are typically the brand owners and, therefore, they control factors related to production demand, such as market development, patent expirations and their external manufacturing strategy. In such cases, we may be unable to increase or maintain our level of sales revenue for these products.
The operational and commercial management group at the Batesville site includes additional degreed professionals with an average experience of more than 25 years in the chemical industry. Our Batesville workforce comprises approximately 515 full and part time non-union employees, and includes degreed professionals including chemists (some with PhDs) and engineers (including licensed professional electrical, mechanical, and chemical engineers).
The operational and commercial management group at the Batesville site includes additional degreed professionals with an average experience of more than 30 years in the chemical industry. Our Batesville workforce comprises approximately 537 full and part time non-union employees, and includes degreed professionals including chemists (some with PhDs) and engineers (including licensed professional electrical, mechanical, and chemical engineers).
Renewable Identification Numbers (“RINs”) are the mechanism for ensuring that the prescribed levels of blending are reached. As ethanol and biodiesel is produced or imported, the producer or importer has the responsibility to report the activity in the USEPA’s Moderated Transaction System (“EMTS”) where a series of numbers (i.e., a RIN) is assigned to their product.
RINs are the mechanism for ensuring that the prescribed levels of blending are reached. As ethanol and biodiesel is produced or imported, the producer or importer has the responsibility to report the activity in the USEPA’s Moderated Transaction System (“EMTS”) where a series of numbers (i.e., a RIN) is assigned to their product.
We have declared normal quarterly cash dividends of $0.06 per share on our common stock for the calendar year 2024.
We have declared normal quarterly cash dividends of $0.06 per share on our common stock for the calendar year 2025.
As well as being driven by the benefits of the RFS and those of the Californian Low Carbon Fuel Standard (LCFS), renewable diesel production is also attractive to US Oil companies as it allows them to repurpose refinery hydro-processing equipment close to existing hydrogen supply facilities that would otherwise be redundant or uneconomical.
As well as being driven by the benefits of the RFS and those of the Californian Low Carbon Fuel Standard (“LCFS”), renewable diesel production is also attractive to U.S. oil companies as it allows them to repurpose refinery hydro-processing equipment close to existing hydrogen supply facilities that would otherwise be redundant or uneconomical.
Renewable diesel operational capacity in the US has grown significantly since 2018 and at the end of 2023 was at approximately 3,249 million gallons per year with that figure expected to continue to rise over the next five years. In 2023 renewable diesel capacity and production surpassed that of conventional biodiesel.
Renewable diesel operational capacity in the US has grown significantly since 2018 and at the end of 2024 was at approximately 4,580 million gallons per year with that figure expected to continue to rise over the next five years. In 2023, renewable diesel capacity and production surpassed that of conventional biodiesel.
Our cash expenditures related to environmental protection and improvement were approximately $12,854,000, $10,268,000, and $9,547,000 for the years ended December 31, 2023, 2022 and 2021, respectively, and are included in costs of goods sold in the consolidated statements of income for each period.
Our cash expenditures related to environmental protection and improvement were approximately $11,991, 000, $12,854,000, and $10,268,000 for the years ended December 31, 2024, 2023 and 2022, respectively, and are included in costs of goods sold in the consolidated statements of income for each period.
We currently market our biodiesel products by truck and rail directly to customers in the United States. We also have the capability to load through barge from a terminal in Little Rock, Arkansas. Through the utilization of liquid bulk storage facilities and barge loading capabilities, we are positioned to market biodiesel throughout the United States predominately for transportation.
We also have the capability to load through barge from a terminal in Little Rock, Arkansas. Through the utilization of liquid bulk storage facilities and barge loading capabilities, we are positioned to market biodiesel throughout the United States predominately for transportation.
The CFPC consolidates and replaces several fuel related credits currently scheduled to expire at the end of 2024, including credits for the production of biodiesel, agri-biodiesel, renewable diesel, second-generation biofuel, sustainable aviation fuel, alternative fuels, and alternative fuels mixtures.
The CFPC consolidated and replaced several fuel related credits that were scheduled to expire at the end of 2024, including credits for the production of biodiesel, agri-biodiesel, renewable diesel, second-generation biofuel, sustainable aviation fuel, alternative fuels, and alternative fuels mixtures.
The biomass-based diesel mandate rose annually and reached 2.43 billion gallons per year in 2021. On June 21, 2023, USEPA finalized a package of actions setting biofuel volumes for the Renewable Fuel Standard (RFS) program for years 2023, 2024, and 2025. The following table shows the finalized volume requirements by the USEPA with a steady growth rate in biomass-based diesel.
The biomass-based diesel mandate rose annually and reached 2.43 billion gallons per year in 2021. On June 21, 2023, USEPA finalized a package of actions setting biofuel volumes for the Renewable Fuel Standard (RFS) program for the years 2023, 2024, and 2025.
Most products are sold FOB the Batesville site for distribution globally. Similarly, raw materials for these products are comparatively higher-value components that are sourced globally.
Most products are sold free on board (“FOB”) from the Batesville site for distribution globally. Similarly, raw materials for these products are comparatively higher-value components that are sourced globally.
For producers not meeting prevailing wage and registered apprenticeship requirements, the maximum credit is 20 cents per gallon of nonaviation fuel and 35 cents per gallon of aviation fuel.
For producers not meeting prevailing wage and registered apprenticeship requirements, the maximum credit is 20 cents per gallon of nonaviation fuel and 35 cents per gallon of aviation fuel. FutureFuel was approved for the CFPC in December 2024.
Operations For the year ended December 31, 2023, approximately 78% of our revenue was derived from biofuels, 18% from manufacturing specialty chemicals for specific customers (“custom manufacturing”), and 4% of revenues from multi-customer specialty chemicals (“performance chemicals”). Our biofuels business segment primarily involves the production and sale of biodiesel and petrodiesel blends.
Operations For the year ended December 31, 2024, approxima tely 67% of our rev enue was derived from biofuels, 29% from manufacturing specialty chemicals for specific customers (“custom manufacturing”), and 4% of revenues from multi-customer specialty chemicals (“performance chemicals”). Our biofuels business segment primarily involves the production and sale of biodiesel and petrodiesel blends.
The future of biodiesel will be driven by feedstock availability; its market price compared to renewable diesel; and State and Federal regulations and incentives. We also compete with other producers of biodiesel regionally, nationally, and with foreign imports.
In addition to renewable diesel, SAF in the US has grown to a capacity of 16.4 million gallons. The future of biodiesel will be driven by feedstock availability; its market price compared to renewable diesel; and State and Federal regulations and incentives. We also compete with other producers of biodiesel regionally, nationally, and with foreign imports.
The most important of these is the one dollar per gallon Blenders' Tax Credit (“BTC”) applicable to all biodiesel. This credit has lapsed and been reinstated numerous times over the last decade. The Inflation Reduction Act of 2022 extended the credit through December 31, 2024 and established a new Clean Fuel Production Credit (“CFPC”) effective January 1, 2025.
The most important of these is the one dollar per gallon Blenders' Tax Credit (“BTC”) applicable to all biodiesel. The Inflation Reduction Act of 2022 extended this credit through December 31, 2024. In August 2022, a new Clean Fuel Production Credit (“CFPC”) was made effective January 1, 2025.
Additionally, during the first quarter of 2024, we declared a special cash dividend of $2.50 per share on our common stock payable on April 9, 2024, to the holders of record of all the issued and outstanding shares of common stock as of the close of business on March 26, 2024.
Additionally, we paid a special cash dividend of $2.50 per share on our common stock on April 9, 2024, to the holders of record of all the issued and outstanding shares of common stock as of the close of business on March 26, 2024. Our business is managed in two segments: chemicals and biofuels.
We are also registered in fuel programs in the states of California and Oregon, which incentivize the use of low carbon fuels specific to biomass-based diesel. We will continue to assess these and other state incentives and determine if we qualify. We will also stay abreast of regulations and update registrations if eligible.
Arkansas does not offer any producer incentives, but does offer investment incentives. We are registered in fuel programs in the states of California and Oregon, which incentivize the use of low carbon fuels specific to biomass-based diesel. We will continue to assess these and other state incentives and determine if we qualify.
Customers and Markets Biodiesel and biodiesel blends are currently used in nearly all of the end markets where petrodiesel is used. Most biodiesel in the United States is consumed in the on-road diesel fuel market, although some is used for off-road purposes such as farming, residential/commercial heating oil, and power generation.
Most biodiesel in the United States is consumed in the on-road diesel fuel market, although some is used for off-road purposes such as farming, residential/commercial heating oil, and power generation. We currently market our biodiesel products by truck and rail directly to customers in the United States.
Our business is managed in two segments: chemicals and biofuels. The chemicals segment manufactures a diversified listing of chemical products that are sold to third party customers. The majority of the revenues from the chemicals segment are derived from the custom manufacturing of specialty chemicals for specific customers.
The chemicals segment manufactures a diversified listing of chemical products that are sold to third party customers. The majority of the revenues from the chemicals segment are derived from the custom manufacturing of specialty chemicals for specific customers. We have actively worked to develop our chemicals business with new customers in more diversified growth markets.
For the year ended December 31, 2023, two customers represented approximately 44% of biofuel revenue (35% of total revenue). For the year ended December 31, 2022, two customers represented approximately 34% of biofuel revenue (27% of total revenue). For the year ended December 31, 2021, three customers represented approximately 52% of biofuel revenue (41% of total revenue).
For the years ended December 31, 2024, 2023, and 2022, two customers represented approximately 37 % of biofuel revenue (25 % of total revenue), 44% of biofuel revenue (35% of total revenue), and 34% of biofuel revenue (27% of total revenue), respectively.
Our current custom manufacturing product portfolio is more diversified into multiple markets including agrochemicals, oilfield chemicals, industrial intermediates, and fabric care markets. Performance chemicals comprise products which are generally available to the open market and sold to multiple customers. These products are sold based upon specification and are intended for specific performance in specialty end-use applications determined by the customer.
Performance chemicals comprise products which are generally available to the open market and sold to multiple customers. These products are sold based upon specification and are intended for specific performance in specialty end-use applications determined by the customer.
This is a relatively low-priced commodity that we aggregate and sell to multiple customers, primarily for use in Bunker C #6 Oil and as an asphalt release agent. Biodiesel Production Capacity According to Biodiesel Magazine 2024 Winter Edition, the United States had a total combined annual operational capacity of 2,221 million gallons from 64 biodiesel plants.
This is a relatively low-priced commodity that we aggregate and sell to multiple customers, primarily for use in Bunker C #6 Oil and as an asphalt release agent. Biodiesel Production Capacity According to the U.S.
Summary We will continue to identify and pursue other legislative incentives to support our business.
We will also stay abreast of regulations and update registrations if eligible. Summary We will continue to identify and pursue other legislative incentives to support our business.
With respect to our biofuels segment, our plant demonstrated capacity of approximately 59 million gallons per year (“MMgy”) during 2023. This scale and the design of our plant in Batesville allows us to process a wide variety of feedstocks and continuously achieve high biodiesel yields.
This scale and the design of our plant in Batesville allows us to process a wide variety of feedstocks and continuously achieve high biodiesel yields.
We have actively worked to develop our chemicals business with new customers in more diversified growth markets. As part of that focus on growth, we have introduced procedural updates to our operation to allow re-entry to the pharma intermediates market. This capability has been validated by third party audits.
As part of that focus on growth, we have introduced procedural updates to our operation to allow our re-entry to the pharma intermediates market. This capability has been confirmed by third party audits. Our chemicals business is based on a solid reputation as a technology-driven, highly reliable, and globally competitive chemicals producer.
Historically, our custom manufacturing product portfolio was highly concentrated on two significant legacy products, namely a laundry detergent additive for a leading consumer products company and a proprietary row crop herbicide. The year 2021 marked the first full year that these legacy products were no longer sold.
Historically, but ending in 2021, our custom manufacturing product portfolio was highly concentrated on two significant legacy products, namely a laundry detergent additive for a leading consumer products company and a proprietary row crop herbicide. Our current custom manufacturing product portfolio is more diversified into multiple markets including agrochemicals, oilfield chemicals, industrial intermediates, and fabric care markets.
Our chemicals business is based on a solid reputation as a technology-driven, highly reliable, and globally competitive chemicals producer. We retain a strong emphasis on operational excellence, cost control, and efficiency improvements to enable us to compete in the worldwide chemical industry.
We retain a strong emphasis on operational excellence, cost control, and efficiency improvements to enable us to compete in the worldwide chemical industry. With respect to our biofuels segment, our plant's demonstrated capacity is approximately 59 million gallons (“MMgy”). We produced 45 and 59 million gallons during 2024 and 2023, respectively.
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Operational plant capacity decreased more than 550 million gallons from 2020 as the renewable diesel market expanded (see Competition ) and feedstock prices increased.
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The following table shows the finalized volume requirements by the USEPA with a steady growth rate in biomass-based diesel.
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Nevertheless, the biodiesel industry has been resilient throughout this period with production levels in the first nine months of 2023 similar to those of 2021 and 2022 (Source: https://www.eia.gov/totalenergy/data/browser/index.php?tbl=T10.04A#/?f=M&start=200101&end=202309&charted=20-6.) Even so, we believe that the biodiesel industry will continue to be highly competitive given the excess capacity and increased competition for feedstocks.
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Renewable Fuel Volumes (billion Renewable Identification Number ("RINs")* 2024 2025 2026** Cellulosic biofuel 1.09 1.38 - Biomass-based diesel 3.04 3.35 - Advanced biofuel 6.54 7.33 - Renewable fuel 21.54 22.33 - * Units for all volumes are ethanol-equivalent, except for biomass-based diesel volumes, which are expressed as physical gallons.
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There has yet to be definitive guidance on how the CFPC will be interpreted and how it may impact the other market variables that ultimately determine operating margin.
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On January 10, 2025, the IRS issued Notice 2025-10 with the purpose of providing initial guidance and solicited comment from the public with a deadline of April 10, 2025, and was to serve as an announcement of forthcoming proposed regulations. It did not include any reliance language and did not constitute final or binding guidance.
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On January 15, 2025, the IRS issued Notice 2025-11 which provided emission rate guidance in support of Notice 2025-10. We commented on both Notices seeking immediate clarity.
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Energy Information Administration (“EIA”), biodiesel production capacity decreased to 1,995 million gallons per year from 2,083 million gallons and renewable diesel and other biofuels increased to 4,580 million gallons from 3,897 million gallons in November 2024 as compared to November 2023, respectively. With the capacity growth of renewable diesel and other biofuels, the biodiesel industry has continued to show resilience.
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(Source: https://www.eia.gov/biofuels/update/) Both biodiesel and renewable diesel have been impacted by the lack of clarity from the U.S. Treasury Department with respect to the CPFC on the delay of the Renewable Fuel Obligation (“RVO”) for 2026.
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The USEPA reports that actual production in January 2025 was significantly lower as compared to January 2024 for both biodiesel (68.7 million gallons versus 160.6 million gallons, respectively) and renewable diesel (175.9 million gallons versus 200.9 million gallons, respectively). However, sustainable aviation fuel (“SAF”) production increased during the same time frame (16.4 million gallons versus 9.7 million gallons, respectively).
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(Source: https://www.epa.gov/fuels-registration-reporting-and-compliance-help/spreadsheet-rin-generation-and-renewable-fuel-0) Even given these challenges, we believe that biodiesel will continue to be a highly competitive, sustainable, renewable fuel as long as the approved RFS pathways continue to be eligible for tax credits. Customers and Markets Biodiesel and biodiesel blends are currently used in nearly all of the end markets where petrodiesel is used.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe expiration or loss of mandates or incentives would have a material adverse effect on our business. The biomass-based diesel industry relies on governmental programs requiring or incentivizing the consumption of biofuels. Biomass-based diesel has historically been more expensive to produce than petroleum-based diesel fuel and these governmental programs support a market for biomass-based diesel that might not otherwise exist.
Biggest changeBiomass-based diesel has historically been more expensive to produce than petroleum-based diesel fuel and these governmental programs support a market for biomass-based diesel that might not otherwise exist. The petroleum industry is opposed to many of these government incentives and can be expected to continue to challenge these incentives.
If the value of LCFS credits were to materially decrease as a result of over-supply, as a result of reduced demand for our fuels, or if the fuel produced is deemed not to qualify for LCFS credits; or if the LCFS or the manner in which it is administered or applied were otherwise changed in a manner adverse to us, our revenues and profits could be seriously harmed. 16 Table of Contents The industries in which we compete are highly competitive.
If the value of LCFS credits were to materially decrease as a result of over-supply, as a result of reduced demand for our fuels, if the fuel produced is deemed not to qualify for LCFS credits, or if the LCFS or the manner in which it is administered or applied were otherwise changed in a manner adverse to us, our revenues and profits could be seriously harmed. 16 Table of Contents The industries in which we compete are highly competitive.
We are unable to predict the effect of additional environmental laws and regulations that may be adopted in the future, including whether any such laws or regulations would materially adversely increase our cost of doing business or affect our operations in any area.
We are unable to predict the effect of additional environmental laws and regulations that may be adopted in the future, including whether any such laws or regulations would materially increase our cost of doing business or adversely affect our operations in any area.
Wide fluctuations in alternative fuel prices may result from relatively minor changes in the supply of and demand for oil and natural gas, market uncertainty, and other factors that are beyond our control, including: ● worldwide and domestic supplies of oil and gas; ● the price and/or availability of biodiesel feedstocks; ● weather conditions; ● the level of consumer demand; ● the price and availability of alternative fuels; ● the availability of pipeline and refining capacity; ● the price and level of foreign imports; ● domestic and foreign governmental regulations and taxes; ● the ability of the members of the Organization of Petroleum Exporting Countries (OPEC) to agree to and maintain oil price and production controls; ● political instability or armed conflict in oil-producing regions; ● pandemics, epidemics, or disease outbreaks; and ● the overall economic environment.
Wide fluctuations in alternative fuel prices may result from relatively minor changes in the supply of and demand for oil and natural gas, market uncertainty, and other factors that are beyond our control, including: ● worldwide and domestic supplies of oil and gas; ● the price and/or availability of biodiesel feedstocks; ● weather conditions; ● the level of consumer demand; ● the price and availability of alternative fuels; ● the availability of pipeline and refining capacity; ● the price and level of foreign imports; ● domestic and foreign governmental regulations and taxes and trade restrictions, including tariffs; ● the ability of the members of the Organization of Petroleum Exporting Countries (OPEC) to agree to and maintain oil price and production controls; ● political instability or armed conflict in oil-producing regions; ● pandemics, epidemics, or disease outbreaks; and ● the overall economic environment.
Our certificate of incorporation authorizes the issuance of 75,000,000 shares of common stock and 5,000,000 shares of preferred stock. As of the date of this report, 43,763,243 shares of our common stock currently are outstanding. The issuance of any additional shares of our common stock or preferred stock would dilute the percentage ownership of our company held by existing stockholders.
Our certificate of incorporation authorizes the issuance of 75,000,000 shares of common stock and 5,000,000 shares of preferred stock. As of the date of this report, 43,803,243 shares of our common stock currently are outstanding. The issuance of any additional shares of our common stock or preferred stock would dilute the percentage ownership of our company held by existing stockholders.
Risks Related to Economic Conditions, Governmental Action, and our Industry Our industry is greatly influenced by the overall global economy and as such adverse economic conditions have the potential to adversely affect our business, results of operations, or financial condition.
Risks Related to Economic Conditions, Governmental Action, and our Industry Our industry is greatly influenced by the U.S. and overall global economy and as such adverse economic conditions have the potential to adversely affect our business, results of operations, or financial condition.
The LCFS is designed to reduce greenhouse gas (“GHG”) emissions associated with transportation fuels used in California by ensuring that the total amount of fuel consumed meets declining targets for such emissions. The regulation quantifies lifecycle GHG emissions by assigning a “carbon intensity” (“CI”) score to each transportation fuel based on that fuel’s lifecycle assessment.
The LCFS is designed to reduce GHG emissions associated with transportation fuels used in California by ensuring that the total amount of fuel consumed meets declining targets for such emissions. The regulation quantifies lifecycle GHG emissions by assigning a “carbon intensity” (“CI”) score to each transportation fuel based on that fuel’s lifecycle assessment.
As a result, we could cease producing biodiesel, which could have an adverse effect on our financial condition. 15 Table of Contents Our biofuels operations may be harmed if federal or state governments were to change current laws and regulations. Alternative fuels businesses benefit from government subsidies and mandates.
As a result, we could be forced to cease production of biodiesel, which would have an adverse effect on our financial condition. 15 Table of Contents Our biofuels operations may be harmed if federal or state governments were to change current laws and regulations. Alternative fuels businesses benefit from government subsidies and mandates.
Our stock price may change dramatically as the result of: (i) announcements of new products or innovations by us or our competitors; (ii) uncertainty regarding the viability of any of our product initiatives; (iii) significant customer contracts; (iv) significant litigation; (v) uncertainty with respect to changing laws and regulations that impact our business and our ability to take advantage of tax credits such as the BTC and CFPC; or (vi) other factors or events that would be expected to affect our business, financial condition, results of operations, and future prospects.
Our stock price may change dramatically as the result of: (i) announcements of new products or innovations by us or our competitors; (ii) uncertainty regarding the viability of any of our product initiatives; (iii) significant customer contracts; (iv) significant litigation; (v) uncertainty with respect to changing laws and regulations that impact our business and our ability to take advantage of tax credits such as the BTC and CFPC; or (vi) unscheduled and extended downtime at our facility; or (vii) events that would be expected to affect our business, financial condition, results of operations, and future prospects.
We compete with large national and multi-national companies that have longer operating histories, greater financial, technical, and other resources, and greater name recognition than we do. In addition, we compete with several smaller companies capable of competing effectively on a regional or local basis, and the number of these smaller companies is increasing.
We compete with large national and multi-national companies that have longer operating histories, greater financial, technical, and other resources, and greater name recognition than we do. In addition, we compete with several smaller companies capable of competing effectively on a regional or local basis.
Many biodiesel plants in the United States do not operate at full capacity. Further, a number of renewable diesel plants are under construction in the United States as of December 2023, and if completed, would add additional renewable fuel production capacity.
Most biodiesel plants, when running, do not operate at full capacity. Further, a number of renewable diesel plants are under construction in the United States as of December 2024, and if completed, would add additional renewable fuel production capacity.
Our indebtedness may limit our ability to borrow additional funds or capitalize on acquisition or other business opportunities. We hold a $100 million revolving credit facility with a commercial bank. This credit facility expires in March 2025.
Our indebtedness may limit our ability to borrow additional funds or capitalize on acquisition or other business opportunities. We hold a $75 million revolving credit facility with a commercial bank. This credit facility expires in February 2030.
For producers meeting prevailing wage and registered apprenticeship requirements, the maximum credit is $1.00 per gallon of biodiesel. However, the maximum credit would require zero GHG emissions which is unrealistic for almost every biodiesel producer. Guidance surrounding this credit have yet to be finalized.
For producers meeting prevailing wage and registered apprenticeship requirements, the maximum credit is $1.00 per gallon of biodiesel. However, the maximum credit would require zero GHG emissions which is unrealistic for almost every biodiesel producer, including the Company. Guidance surrounding this credit has yet to be finalized despite the effective date of the CFPC.
The impacts include, but are not limited to: ● a significant decline in demand for our products due to market disruptions, resulting in a decline in sales and prices; ● limitations of feedstocks, price volatility, or disruptions to our suppliers’ operations; ● the interruption of our distribution system, or temporary or long-term disruption in our supply chains, or delays in the delivery of our product; ● suspension of renewable fuel and/or low carbon fuel policies; ● limitations on our ability to operate our business as a result of federal, state or local regulations, including any changes to the designation of our business as “essential” by the U.S.
The impacts include, but are not limited to: ● a significant decline in demand for our products due to market disruptions, resulting in a decline in sales and prices; ● limitations of feedstocks, price volatility, or disruptions to our suppliers’ operations; ● the interruption of our distribution system, or temporary or long-term disruption in our supply chains, or delays in the delivery of our product; ● suspension of renewable fuel and/or low carbon fuel policies; ● limitations on our ability to operate our business as a result of federal, state or local regulations including taxes and tariffs; and ● decreases in the demand for and price of RINs and LCFS credits as a result of reduced demand for petroleum-based gasoline and diesel fuel.
With the passage of the Inflation Reduction Act in August 2022, the BTC has been extended through December 31, 2024, but is to be replaced by the CFPC on January 1, 2025. The CFPC is structured on a sliding scale so that producers become eligible for larger credits as the GHG emissions of the fuels they produce approach zero.
Most recently, the Inflation Reduction Act, adopted in August 2022, extended the BTC through December 31, 2024, but provided for its replacement by the CFPC on January 1, 2025. The CFPC is structured on a sliding scale so that producers become eligible for larger credits as the GHG emissions of the fuels they produce approach zero.
Sales to these biodiesel customers totaled approximately 35% of total revenue (or $127,763,000) in 2023. Sales in 2022 to our two largest customers represented 27% of total revenues (or $107,898,000). Sales to three largest biodiesel customers totaled 52% of total revenues in 2021 (or $133,231,000).
Sales to these biodiesel customers totaled approximately 25% of total revenue (or $59,867,000) in 2024 . Sales in 2023 to our two largest customers represented 35% of total revenues (or $127,763,000). Sales to our two largest biodiesel customers totaled 27% of total revenues in 2022 (or $107,898,000).
Effective internal controls are necessary for us to provide reliable financial reports and prevent fraud. The process of maintaining our internal controls may be expensive, and time consuming, and may require significant attention from management.
Effective internal controls are necessary for us to provide reliable financial reports and prevent fraud. The process of maintaining our internal controls may be expensive, and time consuming, and may require significant attention from management. We previously identified a material weakness in our internal control over financial reporting related to review controls of our cash flow statement.
Although we have concluded as of December 31, 2023, that our internal control over financial reporting provides reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, because of its inherent limitations, internal control over financial reporting may not prevent or detect fraud or misstatements.
We remediated this material weakness and have concluded as of December 31, 2024, that our internal control over financial reporting provides reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP.
There can be no assurance that we will be able to maintain or establish additional necessary strategic relationships, in which case the opportunity to grow our business may be negatively affected. 24 Table of Contents There is currently excess renewable fuel production capacity and low utilization in the industry and if non-operational and underused facilities commence or increase operations, our results of operations may be negatively affected.
There can be no assurance that we will be able to maintain or establish additional necessary strategic relationships, in which case the opportunity to grow our business may be negatively affected. 24 Table of Contents There is disruption in supply in the renewable fuel market currently without clarity on the CFPT credit.
The petroleum industry is opposed to many of these government incentives and can be expected to continue to challenge these incentives. The most significant tax incentive program in the biomass-based diesel industry has been the BTC. Under the BTC, the first person to blend pure biomass-based diesel with petroleum-based diesel fuel receives a one dollar per gallon refundable tax credit.
Historically, the most significant tax incentive program in the biomass-based diesel industry has been the BTC. Under the BTC, the first market participant to blend pure biomass-based diesel with petroleum-based diesel fuel receives a one dollar per gallon refundable tax credit. From time to time, the BTC has expired and been retroactively reinstated.
However, if our capital requirements vary materially from those provided for in our current projections, we may require additional financing sooner than anticipated. A decrease in expected revenues, in addition to high rates of inflation and high interest rates currently being experienced and expected to persist in the near-term could make obtaining this financing economically unattractive or impossible.
A decrease in expected revenues, in addition to high rates of inflation and high interest rates currently being experienced and expected to persist in the near-term could make obtaining this financing economically unattractive or impossible.
Although this business is contracted in longer-term production agreements, the loss of any of these strategic customers could have a material adverse effect on our chemicals business. Additionally, our biofuels segment has two large customers.
Our chemical business is concentrated with four large customers covering multiple products representing greater than 84% of our chemicals segment product sales, or 28% of total revenues. Although this business is contracted in longer-term production agreements, the loss of any of these strategic customers could have a material adverse effect on our chemicals business.
We source certain raw materials for our chemicals segment internationally, and as such we are subject to supply chain disruptions and price inflation for those raw materials, which can adversely impact our business.
We are subject to various U.S. and global economic conditions, including our sourcing of certain raw materials for our chemicals segment internationally. Accordingly, adverse changes in these conditions, including supply chain disruptions and price inflation for those raw materials, can adversely impact our business.
The risk of loss of the Company ’ s intellectual property, trade secrets or other sensitive business information or disruption of operations could negatively impact the Company ’ s financial results.
If we or our independent registered public accounting firm discover a material weakness, the disclosure of that fact could harm the value of our stock and our business. The risk of loss of the Company ’ s intellectual property, trade secrets or other sensitive business information or disruption of operations could negatively impact the Company ’ s financial results.
Such disruptions could result in an unplanned event that could be significant in scale and could negatively impact operations, neighbors, and the environment, and could have a negative impact on our results of operations. 25 Table of Contents Risks Associated With Owning Our Shares We may issue substantial amounts of additional shares without stockholder approval.
Such disruptions could result in an unplanned event that could be significant in scale and could negatively impact operations, neighbors, and the environment, and could have a negative impact on our results of operations. We are reliant upon a relatively small number of customers.
As of December 31, 2023, we maintained with such banks cash balances of approximately $90.8 million in excess of the amounts insured by the FDIC. We are exposed to operating risks. As a manufacturer of diversified chemical products and biofuels, our business is subject to operating risks common to chemical manufacturing, storage, handling, and transportation.
Risks Related to our Business We are exposed to operating risks. As a manufacturer of diversified chemical products and biofuels, our business is subject to operating risks common to chemical manufacturing, storage, handling, and transportation.
No assurances can be provided that any future disruptions due to these, or other, circumstances will not have a material effect on operations.
We have recently suffered increasingly frequent, unscheduled and extended service utility downtime as a result of supplier delays and quality issues beyond our control. No assurances can be provided that any future disruptions due to these, or other, circumstances will not have a material effect on operations.
Department of Homeland Security; and ● decreases in the demand for and price of RINs and LCFS credits as a result of reduced demand for petroleum-based gasoline and diesel fuel. We operate within the biomass-based diesel industry, which is influenced by governmental programs requiring or incentivizing the consumption of biofuels, including the BTC and CFPC.
We operate within the biomass-based diesel industry, which is significantly influenced by governmental programs requiring or incentivizing the consumption of biofuels, including the BTC and CFPC. The expiration or loss of mandates or incentives would have a material adverse effect on our business. The biomass-based diesel industry relies on governmental programs requiring or incentivizing the consumption of biofuels.
We expect to make capital expenditures for the expansion of our biofuels and chemicals production capacity and complementary infrastructure. We intend to finance these capital expenditures primarily through cash flow from our operations, borrowings under our credit facility, and existing cash.
We intend to finance these capital expenditures primarily through cash flow from our operations, borrowings under our credit facility, and existing cash. However, if our capital requirements vary materially from those provided for in our current projections, we may require additional financing sooner than anticipated.
On March 1, 2023, the credit facility was amended to transition it from LIBOR to the secured overnight financing rate (“SOFR”) and to reflect other conforming changes. We expect to have capital expenditure requirements, and we may be unable to obtain needed financing on satisfactory terms due to inflation and increased interest rates.
We expect to have capital expenditure requirements, and we may be unable to obtain needed financing on satisfactory terms due to inflation and increased interest rates. We expect to make capital expenditures for the expansion of our biofuels and chemicals production capacity and complementary infrastructure.
Failure to implement required new or improved controls, or difficulties encountered in their implementation, could harm our results of operations or cause us to fail to meet our reporting obligations. If we or our independent registered public accounting firm discover a material weakness, the disclosure of that fact could harm the value of our stock and our business.
However, because of its inherent limitations, internal control over financial reporting may not prevent or detect fraud or misstatements. Failure to implement required new or improved controls, or difficulties encountered in their implementation, could harm our results of operations or cause us to fail to meet our reporting obligations.
Our relative position to other biodiesel producers and our absolute position with regard to the value of that credit could have a material adverse effect on us and on the biodiesel industry in general. If biodiesel feedstock costs do not decrease significantly relative to biodiesel prices, we could realize a negative gross margin on biodiesel.
Given our relative position to other biodiesel producers and the importance of such incentives to our operations, a reduction or elimination of these governmental incentives could have a material adverse effect on us and on the biodiesel industry in general.
Removed
The BTC was not in place during 2018 and not in place for the majority of 2019. However, in late December 2019, the BTC was retroactively reinstated from its expiry on January 1, 2018 through December 31, 2022.
Added
Specifically, if biodiesel prices decrease as a result of the expiration or significant reduction in these governmental incentives and biodiesel feedstock costs do not decrease proportionately, we could realize a negative gross margin on biodiesel.
Removed
Risks Related to our Business We are reliant upon a relatively small number of customers. Our chemical business is concentrated with four large customers covering multiple products representing greater than 69% of our chemicals segment product sales, or 15% of total revenues.
Added
Additionally, our biofuels segment has two large customers.
Added
However, under normal conditions there is excess renewable fuel production capacity and low utilization in the industry and if non-operational and underused facilities commence or increase operations, our results of operations may be negatively affected. Many biodiesel plants in the United States are currently shutdown without clarity on the CFPT credit.
Added
As of December 31, 2024, we maintained with such banks cash balances of approximately $18.8 m illion in excess of the amounts insured by the FDIC. 25 Table of Contents Risks Associated With Owning Our Shares We may issue substantial amounts of additional shares without stockholder approval.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeKey aspects of our strategy for managing risks of cybersecurity threats include: ● Timely security patching of endpoints; ● Network and endpoint-based monitoring with autonomous protection capabilities; ● Backups which are regularly tested for recovery with key backups hardened against malicious access; ● Third-party security services for audit, benchmarking, and improvement of our cyber security program; ● Ongoing monitoring and evaluation of our cybersecurity posture and performance through regular vulnerability scans, simulated phishing tests, and penetration tests; ● Oversight of third-party service providers by conducting vendor diligence upon onboarding and ongoing monitoring; ● An incident response plan designed to coordinate the activities that we and our third-party security service providers take to prepare to respond and recover from cybersecurity incidents, which include processes to triage, assess severity, investigate, escalate, contain, and remediate incidents, as well as to comply with applicable legal obligations and mitigate any reputational damage; ● Structured management of change process to ensure material changes to our systems or operations have an updated assessment of their potential impact associated with internal and external threats to the security, confidentiality, integrity, and availability of our data and systems, along with other material risks to our operations; ● Ongoing, annual employee security awareness training; and ● Cybersecurity insurance coverage to help mitigate the risk of loss from cybersecurity incidents.
Biggest changeKey aspects of our strategy for managing risks of cybersecurity threats include: ● Timely security patching of endpoints; ● Network and endpoint-based monitoring with autonomous protection capabilities; ● Backups which are regularly tested for recovery with key backups hardened against malicious access; ● Third-party security services for audit, benchmarking, and improvement of our cyber security program; ● Ongoing monitoring and evaluation of our cybersecurity posture and performance through regular vulnerability scans, simulated phishing tests, and penetration tests; ● Oversight of third -party service providers by conducting vendor due diligence upon onboarding and ongoing monitoring; ● An incident response plan designed to coordinate the activities that we and our third -party security service providers take to prepare to respond and recover from cybersecurity incidents, which include processes to triage, assess severity, investigate, escalate, contain, and remediate incidents, as well as to comply with applicable legal obligations and mitigate any reputational damage; ● Structured management of change process to ensure material changes to our systems or operations have an updated assessment of their potential impact associated with internal and external threats to the security, confidentiality, integrity, and availability of our data and systems, along with other material risks to our operations; ● Ongoing, annual employee security awareness training; and ● Cybersecurity insurance coverage to help mitigate the risk of loss from cybersecurity incidents.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeQuantitative and Qualitative Disclosures About Market Risk. 45 Item 8. Financial Statements and Supplementary Data. 46 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. 76 Item 9A. Controls and Procedures. 76
Biggest changeQuantitative and Qualitative Disclosures About Market Risk. 45 Item 8. Financial Statements and Supplementary Data. 46 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. 77 Item 9A. Controls and Procedures. 77

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThrough December 31, 2023, we issued 64,000 options to purchase shares of our common stock and awarded no shares to participants under the Incentive Plan. 29 Table of Contents Following is additional information regarding the incentive plans as of December 31, 2023.
Biggest changeThrough December 31, 2024, we have issued or awarded 8 4,000 options to purchase shares of our common stock, 750,000 restricted stock units (“RSUs”), and 40,000 shares of stock, in each case under the Incentive Plan. 29 Table of Contents Following is additional information regarding the incentive plans as of December 31, 2024.
Purchase of Securities by Us During 2023, neither we, nor anyone acting on our behalf, purchased any shares of our common stock, which is the only class of our equity securities that is registered pursuant to Section 12 of the Exchange Act.
Purchase of Securities by Us During 2024, neither we, nor anyone acting on our behalf, purchased any shares of our common stock, which is the only class of our equity securities that is registered pursuant to Section 12 of the Exchange Act.
Dividends The payment of cash dividends by us is dependent upon our existing cash and cash equivalents, future earnings, capital requirements, and overall financial condition. We declared and paid regular cash dividends for 2023 and 2022, and we have also declared dividends for 2024.
Dividends The payment of cash dividends by us is dependent upon our existing cash and cash equivalents, future earnings, capital requirements, and overall financial condition. We declared and paid regular cash dividends for 2024 and 2023, and we have also declared dividends for 2025.
While we anticipate similar regular cash dividends after 2024, no assurances can be given that we will declare or pay dividends for years after 2024.
While we anticipate similar regular cash dividends after 2025, no assurances can be given that we will declare or pay dividends for years after 2025.
An investment of $100 (with reinvestment of all dividends) is assumed to have been made in our common stock, in each index and in each of the peer groups on December 31, 2018 and its relative performance is tracked through December 31,2023.
An investment of $100 (with reinvestment of all dividends) is assumed to have been made in our common stock, in each index and in each of the peer groups on December 31, 2019 and its relative performance is tracked through December 31,2024.
Item 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information The shares of our common stock are traded on the NYSE under the trading symbol “FF”. As of March 14, 2024, there are 43,763,243 shares of our common stock outstanding.
Item 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information The shares of our common stock are traded on the NYSE under the trading symbol “FF”. As of March 31, 2025, there are 43,803,243 shares of our common stock outstanding.
Additionally, during the first quarter of 2024, we declared a special cash dividend of $2.50 per share on our common stock payable on April 9, 2024, to the holders of record of all the issued and outstanding shares of common stock as of the close of business on March 26, 2024.
Additionally, we paid a special cash dividend of $2.50 per share on our common stock on April 9, 2024, to the holders of record of all the issued and outstanding shares of common stock as of the close of business on March 26, 2024.
Holders The shares of our common stock were held by approximately 294 holders of record on March 14, 2024 as recorded on our transfer agents’ register. We believe that the number of beneficial owners of our common stock is substantially greater than the number of holders of record.
Holders The shares of our common stock were held by approximately 308 holders of record on March 31, 2025, as recorded on our transfer agents’ register. We believe that the number of beneficial owners of our common stock is substantially greater than the number of holders of record.
Number of securities Weighted-average Number of securities to be issued upon exercise price of remaining available for future exercise of outstanding options, issuance under equity outstanding options, warrants compensation plans (excluding warrants and rights and rights securities reflected in column (a)) Plan Category (a) (b) (c) Equity compensation plans approved by security holders 34,000 $ 9.13 4,310,167 Performance Graph The graph below compares the cumulative 5-Year total return to holders of the Company's common stock relative to the cumulative total returns of the Russell 2000 index and 24 companies, listed in footnote 1 below.
Number of securities Weighted-average Number of securities to be issued upon exercise price of remaining available for future exercise of outstanding options, issuance under equity outstanding units, options, warrants and rights compensation plans (excluding warrants and rights (excluding RSUs securities reflected in column (a)) Plan Category (a) reflected in column (a)) Equity compensation plans approved by security holders 794,000 $ 7.33 3,526,324 Performance Graph The graph below compares the cumulative 5-Year total return to holders of the Company's common stock relative to the cumulative total returns of the Russell 2000 index and 24 companies, listed in footnote 1 below.
The timing and amount of repurchase transactions will be determined by management based on its evaluation of market conditions, share price, and other factors. [TBR1] The ultimate language should be aligned here and in the earnings release. 31 Table of Contents
The timing and amount of repurchase transactions will be determined by management based on its evaluation of market conditions, share price, and other factors. 31 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest change(Dollars in thousands) Years ended December 31: 2023 2022* Net income $ 37,382 $ 15,211 Depreciation 10,348 10,454 Non-cash stock-based compensation - 46 Interest and dividend income (9,577 ) (4,870 ) Non-cash interest expense and amortization of deferred financing costs 135 128 Loss on disposal of property and equipment 29 64 Unrealized gain on derivative instruments (1,878 ) (343 ) (Gain) loss on marketable securities (575 ) 8,546 Other income (882 ) - Income tax provision (benefit) 1 (1,473 ) Adjusted EBITDA* $ 34,983 $ 27,763 The following table reconciles adjusted EBITDA with cash flows from operations, the most directly comparable GAAP liquidity financial measure: (Dollars in thousands) Years ended December 31: 2023 2022* Net cash provided by operating activities $ 23,985 $ 52,451 Benefit for deferred income taxes - 1,822 Interest and dividend income (9,577 ) (4,870 ) Income tax provision (benefit) 1 (1,473 ) Changes in operating assets and liabilities, net 21,456 (20,168 ) Other non-operating (income) expense (882 ) 1 Adjusted EBITDA* $ 34,983 $ 27,763 * Adjusted EBITDA for 2022 has been restated to be consistent with 2023 reporting.
Biggest change(Dollars in thousands) Years ended December 31: 2024 2023 Net income $ 15,503 $ 37,382 Depreciation 9,208 10,348 Non-cash stock-based compensation 359 - Interest and dividend income (7,656 ) (9,577 ) Non-cash interest expense and amortization of deferred financing costs 138 135 Loss on disposal of property and equipment 30 29 Unrealized loss (gain) on derivative instruments 1,971 (1,878 ) Gain on marketable securities - (575 ) Other income (2,751 ) (882 ) Income tax provision 792 1 Adjusted EBITDA $ 17,594 $ 34,983 The following table reconciles adjusted EBITDA with cash flows from operations, the most directly comparable GAAP liquidity financial measure: (Dollars in thousands) Years ended December 31: 2024 2023 Net cash provided by operating activities $ 24,802 $ 21,299 Provision for deferred income taxes (773 ) - Interest and dividend income (7,656 ) (9,577 ) Income tax provision 792 1 Changes in operating assets and liabilities, net 3,180 24,143 Other non-operating income (2,751 ) (883 ) Adjusted EBITDA $ 17,594 $ 34,983 36 Table of Contents Results of Operations Consolidated 2024 Compared to 2023: 2023 Compared to 2022: Change Change (Dollars in thousands) 2024 2023 $ % 2023 2022 $ % Sales $ 243,339 $ 368,250 $ (124,911 ) (34 %) $ 368,250 $ 396,014 $ (27,764 ) (7 %) Volume/product mix effect $ (59,546 ) (16 %) $ 45,350 11 % Price effect $ (65,365 ) (18 %) $ (73,114 ) (18 %) Gross profit $ 19,644 $ 40,979 $ (21,335 ) (52 %) $ 40,979 $ 28,993 $ 11,986 41 % Operating expense $ 13,272 $ 13,611 $ (339 ) (2 %) $ 13,611 $ 11,447 $ 2,164 19 % Other (income) expense $ (9,923 ) $ (10,015 ) $ 92 1 % $ (10,015 ) $ 3,808 $ (13,823 ) NA Pretax income $ 16,295 $ 37,383 $ (21,088 ) (56 %) $ 37,383 $ 13,738 $ 23,645 172 % Income tax provision (benefit) $ 792 $ 1 $ 791 79100 % $ 1 $ (1,473 ) $ 1,474 NA Net income $ 15,503 $ 37,382 $ (21,879 ) (59 %) $ 37,382 $ 15,211 $ 22,171 146 % 2024 Compared to 2023 Consolidated sales revenue decreased 34% or $124,911 in 2024 compared to 2023 from lower sales volumes ($60,574) and lower prices ($65,011) in the biofuel segment.
The Company evaluates its deferred tax assets and records a valuation allowance to reduce these assets to the amount that is more likely than not to be realized.
The Company evaluates its deferred tax assets and records a valuation allowance to reduce these assets to the amount that is more likely than not to be realized.
We do not believe that the loss of this customer would have a material adverse effect on our biofuels segment or on us as a whole in that: (i) unlike our custom manufacturing products, biodiesel is a commodity with a large potential customer base; (ii) we believe that we could readily sell our biodiesel to other customers as potential demand from other customers for biodiesel exceeds our production capacity; (iii) our sales to this customer are not under fixed terms and the customer has no fixed obligation to purchase any minimum quantities except as stipulated by short term purchase orders; and (iv) the prices we receive from this customer are based upon then-market rates, as would be the case with sales of this commodity to other customers.
We do not believe that the loss of this customer would have a material adverse effect on our biofuels segment or on us as a whole in that: (i) unlike our custom manufacturing products, biodiesel is a commodity with a large potential customer base; (ii) we believe that we could readily sell our biodiesel to other customers as potential demand from other customers for biodiesel exceeds our production capacity; (iii) our sales to this customer are not under fixed terms and the customer has no fixed obligation to purchase any minimum quantities except as stipulated by short term purchase orders; and (iv) the prices we receive from this customer are based upon then-market rates, as would be the case with sales of this commodity to other customers.
The discussion of results of operations that follows is based on revenue and expenses in total and for individual product lines and does not differentiate related party transactions. 34 Table of Contents Fiscal Year Ended December 31, 2023 Compared to Fiscal Year Ended December 31, 2022 Set forth below is a summary of certain financial information for the periods indicated.
The discussion of results of operations that follows is based on revenue and expenses in total and for individual product lines and does not differentiate related party transactions. 34 Table of Contents Fiscal Year Ended December 31, 2024 Compared to Fiscal Year Ended December 31, 2023 Set forth below is a summary of certain financial information for the periods indicated.
These hedging transactions are recognized in earnings and do not qualify as a hedge accounting treatment on our consolidated balance sheets at December 31, 2023 or 2022, as they do not meet the definition of a hedge instrument as defined under GAAP. The purchase of biofuels feedstock generally involves two components: basis and price.
These hedging transactions are recognized in earnings and do not qualify as a hedge accounting treatment on our consolidated balance sheets at December 31, 2024 or 2023, as they do not meet the definition of a hedge instrument as defined under GAAP. The purchase of biofuels feedstock generally involves two components: basis and price.
Revenue is measured as the amount of consideration we expect to receive in exchange for transferring products and is generally based upon a negotiated price. We sell products directly to customers generally under agreements with payment terms of 30 to 75 days for chemical segment customers and 2 to 10 days for biofuels segment customers.
Revenue is measured as the amount of consideration we expect to receive in exchange for transferring products and is generally based upon a negotiated price. We sell products directly to customers generally under agreements with payment terms of 30 to 75 days for chemical segment customers and 5 to 10 days for biofuels segment customers.
Historically, we finance capital requirements for our business with cash flows from operations and have not had the need to incur bank indebtedness to finance any of our operations during the periods discussed herein. 42 Table of Contents Credit Facility On March 30, 2020, the Company, with FutureFuel Chemical Company as the borrower and certain of the Company’s other subsidiaries as guarantors, amended and restated its credit agreement (the “Credit Agreement”) originally entered into on April 16, 2015 (as amended, the “Prior Credit Agreement”) with the lenders party thereto, Regions Bank as administrative agent and collateral agent, and PNC Bank, N.A., as syndication agent.
Historically, we finance capital requirements for our business with cash flows from operations and have not had the need to incur bank indebtedness to finance any of our operations during the periods discussed herein. 42 Table of Contents Credit Facility On February 21, 2025, the Company, with FutureFuel Chemical Company as the borrower and certain of the Company’s other subsidiaries as guarantors, amended and restated its credit agreement (the “Credit Agreement”) originally entered into on April 16, 2015 with the lenders party thereto, Regions Bank as administrative agent and collateral agent, and PNC Bank, N.A., as syndication agent and further amended on March 30, 2020 (as amended, the “Prior Credit Agreement”).
Adjusted EBITDA allows our chief operating decision makers to assess the performance and liquidity of our business on a consolidated basis to assess the ability of our operating segments to produce operating cash flow to fund working capital needs, to fund capital expenditures and to pay dividends.
Adjusted EBITDA allows our chief operating decision maker to assess the performance and liquidity of our business on a consolidated basis to assess the ability of our operating segments to produce operating cash flow to fund working capital needs, to fund capital expenditures and to pay dividends.
Liquidity and Capital Resources Our net cash provided by (used in) operating activities, investing activities, and financing activities for the years ended December 31, 2023, 2022 and 2021 are set forth in the following table.
Liquidity and Capital Resources Our net cash provided by (used in) operating activities, investing activities, and financing activities for the years ended December 31, 2024, 2023 and 2022 are set forth in the following table.
As of December 31, 2022, based on all available and allowable evidence, the Company determined that its deferred tax assets are more likely than not realizable only to the extent of its deferred tax liabilities and recorded the resulting valuation allowance.
As of December 31, 2023, based on all available and allowable evidence, the Company determined that its deferred tax assets were more likely than not realizable only to the extent of its deferred tax liabilities and recorded the resulting valuation allowance.
There currently is uncertainty as to whether we will produce biodiesel in the future. This uncertainty results from changes in feedstock prices relative to biodiesel prices and the lack of permanency of government mandates including the BTC, the small producer’s tax credit, the CFPC (effective January 1, 2025), the renewable fuels program, and the California low carbon fuel program credits.
There currently is uncertainty as to our production of biodiesel in the future. This uncertainty results from changes in feedstock prices relative to biodiesel prices and the lack of permanency of government mandates including the BTC, the small producer’s tax credit, the CFPC (effective January 1, 2025), the renewable fuels program, and the California low carbon fuel program credits.
In addition, we deliver blended product to a small group of customers within our region. We also sell D4 and D6 RINs from time to time. At December 31, 2023 we held 4.3 million RINs with a market value of $6,567 and at December 31, 2022, we held 1.5 million RINs in inventory with a market value of $2,557.
In addition, we deliver blended product to a small group of customers within our region. We also sell D4 and D6 RINs from time to time. At December 31, 2024 we held 3.1 million RINs with a market value of $1,831 and at December 31, 2023, we held 4.3 million RINs in inventory with a market value of $6,567.
Performance chemicals and biodiesel are generally sold pursuant to the terms of written purchase orders. In general, customers do not have any rights of return, except for quality disputes. All of our products are tested for quality before shipment, and historically returns have been inconsequential. We do not offer rebates, except those related to the BTC.
Performance chemicals and biodiesel are generally sold pursuant to the terms of written purchase orders. In general, customers do not have any rights of return, except for quality disputes. All of our products are tested for quality before shipment, and historically returns have been inconsequential.
This decrease was attributed to the change in (i) accounts payable, including accounts payable - related parties, of $27,928, (ii) fair value of equity securities of $11,414 with the sale of marketable securities, (iii) income taxes receivable of $7,773, and (iv) inventory of $6,379.
This decrease was attributed to the change in (i) accounts payable, including accounts payable - related parties, of $27,928, (ii) fair value of equity securities of $11,414 with the sale of marketable securities, (iii) income taxes receivable of $7,782, and (iv) inventory of $5,550.
The Credit Agreement consists of a five-year revolving credit facility in a dollar amount of up to $100,000, which includes a sublimit of $30,000 for letters of credit and $15,000 for swingline loans (collectively, the “Credit Facility”). The Credit Facility expires on March 30, 2025.
The Credit Agreement consists of a five-year revolving credit facility in a dollar amount of up to $75,000, which includes a sublimit of $30,000 for letters of credit and $15,000 for swingline loans (collectively, the “Credit Facility”). The Credit Facility expires on February 21, 2030.
The Company’s effective tax rates for the years 2022 and 2021 reflect the positive effect of certain tax credits and incentives, the most significant of which was the BTC and the Small Agri-biodiesel Producer Tax Credit.
The Company’s effective tax rates for the years 2024 and 2023 reflect the positive effect of certain tax credits and incentives, the most significant of which are the BTC and the Small Agri-biodiesel Producer Tax Credit.
In 2021, we paid regular cash dividends aggregating $0.24 per share on our common stock with record dates and payment dates as previously discussed. The regular cash dividends totaled $10,498. On May 10, 2021, we also declared a special cash dividend of $2.50 per share on our common stock.
Dividends In 2024, we paid regular cash dividends aggregating $0.24 per share on our common stock with record dates and payment dates as previously discussed. The regular cash dividends declared in 2024 totaled $10,513 to be paid in 2025. On March 12, 2024, we also declared a special cash dividend of $2.50 per share on our common stock.
Contractual Obligations Purchase obligations include the purchase of biodiesel feedstock and various other infrastructure and capital repairs as follows: Less than 1 year $ 45,389 1-3 years 43 4-5 years - More than 5 years - Total $ 45,432 A component of other noncurrent liabilities is a reserve for asset retirement obligations and environmental contingencies of $1,431 at December 31, 2023.
Contractual Obligations Purchase obligations include the purchase of biodiesel feedstock and various other infrastructure and capital repairs as follows: Less than 1 year $ 9,420 1-3 years 418 4-5 years 137 Total $ 9,975 A component of other noncurrent liabilities is a reserve for asset retirement obligations and environmental contingencies of $1,466 at December 31, 2024.
All Foreign Period United States Countries Total Year ended December 31, 2023 $ 367,368 $ 882 $ 368,250 Year ended December 31, 2022 $ 394,671 $ 1,343 $ 396,014 Year ended December 31, 2021 $ 320,148 $ 1,238 $ 321,386 The majority of our expenses are cost of goods sold.
All Foreign Period United States Countries Total Year ended December 31, 2024 $ 242,685 $ 654 $ 243,339 Year ended December 31, 2023 $ 367,368 $ 882 $ 368,250 Year ended December 31, 2022 $ 394,671 $ 1,343 $ 396,014 The majority of our expenses are cost of goods sold.
Dividends In 2023, we paid regular cash dividends aggregating $0.24 per share on our common stock with record dates and payment dates as previously discussed. The regular cash dividends declared in 2023 totaled $10,503 to be paid in 2024.
This special dividend paid on April 9, 2024 amounted to $109,408. Total cash dividends paid in 2024 were $119,911 . In 2023, we paid regular cash dividends aggregating $0.24 per share on our common stock with record dates and payment dates as previously discussed. The regular cash dividends declared in 2023 totaled $10,503 to be paid in 2024.
In 2022, we paid regular cash dividends aggregating $0.24 per share on our common stock with record dates and payment dates as previously discussed. The regular cash dividends declared in 2022 totaled $21,006; $10,503 paid in 2022 and $10,503 paid in 2023.
In 2022, we paid regular cash dividends aggregating $0.24 per share on our common stock with record dates and payment dates as previously discussed. The regular cash dividends declared in 2022 totaled $21,006; $10,503 paid in 2022 and $10,503 paid in 2023. 43 Table of Contents Capital Management As a result of positive operating results, we accumulated excess working capital.
Taxes collected from customers and remitted to governmental authorities are recorded on a net basis within cost of goods sold. Shipping and handling fees related to sales transactions were billed to customers and recorded as sales revenue. Income Taxes The provision for (benefit from) income taxes is determined using the asset and liability approach of accounting for income taxes.
Shipping and handling fees related to sales transactions were billed to customers and recorded as sales revenue. Income Taxes The provision for (benefit from) income taxes is determined using the asset and liability approach of accounting for income taxes.
Second, we hedge our biofuels feedstock through the execution of purchase contracts and supply agreements with certain vendors which meet the normal purchase and normal sales exception of ASC 815 Derivatives and Hedging .
This activity was captured on our consolidated balance sheets at December 31, 2024 and 2023. Second, we hedge our biofuels feedstock through the execution of purchase contracts and supply agreements with certain vendors which meet the normal purchase and normal sales exception of ASC 815 Derivatives and Hedging .
The Company’s unrecognized tax benefit totaled $0 at December 31, 2023 and 2022. 37 Table of Contents 2022 Compared to 2021 Consolidated sales revenue increased 23.2% or $74,628 in 2022 compared to 2021 primarily from higher average sales prices in the biofuel segment and, to a lesser extent, in the chemical segment.
The Company’s unrecognized tax benefit totaled $0 at December 31, 2024 and 2023. 37 Table of Contents 2023 Compared to 2022 Consolidated sales revenue decreased 7.0% or $27,764 in 2023 compared to 2022 primarily from lower average sales prices in the biofuel segment ($71,198) and, to a lesser extent, in the chemical segment ($1,916).
The Company’s unrecognized tax benefit totaled $0 at December 31, 2022 and 2021. 38 Table of Contents Chemicals Segment 2023 Compared to 2022: 2022 Compared to 2021: Change Change (Dollars in thousands) 2023 2022 $% 2022 2021 $% Sales $ 79,333 $ 80,893 $ (1,560 ) (1.9 )% $ 80,893 $ 67,542 $ 13,351 19.8 % Volume/product mix effect 356 0.4 % (1,137 ) (1.7 )% Price effect (1,916 ) (2.4 )% 14,488 21.5 % Gross profit $ 29,936 $ 25,645 $ 4,291 16.7 % $ 25,645 $ 13,970 $ 11,675 83.6 % 2023 Compared to 2022 Chemical sales revenue decreased 1.9% or $1,560 in 2023 compared with 2022.
The Company’s unrecognized tax benefit totaled $0 at December 31, 2023 and 2022. 38 Table of Contents Chemicals Segment 2024 Compared to 2023: 2023 Compared to 2022: Change Change (Dollars in thousands) 2024 2023 $ % 2023 2022 $ % Sales $ 80,007 $ 79,333 $ 674 0.8 % $ 79,333 $ 80,893 $ (1,560 ) (1.9 %) Volume/product mix effect 1,028 1.3 % 356 0.4 % Price effect (354 ) (0.4 %) (1,916 ) (2.4 %) Gross profit $ 22,632 $ 29,936 $ (7,304 ) (24.4 %) $ 29,936 $ 25,645 $ 4,291 16.7 % 2024 Compared to 2023 Chemical sales revenue increased 1% or $674 in 2024 compared with 2023.
Sales revenue for our custom chemical product line (chemicals produced for specific customers) totaled $64,286, an increase of 9.4% or $5,549 from 2022.
Sales revenue for our custom chemical product line (chemicals produced for specific customers) totaled $69,473, an increase of 8% or $5,187 from 2023.
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.
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.
We intend to retain the remaining cash to fund infrastructure and capacity expansion at our Batesville plant or to otherwise fund our future growth. Third parties have not placed significant restrictions on our working capital management decisions. A significant portion of these funds were held in cash or cash equivalents at multiple financial institutions.
We intend to retain the remaining cash to fund infrastructure and capacity expansion at our Batesville plant or to otherwise fund our future growth. Third parties have not placed significant restrictions on our working capital management decisions. We maintain depository accounts such as checking accounts, money market accounts, and other similar accounts at selected financial institutions.
No assurances can be given that we will continue to sell to such major refiners, or, if we do sell, the volume we will sell or the profit margin we will realize.
A portion of our biodiesel sold was to two major refiners in the United States in 2024 and 2023. No assurances can be given that we will continue to sell to such major refiners, or, if we do sell, the volume we will sell or the profit margin we will realize.
Critical Accounting Policies and Estimates Useful Lives of Property, Plant, and Equipment We primarily base our estimate of an asset’s useful life on our experience with other similar assets.
In 2022, the liquidation effect of exiting the pipeline business increased gross profit $1,851 in 2022; no such liquidation occurred in 2023. Critical Accounting Policies and Estimates Useful Lives of Property, Plant, and Equipment We primarily base our estimate of an asset’s useful life on our experience with other similar assets.
Investing Activities Cash provided by investing activities was $30,336 in 2023 compared to cash used by investing activities of $3,829 in 2022 for a net increase in cash of $34,165. This increase was primarily attributable to the sale of marketable securities in 2023 of $37,701 compared to sales of marketable securities in 2022 of $1,292.
This increase was primarily attributable to the sale of marketable securities in 2023 of $37,701 compared to sales of marketable securities in 2022 of $1,292. Increased capital expenditures decreased cash from investing activities by $1,244.
We will be permitted to use net proceeds of any borrowings under the Credit Facility for working capital and other general corporate purposes. No borrowings were made under the Credit Agreement or the Prior Credit Agreement as of December 31, 2023 and 2022. See Note 13 of the consolidated financial statements for additional information regarding our Credit Agreement.
The primary amendment from the Prior Credit Agreement was a reduction in the facility’s credit limit by $25,000. We will be permitted to use net proceeds of any borrowings under the Credit Facility for working capital and other general corporate purposes. No borrowings were made under the Prior Credit Agreement as of December 31, 2024 and 2023.
(Dollars in thousands) 2023 2022 2021 Net cash provided by operating activities $ 23,985 $ 52,451 $ 44,084 Net cash provided by (used in) investing activities $ 30,336 $ (3,829 ) $ 14,993 Net cash used in financing activities $ (10,517 ) $ (10,503 ) $ (119,678 ) 41 Table of Contents Operating Activities Cash provided by operating activities decreased in 2023 to $23,985 from $52,451 in 2022, a net decrease of $28,466.
(Dollars in thousands) 2024 2023 2022 Net cash provided by operating activities $ 24,802 $ 21,299 $ 52,451 Net cash (used in) provided by investing activities $ (14,794 ) $ 33,022 $ (3,829 ) Net cash used in financing activities $ (119,911 ) $ (10,517 ) $ (10,503 ) 41 Table of Contents Operating Activities Cash provided by operating activities increased in 2024 to $24,802 from $21,299 in 2023, a net increase of $3,503.
Bill-and-hold transactions for 2023 and 2022 were related to custom chemicals customers whereby revenue was recognized in accordance with contractual agreements based upon product being produced and ready for use by the customer. These sales were subject to written monthly purchase orders with agreement that production was reasonable.
Revenue from bill-and-hold transactions in which a performance obligation exists is recognized when the total performance obligation has been met and control of the product has transferred. Bill-and-hold transactions for 2024 and 2023 were related to custom chemicals customers whereby revenue was recognized in accordance with contractual agreements based upon product being produced and ready for use by the customer.
The product was custom manufactured and stored at the customer’s request and could not be sold to another buyer. Credit and payment terms for bill-and-hold customers are similar to other custom chemicals customers. Sales revenue under bill-and-hold arrangements were $43,766, $36,805, and $34,695 for the years ended December 31, 2023, 2022 and 2021, respectively.
These sales were subject to written monthly purchase orders with agreement that production was reasonable. The product was custom manufactured and stored at the customer’s request and could not be sold to another buyer. Credit and payment terms for bill-and-hold customers are similar to other custom chemicals customers.
Rarely are we the exporter of record, never are we the importer of record into foreign countries, and we are not always aware of the exact quantities of our products that are moved into foreign markets by our customers.
Many of our chemicals are used to manufacture products that are shipped, further processed, and/or consumed throughout the world, and we are not always aware of the exact quantities of our products that are moved into foreign markets by our customers.
Partially offsetting the decrease in cash from operations was the increase of $22,137 in net income in 2023 compared to 2022. Cash provided by operating activities increased in 2022 to $52,451 from $44,084 in 2021, a net increase of $8,367.
Partially offsetting the decrease in cash from operations was the increase of $22,171 in net income in 2023 compared to 2022. Investing Activities Cash used in investing activities was $14,794 in 2024 compared to cash provided by investing activities of $33,022 in 2023 for a net decrease in cash of $47,816.
Biodiesel selling prices can at times fluctuate based on the timing of unsold, internally generated RINs. From time to time, sales of biodiesel are on a “RINs-free” basis. Such method of selling results in applicable RINs being held.
From time to time, sales of biodiesel are on a “RINs-free” basis. Such method of selling results in applicable RINs being held. The value of RINs is not reflected in revenue until such time as the RINs sale has been completed with the transfer of the RINs.
This decrease was primarily attributable to sales of marketable securities in 2022 of $1,292 compared to the net sales of marketable securities in 2021 of $17,106. Increased capital expenditures decreased cash from investing activities by $3,322. Financing Activities Cash used in financing activities was $10,517 in 2023, primarily from the payment of dividends of $10,503.
This decrease was primarily attributable to the sale of marketable securities in 2023 of $37,701. In addition, increased capital expenditures decreased cash from investing activities by $8,646. Cash provided by investing activities was $33,022 in 2023 compared to cash used by investing activities of $3,829 in 2022 for a net increase in cash of $36,851.
In addition, the prior year gross profit was negatively impacted from higher natural gas prices incurred from Winter Storm Uri. 39 Table of Contents Biofuel Segment 2023 Compared to 2022: 2022 Compared to 2021: Change Change (Dollars in thousands) 2023 2022 $% 2022 2021 $% Sales $ 288,917 $ 315,121 $ (26,204 ) (8.3 )% $ 315,121 $ 253,844 $ 61,277 24.1 % Volume/product mix effect 44,994 14.3 % (29,164 ) (11.5 )% Price effect (71,198 ) (22.6 )% 90,441 35.6 % Gross profit $ 11,043 $ 3,348 $ 7,695 229.8 % $ 3,348 $ 9,567 $ (6,219 ) (65.0 )% 2023 Compared to 2022 Biofuels sales revenue decreased 8.3% or $26,204 in 2023 compared to 2022, primarily from decreased selling prices of biodiesel and biodiesel blends, inclusive of a decline in separated RIN sale prices.
Partially reducing these improvements was the change in the timing of deferred revenue amortization of $3,081 and lower margins from glycerin products on reduced selling price from increased imports. 39 Table of Contents Biofuel Segment 2024 Compared to 2023: 2023 Compared to 2022: Change Change (Dollars in thousands) 2024 2023 $ % 2023 2022 $ % Sales $ 163,332 $ 288,917 $ (125,585 ) (43.5 %) $ 288,917 $ 315,121 $ (26,204 ) (8.3 %) Volume/product mix effect (60,574 ) (21.0 %) 44,994 14.3 % Price effect (65,011 ) (22.5 %) (71,198 ) (22.6 %) Gross (loss) profit $ (2,988 ) $ 11,043 $ (14,031 ) NA $ 11,043 $ 3,348 $ 7,695 229.8 % 2024 Compared t o 2023 Biofuels sales revenue decreased 43% in 2024 compared to 2023, primarily from a 21% reduction in sales volume and a 23% reduction in the average price of fuel sold inclusive of D4 RIN prices.
Based on technical guidance from the Internal Revenue Service, the Company excludes the portion of the BTC not used to satisfy excise tax liabilities from income. The Company’s effective tax rate for 2022 includes an expense of $7,392 or 53.8% from the recording of a valuation allowance against its deferred tax assets.
Based on technical guidance from the Internal Revenue Service, the Company excludes the portion of the BTC not used to satisfy excise tax liabilities from income. See Note 3 to our consolidated financial statements for a discussion of the pretax earnings impact of the BTC.
Lastly, we maintain depository accounts such as checking accounts, money market accounts, and other similar accounts at selected financial institutions. As of December 31, 2023, approximately 55% of these deposits were insured by the Federal Deposit Insurance Corporation. Off-Balance Sheet Arrangements We engage in two types of hedging transactions.
As of December 31, 2024, approximately 83% o f these deposits were insured by the Federal Deposit Insurance Corporation. Off-Balance Sheet Arrangements We engage in two types of hedging transactions. First, we hedge our biofuels sales through the purchase and sale of futures contracts and options on futures contracts of energy commodities.
(Dollars in thousands other than per share amounts) Year Year Ended Ended December 31, December 31, Dollar % 2023 2022* Change Change Revenue $ 368,250 $ 396,014 $ (27,764 ) (7 )% Income from operations $ 27,368 $ 17,546 $ 9,822 56 % Net income $ 37,382 $ 15,211 $ 22,171 146 % Earnings per common share: Basic $ 0.85 $ 0.35 $ 0.50 143 % Diluted $ 0.85 $ 0.35 $ 0.50 143 % Adjusted EBITDA* $ 34,983 $ 27,763 $ 7,220 26 % * Adjusted EBITDA for 2022 has been restated to be consistent with 2023 reporting.
(Dollars in thousands other than per share amounts) Year Year Ended Ended December 31, December 31, Dollar % 2024 2023 Change Change Revenue $ 243,339 $ 368,250 $ (124,911 ) (34 )% Income from operations $ 6,372 $ 27,368 $ (20,996 ) (77 )% Net income $ 15,503 $ 37,382 $ (21,879 ) (59 )% Earnings per common share: Basic $ 0.35 $ 0.85 $ (0.50 ) (59 )% Diluted $ 0.35 $ 0.85 $ (0.50 ) (59 )% Adjusted EBITDA $ 17,594 $ 34,983 $ (17,389 ) (50 )% We use adjusted EBITDA as a key operating metric to measure both performance and liquidity.
In 2022, the liquidation effect of exiting the pipeline business increased gross profit $1,851 in 2022; no such liquidation occurred in 2023. 2022 Compared to 2021 Biofuels sales revenue increased 24.1% or $61,277 in 2022 compared to 2021, primarily from increased selling prices of biodiesel and biodiesel blends, inclusive of separated RIN sales.
This adjustment increased gross profit $2,370 in 2024 as compared to an increase in gross profit of $8,414 in 2023. 2023 Compared to 2022 Biofuels sales revenue decreased 8.3% or $26,204 in 2023 compared to 2022, primarily from decreased selling prices of biodiesel and biodiesel blends, inclusive of a decline in separated RIN sale prices.
At December 31, 2023 and 2022, $4,317 and $4,473, respectively, was included in revenue for products that had not shipped. The latter amounts do not include Contract Assets of $734 and $775 that have not been billed nor shipped at December 31, 2023 and 2022, respectively.
The latter amounts do not include Contract Assets of $29 and $734 that have not been billed nor shipped at December 31, 2024 and 2023, respectively. Taxes collected from customers and remitted to governmental authorities are recorded on a net basis within cost of goods sold.
Most of our sales are FOB the Batesville plant, although some transfer points are in other states or foreign ports. While many of our chemicals are used to manufacture products that are shipped, further processed, and/or consumed throughout the world, the chemical products, with limited exceptions, generally leave the United States only after we have transferred ownership.
Most of our sales are FOB the Batesville plant, although some transfer points are in other states or foreign ports.
The First Amendment does not modify the aggregate amount, or expiration date, of the Credit Facility. We do not expect the transition from LIBOR to have a material impact on the Credit Facility. Pursuant to the First Amendment, the interest rate floats at the following margins over SOFR or base rate based upon our leverage ratio.
The interest rate floats at the following margins over SOFR or base rate based upon our leverage ratio.
Cash used in financing activities decreased to $10,503 in 2022, from $119,678 in 2021, a net decrease of $109,175. This decrease resulted from the payment of special cash dividends in 2021 of $109,408 compared to $0 in 2022. Capital Expenditure Commitments We had $560 of infrastructure capital repair projects that generated commitments as of December 31, 2023.
Financing Activities Cash used in financing activities increased to $119,911 in 2024 from $10,517 in 2023, a net increase of $109,394 primarily from the payment of a special cash dividend of $109,408. Cash used in financing activities was $10,517 in 2023, primarily from the payment of dividends of $10,503.
Sales revenue for our custom chemical product line (chemicals produced for specific customers) totaled $58,737, an increase of 15.9% or $8,062 from 2021. This increase was primarily from higher sales volumes of chemical intermediates in the oil and gas industry.
This adjustment increased gross profit $658 in 2024 as compared to $1,920 in 2023. 2023 Compared to 2022 Chemical sales revenue decreased 1.9% or $1,560 in 2023 compared with 2022. Sales revenue for our custom chemical product line (chemicals produced for specific customers) totaled $64,286, an increase of 9.4% or $5,549 from 2022.
Performance chemicals revenue (comprised of multi-customer products which were sold based on specification) was $22,156 in 2022, an increase of 31.4% or $5,289 from 2021. This increase resulted from higher selling prices of our glycerin products partially offset by lower volumes of polymer modifiers. Gross profit for the chemicals segment increased 83.6% or $11,675 in 2022 compared with 2021.
Mostly offsetting these increases were reduced sales prices and volumes of chemicals sold in the agricultural and energy markets. Performance chemicals revenue (comprised of multi-customer products which are sold based on specification) was $10,534 in 2024, a decrease of 30% or $4,513 from 2023. This decrease resulted from lower sales volumes and prices of glycerin products.
Removed
Adjusted EBITDA in both years excludes the impact from unrealized gains or losses on derivatives. Realized gains and losses are included in Adjusted EBITDA in both 2022 and 2023. We use adjusted EBITDA as a key operating metric to measure both performance and liquidity. Adjusted EBITDA is a non-GAAP financial measure.
Added
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.
Removed
Adjusted EBITDA in both years excludes the impact from unrealized gains or losses on derivatives.
Added
Partially offsetting this decline was an increase in chemical segment volumes and an increase of $5,492 in amortization of deferred revenue from the expiration of a long-term contract which is now a short-term contract. Gross profit decreased 52% or $21,335 in 2024 compared to 2023. This comparative decrease was ($14,031) in the biofuel segment and ($7,304) in the chemical segment.
Removed
Realized gains and losses are included in Adjusted EBITDA in both 2022 and 2023. 36 Table of Contents Results of Operations Consolidated 2023 Compared to 2022: 2022 Compared to 2021: Change Change (Dollars in thousands) 2023 2022 $% 2022 2021 $% Sales $ 368,250 $ 396,014 $ (27,764 ) (7.0 )% $ 396,014 $ 321,386 $ 74,628 23.2 % Volume/product mix effect $ 45,350 11.5 % $ (30,301 ) (9.4 )% Price effect $ (73,114 ) (18.5 )% $ 104,929 32.6 % Gross profit $ 40,979 $ 28,993 $ 11,986 41.3 % $ 28,993 $ 23,537 $ 5,456 23.2 % Operating expense $ 13,611 $ 11,447 $ 2,164 18.9 % $ 11,447 $ 10,639 $ 808 7.6 % Other (income) expense $ (10,015 ) $ 3,808 $ (13,823 ) NA $ 3,808 $ (3,032 ) $ 6,840 NA Pretax income $ 37,383 $ 13,738 $ 23,645 172.1 % $ 13,738 $ 15,930 $ (2,192 ) (13.8 )% Income tax provision (benefit) $ 1 $ (1,473 ) $ 1,474 NA $ (1,473 ) $ (10,325 ) $ 8,852 (85.7 )% Net income $ 37,382 $ 15,211 $ 22,171 145.8 % $ 15,211 $ 26,255 $ (11,044 ) (42.1 )% 2023 Compared to 2022 Consolidated sales revenue decreased 7.0% or $27,764 in 2023 compared to 2022 primarily from lower average sales prices in the biofuel segment ($71,198) and, to a lesser extent, in the chemical segment ($1,916).
Added
This reduction was inclusive of (i) reduced sales volumes of biodiesel and glycerin from extreme weather conditions in the first three months of the year, ii) downtime of both biodiesel and chemical production equipment during the last half of 2024 from delays by equipment suppliers, and iii) in the biofuel segment, the change in the unrealized activity of derivative instruments in comparison to the prior year with a loss of $1,971 in the current year and a gain of $1,878 in the prior year.
Removed
This increase was reduced in part by lower sales volumes primarily in the biofuels segment and, to a lesser extent, in the chemicals segment. Gross profit increased 23.2% or $5,456 in 2022 compared to 2021.
Added
Also contributing to this reduced margin was the change in adjustments in the carrying value of our inventory as determined utilizing the LIFO method of inventory accounting which increased gross profit $3,028 in 2024 as compared to $10,334 in 2023. Partially offsetting this decrease was the benefit of the amortization of deferred revenue in the chemical segment of $5,492.
Removed
This comparative increase was primarily attributable to: (i) improved margins in the chemical segment, and (ii) the prior year was unfavorably impacted by significantly atypical natural gas prices incurred in February 2021 from Winter Storm Uri.
Added
Operating expenses decreased $339 in 2024 compared to 2023. This decrease was primarily the result of decreased research and development and legal expenses. Other income decreased $92 in 2024 as compared to 2023.
Removed
Partially offsetting this improvement in gross profit was the unfavorable change in the realized and unrealized activity of derivative instruments which resulted in a reduction in gross profit of $10,500 in 2022. The comparative unfavorable change was primarily from the unprecedented volatility in the NYMEX heating oil futures market. Operating expenses increased $808 in 2022 compared to 2021.
Added
This net decrease was due to (i) the reduction of interest income of $1,921, (ii) the prior year gain of $575 on the sale of marketable securities with no such gain in the current year, and (iii) separations payments made in the current year.
Removed
This increase was primarily the result of increased compensation expense. Other expense increased $6,840 from 2022 primarily from realized and unrealized losses on equity securities with a loss of $8,546 in 2022 as compared to a loss of $70 in 2021.
Added
These reductions were mostly offset by the receipt of a $2,750 settlement in 2024 (see Note 22 of our consolidated financial statements for further details). Income tax provision (benefit) The income tax provision was $792 in 2024 or an effective tax rate of 4.9% as compared to a provision in 2023 of $1 or an effective tax rate of 0.0%.
Removed
Income tax benefit (provision) The income tax benefit in 2022 was $1,473 or an effective tax rate of (10.7%) as compared to a benefit in 2021 of $10,325 or an effective tax rate of (64.8%).
Added
The Company’s effective tax rate for 2024 and 2023 includes an expense of $8,169 or 50.1% and $6,821 or 18.2%, respectively, from the recording of a valuation allowance against its deferred tax assets.
Removed
Partially reducing these improvements was the change in the timing of deferred revenue amortization of $3,081 and lower margins from glycerin products on reduced selling price from increased imports. 2022 Compared to 2021 Chemical sales revenue increased 19.8% or $13,351 in 2022 compared with 2021.
Added
As of December 31, 2024, based on all available and allowable evidence, the Company determined that its deferred tax assets of $41,076 are more likely than not realizable only to the extent of $18,691, resulting in a net deferred tax liability of $773.
Removed
This increase resulted primarily from stronger margins and higher sales volumes in products sold into the oil and gas industry and glycerin markets.
Added
Included in this net increase were higher sales volumes of chemicals sold into the automotive coatings market, sales of one new product into the coatings market, and an increase of $5,492 from the amortization of deferred revenue of a long-term contract which expired. We are working with this customer on a new long-term agreement while we continue to do business.
Removed
Sales revenue declined in part on lower sales volumes as margins narrowed from the prior year. A portion of our biodiesel sold was to two major refiners in the United States in 2022 as compared with three major refiners in 2021.
Added
Sales volumes were negatively impacted by the downtime of production equipment during the last half of 2024 from delays by equipment suppliers. Gross profit for the chemicals segment decreased 24% or $7,304 in 2024 compared with 2023.
Removed
Biofuels gross profit decreased 65.0% or $6,219 in 2022 compared to 2021. Gross profit primarily decreased due to the unprecedented volatility in the heating oil futures market which resulted in a basis risk loss of $10,500 and lower sales volumes.
Added
This decrease was primarily from: (i) reduced chemical sales prices in the agricultural and energy markets, and (ii) reduced sales volumes as described above.
Removed
Partially improving gross profit was (i) the change in adjustments in the carrying value of our inventory as determined utilizing the LIFO method of inventory accounting reduced gross profit $9,921 in 2021 as compared to $5,794 in 2022, (ii) the liquidation effect of exiting the pipeline business, which increased profits $1,851 in 2022, and (iii) 2021 gross profit was unfavorably impacted by higher natural gas prices incurred from Winter Storm Uri.
Added
Partially offsetting these decreases were: (i) the benefit of the amortization of deferred revenue in the chemical segment of $5,492, and (ii) the change in the adjustment in the carrying value of our inventory as determined utilizing the LIFO method of inventory accounting.
Removed
The value of RINs is not reflected in revenue until such time as the RINs sale has been completed with the transfer of the RINs. Revenue from bill-and-hold transactions in which a performance obligation exists is recognized when the total performance obligation has been met and control of the product has transferred.
Added
Production and sales volumes in 2024 were impacted by the extreme winter weather experienced in the first quarter as well as production issues, stemming from delays by equipment suppliers that created an extended service utility downtime, which impacted the third and fourth quarter.
Removed
This increase was attributed to the change in (i) accounts receivable, including accounts receivable - related parties, of $9,731 and (ii) accounts payable, including accounts payable-related parties, of $4,656. Primarily offsetting the increase in cash from operations was the increase of $6,807 in inventory in 2022 compared to 2021.
Added
Biofuels gross profit decreased $14,031 in 2024 compared to 2023.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest change(Volumes and dollars in thousands) Hypothetical Percentage Adverse Decrease Volume Change in Decrease in in Gross Item Requirements(a) Units Price Gross Profit Profit Biodiesel feedstocks 55,835 GAL 10 % $ 25,532 62.3 % Methanol 9,747 GAL 10 % $ 989 2.4 % Electricity 105 MWH 10 % $ 664 1.6 % Sodium Methylate 13,929 LB 10 % $ 653 1.6 % (a) Volume requirements and average price information are based upon volumes used and prices obtained for the year ended December 31, 2023.
Biggest change(Dollars in thousands) Hypothetical Percentage Adverse Decrease Volume Change in Decrease in in Gross Item Requirements(a) Units Price Gross Profit Profit Biodiesel feedstocks 42.4 MGAL 10 % $ 13,403 69.4 % Methanol 7.6 MGAL 10 % $ 810 4.2 % Electricity 104,738 MWH 10 % $ 548 2.8 % Sodium Methylate 10.8 MLB 10 % $ 531 2.7 % Coal 32,454 TON 10 % $ 349 1.8 % Natural Gas 1,165,645 MCF 10 % $ 301 1.6 % (a) Volume requirements and average price information are based upon volumes used and prices obtained for the year ended December 31, 2024.
We had no derivative instruments that qualified under these rules as designated accounting hedges in 2023 or 2022. Changes in the fair value of our derivative instruments are recognized at the end of each accounting period and recorded in the consolidated statement of operations as a component of cost of goods sold.
We had no derivative instruments that qualified under these rules as designated accounting hedges in 2024 or 2023. Changes in the fair value of our derivative instruments are recognized at the end of each accounting period and recorded in the consolidated statement of operations as a component of cost of goods sold.
Volume requirements may differ materially from these quantities in future years as our business evolves. We had no borrowings as of December 31, 2023 or 2022, and, as such, we were not exposed to interest rate risk for those years.
Volume requirements may differ materially from these quantities in future years as our business evolves. We had no borrowings as of December 31, 2024 or 2023, and, as such, we were not exposed to interest rate risk for those years.
We prepared a sensitivity analysis of our exposure to market risk with respect to key raw materials and conversion costs for which we do not possess contractual market price adjustment protections based on average prices in 2023.
We prepared a sensitivity analysis of our exposure to market risk with respect to key raw materials and conversion costs for which we do not possess contractual market price adjustment protections based on average prices in 2024.
As of December 31, 2023 and 2022, the fair values of our derivative instruments were in an asset position in the amount of $1,736 and a liability position of $142, respectively.
As of December 31, 2024 and 2023, the fair values of our derivative instruments were in a liability position in the amount of $235 and an asset position of $1,736, respectively.

Other FF 10-K year-over-year comparisons