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Note 10 - Segment Information
3 Months Ended
Mar. 31, 2018
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]
10
 
)
SEGMENT INFORMATION
 
FutureFuel has
two
reportable segments organized along similar product groups – chemicals and biofuels.
 
Chemicals
 
FutureFuel’s chemicals segment manufactures diversified chemical products that are sold externally to
third
party customers. This segment is comprised of
two
components: “custom manufacturing” (manufacturing chemicals for specific customers) and “performance chemicals” (multi-customer specialty chemicals).
 
Biofuels
 
FutureFuel’s biofuels business segment primarily manufactures and markets biodiesel. Biodiesel revenues are generated through the sale of biodiesel to customers through FutureFuel’s distribution network at the Batesville Plant, through distribution facilities available at leased oil storage facilities, and through a network of remotely located tanks. Biofuels revenues also include the sale of biodiesel blends with petrodiesel, petrodiesel with
no
biodiesel added, internally generated, separated RINs, biodiesel production byproducts, and the purchase and sale of other petroleum products on common carrier pipelines.  Biodiesel selling prices and profitability can at times fluctuate based on the timing of unsold, internally generated RINs. FutureFuel does
not
allocate production costs to internally generated RINs, and, from time to time, can enter into sales of biodiesel on a “RINs-free” basis. Such method of selling results in FutureFuel maintaining possession of the applicable RINs from the sale. The benefit derived from the eventual sale of the RINs is
not
reflected in results of operations until such time as the RIN sale has been completed, which
may
lead to variability in reported operating results.
 
Summary
of long-lived
assets
and
revenues
by
geographic area
 
All of FutureFuel’s long-lived assets are located in the United States.
 
Most of FutureFuel’s sales are transacted with title passing at the time of shipment from the Batesville Plant, although some sales are transacted with title passing at the delivery point. While many of FutureFuel’s chemicals are utilized 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 ownership has transferred from FutureFuel to the customer. FutureFuel is rarely the exporter of record, never the importer of record into foreign countries, and is
not
always aware of the exact quantities of its products that are moved into foreign markets by its customers. FutureFuel does track the addresses of its customers for invoicing purposes and uses this address to determine whether a particular sale is within or outside the United States. FutureFuel’s revenues attributable to the United States and foreign countries (based upon the billing addresses of its customers) were as follows: 
 
   
Three months ended March 31,
 
   
2018
   
2017
 
United States
  $
55,266
    $
53,415
 
All Foreign Countries
   
481
     
696
 
Total
  $
55,747
    $
54,111
 
 
 
 Revenues from a single foreign country during the 
three
months ended
March 31, 2018
and
2017
did
not
exceed
1%
of total revenues.  
 
Summary of
business
by
segment
 
   
Three months ended March 31,
 
   
2018
   
2017
 
Revenue
               
Custom chemicals
  $
23,420
    $
21,952
 
Performance chemicals
   
5,661
     
4,405
 
Chemicals revenue
   
29,081
     
26,357
 
Biofuels revenue
   
26,666
     
27,754
 
Total Revenue
  $
55,747
    $
54,111
 
                 
Segment gross profit
               
Chemicals
  $
7,556
    $
7,009
 
Biofuels
   
29,951
     
(879
)
Total gross profit
   
37,507
     
6,130
 
Corporate expenses
   
(2,940
)    
(2,655
)
Income before interest and taxes
   
34,567
     
3,475
 
Interest and other income
   
3,367
     
1,723
 
Interest and other expense
   
(43
   
(205
)
Benefit/(provision) for income taxes
   
2,463
     
(1,597
)
Net income
  $
40,354
    $
3,396
 
 
Depreciation is allocated to segment costs of goods sold based on plant usage. The total assets and capital expenditures of FutureFuel have
not
been allocated to individual segments as large portions of these assets are shared to varying degrees by each segment, causing such an allocation to be of little value.