Note 13 - Segment Information

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

13) SEGMENT INFORMATION

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

Chemicals

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

Biofuels

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

As of September 30, 2023, FutureFuel held 4.2 million of RINs in inventory with a fair market value of $6,971 and no cost. Comparatively, at September 30, 2022, FutureFuel held 8.1 million of RINs in inventory with a fair market value of $12,752 and no cost.

Summary of business by segment

	Three Months Ended September 30,					Nine Months Ended September 30,
	2023			2022		2023			2022
Revenue
Custom chemicals	$	14,454		$	16,047	$	46,650		$	44,028
Performance chemicals		3,393			5,459		11,834			17,233
Chemical revenue		17,847			21,506		58,484			61,261
Biofuel revenue		98,905			96,635		217,757			216,937
Total Revenue	$	116,752		$	118,141	$	276,241		$	278,198
Segment gross profit
Chemical	$	6,878		$	8,362	$	21,917		$	17,976
Biofuel		(3,008	)		11,623		(5,016	)		(4,169	)
Total gross profit	$	3,870		$	19,985	$	16,901		$	13,807

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