FutureFuel Third Quarter Net Income Increases 165% or $8 Million
Reports Net Income of $12.9 Million or $0.29 per Diluted Share, and Adjusted EBITDA of $10.1
Million
CLAYTON, Mo., Nov. 09, 2016 (GLOBE NEWSWIRE) -- FutureFuel Corp. (NYSE:FF) (“FutureFuel”), a manufacturer of custom and performance chemicals and biofuels, today
announced financial results for the third quarter and the nine months ended September 30, 2016.
Third Quarter 2016 Financial Highlights (all comparisons are with the third quarter of
2015)
- Revenues were $69.3 million, down 35.3% from $107.1 million
- EBITDA was $10.1 million, up 290.3% from $2.6 million
- Net income increased to $12.9 million, or $0.29 per diluted share, from $4.9 million, or $0.11 per diluted share.
Nine Month 2016 Financial Highlights (all comparisons are with the first nine months of 2015)
- Revenues were $183.8 million, down 30.8% from $265.7 million
- EBITDA was $36.3 million, up 46.8% from $24.7 million
- Net income increased to $37.7 million, or $0.86 per diluted share, from $16.8 million, or $0.38 per diluted share.
“We delivered solid operating earnings and cash flow in the third quarter driven by an improved regulatory
environment in our biofuels business. We continue to manage through softness in some key custom chemical markets,” said Paul Flynn,
Executive Vice President of Business and Marketing for FutureFuel Chemical Company.
2016 Regular Cash Dividends
FutureFuel declared normal quarterly dividends of $0.06 per share for the third quarter of 2016. The
remaining dividends will be paid in December.
Financial Overview and Key Operating
Metrics
Financial and operating metrics, which include non-GAAP financial measures, include dollars in thousands, except
per share amounts:
| FutureFuel Corp. |
| Certain Financial and Operating Metrics |
| (Dollars in thousands, except per share amounts) |
| (Unaudited) |
| |
| |
Three months ended
September 30: |
| |
|
|
|
|
Dollar |
|
% |
| |
|
2016 |
|
|
|
2015 |
|
|
Change |
|
Change |
| Revenues |
$ |
69,306 |
|
|
$ |
107,054 |
|
|
$ |
(37,748 |
) |
|
|
(35.3 |
%) |
| Income from operations |
$ |
7,841 |
|
|
$ |
5,933 |
|
|
$ |
1,908 |
|
|
|
32.2 |
% |
| Net income |
$ |
12,868 |
|
|
$ |
4,850 |
|
|
$ |
8,018 |
|
|
|
165.3 |
% |
| Earnings per common share: |
|
|
|
|
|
|
|
| Basic |
$ |
0.29 |
|
|
$ |
0.11 |
|
|
$ |
0.18 |
|
|
|
163.6 |
% |
| Diluted |
$ |
0.29 |
|
|
$ |
0.11 |
|
|
$ |
0.18 |
|
|
|
163.6 |
% |
| Capital expenditures and intangibles (net of customer reimbursements and regulatory
grants) |
$ |
853 |
|
|
$ |
996 |
|
|
$ |
(143 |
) |
|
|
(14.4 |
%) |
| Adjusted EBITDA |
$ |
10,117 |
|
|
$ |
2,592 |
|
|
$ |
7,525 |
|
|
|
290.3 |
% |
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
Nine months ended
September 30: |
| |
|
|
|
|
Dollar |
|
% |
| |
|
2016 |
|
|
|
2015 |
|
|
Change |
|
Change |
| Revenues |
$ |
183,820 |
|
|
$ |
265,739 |
|
|
$ |
(81,919 |
) |
|
|
(30.8 |
%) |
| Income from operations |
$ |
21,746 |
|
|
$ |
19,887 |
|
|
$ |
1,859 |
|
|
|
9.3 |
% |
| Net income |
$ |
37,661 |
|
|
$ |
16,774 |
|
|
$ |
20,887 |
|
|
|
124.5 |
% |
| Earnings per common share: |
|
|
|
|
|
|
|
| Basic |
$ |
0.86 |
|
|
$ |
0.38 |
|
|
$ |
0.48 |
|
|
|
126.3 |
% |
| Diluted |
$ |
0.86 |
|
|
$ |
0.38 |
|
|
$ |
0.48 |
|
|
|
126.3 |
% |
| Capital expenditures and intangibles (net of customer reimbursements and regulatory
grants) |
$ |
2,988 |
|
|
$ |
5,967 |
|
|
$ |
(2,979 |
) |
|
|
(49.9 |
%) |
| Adjusted EBITDA |
$ |
36,328 |
|
|
$ |
24,745 |
|
|
$ |
11,583 |
|
|
|
46.8 |
% |
Third Quarter Financial and Business Summary
Sales revenue in the three months ended September 30, 2016 decreased by $37,748,000 compared to the three months
ended September 30, 2015. Sales revenue from the chemicals segment declined $7,308,000 compared to 2015 and accounted for 35.1% of
total revenues in the three months ended September 30, 2016, as compared to 29.5% in the same period in 2015. Sales revenue
from the biofuels segment decreased $30,440,000 and accounted for 64.9% of total revenues in the third three months of 2016 as
compared to 70.5% in the same period in 2015.
Sales revenue for our custom chemicals (unique chemicals produced for specific customers) for the three months
ended September 30, 2016 totaled $20,455,000, a decline of $6,210,000 from the comparable period in 2015. This decline
was primarily attributed to continued lower sales volumes of chemicals used in the agrochemical and energy markets and to a lesser
extent, lower sales volumes of the laundry detergent additive. Further impacting revenue was reduced selling prices in accordance
with contractual agreements indexed to key raw materials. Performance chemicals (comprised of multi-customer products which are
sold based on specification) sales revenues were $3,844,000 in the three months ended September 30, 2016, a decrease of $1,098,000
from the three months ended September 30, 2015. This decrease was primarily from timing of product shipments to
customers.
Biofuels sales revenue in the three months ended September 30, 2016 decreased $30,440,000 when compared to the
three months ended September 30, 2015. This decrease was primarily from the reduction in pipeline sales which totaled
$1,509,000 and $27,689,000 in the three months ended September 30, 2016 and 2015, respectively. Additionally, sales volumes of
biodiesel and biodiesel blends increased 6% but were more than offset by lower average selling prices. Total sales from
biodiesel and biodiesel blends decreased $4,260,000.
Gross profit for the chemicals segment for the three months ended September 30, 2016 increased by $559,000 when
compared to the three months ended September 30, 2015. Gross profits were increased by the change in adjustments in the carrying
value of our inventory as determined utilizing the LIFO method of inventory accounting. This adjustment decreased gross profit
$77,000 and $853,000 in the three months ended September 30, 2016 and 2015, respectively. The changes in the LIFO adjustment
and product mix primarily resulted in a 32% decline in cost of goods sold and distribution expense as compared to a 23%
decline in revenue in the three months ended September 30, 2016.
Biofuels gross profit in the three months ended September 30, 2016 increased $1,085,000 when compared to the
three months ended September 30, 2015. Cost of goods sold declined 43% quarter over quarter as compared to a decline of 40% in
sales revenue for the same periods. Gross profits were benefited by the change in adjustments in the carrying value of our
inventory as determined utilizing the LIFO method of inventory accounting. The LIFO adjustment decreased gross profit $336,000
and $1,326,000 in the three months ended September 30, 2016 and 2015, respectively. The segment was further impacted by a
lower of cost or market adjustment of $1,877,000 and $192,000 in the three months ended September 30, 2016 and 2015,
respectively.
FutureFuel reported net income of $12,868,000, or $0.29 per diluted share, in the third quarter of 2016 compared
to net income of $4,850,000, or $0.11 per diluted share in 2015. Net income for the quarter ended September 30, 2016
increased 165% or $8,018,000 as compared to the same quarter in 2015. This increase was primarily due to: i) the benefit of
tax credits and incentives in the three months ended September 30, 2016 which was not in place in the three months ended September
30, 2015; ii) the benefit of the EPA's final rule on the Renewable Fuel Standards; and iii) the favorable reversal of a state's
previous tax treatment of tax credits and incentives.
Nine Month Financial and Business Summary
Sales revenue in the nine months ended September 30, 2016 declined by $81,919,000, compared to the nine months
ended September 30, 2015. Sales revenue from the chemicals segment declined by $24,571,000 compared to the nine months ended
September 30, 2015 and accounted for 40.2% of total revenues in the nine months ended September 30, 2016 as compared to 37.1% in
the same period in 2015. Sales revenue from the biofuels segment decreased $57,348,000 and accounted for 59.8% of total
revenues in the nine months ended September 30, 2016 as compared to 62.9% in the same period in 2015.
Sales revenue for our custom chemicals (unique chemicals produced for specific customers) for the nine months
ended September 30, 2016 totaled $60,148,000, a decline of $24,473,000 from the comparable period in 2015. This decline was
primarily attributed to continued lower sales volumes of chemicals sold to customers servicing the agrochemical and energy
markets and to a lesser extent, reduced sales volumes of the laundry detergent additive. Further impacting revenue was
reduced selling prices in accordance with contractual agreements indexed to certain key raw materials. Performance chemicals
(comprised of multi-customer products which are sold based on specification) sales revenues were $13,782,000 in the nine months
ended September 30, 2016, a slight decrease of $98,000 from the nine months ended September 30,2015.
Sales revenue from the biofuels segment decreased 34.3% in the nine months ended September 30, 2016, compared to
the nine months ended September 30, 2015. This decrease was primarily from lower sales of pipeline business in the
biofuels segment. Pipeline sales totaled $7,390,000 and $59,232,000 in the nine months ended September 30, 2016
and 2015, respectively. Additionally, sales volumes in the biodiesel and biodiesel blends increased 19% but were more than
offset by lower average selling prices. Total sales from biodiesel and biodiesel blends decreased $5,506,000.
Gross profit for the chemicals segment for the nine months ended September 30, 2016 decreased by $5,437,000 when
compared to the nine months ended September 30, 2015. This decrease resulted primarily from lower sales volumes of the laundry
detergent additive and reduced volume from other custom products used in the agrochemical and energy markets. Gross profits were
benefited by the change in adjustments in the carrying value of our inventory as determined utilizing the LIFO method of inventory
accounting. This adjustment increased gross profit $946,000 and $189,000 in the nine months ended September 30, 2016 and 2015,
respectively. The net result of all changes was a 27% decline in cost of goods sold and distribution expense as compared to a 25%
decline in revenue in the nine months ended September 30, 2016.
Biofuels gross profit in the nine months ended September 30, 2016 increased $7,248,000. Cost of goods sold
declined 38% as compared to a decline of 34% in sales revenue for the same period. Gross profit was primarily benefited with
the BTC and the final rule on the Renewable Fuel Standards from the EPA in place throughout the year when neither was in effect in
the same period of 2015. The segment was impacted by a lower of cost or market adjustment of $1,877,000 and $192,000 in
the nine months ended September 30, 2016 and 2015, respectively.
FutureFuel reported net income of $37,661,000, or $0.86 per diluted share, in the first nine months of 2016
compared to net income of $16,774,000, or $0.38 per diluted share in 2015. Net income for the nine months ended
September 30, 2016 increased 124.5% or $20,887,000 as compared to the same period in 2015. This increase for the nine-month
period was from: i) the benefit of tax credits and incentives in effect resulting in an income tax benefit in the
nine months ended September 30, 2016 which was not in effect in the nine months ended September 30, 2015; ii) the benefit
of the EPA's final rule on the Renewable Fuel Standards; and iii) the favorable reversal of a state's previous tax treatment of tax
credits and incentives.
Capital Expenditures
Capital expenditures and intangibles were $3,107,000 in the first nine months of 2016, compared with $7,437,000
in the same period in 2015. FutureFuel was reimbursed for a portion of these expenditures by certain customers as summarized in the
following table.
| (Dollars in thousands) |
| |
| |
Nine months ended
September 30: |
| |
|
2016 |
|
|
|
2015 |
|
| Cash paid for capital expenditures and intangibles |
$ |
3,107 |
|
|
$ |
7,437 |
|
| Cash received as reimbursement of capital expenditures |
$ |
(119 |
) |
|
$ |
(1,470 |
) |
| Cash paid, net of reimbursement, for capital expenditures |
$ |
2,988 |
|
|
$ |
5,967 |
|
| |
Cash and Cash Equivalents and
Marketable Securities
Cash and cash equivalents and marketable securities totaled $293,382,000 as of September 30, 2016, compared with
$228,716,000 as of December 31, 2015.
About FutureFuel
FutureFuel is a leading manufacturer of diversified chemical products and biofuels. FutureFuel’s chemicals
segment manufactures specialty chemicals for specific customers (“custom manufacturing”) as well as multi-customer specialty
chemicals (“performance chemicals”). FutureFuel’s custom manufacturing product portfolio includes a laundry detergent additive,
proprietary agrochemicals, adhesion promoters, a biocide intermediate, and an antioxidant precursor. FutureFuel’s performance
chemicals products include a portfolio of proprietary nylon and polyester polymer modifiers and several small-volume specialty
chemicals and solvents for diverse applications. FutureFuel’s biofuels segment primarily produces and sells biodiesel to its
customers. Please visit www.futurefuelcorporation.com for more information.
Forward-Looking Statements
This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform
Act of 1995. Forward-looking statements deal with FutureFuel’s current plans, intentions, beliefs, and expectations, and statements
of future economic performance. Statements containing such terms as “believe,” “do not believe,” “plan,” “expect,” “intend,”
“estimate,” “anticipate,” and other phrases of similar meaning are considered to contain uncertainty and are forward-looking
statements. In addition, from time to time FutureFuel or its representatives have made or will make forward-looking statements
orally or in writing. Furthermore, such forward-looking statements may be included in various filings that the company makes with
United States Securities and Exchange Commission (the “SEC”), in press releases, or in oral statements made by or with the approval
of one of FutureFuel’s authorized executive officers.
These forward-looking statements are subject to certain known and unknown risks and uncertainties,
as well as assumptions that could cause actual results to differ materially from those reflected in these
forward-looking statements. Factors that might cause actual results to differ include, but are not limited to, those set forth
under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in
FutureFuel’s Form 10-K Annual Report for the year ended December 31, 2015 and in its future filings made with the SEC. An investor
should not place undue reliance on any forward-looking statements contained in this document, which reflect FutureFuel management’s
opinions only as of their respective dates. Except as required by law, the company undertakes no obligation to revise or publicly
release the results of any revisions to forward-looking statements. The risks and uncertainties described in this document and in
current and future filings with the SEC are not the only ones faced by FutureFuel. New factors emerge from time to time, and it is
not possible for the company to predict which will arise. There may be additional risks not presently known to the company or that
the company currently believes are immaterial to its business. In addition, FutureFuel cannot assess the impact of each factor on
its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those
contained in any forward-looking statements. If any such risks occur, FutureFuel’s business, operating results, liquidity, and
financial condition could be materially affected in an adverse manner. An investor should consult any additional disclosures
FutureFuel has made or will make in its reports to the SEC on Forms 10-K, 10-Q, and 8-K, and any amendments
thereto. All subsequent written and oral forward-looking statements attributable to FutureFuel or persons acting on its behalf are
expressly qualified in their entirety by the cautionary statements contained in this document.
Non-GAAP Financial Measures
In this press release, FutureFuel used adjusted EBITDA as a key operating metric to measure both performance and
liquidity. Adjusted EBITDA is a non-GAAP financial measure. Adjusted EBITDA is not a substitute for operating income, net income,
or cash flow from operating activities (each as determined in accordance with GAAP), as a measure of performance or liquidity.
Adjusted EBITDA has limitations as an analytical tool, and should not be considered in isolation or as a substitute for analysis of
results as reported under GAAP. FutureFuel defines adjusted EBITDA as net income before interest, income taxes, depreciation, and
amortization expenses, excluding, when applicable, non-cash share-based compensation expense, public offering expenses,
acquisition-related transaction costs, purchase accounting adjustments, loss on disposal of property and equipment, gains or losses
on derivative instruments, other non-operating income or expense. Information relating to adjusted EBITDA is provided so that
investors have the same data that management employs in assessing the overall operation and liquidity of FutureFuel’s
business. FutureFuel’s calculation of adjusted EBITDA may be different from similarly titled measures used by other companies;
therefore, the results of its calculation are not necessarily comparable to the results of other companies.
Adjusted EBITDA allows FutureFuel’s chief operating decision makers to assess the performance and liquidity of
FutureFuel’s business on a consolidated basis to assess the ability of its operating segments to produce operating cash flow to
fund working capital needs, to fund capital expenditures, and to pay dividends. In particular, FutureFuel management believes that
adjusted EBITDA permits a comparative assessment of FutureFuel’s operating performance and liquidity, relative to a performance and
liquidity based on GAAP results, while isolating the effects of depreciation and amortization, which may vary among its
operating segments without any correlation to their underlying operating performance, and of non-cash stock-based compensation
expense, which is a non-cash expense that varies widely among similar companies, and gains and losses on derivative instruments,
whose immediate recognition can cause net income to be volatile from quarter to quarter due to the timing of the valuation change
in the derivative instruments relative to the sale of biofuel.
A table included in this earnings release reconciles adjusted EBITDA with net income, the most directly
comparable GAAP performance financial measure, and a table reconciles adjusted EBITDA with cash flows from operations, the most
directly comparable GAAP liquidity financial measure.
| FutureFuel Corp. |
| Condensed Consolidated Balance Sheets |
| (Dollars in thousands) |
| (Unaudited) |
| |
| |
September 30, 2016 |
|
December 31, 2015 |
| Assets |
|
|
|
| Cash and cash equivalents |
$ |
182,373 |
|
|
$ |
154,049 |
|
| Accounts receivable, inclusive of the blenders' tax credit of $11,409 and $30,895 and net of
allowances for bad debt of $0 and $0, at September 30, 2016 and December 31, 2015, respectively |
|
30,017 |
|
|
|
46,329 |
|
| Inventory |
|
47,948 |
|
|
|
64,957 |
|
| Marketable securities |
|
111,009 |
|
|
|
74,667 |
|
| Other current assets |
|
17,033 |
|
|
|
19,822 |
|
| Total current assets |
|
388,380 |
|
|
|
359,824 |
|
| Property, plant and equipment, net |
|
119,152 |
|
|
|
124,330 |
|
| Other assets |
|
5,502 |
|
|
|
4,955 |
|
| Total noncurrent assets |
|
124,654 |
|
|
|
129,285 |
|
| Total Assets |
$ |
513,034 |
|
|
$ |
489,109 |
|
| Liabilities and Stockholders’ Equity |
|
|
|
| Accounts payable |
$ |
25,052 |
|
|
$ |
34,686 |
|
| Other current liabilities |
|
16,243 |
|
|
|
13,867 |
|
| Total current liabilities |
|
41,295 |
|
|
|
48,553 |
|
| Deferred revenue – long-term |
|
16,852 |
|
|
|
15,908 |
|
| Other noncurrent liabilities |
|
27,395 |
|
|
|
30,336 |
|
| Total noncurrent liabilities |
|
44,247 |
|
|
|
46,244 |
|
| Total liabilities |
|
85,542 |
|
|
|
94,797 |
|
| Commitments and contingencies: |
|
|
|
| Preferred stock, $0.0001 par value, 5,000,000 shares authorized, none issued and
outstanding |
|
- |
|
|
|
- |
|
| Common stock, $0.0001 par value, 75,000,000 shares authorized, 43,721,376 and 43,715,832,
issued and outstanding as of September 30, 2016 and December 31, 2015, respectively |
|
4 |
|
|
|
4 |
|
| Accumulated other comprehensive income |
|
4,254 |
|
|
|
2,055 |
|
| Additional paid in capital |
|
280,420 |
|
|
|
279,231 |
|
| Retained earnings |
|
142,814 |
|
|
|
113,022 |
|
| Total Stockholders’ Equity |
|
427,492 |
|
|
|
394,312 |
|
| Total Liabilities and Stockholders’ Equity |
$ |
513,034 |
|
|
$ |
489,109 |
|
| |
|
|
|
|
|
|
|
| FutureFuel Corp. |
| Condensed Consolidated Statements of Operations and Comprehensive
Income |
| (Dollars in thousands, except per share amounts) |
| (Unaudited) |
| |
| |
Three months ended September 30: |
|
Nine months ended September 30: |
| |
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
| Revenue |
$ |
69,306 |
|
|
$ |
107,054 |
|
|
$ |
183,820 |
|
|
$ |
265,739 |
|
| Cost of goods sold and distribution |
|
58,987 |
|
|
|
98,379 |
|
|
|
154,476 |
|
|
|
238,206 |
|
| Gross profit |
|
10,319 |
|
|
|
8,675 |
|
|
|
29,344 |
|
|
|
27,533 |
|
| Selling, general, and administrative expenses |
|
1,790 |
|
|
|
2,004 |
|
|
|
5,485 |
|
|
|
5,523 |
|
| Research and development expenses |
|
688 |
|
|
|
738 |
|
|
|
2,113 |
|
|
|
2,123 |
|
| |
|
2,478 |
|
|
|
2,742 |
|
|
|
7,598 |
|
|
|
7,646 |
|
| Income from operations |
|
7,841 |
|
|
|
5,933 |
|
|
|
21,746 |
|
|
|
19,887 |
|
| Other income, net |
|
1,159 |
|
|
|
977 |
|
|
|
3,258 |
|
|
|
4,949 |
|
| Income before income taxes |
|
9,000 |
|
|
|
6,910 |
|
|
|
25,004 |
|
|
|
24,836 |
|
| (Benefit)/provision for income taxes |
|
(3,868 |
) |
|
|
2,060 |
|
|
|
(12,657 |
) |
|
|
8,062 |
|
| Net income |
$ |
12,868 |
|
|
$ |
4,850 |
|
|
$ |
37,661 |
|
|
$ |
16,774 |
|
| |
|
|
|
|
|
|
|
| Earnings per common share |
|
|
|
|
|
|
|
| Basic |
$ |
0.29 |
|
|
$ |
0.11 |
|
|
$ |
0.86 |
|
|
$ |
0.38 |
|
| Diluted |
$ |
0.29 |
|
|
$ |
0.11 |
|
|
$ |
0.86 |
|
|
$ |
0.38 |
|
| Weighted average shares outstanding |
|
|
|
|
|
|
|
| Basic |
|
43,570,734 |
|
|
|
43,460,449 |
|
|
|
43,524,729 |
|
|
|
43,418,243 |
|
| Diluted |
|
43,572,997 |
|
|
|
43,461,286 |
|
|
|
43,529,423 |
|
|
|
43,424,423 |
|
| |
|
|
|
|
|
|
|
| Comprehensive Income |
|
|
|
|
|
|
|
| Net income |
$ |
12,868 |
|
|
$ |
4,850 |
|
|
$ |
37,661 |
|
|
$ |
16,774 |
|
| Other comprehensive income/(loss) from unrealized net gains/(losses) on available-for-sale
securities |
|
1,714 |
|
|
|
(2,081 |
) |
|
|
3,741 |
|
|
|
(5,138 |
) |
| Income tax effect |
|
(832 |
) |
|
|
799 |
|
|
|
(1,542 |
) |
|
|
1,973 |
|
| Total unrealized gains/(losses), net of tax |
|
882 |
|
|
|
(1,282 |
) |
|
|
2,199 |
|
|
|
(3,165 |
) |
| Comprehensive income |
$ |
13,750 |
|
|
$ |
3,568 |
|
|
$ |
39,860 |
|
|
$ |
13,609 |
|
| FutureFuel Corp. |
| Consolidated Statements of Cash Flows |
| For the Nine Months Ended September 30, 2016 and 2015 |
| (Dollars in thousands) |
| (Unaudited) |
| |
| |
Nine months ended September 30: |
| |
|
2016 |
|
|
|
2015 |
|
| Cash flows provided by operating activities |
|
|
|
| Net income |
$ |
37,661 |
|
|
$ |
16,774 |
|
| Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
| Depreciation |
|
7,960 |
|
|
|
7,476 |
|
| Amortization of deferred financing costs |
|
108 |
|
|
|
72 |
|
| Benefit for deferred income taxes |
|
(9,243 |
) |
|
|
(6,569 |
) |
| Change in fair value of derivative instruments |
|
6,686 |
|
|
|
1,755 |
|
| Other than temporary impairment of marketable securities |
|
2,184 |
|
|
|
606 |
|
| Impairment of fixed assets |
|
178 |
|
|
|
- |
|
| Gain on the sale of investments |
|
(1,457 |
) |
|
|
(1,808 |
) |
| Stock based compensation |
|
1,431 |
|
|
|
1,431 |
|
| Losses on disposals of fixed assets |
|
147 |
|
|
|
168 |
|
| Noncash interest expense |
|
20 |
|
|
|
20 |
|
| Changes in operating assets and liabilities: |
|
|
|
| Accounts receivable |
|
16,333 |
|
|
|
30,367 |
|
| Accounts receivable – related parties |
|
(21 |
) |
|
|
1,141 |
|
| Inventory |
|
17,009 |
|
|
|
10,981 |
|
| Income tax receivable |
|
(1,185 |
) |
|
|
10,435 |
|
| Prepaid expenses |
|
1,104 |
|
|
|
1,279 |
|
| Prepaid expenses – related party |
|
35 |
|
|
|
(35 |
) |
| Accrued interest on marketable securities |
|
(84 |
) |
|
|
13 |
|
| Other assets |
|
(413 |
) |
|
|
(310 |
) |
| Accounts payable |
|
(9,853 |
) |
|
|
(11,697 |
) |
| Accounts payable – related parties |
|
219 |
|
|
|
(2,910 |
) |
| Accrued expenses and other current liabilities |
|
3,565 |
|
|
|
1,855 |
|
| Accrued expenses and other current liabilities – related parties |
|
- |
|
|
|
321 |
|
| Deferred revenue |
|
2,735 |
|
|
|
988 |
|
| Other noncurrent liabilities |
|
1,760 |
|
|
|
(2,431 |
) |
| Net cash provided by operating activities |
|
76,879 |
|
|
|
59,922 |
|
| Cash flows from investing activities |
|
|
|
| Collateralization of derivative instruments |
|
(4,009 |
) |
|
|
(3,832 |
) |
| Purchase of marketable securities |
|
(54,096 |
) |
|
|
(32,952 |
) |
| Proceeds from the sale of marketable securities |
|
20,768 |
|
|
|
45,849 |
|
| Expenditures for intangible assets |
|
- |
|
|
|
(1,408 |
) |
| Capital expenditures |
|
(3,107 |
) |
|
|
(6,029 |
) |
| Net cash used in investing activities |
|
(40,444 |
) |
|
|
1,628 |
|
| Cash flows from financing activities |
|
|
|
| Minimum tax withholding on stock options exercised and awards vested |
|
(59 |
) |
|
|
(120 |
) |
| Excess tax benefits associated with stock options and awards |
|
(183 |
) |
|
|
(371 |
) |
| Deferred financing costs |
|
- |
|
|
|
(721 |
) |
| Payment of dividends |
|
(7,869 |
) |
|
|
(7,870 |
) |
| Net cash used in financing activities |
|
(8,111 |
) |
|
|
(9,082 |
) |
| Net change in cash and cash equivalents |
|
28,324 |
|
|
|
52,468 |
|
| Cash and cash equivalents at beginning of period |
|
154,049 |
|
|
|
124,079 |
|
| Cash and cash equivalents at end of period |
$ |
182,373 |
|
|
$ |
176,547 |
|
| |
|
|
|
| |
|
|
|
| Cash paid for interest |
|
2 |
|
|
|
- |
|
| Cash paid for income taxes |
$ |
986 |
|
|
$ |
13,377 |
|
| |
|
|
|
|
|
|
|
| FutureFuel Corp. |
| Reconciliation of Non-GAAP Financial Measure to Financial
Measure |
| (Dollars in thousands) |
| (Unaudited) |
| |
| Reconciliation of Adjusted EBITDA to Net Income |
| |
| |
Three months
ended
September 30: |
|
Nine months
ended
September 30: |
| |
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
| Adjusted EBITDA |
$ |
10,117 |
|
|
$ |
2,592 |
|
|
$ |
36,328 |
|
|
$ |
24,745 |
|
| Depreciation and amortization |
|
(2,739 |
) |
|
|
(2,640 |
) |
|
|
(8,068 |
) |
|
|
(7,548 |
) |
| Non-cash stock-based compensation |
|
(477 |
) |
|
|
(477 |
) |
|
|
(1,431 |
) |
|
|
(1,431 |
) |
| Interest and dividend income |
|
1,637 |
|
|
|
1,336 |
|
|
|
4,446 |
|
|
|
4,008 |
|
| Interest expense |
|
(9 |
) |
|
|
(42 |
) |
|
|
(22 |
) |
|
|
(91 |
) |
| Losses on disposal of property and equipment |
|
(10 |
) |
|
|
(46 |
) |
|
|
(147 |
) |
|
|
(168 |
) |
| Gains/(losses) on derivative instruments |
|
803 |
|
|
|
6,456 |
|
|
|
(5,375 |
) |
|
|
4,119 |
|
| (Losses)/gains on marketable securities |
|
(322 |
) |
|
|
(269 |
) |
|
|
(727 |
) |
|
|
1,202 |
|
| Income tax benefit/(expense) |
|
3,868 |
|
|
|
(2,060 |
) |
|
|
12,657 |
|
|
|
(8,062 |
) |
| Net income |
$ |
12,868 |
|
|
$ |
4,850 |
|
|
$ |
37,661 |
|
|
$ |
16,774 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Reconciliation of Adjusted EBITDA to Net Cash Provided by
Operating Activities |
| |
| |
Nine months ended
September 30: |
| |
|
2016 |
|
|
|
2015 |
|
| Adjusted EBITDA |
$ |
36,328 |
|
|
$ |
24,745 |
|
| Amortization of deferred financing costs |
|
- |
|
|
|
(72 |
) |
| Benefit for deferred income taxes |
|
(9,243 |
) |
|
|
(6,569 |
) |
| Impairment of fixed assets |
|
178 |
|
|
|
- |
|
| Interest and dividend income |
|
4,446 |
|
|
|
4,008 |
|
| Income tax benefit/(expense) |
|
12,657 |
|
|
|
(8,062 |
) |
| Losses on derivative instruments |
|
(5,375 |
) |
|
|
4,119 |
|
| Change in fair value of derivative instruments |
|
6,686 |
|
|
|
1,755 |
|
| Changes in operating assets and liabilities, net |
|
31,204 |
|
|
|
39,997 |
|
| Other |
|
(2 |
) |
|
|
1 |
|
| Net cash provided by/(used in) operating activities |
$ |
76,879 |
|
|
$ |
59,922 |
|
| |
|
|
|
|
|
|
|
| FutureFuel Corp. |
| Condensed Consolidated Segment Income |
| (Dollars in thousands) |
| (Unaudited) |
| |
| |
Three months ended
September 30: |
|
Nine months ended
September 30: |
| |
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
| Revenue |
|
|
|
|
|
|
|
| Custom chemicals |
$ |
20,455 |
|
|
$ |
26,665 |
|
|
$ |
60,148 |
|
|
$ |
84,621 |
|
| Performance chemicals |
|
3,844 |
|
|
|
4,942 |
|
|
|
13,782 |
|
|
|
13,880 |
|
| Chemicals revenue |
$ |
24,299 |
|
|
$ |
31,607 |
|
|
$ |
73,930 |
|
|
$ |
98,501 |
|
| Biofuels revenue |
|
45,007 |
|
|
|
75,447 |
|
|
|
109,890 |
|
|
|
167,238 |
|
| Total Revenue |
$ |
69,306 |
|
|
$ |
107,054 |
|
|
$ |
183,820 |
|
|
$ |
265,739 |
|
| |
|
|
|
|
|
|
|
| Segment gross profit |
|
|
|
|
|
|
|
| Chemicals |
$ |
7,853 |
|
|
$ |
7,294 |
|
|
$ |
22,722 |
|
|
$ |
28,159 |
|
| Biofuels |
|
2,466 |
|
|
|
1,381 |
|
|
|
6,622 |
|
|
|
(626 |
) |
| Total gross profit |
|
10,319 |
|
|
|
8,675 |
|
|
|
29,344 |
|
|
|
27,533 |
|
| Corporate expenses |
|
(2,478 |
) |
|
|
(2,742 |
) |
|
|
(7,598 |
) |
|
|
(7,646 |
) |
| Income before interest and taxes |
|
7,841 |
|
|
|
5,933 |
|
|
|
21,746 |
|
|
|
19,887 |
|
| Interest and other income |
|
1,637 |
|
|
|
1,336 |
|
|
|
4,446 |
|
|
|
5,210 |
|
| Interest and other expense |
|
(478 |
) |
|
|
(359 |
) |
|
|
(1,188 |
) |
|
|
(261 |
) |
| Benefit/(provision) for income taxes |
|
3,868 |
|
|
|
(2,060 |
) |
|
|
12,657 |
|
|
|
(8,062 |
) |
| Net income |
$ |
12,868 |
|
|
$ |
4,850 |
|
|
$ |
37,661 |
|
|
$ |
16,774 |
|
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.
COMPANY CONTACT FutureFuel Corp. Paul M. Flynn (314) 854-8385 www.futurefuelcorporation.com
