Income from operations increased from $22,155,000 in the six months ended June 30, 2012 to $43,925,000 in the six months ended June 30, 2013. FutureFuel does not report income from operations by segment, but does report segment gross profit. The chemicals segment gross profit increased 22% to $27,850,000 in the six months ended June 30, 2013 from $22,918,000 in the six month ended June 30, 2012. Biofuels segment gross profit increased to $21,157,000 in the six months ended June 30, 2013 from $4,283,000 in the six months ended June 30, 2012. This increase was largely a result of a combination of the following: (i) as a result of the retroactive reinstatement of the 2012 $1.00 blenders credit, we recognized a $2,535,000 in profit in the first quarter of 2013. As stated above, this credit will expire at December 31, 2013. No such reduction in cost of goods sold was recognized in the first quarter of 2012; biodiesel profitability in the six months of 2012 was negatively impacted due to our inventory of unsold, internally generated RINs. We do not allocate production costs to internally generated RINs, and, from time to time, we enter into sales of biodiesel on a "RINs-free" basis. Such method of selling results in us maintaining possession of the applicable RINs from the sale. The benefit derived from the eventual sale of the RINs is not reflected in our results of operations until such time as the RIN sale has been completed, which may lead to variability in our reported operating results. At June 30, 2012 we had RINs available for sale which we did not have at June 30, 2013. Overall market conditions were more favorable for biodiesel in 2013 as compared to 2012 largely as a result of the reinstatement of the $1.00 blenders' credit in effect for 2013, which was not in effect for 2012. Biofuels gross profit was negatively impacted by a reduction in hedging gains. For the first six months of 2013 hedging gains totaled $3,666,000 down from a gain of $5,219,000 in the first six months of 2012. Chemical segment gross profit increased primarily as a result of the combination of the following: (i) profits realized with the change in product mix; (ii) variability in production expenditures and timing differences in price adjustments to customers for such variability; (iii) improved profit on the bleach activator as sales price has increased on lower sales demands and (iv) as sales in our biofuels segment increased, fixed costs that may have previously been more heavily allocated to the chemicals segment were being allocated in greater proportion to the biofuels segment.
FutureFuel Releases Second Quarter 2013 Results
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