Income from operations decreased to $11,572,000 in the second quarter of 2012 from $12,656,000 for the second quarter of 2011. FutureFuel does not report income from operations by segment, but does report segment gross profit. The chemicals segment gross profit increased 59% to $11,249,000 in the second quarter of 2012 from $7,068,000 in the second quarter of 2011. Biofuels segment gross profit decreased to $3,151,000 in the second quarter of 2012 from $8,361,000 in the second quarter of 2011. This decrease primarily was the result of the expiration of the $1.00 per gallon federal blenders tax credit which, prior to 2012, generally resulted in a reduction to our cost of goods sold. Additionally, we do not allocate production costs to internally generated RINS and the benefit derived from the sale of RINs is not reflected in our results of operations until such time as the RIN sale has been completed. This 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, 2011.

Chemicals segment gross profit increased primarily as a result of two factors. First, FutureFuel incurred certain expenditures that it was unable to pass along to customers in the second quarter of 2011. Such expenditures decreased in the second quarter of 2012. Second, we experienced certain reductions in our operating costs due to an ongoing effort to minimize such expenditures.

FutureFuel reported net income of $8,473,000, or $0.20 per diluted share, for the second quarter of 2012, compared with net income of $8,439,000, or $0.21 per diluted share, for the second quarter of 2011. Adjusted EBITDA for the second quarter of 2012 was $5,940,000, down from $13,173,000 in the second quarter of 2011.

Six Month Financial Summary

Revenues for the six months ended June 30, 2012 were $188,964,000 as compared to revenues for the six months ended June 30, 2011 of $129,969,000, an increase of 45%. Revenues from biofuels increased 126% and accounted for 58% of total revenues in the first six months of 2012 as compared to 37% in the first six months of 2011. Revenues from chemicals decreased 3% and accounted for 42% of total revenues in the first six months of 2012 as compared to 63% in the first six months of 2011. Revenue from the bleach activator and the proprietary herbicide and intermediates are together the most significant components of our chemicals business revenue base, accounting for 23% of total revenues for the six months ended June 30, 2012 as compared to 39% of total revenues for the six months ended June 30, 2011. These products comprised a smaller percentage of our total revenues in 2012 as revenues from our biofuels segment have assumed a larger percentage coupled with decreases in the sales of the bleach activator and the proprietary herbicide and intermediates. Sales and production of biodiesel increased in the first six months of 2012 as we were producing and selling a larger quantity of biodiesel for the entire period; sales in the first six months of 2011 were limited due to the initial conversion to lower grade biodiesel feedstocks and adaptation to the improvement in biodiesel economics. Revenues from biofuels have also been benefited by our sales of refined petroleum products as a supplier on a common carrier pipeline. Such sales totaled $8,881,000 in the first six months of 2012 compared to $2,749,000 in the first six months of 2011. Such sales generate little gross profit.

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