10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

 (Mark One)

√ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2018

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

Commission file number: 0-52577

(Exact Name of Registrant as Specified in Its Charter)

Delaware	20-3340900
(State or Other Jurisdiction of	(IRS Employer Identification No.)
Incorporation or Organization)

8235 Forsyth Blvd., Suite 400

St. Louis, Missouri 63105

(Address of Principal Executive Offices)

(314) 854-8352 

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes √ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes √ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”  “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer   ☐	Accelerated filer	√
Non-accelerated filer  ☐	Smaller reporting company	☐
(do not check if a smaller reporting company)	Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No √

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of November 9, 2018: 43,743,243 

PART I FINANCIAL INFORMATION

Item 1. Financial Statements.

The following sets forth our unaudited consolidated balance sheet as of September 30, 2018, our audited consolidated balance sheet as of December 31, 2017, our unaudited consolidated statements of operations and comprehensive income for the three-month and nine-month periods ended September 30, 2018 and 2017, and our unaudited consolidated statements of cash flows for the nine-month periods ended September 30, 2018 and 2017.

FutureFuel Corp.

Consolidated Balance Sheets

As of September 30, 2018 and December 31, 2017

(Dollars in thousands)

	(Unaudited)
	September 30, 2018		December 31, 2017
Assets
Cash and cash equivalents	$	199,348	$	114,627
Accounts receivable, net of allowances for bad debt of $0 and $0, at September 30, 2018 and December 31, 2017, respectively		18,942		21,973
Accounts receivable – related parties		2,547		165
Inventory		48,005		43,754
Income tax receivable		479		6,937
Prepaid expenses		470		1,660
Prepaid expenses – related parties		12		12
Marketable securities		103,102		120,699
Deferred financing costs		144		144
Other current assets		677		387
Total current assets		373,726		310,358
Property, plant and equipment, net		104,254		109,735
Intangible assets		1,408		1,408
Deferred financing costs		72		180
Other assets		3,745		3,882
Total noncurrent assets		109,479		115,205
Total Assets	$	483,205	$	425,563
Liabilities and Stockholders’ Equity
Accounts payable	$	31,414	$	18,396
Accounts payable – related parties		3,132		1,183
Deferred revenue – short-term		7,114		2,736
Dividends payable		2,626		10,498
Accrued expenses and other current liabilities		7,853		2,468
Total current liabilities		52,139		35,281
Deferred revenue – long-term		14,651		16,522
Other noncurrent liabilities		1,137		1,115
Noncurrent deferred income tax liability		17,430		21,049
Total noncurrent liabilities		33,218		38,686
Total liabilities		85,357		73,967
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, 43,743,243 and 43,741,670, issued and outstanding as of September 30, 2018 and December 31, 2017, respectively		4		4
Accumulated other comprehensive income		124		8,433
Additional paid in capital		282,109		281,964
Retained earnings		115,611		61,195
Total stockholders’ equity		397,848		351,596
Total Liabilities and Stockholders’ Equity	$	483,205	$	425,563

The accompanying notes are an integral part of these financial statements.

1

 FutureFuel Corp.

Consolidated Statements of Operations and Comprehensive Income

For the Three and Nine Months ended September 30, 2018 and 2017

(Dollars in thousands, except per share amounts)

(Unaudited)

	Three months ended September 30,						Nine months ended September 30,
	2018			2017			2018			2017
Revenue	$	80,588		$	77,106		$	223,184		$	198,726
Revenues – related parties		834			500			2,321			1,039
Cost of goods sold		61,559			61,088			146,916			165,469
Cost of goods sold – related parties		5,651			9,880			15,682			17,995
Distribution		1,512			1,072			4,329			2,730
Distribution – related parties		47			40			147			117
Gross profit		12,653			5,526			58,431			13,454
Selling, general, and administrative expenses
Compensation expense		933			876			3,054			3,170
Other expense		476			477			1,482			1,562
Related party expense		138			38			416			138
Research and development expenses		877			935			2,843			2,535
		2,424			2,326			7,795			7,405
Income from operations		10,229			3,200			50,636			6,049
Interest and dividend income		2,543			1,965			6,688			5,679
Interest expense		(43	)		(43	)		(129	)		(129	)
Gain/(loss) on marketable securities		815			26			(3,273	)		(543	)
Other expense		(87	)		(84	)		(264	)		(117	)
		3,228			1,864			3,022			4,890
Income before income taxes		13,457			5,064			53,658			10,939
Provision for income taxes		4,012			1,730			2,336			3,375
Net income	$	9,445		$	3,334		$	51,322		$	7,564
Earnings per common share
Basic	$	0.22		$	0.08		$	1.17		$	0.17
Diluted	$	0.22		$	0.08		$	1.17		$	0.17
Weighted average shares outstanding
Basic		43,724,195			43,705,234			43,719,215			43,662,672
Diluted		43,732,920			43,714,753			43,725,370			43,671,420
Comprehensive Income
Net income	$	9,445		$	3,334		$	51,322		$	7,564
Other comprehensive income/(loss) from unrealized net gains/(losses) on available-for-sale debt securities		(27	)		1,006			(46	)		7,102
Income tax effect		6			(353	)		10			(2,490	)
Total unrealized gains/(losses), net of tax		(21	)		653			(36	)		4,612
Comprehensive income	$	9,424		$	3,987		$	51,286		$	12,176

  The accompanying notes are an integral part of these financial statements.

2

FutureFuel Corp.  

Consolidated Statements of Cash Flows

For the Three and Nine Months ended September 30, 2018 and 2017

(Dollars in thousands)

(Unaudited)

	Nine months ended September 30,
	2018			2017
Cash flows provided by operating activities
Net income	$	51,322		$	7,564
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		8,244			8,735
Amortization of deferred financing costs		108			109
Benefit for deferred income taxes		(3,609	)		(1,303	)
Change in fair value of equity securities		5,597			-
Change in fair value of derivative instruments		(2,290	)		(60	)
Other than temporary impairment of marketable securities		-			177
Impairment of fixed assets		258			28
(Gain)/loss on the sale of investments		(2,324	)		366
Stock based compensation		321			878
Loss on disposal of fixed assets		41			145
Noncash interest expense		22			20
Changes in operating assets and liabilities:
Accounts receivable		3,031			3,081
Accounts receivable – related parties		(2,382	)		(1,181	)
Inventory		(4,251	)		8,570
Income tax receivable		6,458			5,546
Prepaid expenses		1,190			1,152
Prepaid expenses – related parties		-			(4	)
Accrued interest on marketable securities		9			22
Other assets		(256	)		37
Accounts payable		13,018			1,425
Accounts payable – related parties		1,949			2,780
Accrued expenses and other current liabilities		5,385			1,587
Accrued expenses and other current liabilities – related parties		-			(142	)
Deferred revenue		(2,672	)		(3,220	)
Other noncurrent liabilities		-			128
Net cash provided by operating activities		79,169			36,440
Cash flows from investing activities
Collateralization of derivative instruments		2,384			(760	)
Purchase of marketable securities		(19,664	)		(25,795	)
Proceeds from the sale of marketable securities		33,942			14,913
Proceeds from the sale of fixed assets		22			4
Capital expenditures		(3,084	)		(2,614	)
Net cash provided by/(used in) investing activities		13,600			(14,252	)
Cash flows from financing activities
Minimum tax withholding on stock options exercised and awards vested		(176	)		(121	)
Excess tax benefits associated with stock options and awards		-			(31	)
Payment of dividends		(7,872	)		(108,063	)
Net cash used in financing activities		(8,048	)		(108,215	)
Net change in cash and cash equivalents		84,721			(86,027	)
Cash and cash equivalents at beginning of period		114,627			199,272
Cash and cash equivalents at end of period	$	199,348		$	113,245
Cash paid for interest	$	-		$	-
Cash paid for income taxes	$	1,506		$	55

The accompanying notes are an integral part of these financial statements.

3

Notes to Consolidated Financial Statements of FutureFuel Corp.

(Dollars in thousands, except per share amounts)

(Unaudited)

1 ) NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Organization

FutureFuel Corp. (“FutureFuel”), through its wholly-owned subsidiary, FutureFuel Chemical Company (“FutureFuel Chemical”), owns and operates a chemical production facility located on approximately 2,200 acres of land six miles southeast of Batesville in north central Arkansas fronting the White River (the “Batesville Plant”). FutureFuel Chemical manufactures diversified chemical products, biobased products comprised of biofuels, and biobased specialty chemical products. FutureFuel Chemical’s operations are reported in two segments: chemicals and biofuels.

The chemicals segment manufactures a diversified portfolio of chemical products that are sold to third party customers. The majority of the revenues from the chemicals segment are derived from the custom manufacturing of specialty chemicals for specific customers.

The biofuels business segment primarily produces and sells biodiesel. FutureFuel Chemical also sells petrodiesel in blends with the company’s biodiesel and, from time to time, with no biodiesel added. Finally, FutureFuel Chemical is a shipper of refined petroleum products on common carrier pipelines and buys and sells petroleum products to maintain an active shipper status on these pipelines.

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared by FutureFuel in accordance and consistent with the accounting policies stated in FutureFuel’s 2017 audited consolidated financial statements and should be read in conjunction with the 2017 audited consolidated financial statements of FutureFuel.

In the opinion of FutureFuel, all normal recurring adjustments necessary for a fair presentation have been included in the unaudited consolidated financial statements. The unaudited consolidated financial statements have been prepared in compliance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with instructions to Form 10-Q adopted by the Securities and Exchange Commission (“SEC”). Accordingly, the financial statements do not include all the information and footnotes required by GAAP for complete financial statements, and do include amounts that are based upon management estimates and judgments. Future actual results could differ from such current estimates. The unaudited consolidated financial statements include assets, liabilities, revenues, and expenses of FutureFuel and its wholly owned subsidiaries; namely, FutureFuel Chemical, FFC Grain, L.L.C., FutureFuel Warehouse Company, L.L.C., and Legacy Regional Transport, L.L.C. Intercompany transactions and balances have been eliminated in consolidation.

2 ) REINSTATEMENT OF THE BIODIESEL BLENDERS’ TAX CREDIT AND SMALL AGRI-BIODIESEL PRODUCER TAX CREDIT

The biodiesel Blenders’ Tax Credit (“BTC”) provides a $1.00 per gallon tax credit to the blender of biomass-based diesel with at least 0.1% petroleum-based diesel fuel.  When in effect, FutureFuel is the blender of record and recognizes the credit as a reduction to cost of goods sold.  The BTC expired on December 31, 2016 and was not reinstated for 2017 until it was signed into law as part of The Bipartisan Budget Act of 2018 passed by Congress on February 9, 2018.  As this Act was passed into law in 2018, FutureFuel recognized a net estimated pretax benefit from the reinstatement in the biofuels segment of $28,869 (a reduction in sales revenue of $13,559 for customer rebates (“BTC Rebates”) upon reinstatement and a reduction in cost of goods sold of $42,428). The gallons related to this credit were sold in the twelve months ended December 31, 2017.

As part of the law from which the BTC was reinstated, small agri-biodiesel producers with production capacity not in excess of 60 million gallons were eligible for an additional tax credit of $0.10 per gallon on the first 15 million gallons of agri-biodiesel sold (the “Small Agri-biodiesel Producer Tax Credit”).  The benefit of the Small Agri-biodiesel Producer Tax Credit was recognized as a benefit in the tax provision in the first three months of the nine month period ended September 30, 2018.

4

 Notes to Consolidated Financial Statements of FutureFuel Corp.

(Dollars in thousands, except per share amounts)

(Unaudited)  

Neither the BTC nor the Small Agri-biodiesel Producer Tax Credit have been passed into law for 2018.  

3 ) INVENTORY

The carrying values of inventory were as follows as of:  

	September 30, 2018			December 31, 2017
At average cost (approximates current cost)
Finished goods	$	18,668		$	22,998
Work in process		1,858			1,735
Raw materials and supplies		38,221			27,143
		58,747			51,876
LIFO reserve		(10,742	)		(8,122	)
Total inventory	$	48,005		$	43,754

Lower of Cost or Market ("LCM") adjustments are recorded as a decrease in inventory values and an increase in cost of goods sold.  The inventory is relieved at the LCM adjusted cost basis when sold.  There was no LCM adjustment in the three and nine months ended September 30, 2018.  For the three months ended September 30, 2017, there was no LCM adjustment. In the nine months ended September 30, 2017, there was an LCM adjustment of $1,912 which impacted inventory sold prior to September 30, 2017.

4 ) DERIVATIVE INSTRUMENTS

FutureFuel is exposed to certain risks relating to its ongoing business operations. Commodity price risk is the primary risk managed by using derivative instruments. Regulated fixed price futures and option contracts are utilized to manage the price risk associated with future purchases of feedstock used in FutureFuel’s biodiesel production along with physical feedstock and finished product inventories attributed to this process.

FutureFuel recognizes all derivative instruments as either assets or liabilities at fair value in its consolidated balance sheets. FutureFuel’s derivative instruments do not qualify for hedge accounting under the specific guidelines of ASC 815-20-25, Derivatives and Hedging. None of the derivative instruments are designated and accounted for as hedges primarily as a result of the extensive record keeping requirements.

The fair value of FutureFuel’s derivative instruments is determined based on the closing prices of the derivative instruments on relevant commodity exchanges at the end of an accounting period. Realized gains and losses on derivative instruments and changes in fair value of the derivative instruments are recorded in the statements of operations as a component of cost of goods sold, and amounted to a loss of $676 and $3,314 for the three months ended September 30, 2018 and 2017, respectively, and a loss of $3,947 and $1,511 for the nine months ended September 30, 2018 and 2017, respectively.

The volumes and carrying values of FutureFuel’s derivative instruments were as follows at: 

	September 30, 2018					December 31, 2017
	Contract quantity Short		Fair Value			Contract quantity Short		Fair Value
Regulated options, included in other current assets		-	$	-			200	$	(2,428	)
Regulated fixed price future commitments, included in other current assets		31	$	(138	)		-	$	-

The margin account maintained with a broker to collateralize these derivative instruments carried an account balance of $276 and $2,660 at September 30, 2018 and December 31, 2017, respectively, and was classified as other current assets in the consolidated balance sheets. The carrying values of the margin account and of the derivative instruments are included net, in other current assets.

5

Notes to Consolidated Financial Statements of FutureFuel Corp.

(Dollars in thousands, except per share amounts)

(Unaudited)

5 ) MARKETABLE SECURITIES 

At September 30, 2018 and December 31, 2017, FutureFuel had investments in certain debt securities (trust preferred securities and exchange traded debt instruments) and in preferred stock and other equity instruments. These investments are classified as current assets in the consolidated balance sheets. FutureFuel has designated the debt securities as being available-for-sale. Accordingly, debt securities were recorded at fair value, with the unrealized gains and losses, net of taxes, reported as a component of stockholders’ equity in the year ended December 31, 2017. For the three and nine months ended, September 30, 2018, in accordance with ASC 321, the change in the fair value of equity securities was reported as (losses)/gains on marketable securities as a component of net income.

FutureFuel’s available for sale debt securities were comprised of the following at September 30, 2018 and December 31, 2017: 

	September 30, 2018
	Adjusted Cost		Unrealized Gains		Unrealized Losses			Fair Value
Exchange traded debt	$	1,428	$	83	$	(11	)	$	1,500
Trust preferred		3,147		86		(1	)		3,232
Total debt securities	$	4,575	$	169	$	(12	)	$	4,732

	December 31, 2017
	Adjusted Cost		Unrealized Gains		Unrealized Losses		Fair Value
Exchange traded debt	$	1,702	$	158	$	-	$	1,860
Trust preferred		3,147		114		-		3,261
Total debt securities	$	4,849	$	272	$	-	$	5,121

The aggregate fair value of debt securities with unrealized losses totaled $578 at September 30, 2018, and the aggregate fair value of debt and equity securities with unrealized losses totaled $14,103 at December 31, 2017. As of September 30, 2018, FutureFuel had investments in debt securities with a total value of $103 that were in an unrealized loss position for a greater than a 12-month period. As of December 31, 2017, FutureFuel had investments in debt and equity securities with a total value of $2,903 that were in an unrealized loss position for a greater than 12-month period. The unrealized loss position for those securities was $4 and $124, respectively, at September 30, 2018 and December 31, 2017.  Those loss positions represented a minimal reduction for the securities and are expected to fully recover given changes in market value.

6 ) ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities, including those associated with related parties, consisted of the following at:   

	September 30, 2018		December 31, 2017
Accrued employee liabilities	$	5,859	$	976
Accrued property, franchise, motor fuel and other taxes		1,516		1,387
Other		478		105
Total	$	7,853	$	2,468

6

Notes to Consolidated Financial Statements of FutureFuel Corp.

(Dollars in thousands, except per share amounts)

(Unaudited)

7 ) BORROWINGS

On April 16, 2015, FutureFuel, with FutureFuel Chemical as the borrower, and certain of FutureFuel’s other subsidiaries, as guarantors, entered into a $150,000 secured and committed credit facility with the lenders party thereto, Regions Bank as administrative agent and collateral agent, and PNC Bank, N.A., as syndication agent. On May 25, 2016, FutureFuel increased the credit facility by $15,000. The credit facility consists of a five-year revolving credit facility in a dollar amount of up to $165,000, which includes a sublimit of $30,000 for letters of credit and $15,000 for swingline loans (collectively, the “Credit Facility”).

The interest rate floats at the following margins over LIBOR or base rate based upon the leverage ratio from time to time:

Consolidated Leverage Ratio			Adjusted LIBOR Rate Loans and Letter of Credit Fee		Base Rate Loans		Commitment Fee
< 1.00:1.0				1.25%		0.25%		0.15%
≥ 1.00:1.0	And	< 1.50:1.0		1.50%		0.50%		0.20%
≥ 1.50:1.0	And	< 2.00:1.0		1.75%		0.75%		0.25%
≥ 2.00:1.0	And	< 2.50:1.0		2.00%		1.00%		0.30%
≥ 2.50:1.0				2.25%		1.25%		0.35%

The terms of the Credit Facility contain certain covenants and conditions including a maximum consolidated leverage ratio, a minimum consolidated fixed charge coverage ratio, and a minimum liquidity requirement. FutureFuel was in compliance with such covenants as of September 30, 2018.

There were no borrowings under this credit agreement at September 30, 2018 or December 31, 2017.

8 ) PROVISION FOR INCOME TAXES 

The following table summarizes the provision for income taxes.

	Three months ended September 30,						Nine months ended September 30,
	2018			2017			2018			2017
Provision for income taxes	$	4,012		$	1,730		$	2,336		$	3,375
Effective tax rate		29.8	%		34.2	%		4.4	%		30.9	%

The effective tax rate for the three months ended September 30, 2018 and 2017 reflects our expected tax rate on reported operating income before income tax. This three-month effective rate is expected to materially continue for the remainder of 2018 absent the effect of the subsequent event impact as noted below.

The effective tax rate for the nine months ended September 30, 2018 reflects our expected tax rate on reported operating income before income tax including the positive effect of the retroactive reinstatement of the 2017 BTC and Small Agri-biodiesel Producer Tax Credit. Our effective tax rate in the nine months ended September 30, 2017 does not reflect the BTC and Small Agri-biodiesel Producer Tax Credit recognized in 2018 because these credits and incentives were retroactively extended through December 31, 2017 on February 9, 2018. This rate is not expected to continue for the remainder of 2018 as these credits only benefited the three months ended March 31, 2018 and nine months ended September 30, 2018.

7

Notes to Consolidated Financial Statements of FutureFuel Corp.

(Dollars in thousands, except per share amounts)

(Unaudited)  

Unrecognized tax benefits totaled $0 at September 30, 2018 and December 31, 2017.

FutureFuel records interest and penalties, net, as a component of provision for income taxes. Interest and penalties included as a component of provision for income taxes amounted to $81 for the three and nine months ended September 30, 2018, and $29 and $402, for the three and nine months ended September 30, 2017, respectively.

In a decision dated November 1, 2018, the United States Court of Appeals for the Federal Circuit affirmed a November 22, 2016 decision of the Federal Court of Claims pertaining to the income tax treatment of the blenders’ fuel mixture credit.  Like the Federal Court of Claims before it, the Court of Appeals found that the mixture credit is a reduction in excise tax liability and, to the extent the mixture credit reduces excise tax liabilities, the mixture credit is a component of taxable income.

As a result of the November 1, 2018 decision, FutureFuel is assessing whether the recorded benefits associated with the mixture credit should be re-measured in the period of the decision.  If FutureFuel determines that ASC 740, Income Tax’s recognition threshold of more-likely-than-not is no longer met because of the decision, FutureFuel may recognize additional income tax expense ranging from approximately $4,000 to $4,500 in the fourth quarter.      

9 ) EARNINGS PER SHARE

The Company computes earnings per share using the two-class method in accordance with ASC Topic No. 260, “Earnings per Share.” The two-class method is an allocation of earnings between the holders of common stock and a company’s participating security holders. Outstanding non-vested shares of restricted stock contain non-forfeitable rights to dividends and, therefore, are considered participating securities for purposes of computing earnings per share pursuant to the two-class method. The Company had no other participating securities at September 30, 2018 or 2017.

Contingently issuable shares associated with outstanding service-based restricted stock units were not included in the earnings per share calculations for the three and nine-month periods ended September 30, 2018 or 2017 as the vesting conditions had not been satisfied.

Basic and diluted earnings per common share were computed as follows: 

	Three months ended September 30,						Nine months ended September 30,
	2018			2017			2018			2017
Numerator:
Net income	$	9,445		$	3,334		$	51,322		$	7,564
Less: distributed earnings allocated to non-vested stock		-			-			-			-
Less: undistributed earnings allocated to non-vested restricted stock		(4	)		(3	)		(26	)		(15	)
Numerator for basic earnings per share	$	9,441		$	3,331		$	51,296		$	7,549
Effect of dilutive securities:
Add: undistributed earnings allocated to non-vested restricted stock		4			3			26			15
Less: undistributed earnings reallocated to non-vested restricted stock		(4	)		(3	)		(26	)		(15	)
Numerator for diluted earnings per share	$	9,441		$	3,331		$	51,296		$	7,549
Denominator:
Weighted average shares outstanding – basic		43,724,195			43,705,234			43,719,215			43,662,672
Effect of dilutive securities:
Stock options and other awards		8,725			9,519			6,155			8,748
Weighted average shares outstanding – diluted		43,732,920			43,714,753			43,725,370			43,671,420
Basic earnings per share	$	0.22		$	0.08		$	1.17		$	0.17
Diluted earnings per share	$	0.22		$	0.08		$	1.17		$	0.17

8

Notes to Consolidated Financial Statements of FutureFuel Corp.

(Dollars in thousands, except per share amounts)

(Unaudited)

Certain options to purchase FutureFuel’s common stock were not included in the computation of diluted earnings per share for the three and nine months ended September 30, 2018 and 2017 because they were anti-dilutive in the periods. The weighted average number of options excluded on this basis was 0 and 20,000 for the three-months and nine-months ended September 30, 2018, respectively.  The weighted average number of options excluded on this basis was 0 and 10,000 for the three-months and nine-months ended September 30, 2017, respectively. 

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 Renewable Identification Numbers (“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 control and title passing at the time of shipment from the Batesville Plant, although some sales are transacted with control and 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 September 30,				Nine months ended September 30,
	2018		2017		2018		2017
United States	$	81,152	$	76,711	$	223,943	$	197,044
All Foreign Countries		270		895		1,562		2,721
Total	$	81,422	$	77,606	$	225,505	$	199,765

Revenues from a single foreign country during the three and nine months ended September 30, 2018 and 2017 did not exceed 1% of total revenues.    

9

Notes to Consolidated Financial Statements of FutureFuel Corp.

(Dollars in thousands, except per share amounts)

(Unaudited)

Summary of business by segment

	Three months ended September 30,						Nine months ended September 30,
	2018			2017			2018			2017
Revenue
Custom chemicals	$	23,973		$	23,593		$	74,465		$	65,189
Performance chemicals		4,049			4,574			14,165			12,686
Chemicals revenue		28,022			28,167			88,630			77,875
Biofuels revenue		53,400			49,439			136,875			121,890
Total Revenue	$	81,422		$	77,606		$	225,505		$	199,765
Segment gross profit/(loss)
Chemicals	$	8,898		$	8,060		$	24,470		$	20,401
Biofuels		3,755			(2,534	)		33,961			(6,947	)
Total gross profit		12,653			5,526			58,431			13,454
Corporate expenses		(2,424	)		(2,326	)		(7,795	)		(7,405	)
Income before interest and taxes		10,229			3,200			50,636			6,049
Interest and other income		3,358			1,965			6,688			5,679
Interest and other expense		(130	)		(101	)		(3,666	)		(789	)
Provision for income taxes		(4,012	)		(1,730	)		(2,336	)		(3,375	)
Net income	$	9,445		$	3,334		$	51,322		$	7,564

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.

11 )  FAIR VALUE MEASUREMENTS

Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. Fair value accounting pronouncements also include a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability developed based on market data obtained from sources independent of FutureFuel. Unobservable inputs are inputs that reflect FutureFuel’s assumptions about the factors market participants would use in valuing the asset or liability developed based upon the best information available in the circumstances. The hierarchy is broken down into three levels. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

10

Notes to Consolidated Financial Statements of FutureFuel Corp.

(Dollars in thousands, except per share amounts)

(Unaudited)

The following tables provide information by level for assets and liabilities that are measured at fair value, on a recurring basis, at September 30, 2018 and December 31, 2017.

	Asset (Liability)
				Fair Value Measurements Using
	Fair Value at			Inputs Considered as:
Description	September 30, 2018			Level 1			Level 2		Level 3
Derivative instruments	$	(138	)	$	(138	)	$	-	$	-
Preferred stock, and other equity instruments	$	98,370		$	98,370		$	-	$	-
Trust preferred and exchange traded debt instruments	$	4,732		$	4,732		$	-	$	-

	Asset (Liability)
				Fair Value Measurements Using
	Fair Value at			Inputs Considered as:
Description	December 31, 2017			Level 1			Level 2		Level 3
Derivative instruments	$	(2,428	)	$	(2,428	)	$	-	$	-
Preferred stock, and other equity instruments	$	115,578		$	115,578		$	-	$	-
Trust preferred and exchange traded debt instruments	$	5,121		$	5,121		$	-	$	-

12 ) RECLASSIFICATIONS FROM ACCUMULATED OTHER COMPREHENSIVE INCOME:

The following tables summarize changes in accumulated other comprehensive income from unrealized gains and losses on available-for-sale securities in the three and nine months ended September 30, 2018 and 2017. 

Changes in Accumulated Other Comprehensive Income From Unrealized

Gains and Losses on Available-for-Sale Securities

For the three months ended September 30, 2018 and 2017

(net of tax)

	2018			2017
Balance at July 1	$	145		$	7,499
Other comprehensive income before reclassifications		(21	)		670
Amounts reclassified from accumulated other comprehensive income		-			(17	)
Net current-period other comprehensive income		(21	)		653
Balance at September 30	$	124		$	8,152

Changes in Accumulated Other Comprehensive Income From Unrealized

Gains and Losses on Available-for-Sale Securities

For the nine months ended September 30, 2018 and 2017

(net of tax)

	2018			2017
Balance at January 1[1]	$	160		$	3,540
Other comprehensive income before reclassifications		(36	)		4,259
Amounts reclassified from accumulated other comprehensive income		-			353
Net current-period other comprehensive income		(36	)		4,612
Balance at September 30	$	124		$	8,152

[1] The beginning balance for 2018 was decreased $8,273 to reflect the impact of the adoption of ASU 2016-01. See Note 18 for additional information.

11

Notes to Consolidated Financial Statements of FutureFuel Corp.

(Dollars in thousands, except per share amounts)

(Unaudited)

The following tables summarize amounts reclassified from accumulated other comprehensive income in the three and nine months ended September 30, 2018 and 2017: 

Reclassifications from Accumulated Other

Comprehensive Income for the three and nine months ended

September 30, 2018 and 2017

	Three months ended September 30,
	2018		2017			Affected Line Item in Statement of Operations
Unrealized gains on available-for-sale debt securities	$	-	$	26		Gain/(loss) on marketable securities
Total before tax		-		26
Tax provision		-		(9	)
Total reclassifications	$	-	$	17

	Nine months ended September 30,
	2018		2017			Affected Line Item in Statement of Operations
Unrealized losses on available-for-sale debt securities	$	-	$	(543	)	Gain/(loss) on marketable securities
Total before tax		-		(543	)
Tax benefit		-		190
Total reclassifications	$	-	$	(353	)

*Effective January 1, 2018, FutureFuel’s unrealized gains/(losses) on available-for-sale securities includes debt securities only in accordance with ASC 320 and ASC 321.  The prior year was not restated under the modified retrospective approach in adoption of ASC 321. Please see Note 18 for further details on the adoption of this standard.

13 )  LEGAL MATTERS

From time to time, FutureFuel and its operations are parties to, or targets of, lawsuits, claims, investigations, regulatory matters, and proceedings, which are being handled and defended in the ordinary course of business. While FutureFuel is unable to predict the outcomes of these matters, it does not believe, based upon currently available facts, that the ultimate resolution of any such pending matters will have a material adverse effect on its overall financial condition, results of operations, or cash flows.

14 )  RELATED PARTY TRANSACTIONS

FutureFuel enters into transactions with companies affiliated with or controlled by a director and significant shareholder. Revenues, expenses, prepaid amounts, and unpaid amounts related to these transactions are captured in the accompanying consolidated financial statements as related party line items.

Related party revenues are the result of sales of biodiesel, petrodiesel, blends, other petroleum products, and other similar or related products to these related parties.  

Related party cost of goods sold and distribution are the result of sales of biodiesel, petrodiesel, blends, and other petroleum products to these related parties along with the associated expense from the purchase of natural gas, storage and terminalling services, and income tax and consulting services by FutureFuel from these related parties.

12

Notes to Consolidated Financial Statements of FutureFuel Corp.

(Dollars in thousands, except per share amounts)

(Unaudited)

15 )  INTANGIBLE ASSET

In April of 2015, FutureFuel acquired additional historical line space on a pipeline for $1,408. The acquired line space was recorded as an intangible asset with an indefinite life as there was no foreseeable limit on the time period over which it is expected to contribute to cash flows. The carrying value of the asset was $1,408 as of September 30, 2018 and December 31, 2017. FutureFuel tests the intangible asset for impairment in accordance with ASC 350-30-35-18 through 35-20. 

 16 )  RECENTLY ISSUED ACCOUNTING STATEMENTS

The following table provides a brief description of recent Accounting Standard Updates ("ASU") issued by the FASB:
Standard	Description	Effective Date	Effect on the Financial Statements or Other Significant Matters
In February 2016, the FASB issued ASU 2016-02, Leases. In July 2018, the FASB issued ASU 2018-11, Leases – Targeted Improvements	The new guidance supersedes the lease guidance under FASB ASC Topic 840, Leases, resulting in the creation of FASB ASC Topic 842, Leases. The guidance requires a lessee to recognize in the statement of financial position a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term for both finance and operating leases. The targeted improvements provide entities with an additional (and optional) transition method to adopt the new leases standard.	Annual periods beginning after December 15, 2018. Early adoption is permitted.	The Company is currently evaluating its population of leases, and is continuing to assess all potential impacts of the standard, but currently believes the most significant impact relates to its accounting for logistics equipment. The Company anticipates recognition of additional assets and corresponding liabilities related to leases upon adoption. The Company plans to adopt the standard effective January 1, 2019.
In February 2018, the FASB issued ASU 2018-02, Income Statement-Reporting Comprehensive Income.	The amendments in this Update allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act passed by congress on December 22, 2017 and certain disclosures related to those stranded tax effects.	Annual periods beginning after December 15, 2018. Early adoption is permitted.	The Company is currently evaluating the impact of this standard. The Company plans to adopt the standard on January 1, 2019.
In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting.	This Update is part of the FASB Simplification Initiative. Under the new standard, Topic 718 is expanded to include the nonemployee share-based payments. As a result, companies will no longer be required to value non-employee awards differently from employee awards. This means that companies will value all equity classified awards at their grant-date under ASC Topic 718 and forgo revaluing the award after that date as currently required under Subtopic 505-50.	Annual periods beginning after December 15, 2018. Early adoption is permitted.	The Company believes the adoption of the standard will have minimal impact on our financial statements. The Company plans to adopt the standard effective January 1, 2019.

13

Notes to Consolidated Financial Statements of FutureFuel Corp.

(Dollars in thousands, except per share amounts)

(Unaudited)

17 ) REVENUE RECOGNITION

On January 1, 2018, FutureFuel adopted ASU 2014-09 Revenue Recognition and related subsequently issued ASU’s (“Topic 606”). Under this standard, FutureFuel recognizes revenue when performance obligations of the sale are satisfied. FutureFuel sells to customers through master sales agreements or standalone purchase orders. The majority of FutureFuel's terms of sale have a single performance obligation to transfer products. Accordingly, FutureFuel recognizes revenue when control has been transferred to the customer, generally at the time of shipment or delivery of products. Under the previous revenue recognition accounting standard (“Topic 605”), FutureFuel recognized revenue upon the transfer of title and risk of loss, generally upon shipment or delivery of goods, although some revenue was recognized on a bill and hold basis.

A select number of FutureFuel custom chemical contracts within the chemical segment contain a material right as defined by Topic 606 as a result of upfront payments provided by customers. Each contract also has a performance obligation to transfer products with 30-day payment terms. FutureFuel recognizes revenue when the customer takes control of the inventory, either upon shipment or when the material is made available for pickup. FutureFuel has applied the renewal option approach in allocating the transaction price to these material rights and transfer of product. As a basis for allocating the transaction price to the material right and transfer of product, FutureFuel estimated the expected life of the product, the expected contractual volumes to be sold over that life, and the most likely expected sales price. Each estimate will be updated quarterly on a prospective basis. In applying the cumulative effect of Topic 606 as of January 1, 2018, FutureFuel recorded a gross reduction to opening retained earnings of $6,900 and a net of tax reduction of $5,178. Additionally, the adoption of Topic 606 resulted in one contract recognizing revenue on a bill and hold basis, whereas under Topic 605 it was recognized at point of shipment. The adoption of Topic 606 also increased short term deferred revenue $3,251 and long term deferred revenue $3,293 and reduced inventory $356 as of January 1, 2018.

The majority of our revenue is from short term contracts with revenue recognized when a single performance obligation to transfer product under the terms of a contract with a customer are satisfied. Accordingly, FutureFuel recognizes revenue when control is transferred to the customer, which is when products are considered to meet customer specification and title and risk of loss are transferred. This typically occurs at the time of shipment or delivery, however, for certain contracts, this occurs upon delivery of the material to a FutureFuel storage location, ready for customer pickup and separated from other FutureFuel inventory. Revenue is measured as the amount of consideration FutureFuel expects to receive in exchange for transferring products and is generally based upon a negotiated price. FutureFuel sells its products directly to customers generally under agreements with payment terms of 30 to 75 days for chemical segment customers and 3 to 10 days for biofuel segment customers. For these short-term contracts, there was no material change in recognizing revenue under Topic 606 and Topic 605.

Contract Assets and Liabilities:

Contract assets consist of unbilled amounts typically resulting from revenue recognized through bill and hold arrangements. The contract assets are recorded as accounts receivable on the consolidated balance sheet. Contract liabilities consist of advance payments related to material rights. These amounts were historically recorded as deferred revenue which primarily related to upfront capital payments. The contract liabilities are recorded as deferred revenue in the consolidated balance sheets and are reduced as FutureFuel transfers product to the customer under the renewal option approach.

14

Notes to Consolidated Financial Statements of FutureFuel Corp.

(Dollars in thousands, except per share amounts)

(Unaudited)

These contract assets and liabilities are reported on the consolidated balance sheets on a contract-by-contract basis at the end of each reporting period.

The following table reflects the changes in FutureFuel’s contract assets and contract liabilities for the three and nine months ended September 30, 2018. There were no contract assets recognized under Topic 605:

Contract assets - short-term (included in accounts receivable)

	Three months ended September 30, 2018
Beginning balance at June 30, 2018	$	1,110
Additions		656
Reductions		(1,110	)
Ending balance at September 30, 2018	$	656

	Nine months ended September 30, 2018
Beginning balance at January 1, 2018	$	505
Additions		2,417
Reductions		(2,266	)
Ending balance at September 30, 2018	$	656

	As Reported			Under Prior Standard
Contract Liabilities	Topic 606			Topic 605			Change
Beginning balance at July 1, 2018	$	18,155		$	13,098		$	5,057
Additions		474			310			164
Revenue recognized for the three months ended September 30, 2018		(1,486	)		(965	)		(521	)
Ending balance at September 30, 2018	$	17,143		$	12,443		$	4,700
Beginning balance at January 1, 2018	$	21,013		$	14,469		$	6,544
Additions		932			768			164
Revenue recognized for the nine months ended September 30, 2018		(4,802	)		(2,794	)		(2,008	)
Ending balance at September 30, 2018	$	17,143		$	12,443		$	4,700

Transaction price allocated to the remaining performance obligations

As of September 30, 2018, approximately $17,143 of revenue is expected to be recognized from remaining performance obligations. FutureFuel expects to recognize this revenue ratably over expected sales over the expected term of its long-term contracts which range from one to five years. Approximately 40% of this revenue is expected to be recognized over the next 12 months, and 60% is expected to be recognized between one and 5 years. These amounts are subject to change based upon changes in the estimated contract life and estimated quantities to be sold over the contract life.

15

Notes to Consolidated Financial Statements of FutureFuel Corp.

(Dollars in thousands, except per share amounts)

(Unaudited)

We applied the practical expedient in ASC 606-10-50-14 and have excluded the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less; and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed.

Disaggregation of revenue – contractual and non-contractual

	Three months ended September 30,				Nine months ended September 30,
	2018		2017(a)		2018			2017 (a)
Contract revenue from customers with > 1 year arrangements	$	14,587	$	14,779	$	47,745		$	40,706
Contract revenue from customers with < 1 year arrangement		66,780		62,772		191,194			158,894
Revenue from non-contractual arrangements		55		55		165			165
BTC rebate		-		-		(13,599	)		-
Total revenue	$	81,422	$	77,606	$	225,505		$	199,765

Timing of revenue

	Three months ended September 30,				Nine months ended September 30,
	2018		2017(a)		2018		2017(a)
Bill and hold revenue	$	11,576	$	4,519	$	32,470	$	12,477
Non-bill and hold revenue		69,846		73,087		193,035		187,288
Total revenue	$	81,422	$	77,606	$	225,505	$	199,765

(a) Prior periods have not been adjusted under the modified retrospective method for Topic 606.

For both long term and short-term contracts, FutureFuel has elected to account for shipping and handling as activities to fulfill the promise to transfer the good. As such, shipping and handling fees billed to customers in a sales transaction are recorded in net sales and shipping and handling costs incurred are recorded in cost of goods sold and distribution. FutureFuel has elected to exclude from net sales any taxes which it collects concurrent with revenue-producing activities. These accounting policy elections are consistent with the manner in which FutureFuel historically recorded shipping and handling fees and taxes.

The following table summarizes the impacts of Topic 606 adoption on the Company’s consolidated statement of operations and comprehensive income for the three and nine months ended September 30, 2018.

	Three months ended September 30, 2018
	Balances Prior to Adoption of Topic 606		Adjustments			As Reported
Revenue	$	80,521	$	67		$	80,588
Cost of goods sold		61,879		(320	)		61,559
Gross profit		12,266		387			12,653
Income from operations		9,842		387			10,229
Income before income taxes		13,070		387			13,457
Provision for income taxes		3,915		97			4,012
Net income	$	9,155	$	290		$	9,445
Basic earnings per share	$	0.21	$	0.01		$	0.22
Diluted earnings per share	$	0.21	$	0.01		$	0.22
Comprehensive income	$	9,134	$	290		$	9,424

16

Notes to Consolidated Financial Statements of FutureFuel Corp.

(Dollars in thousands, except per share amounts)

(Unaudited)

	Nine months ended September 30, 2018
	Balances Prior to Adoption of Topic 606		Adjustments		As Reported
Revenue	$	220,520	$	2,664	$	223,184
Cost of goods sold		146,823		93		146,916
Gross profit		55,860		2,571		58,431
Income from operations		48,065		2,571		50,636
Income before income taxes		51,087		2,571		53,658
Provision for income taxes		1,750		586		2,336
Net income	$	49,337	$	1,985	$	51,322
Basic earnings per share	$	1.13	$	0.04	$	1.17
Diluted earnings per share	$	1.13	$	0.04	$	1.17
Comprehensive income	$	49,301	$	1,985	$	51,286

The following table summarizes the impacts of Topic 606 adoption on the Company’s consolidated balance sheet which has been adjusted for the adoption of Topic 606 as of September 30, 2018.

	Balances Prior to Adoption of Topic 606		Adjustments			As Reported
Accounts receivable	$	18,286	$	656		$	18,942
Inventory		48,453		(448	)		48,005
Income tax receivable		519		(40	)		479
Total current assets		373,558		168			373,726
Total assets		483,037		168			483,205
Accounts payable		31,578		(164	)		31,414
Deferred revenue - short term		2,690		4,424			7,114
Total current liabilities		47,879		4,260			52,139
Deferred revenue - long term		14,375		276			14,651
Noncurrent deferred income tax liability		18,605		(1,175	)		17,430
Total noncurrent liabilities		34,117		(899	)		33,218
Total liabilities		81,996		3,361			85,357
Retained earnings		118,804		(3,193	)		115,611
Total stockholders' equity		401,041		(3,193	)		397,848
Total liabilities and stockholders' equity	$	483,037	$	168		$	483,205

The following table summarizes the impacts of our adoption of Topic 606 on the Company’s consolidated statement of cash flows for the nine months ended September 30, 2018:

	Balances Prior to
	Adoption of						As Reported
	Topic 606			Adjustments			or Restated
Change in net income	$	49,337		$	1,985		$	51,322
Benefit for deferred income taxes		(2,434	)		(1,175	)		(3,609	)
Changes in operating assets and liabilities:
Accounts receivables		3,687			(656	)		3,031
Inventory		(4,699	)		448			(4,251	)
Income tax receivable		6,418			40			6,458
Accounts payable		13,182			(164	)		13,018
Deferred revenue		(2,194	)		(478	)		(2,672	)
Net cash provided by operating activities	$	79,169		$	-		$	79,169

17

Notes to Consolidated Financial Statements of FutureFuel Corp.

(Dollars in thousands, except per share amounts)

(Unaudited)

18 ) CHANGE IN ACCOUNTING PRINCIPLE

In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. One provision of this update requires that equity investments, except those accounted for under the equity method or resulting in consolidation, be measured at fair value and changes in fair value recognized in net income. The provisions of this update are recognized as a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. For public entities, this guidance was effective for years beginning after December 15, 2017, including interim periods within those years.

The new accounting standard related to the recognition and measurement of financial assets and liabilities makes the following changes to prior guidance and requires:

● certain equity investments to be measured at fair value with changes in fair value now recognized in net income. However, equity investments that do not have readily determinable fair values may be measured at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer;

● a qualitative assessment of equity investments without readily determinable fair values to identify impairment; and

● separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or in the accompanying notes to the financial statements.

We adopted the new accounting standard utilizing the modified retrospective method, and, therefore, no adjustments were made to amounts in our prior period financial statements. We recorded the cumulative effect of adopting the standard as an adjustment to increase the opening balance of retained earnings by $13,139 on a pre-tax basis ($8,273 after-tax) related to the net impact of unrealized gains and losses primarily on equity securities and preferred stock.

	Three months ended September 30,				Nine months ended September 30,
	2018			2017*		2018			2017*
Net gains/(losses) recognized on equity securities	$	815	$	26	$	(3,273	)	$	(543	)
Less: net gains/(losses) recognized during the period on equity securities sold during the period		-		26		2,324			(543	)
Unrealized gains/(losses) during the reporting period on equity securities held at the reporting date	$	815	$	-	$	(5,597	)	$	-

*Prior periods have not been adjusted under the modified retrospective method for Topic 321.

18

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

All dollar amounts expressed as numbers in this M D&A are in thousands (except per share amounts).

Certain tables may not add due to rounding.

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read together with our consolidated financial statements, including the notes thereto, set forth herein. This discussion contains forward-looking statements that reflect our current views with respect to future events and financial performance. Actual results may differ materially from those anticipated in these forward-looking statements. See “Forward Looking Information” below for additional discussion regarding risks associated with forward-looking statements.

Overview

Our company is managed and reported in two reporting segments: chemicals segment and biofuels segment. Within the chemicals segment are two product groupings: custom chemicals and performance chemicals. The custom product group is comprised of specialty chemicals manufactured for a single customer whereas the performance product group is comprised of chemicals manufactured for multiple customers. The biofuels segment is comprised of one product group. Management believes that the diversity of each segment strengthens the company in the ability to utilize resources and is committed to growing each segment.

Summary of Financial Results

Set forth below is a summary of certain consolidated financial information for the periods indicated.

	Three months ended September 30,
					Dollar			%
	2018		2017		Change			Change
Revenues	$	81,422	$	77,606	$	3,816			4.9	%
Income from operations	$	10,229	$	3,200	$	7,029			219.7	%
Net income	$	9,445	$	3,334	$	6,111			183.3	%
Earnings per common share:
Basic	$	0.22	$	0.08	$	0.14			175.0	%
Diluted	$	0.22	$	0.08	$	0.14			175.0	%
Capital expenditures and intangibles (net of customer reimbursements and regulatory grants)	$	642	$	856	$	(214	)		(25.0%	)
Adjusted EBITDA	$	13,661	$	9,553	$	4,108			43.0	%

	Nine months ended September 30,
					Dollar			%
	2018		2017		Change			Change
Revenues	$	225,505	$	199,765	$	25,740			12.9	%
Income from operations	$	50,636	$	6,049	$	44,587			737.1	%
Net income	$	51,322	$	7,564	$	43,758			578.5	%
Earnings per common share:
Basic	$	1.17	$	0.17	$	1.00			588.2	%
Diluted	$	1.17	$	0.17	$	1.00			588.2	%
Capital expenditures and intangibles (net of customer reimbursements and regulatory grants)	$	1,539	$	2,413	$	(874	)		(36.2%	)
Adjusted EBITDA	$	62,926	$	17,201	$	45,725			265.8	%

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We use 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. We define adjusted EBITDA as net income before interest, income taxes, depreciation, and amortization expenses, excluding, when applicable, non-cash stock-based compensation expenses, public offering expenses, acquisition-related transaction costs, purchase accounting adjustments, losses on disposal of property and equipment, gains or losses on derivative instruments, and other non-operating income or expenses. Information relating to adjusted EBITDA is provided so that investors have the same data that we employ in assessing the overall operation and liquidity of our business. Our calculation of adjusted EBITDA may be different from similarly titled measures used by other companies; therefore, the results of our calculation are not necessarily comparable to the results of other companies.

Adjusted EBITDA allows our chief operating decision makers to assess the performance and liquidity of our business on a consolidated basis to assess the ability of our operating segments to produce operating cash flow to fund working capital needs, to fund capital expenditures and to pay dividends. In particular, our management believes that adjusted EBITDA permits a comparative assessment of our operating performance and liquidity, relative to a performance and liquidity based on GAAP results, while isolating the effects of certain items, including depreciation and amortization, which may vary among our operating segments without any correlation to their underlying operating performance, 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, which can cause net income to appear volatile from period to period relative to the sale of the underlying physical product.

We enter into commodity derivative instruments primarily to protect our operations from downward movements in commodity prices, and to provide greater certainty of cash flows associated with sales of our commodities. We enter into hedges, and we utilize mark-to-market accounting to account for these instruments. Thus, our results in any given period can be impacted, and sometimes significantly, by changes in market prices relative to our contract price along with the timing of the valuation change in the derivative instruments relative to the sale of biofuel. We include this item as an adjustment as we believe it provides a relevant indicator of the underlying performance of our business in a given period.

The following table reconciles adjusted EBITDA with net income, the most directly comparable GAAP performance financial measure. 

	Three months ended September 30,						Nine months ended September 30,
	2018			2017			2018			2017
Adjusted EBITDA	$	13,661		$	9,553		$	62,926		$	17,201
Depreciation		(2,732	)		(2,927	)		(8,244	)		(8,735	)
Non-cash stock-based compensation		(107	)		(128	)		(321	)		(878	)
Interest and dividend income		2,543			1,965			6,688			5,679
Non-cash interest expense (including amortization of deferred financing costs)		(43	)		(43	)		(130	)		(129	)
Losses on disposal of property and equipment		(4	)		(68	)		(41	)		(145	)
Losses on derivative instruments		(676	)		(3,314	)		(3,947	)		(1,511	)
Gains/(losses) on marketable securities		815			26			(3,273	)		(543	)
Provision for income taxes		(4,012	)		(1,730	)		(2,336	)		(3,375	)
Net income	$	9,445		$	3,334		$	51,322		$	7,564

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The following table reconciles adjusted EBITDA with cash flows from operations, the most directly comparable GAAP liquidity financial measure.

	Nine months ended September 30,
	2018			2017
Adjusted EBITDA	$	62,926		$	17,201
Benefit for deferred income taxes		(3,609	)		(1,303	)
Impairment of fixed assets		258			28
Interest and dividend income		6,688			5,679
Provision for income taxes		(2,336	)		(3,375	)
Losses on derivative instruments		(3,947	)		(1,511	)
Change in fair value of derivative instruments		(2,290	)		(60	)
Changes in operating assets and liabilities, net		21,479			19,781
Net cash provided by operating activities	$	79,169		$	36,440

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Results of Operations 

Consolidated

	Three months ended September 30,												Nine months ended September 30,
					Change										Change
	2018		2017		Amount			%			2018		2017		Amount		%
Revenues	$	81,422	$	77,606	$	3,816			4.9	%	$	225,505	$	199,765	$	25,740		12.9	%
Volume/product mix effect					$	(3,054	)		(3.9	%)					$	18,288		9.2	%
Price effect					$	6,870			8.9	%					$	7,452		3.7	%
Gross profit	$	12,653	$	5,526	$	7,127			129.0	%	$	58,431	$	13,454	$	44,977		334.3	%

Consolidated sales revenue in the three and nine months ended September 30, 2018 increased 4.9% or $3,816 and 12.9% or $25,740, compared to the three and nine months ended September 30, 2017. The current three-month period was benefited $6,086 from higher biofuel prices and unfavorably affected by a volume reduction in pipeline trades. In the first nine months of 2018, sales revenue benefited from strong demand in the agricultural chemical and energy markets with higher sales volumes and prices in both segments. Within the chemical segment, in the current nine-month period, sales volume/product mix improved 11.0% or $8,543 in addition to an increase of $2,212 from higher average selling prices. The price increases were primarily from higher prices indexed to higher raw material prices. Within the biofuel segment, sales revenue increased $9,745 in the current nine-month period from improved sales volumes and product mix and $5,240 from higher average selling prices experienced in the fuel industry. Negatively influencing this price effect was the retroactive reinstatement of the 2017 blenders’ tax credit (BTC) passed into law on February 9, 2018. Please see Note 2 for additional discussion.

Gross profit in the three and nine months ended September 30, 2018 increased $7,127 and $44,977 compared to the three months and nine months ended September 30, 2017. The three-month increase was primarily from stronger margins in the biofuel segment. The nine-month increase was primarily from improved margins in the biofuel segment from the BTC which expired on December 31, 2016 and was retroactively reinstated for 2017 (but, not beyond 2017) on February 9, 2018 resulting in the benefit being recognized in 2018. Also benefiting gross profit in the nine-month period was increased sales volumes in both the chemicals and biofuels segments. 

Gross profit was favorably impacted in the three and nine months ended September 30, 2018, as compared to the prior year period, by the adjustment in the carrying value of our inventory as determined utilizing the LIFO method of inventory accounting.  The change in this adjustment decreased gross profit $443 in the three months ended September 30, 2018 and increased gross profit $2,708 in the nine months ended September 30, 2018 as compared to the three and nine months ended September 30, 2017. Please see Note 3 for additional discussion.

Gross profit was favorably impacted by the change in the unrealized and realized activity in derivative instruments with a loss of $676 in the three months ended September 30, 2018, as compared to a loss of $3,314 in the prior year period. In the nine-month period, gross profit was impacted negatively by the change in unrealized and realized activity in derivative instruments with a loss of $3,947, as compared to a loss of $1,511, in the prior year period.

Operating Expenses

Operating expenses increased $98 and $390 in the three and nine months ended September 30, 2018, respectively, as compared to the three and nine months ended September 30, 2017. This increase was primarily from an increase in purchased services and compensation.

Provision for Income Taxes 

The effective tax rate for the three months ended September 30, 2018 and 2017 reflects our expected tax rate on reported operating income before income tax. This three-month effective rate is expected to materially continue for the remainder of 2018 absent the effect of the subsequent event impact as noted below.

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The effective tax rate for the nine months ended September 30, 2018 reflects our expected tax rate on reported operating income before income tax including the positive effect of the retroactive reinstatement of the 2017 BTC and Small Agri-biodiesel Producer Tax Credit. Our effective tax rate in the nine months ended September 30, 2017 does not reflect the BTC and Small Agri-biodiesel Producer Tax Credit recognized in 2018 because these credits and incentives were retroactively extended through December 31, 2017 on February 9, 2018. This rate is not expected to continue for the remainder of 2018 as these credits only benefited the three months ended March 31, 2018 and nine months ended September 30, 2018.

Unrecognized tax benefits totaled $0 at both September 30, 2018 and December 31, 2017.

FutureFuel records interest and penalties, net, as a component of provision for income taxes. Interest and penalties included as a component of provision for income taxes amounted to $81 for the three and nine months ended September 30, 2018, and $29 and $402, for the three and nine months ended September 30 2017, respectively.

In a decision dated November 1, 2018, the United States Court of Appeals for the Federal Circuit affirmed a November 22, 2016 decision of the Federal Court of Claims pertaining to the income tax treatment of the blenders’ fuel mixture credit.  Like the Federal Court of Claims before it, the Court of Appeals found that the mixture credit is a reduction in excise tax liability and, to the extent the mixture credit reduces excise tax liabilities, the mixture credit is a component of taxable income.

As a result of the November 1, 2018 decision, FutureFuel is assessing whether the recorded benefits associated with the mixture credit should be re-measured in the period of the decision.  If FutureFuel determines that ASC 740, Income Tax’s recognition threshold of more-likely-than-not is no longer met because of the decision, FutureFuel may recognize additional income tax expense ranging from approximately $4,000 to $4,500 in the fourth quarter.

Net Income

Net income for the three and nine months ended September 30, 2018 increased $6,111 and $43,758 as compared to the same periods in 2017. The increase was from stronger sales volumes, a 14% reduction in the federal statutory tax rate, and biodiesel tax credits and incentives that were reinstated in the three months ended March 31, 2018 that were not in effect for 2017 (see Note 2).

Chemicals Segment

	Three months ended September 30,										Nine months ended September 30,
					Change										Change
	2018		2017		Amount			%			2018		2017		Amount		%
Revenues	$	28,022	$	28,167	$	(145	)		(0.5%	)	$	88,630	$	77,875	$	10,755		13.8	%
Volume/product mix effect					$	(929	)		(3.3%	)					$	8,543		11.0	%
Price effect					$	784			2.8	%					$	2,212		2.8	%
Gross profit	$	8,898	$	8,060	$	838			10.4	%	$	24,470	$	20,401	$	4,069		19.9	%

Sales revenue in the three and nine months ended September 30, 2018 decreased $145 and increased $10,755, compared to the three and nine months ended September 30, 2017. Sales revenue for our custom chemicals (unique chemicals produced for specific customers) for the three months and nine months ended September 30, 2018 totaled $23,973 and $74,465, an increase of $380 and $9,276 from the comparable periods, respectively in 2017. In the three-month comparison period, revenue was unfavorably impacted by lower volumes from the timing of custom chemicals shipments. In the nine-month comparison period, sales revenue was benefited from higher volumes in the agrochemical and energy markets. To a lesser extent, the three and nine-month comparison periods were benefited from the change in the recognition of contract liabilities in deferred revenue for a few custom chemical contracts from the adoption of ASC 606.  See Note 17 for additional discussion.  Performance chemicals (comprised of multi-customer products, which are sold based on specification) sales revenues were $4,049 and $14,165, in the three and nine months ended September 30, 2018, a decrease of $525 and an increase of $1,479 from the three and nine months ended September 30, 2017, respectively. The change in the three-month period was related to timing of shipments for products campaigned.  The nine-month comparison period was benefited by higher unit pricing for glycerin products based on improved market conditions.

Gross profit for the chemicals segment for the three and nine months ended September 30, 2018, increased $838 and $4,069 when compared to the three and nine months ended September 30, 2017, respectively. This increase was driven primarily by higher volumes in the agrochemical and energy markets, and to a lesser extent, from a favorable product mix and the change in the recognition of contract liabilities in deferred revenue for a few customer chemical contracts given the adoption of ASC 606. See Note 17 for additional discussion.

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Biofuels Segment

	Three months ended September 30,											Nine months ended September 30,
						Change											Change
	2018		2017			Amount			%			2018		2017			Amount		%
Revenues	$	53,400	$	49,439		$	3,961			8.0	%	$	136,875	$	121,890		$	14,985		12.3	%
Volume/product mix effect						$	(2,125	)		(4.3%	)						$	9,745		8.0	%
Price effect						$	6,086			12.3	%						$	5,240		4.3	%
Gross profit	$	3,755	$	(2,534	)	$	6,289			248.2	%	$	33,961	$	(6,947	)	$	40,908		588.9	%

Biofuels sales revenue in the three and nine months ended September 30, 2018 increased $3,961 and $14,985 when compared to the three and nine months ended September 30, 2017. This increase in the three-month comparison period was primarily from higher sales prices partially offset by lower pipeline sales volumes.  The increase in the nine-month comparison period was benefited by an 8% volume increase and a net 4.3% price increase.  The price increase was partially offset by the effect of the retroactive reinstatement of the 2017 BTC, as recorded in the first three months ended March 31, 2018 (see Note 2).

Revenue from common carrier pipelines varies as its revenue recognition depends upon whether a transaction is bought from and sold to the same party. Purchases and sales of inventory with the same counterparty that are entered into in contemplation of one another (including buy/sell agreements) are combined and recorded on a net basis. Additionally, revenue from common carrier pipelines fluctuates with market conditions.  Revenue from pipeline transactions was $0 and $1,852, in the three and nine months ended September 30, 2018 and 2017, respectively.

A portion of our biodiesel sold in 2018 and 2017 was to a couple major refiners/blenders.  No assurances can be given that we will continue to sell to such major refiner, or, if we do sell, the volume we will sell or the profit margin we will realize. We do not believe that the loss of this customer would have a material adverse effect on our biofuels segment or on us as a whole in that: (i) unlike our custom manufacturing products, biodiesel is a commodity with a large potential customer base; (ii) we believe that we could readily sell our biodiesel to other customers as potential demand from other customers for biodiesel exceeds our production capacity; (iii) our sales to these customers are not under fixed terms and the customers have no fixed obligation to purchase any minimum quantities except as stipulated by short term purchase orders; and (iv) the prices we receive from these customers are based upon then-market rates, as would be the case with sales of this commodity to other customers.

Biofuels gross profit in the three and nine months ended September 30, 2018 increased $6,289 and $40,908 when compared to the three and nine months ended September 30, 2017. The increase in the three-month period was primarily from higher sales volumes and improved petroleum margins. The increase for the nine-month period was benefited from the recognition in the first quarter of 2018 of the retroactive reinstatement of the 2017 BTC totaling $28,869. Also benefitting gross profit in the nine-month comparison period was the change in adjustments in the carrying value of our inventory as determined utilizing the LIFO method of inventory accounting, which increased biofuels gross profit $2,256.

Biofuels gross profit improved in the three months ended September 30, 2018 as compared to same period in 2017 by the change in activity in derivative instruments with a loss of $676 as compared to a loss of $3,314, respectively. Gross profit was unfavorably impacted by this change in the nine-month comparison period of 2018 to 2017 with a loss of $3,947 and $1,511, respectively. In order to better manage the commodity price risk caused by market fluctuations in biofuel prices, we may enter into exchange traded commodity futures and options contracts. We account for these derivative instruments in accordance with accounting standards whereby the fair value of FutureFuel’s derivative instruments is determined based on the closing prices of the derivative instruments on relevant commodity exchanges at the end of an accounting period. Realized gains and losses on derivative instruments, and changes in fair value of the derivative instruments, are recorded in the statement of operations as a component of cost of goods sold within the biofuels segment.

FutureFuel recognizes all derivative instruments as either assets or liabilities at fair value in its consolidated balance sheet. FutureFuel’s derivative instruments do not qualify for hedge accounting under the specific guidelines of ASC 815-20-25, Derivatives and Hedging. None of the derivative instruments are designated and accounted for as hedges due primarily to the extensive record keeping requirements.

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The volumes and carrying values of FutureFuel’s derivative instruments were as follows:

	September 30, 2018					December 31, 2017
	Number of contracts Short		Fair Value			Number of contracts Short		Fair Value
Regulated options, included in other current assets		-	$	-			200	$	(2,428	)
Regulated fixed price future commitments, included in other current assets		31	$	(138	)		-	$	-

*All derivative instruments are entered into with the standard contract terms and conditions in accordance with major trading authorities of the New York Mercantile Exchange.

Critical Accounting Estimates

Revenue Recognition

On January 1, 2018, we adopted Topic 606 using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historical accounting under Topic 605.

Certain long-term contracts had an upfront non-cancellable payment considered a material right. The Company applied the renewal option approach in allocating the transaction price to the material right. For each of these contracts, the Company estimated the expected contractual volumes to be sold at the most likely expected sales price as a basis for allocating the transaction price to the material right. Each estimate will be updated quarterly on a prospective basis. These custom chemical contracts have payment terms of 30 days. Please see Note 17 for additional discussion.

For most product sales, revenue is recognized when product is shipped from our facilities and risk of loss and title have passed to the customer, which is in accordance with our customer contracts and the stated shipping terms. Nearly all custom manufactured products are manufactured under written master service agreements. Performance chemicals and biodiesel are generally sold pursuant to the terms of written purchase orders. In general, customers do not have any rights of return, except for quality disputes. All of our products are tested for quality before shipment, and historically returns have been inconsequential. We do not offer rebates, except those related to the BTC, or other warranties.

Biodiesel selling prices can at times fluctuate based on the timing of unsold, internally generated RINs. From time to time, sales of biodiesel are on a “RINs-free” basis. Such method of selling results in applicable RINs being held. The value of the RINs is not reflected in revenue until such time as the RIN sale has been completed.

Revenue from bill and hold transactions in which a performance obligation exists is recognized when the total performance obligation has been met and control of the product has transferred. Bill and hold transactions for the three months ended September 30, 2018 and 2017 were related to custom chemicals customers whereby revenue was recognized in accordance with contractual agreements based upon product being produced and ready for use by the customer. These sales were subject to written monthly purchase orders with agreement that production was reasonable. The product was custom manufactured and stored at the customer’s request and could not be sold to another buyer. Credit and payment terms for bill and hold customers are similar to other custom chemicals customers. Sales revenue under bill and hold arrangements were $11,602 and $4,519 for the three months ended September 30, 2018 and 2017, respectively. For the nine months ended September 30, 2018 and 2017, bill and hold revenue was $32,496 and $12,477, respectively.

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Liquidity and Capital Resources

Our net cash provided by (used in) operating activities, investing activities, and financing activities for the nine months ended September 30, 2018 and 2017 are set forth in the following chart.

	Nine months ended September 30,
	2018			2017
Net cash provided by operating activities	$	79,169		$	36,440
Net cash used in investing activities	$	13,600		$	(14,252	)
Net cash used in financing activities	$	(8,048	)	$	(108,215	)

Operating Activities

Cash from operating activities increased from $36,440 of cash provided by operating activities in the first nine months of 2017 to $79,169 of cash provided by operating activities in the first nine months of 2018. This increase was primarily attributable to the increase of $43,758 in net income, the increase in the change in accounts payable, including accounts payable - related parties, of $10,762 offset by the decrease in the change in inventory of $12,821.  

Investing Activities

Cash provided by investing activities increased $27,852, from cash used in investing activities of $14,252 in the first nine months of 2017 compared to $13,600 of cash provided by investing activities in the first nine months of 2018. Of this change, $25,160 was the result of net sales of marketable securities in the first nine months of 2018 compared to net purchases in the first nine months of 2017. Such net sales totaled $14,278, in the first nine months of 2018, compared to $10,882 in net purchases in the first nine months of 2017. Our capital expenditures and customer reimbursements for capital expenditures are summarized in the following table: 

	Nine months ended September 30,
	2018			2017
Cash paid for capital expenditures and intangibles	$	3,084		$	2,614
Cash received as reimbursement of capital expenditures	$	(1,545	)	$	(201	)
Cash paid, net of reimbursement, for capital expenditures	$	1,539		$	2,413

Financing Activities

Cash used in financing activities decreased to $8,048 in the first nine months of 2018 from $108,215 in the first nine months of 2017. This change is the result of payments of dividends on our common stock in the first nine months of 2018 compared to the first nine months of 2017. The payment of dividends totaled $7,872 and $108,063 in the first nine months of 2018 and 2017, respectively.

Credit Facility

Effective April 16, 2015, we entered into a new $150,000 secured committed credit facility with a syndicated group of commercial banks. On May 25, 2016, we increased the facility $15,000. The loan is a revolving facility, the proceeds of which may be used for our working capital, capital expenditures, and general corporate purposes. The facility terminates on April 16, 2020. See Note 7 for additional information regarding our Credit Agreement.

We intend to fund future capital requirements for our businesses from cash flow as well as from existing cash, cash investments, and, if the need should arise, borrowings under our credit facility. We do not believe there will be a need to issue any securities to fund such capital requirements.

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Dividends

In each of the first three quarters of 2018, we paid a regular cash dividend in the amount of $0.06 per share on our common stock. The regular cash dividend amounted to $2,624 in each of such three quarters of 2018 for a total of $7,872.  In each of the first three quarters of 2017, we paid a regular cash dividend in the amount of $0.06 per share on our common stock. The regular cash dividend amounted to $2,625 per quarter. In the first quarter of 2017, we also paid a special cash dividend of $2.29 per share on our common stock. This special cash dividend amounted to $100,188. Total cash dividends paid were $108,063 in the first nine months of 2017.

Capital Management

As a result of our initial equity offering, our subsequent positive operating results, the exercise of warrants, and the issuance of shares in our at-the-market offering, we accumulated excess working capital. Some of this excess working capital has been paid out as special and regular cash dividends. Additionally, regular cash dividends will be paid in 2018, as previously reported. Third parties have not placed significant restrictions on our working capital management decisions.

A significant portion of these funds was held in cash or cash equivalents at multiple financial institutions. In the periods ended September 30, 2018 and December 31, 2017, we also had investments in certain preferred stock, trust preferred securities, exchange traded debt instruments, and other equity instruments. We classify these investments as current assets in the accompanying consolidated balance sheets and designate the debt securities as being “available-for-sale.” Accordingly, the debt securities are recorded at fair value, with the unrealized gains and losses, net of taxes, reported as a component of stockholders’ equity. We also held equity securities with readily available market values. These equity instruments are recorded at fair value, with the unrealized gains and losses in net income. The fair value of the debt securities and equity instruments totaled $103,102 and $120,699 at September 30, 2018 and December 31, 2017, respectively.

Lastly, we maintain depositary accounts such as checking accounts, money market accounts, and other similar accounts at selected financial institutions.

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Off- Balance Sheet Arrangements

We engage in two types of hedging transactions. First, we hedge our biofuels sales through the purchase and sale of futures contracts and options on futures contracts of energy commodities. This activity was captured on our balance sheet at September 30, 2018 and December 31, 2017. Second, we hedge our biofuels feedstock through the execution of purchase contracts and supply agreements with certain vendors. These hedging transactions are recognized in earnings and were not recorded on our balance sheet at September 30, 2018 or December 31, 2017 because they do not meet the definition of a derivative instrument as defined under GAAP. The purchase of biofuels feedstock generally involves two risk components: basis and price. Basis covers any refining or processing required as well as transportation. Price covers the purchases of the actual agricultural commodity. Both basis and price fluctuate over time. A supply agreement with a vendor constitutes a hedge when we have committed to a certain volume of feedstock in a future period and have fixed the basis for that volume.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk.

All dollar amounts expressed as numbers in these Market Risk Disclosures are in thousands (except per share amounts).

In recent years, general economic inflation has not had a material adverse impact on our costs and, as described elsewhere herein, we have passed some price increases along to our customers. However, we are subject to certain market risks as described below.

Market risk represents the potential loss arising from adverse changes in market rates and prices. Commodity price risk is inherent in the chemicals and biofuels business both with respect to inputs (electricity, coal, raw materials, biofuels feedstock, etc.) and outputs (manufactured chemicals and biofuels).

We seek to mitigate our market risks associated with the manufacturing and sale of chemicals by entering into long-term sale contracts that include contractual market price adjustment protections to allow changes in market prices of key raw materials to be passed on to the customer. Such price protections are not always obtained, however, and some raw material price risk remains significant.

In order to manage price risk caused by market fluctuations in biofuels prices, we may enter into exchange traded commodity futures and options contracts. We account for these derivative instruments in accordance with ASC 815-20-25, Derivatives and Hedging. Under this standard, the accounting for changes in the fair value of a derivative instrument depends upon whether it has been designated as an accounting hedging relationship and, further, on the type of hedging relationship. To qualify for designation as an accounting hedging relationship, specific criteria must be met and appropriate documentation maintained. We had no derivative instruments that qualified under these rules as designated accounting hedges in the first nine months of 2018 or 2017. Changes in the fair value of our derivative instruments are recognized at the end of each accounting period and recorded in the statement of operations as a component of cost of goods sold within the biodiesel segment.

Our immediate recognition of derivative instrument gains and losses can cause net income to be volatile from period to period due to the timing of the change in value of the derivative instruments relative to the volume of biofuel being sold. As of September 30, 2018 and December 31, 2017, the fair values of our derivative instruments were a net liability in the amount of $138 and $2,428, respectively.

Our gross profit will be impacted by the prices we pay for raw materials and conversion costs (costs incurred in the production of chemicals and biofuels) for which we do not possess contractual market price adjustment protection. These items are principally comprised of crude corn oil and yellow grease and petrodiesel. The availability and price of these items are subject to wide fluctuations due to unpredictable factors such as weather conditions, overall economic conditions, governmental policies, commodity markets, and global supply and demand.

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We prepared a sensitivity analysis of our exposure to market risk with respect to key raw materials and conversion costs for which we do not possess contractual market price adjustment protections, based on average prices for the first nine months of 2018. We included only those raw materials and conversion costs for which a hypothetical adverse change in price would result in a 1% or greater decrease in gross profit. Assuming that the prices of the associated finished goods could not be increased and assuming no change in quantities sold, a hypothetical 10% change in the average price of the commodity listed below would result in the following change in gross profit.

(Volume and dollars in thousands)

Item	Volume Requirements (a)		Units	Hypothetical Adverse Change in Price			Decrease in Gross Profit		Percentage Decrease in Gross Profit
Biodiesel feedstock		310,928	LB		10	%	$	8,053		13.8	%
Methanol		113,984	LB		10	%	$	2,572		4.4	%

(a)   Volume requirements and average price information are based upon volumes used and prices obtained for the nine months ended September 30, 2018.  Volume requirements may differ materially from these quantities in future years as our business evolves.

We had no borrowings as of September 30, 2018 or December 31, 2017 and, as such, we were not exposed to interest rate risk for those periods. Due to the relative insignificance of transactions denominated in foreign currency, we consider our foreign currency risk to be immaterial.

Item 4. Controls and Procedures.

Under the supervision and with the participation of our chief executive officer and our principal financial officer and other senior management personnel, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15(d)-15(e)) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this report. Based on that evaluation, our chief executive officer and our principal financial officer have concluded that these disclosure controls and procedures as of September 30, 2018 were effective to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms.

There were no changes in our internal control over financial reporting during our last fiscal quarter that materially affected, or were reasonably likely to materially affect, our internal control over financial reporting.

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PART II OTHER INFORMATION

Item 1. Legal Proceedings.

We are not a party to, nor is any of our property subject to, any material pending legal proceedings, other than ordinary routine litigation incidental to our business. However, from time to time, we may be a party to, or a target of, lawsuits, claims, investigations, and proceedings, including product liability, personal injury, asbestos, patent and intellectual property, commercial, contract, environmental, antitrust, health and safety, and employment matters, which we expect to be handled and defended in the ordinary course of business. While we are unable to predict the outcome of any matters currently pending, we do not believe that the ultimate resolution of any such pending matters will have a material adverse effect on our overall financial condition, results of operations, or cash flows. However, adverse developments could negatively impact earnings or cash flows in future periods.

Item 1A. Risk Factors.

There have been no material changes to the risk factors we previously disclosed in Item 1A of our Form 10-K, Annual

Report for the year ended December 31, 2017 filed with the SEC on March 16, 2018.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

None.

Item 5. Other Information.

None.

Item 6. Exhibits.

Exhibit	Description
11.	Statement re Computation of per Share Earnings
31(a).	Rule 13a-15(e)/15d-15(e) Certification of chief executive officer
31(b).	Rule 13a-15(e)/15d-15(e) Certification of chief principal officer
32.	Section 1350 Certification of chief executive officer and principal financial officer
101	Interactive Data Files**
101.INS	XBRL Instance
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation
101.DEF	XBRL Taxonomy Extension Definition
101.LAB	XBRL Taxonomy Extension Labels
101.PRE	XBRL Taxonomy Extension Presentation
**	Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files in Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

31

Special Note Regarding Forward Looking Information

This report, and the documents incorporated by reference into this report contain forward-looking statements. Forward- looking statements deal with our 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 we or our 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 we make with the SEC, or in press releases, or in oral statements made by or with the approval of one of our 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, 2017 and in our future filings made with the SEC. You should not place undue reliance on any forward-looking statements contained in this report which reflect our management’s opinions only as of their respective dates. Except as required by law, we undertake no obligation to revise or publicly release the results of any revisions to forward-looking statements. The risks and uncertainties described in this report and in subsequent filings with the SEC are not the only ones we face. New factors emerge from time to time, and it is not possible for us to predict which will arise. There may be additional risks not presently known to us or that we currently believe are immaterial to our business. In addition, we cannot assess the impact of each factor on our 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, our business, operating results, liquidity, and financial condition could be materially affected in an adverse manner. You should consult any additional disclosures we have made or will make in our 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 us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained in this report.

32

S I G N A T U R E S

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

FUTUREFUEL CORP.
By:	/s/ Paul A. Novelly
Paul A. Novelly, Chairman and Chief
Executive Officer
Date: November 9, 2018
By:	/s/ Rose M. Sparks
Rose M. Sparks, Chief Financial Officer
and Principal Financial Officer
Date: November 9, 2018

33

EX-11

Exhibit 11

Statement  of Computation of Per Share Earnings

We compute earnings per share using the two-class method in accordance with Accounting Standards Codification Topic No. 260, "Earnings Per Share." The two-class method is an allocation of earnings between the holders of common stock and a company's participating security holders. Our outstanding non-vested shares of restricted stock contain non-forfeitable rights to dividends and, therefore, are considered participating securities for purposes of computing earnings per share pursuant to the two-class method. We had no other participating securities at September 30, 2018 or 2017.

Contingently issuable shares associated with outstanding service-based restricted stock units were not included in the earnings per share calculations for the three-month and nine-month periods ended September 30, 2018 and 2017 as the vesting conditions had not been satisfied.

The composition of basic and diluted earnings per share were as follows:

(Dollars in thousands, except per share amounts)

	Three months ended September 30,						Nine months ended September 30,
	2018			2017			2018			2017
Numerator:
Net income	$	9,445		$	3,334		$	51,322		$	7,564
Less: distributed earnings allocated to non-vested stock		-			-			-			-
Less: undistributed earnings allocated to non-vested restricted stock		(4	)		(3	)		(26	)		(15	)
Numerator for basic earnings per share	$	9,441		$	3,331		$	51,296		$	7,549
Effect of dilutive securities:
Add: undistributed earnings allocated to non-vested restricted stock		4			3			26			15
Less: undistributed earnings reallocated to non-vested restricted stock		(4	)		(3	)		(26	)		(15	)
Numerator for diluted earnings per share	$	9,441		$	3,331		$	51,296		$	7,549
Denominator:
Weighted average shares outstanding – basic		43,724,195			43,705,234			43,719,215			43,662,672
Effect of dilutive securities:
Stock options and other awards		8,725			9,519			6,155			8,748
Weighted average shares outstanding – diluted		43,732,920			43,714,753			43,725,370			43,671,420
Basic earnings per share	$	0.22		$	0.08		$	1.17		$	0.17
Diluted earnings per share	$	0.22		$	0.08		$	1.17		$	0.17

EX-31.A

Exhibit 31(a)

Certification

I, Paul A. Novelly, certify that:

1. I have reviewed this report on Form 10-Q of FutureFuel Corp. (the "registrant").

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

3. Based on my knowledge, the financial statements, and the other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially effect, the registrant's internal control over financial reporting.

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors:

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:   November 9, 2018   

/s/ Paul A. Novelly

Paul A. Novelly, Chairman and Chief

Executive Officer

EX-31.B

Exhibit 31(b)

Certification

I, Rose M. Sparks, certify that:

1. I have reviewed this report on Form 10-Q of FutureFuel Corp. (the "registrant").

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

3. Based on my knowledge, the financial statements, and the other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially effect, the registrant's internal control over financial reporting.

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors:

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant  role in the registrant's internal control over financial reporting.

Date:  November 9, 2018

/s/ Rose M. Sparks

Rose M. Sparks, Chief Financial Officer

and Principal Financial Officer

EX-32

Exhibit  32

Certification  Pursuant to 18

U.S.C. §1350, As Adopted

Pursuant  to

§906 of the Sarbanes -Oxley Act of 2002

In connection with the Quarterly Report of Future Fuel Corp. (the "Company") on Form 10-Q for the period ending September 30, 2018 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned hereby certify pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of §13(a) of the Securities Exchange Act of 1934, as amended.

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Paul A. Novelly

Paul A. Novelly,   

Chairman and Chief Executive Officer   

/s/ Rose M. Sparks

Rose M. Sparks, Chief Financial Officer    

and Principal Financial Officer   

November 9, 2018

XML

Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2018	Nov. 09, 2018
Document Information [Line Items]
Entity Registrant Name	FUTUREFUEL CORP.
Entity Central Index Key	0001337298
Trading Symbol	ff
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Current Reporting Status	Yes
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Common Stock, Shares Outstanding (in shares)		43,743,243
Document Type	10-Q
Document Period End Date	Sep. 30, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q3
Amendment Flag	false

XML

Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Assets
Cash and cash equivalents	$ 199,348	$ 114,627
Accounts receivable, net of allowances for bad debt of $0 and $0, at September 30, 2018 and December 31, 2017, respectively	18,942	21,973
Accounts receivable – related parties	2,547	165
Inventory	48,005	43,754
Income tax receivable	479	6,937
Prepaid expenses	470	1,660
Prepaid expenses – related parties	12	12
Marketable securities	103,102	120,699
Deferred financing costs	144	144
Other current assets	677	387
Total current assets	373,726	310,358
Property, plant and equipment, net	104,254	109,735
Intangible assets	1,408	1,408
Deferred financing costs	72	180
Other assets	3,745	3,882
Total noncurrent assets	109,479	115,205
Total Assets	483,205	425,563
Liabilities and Stockholders’ Equity
Accounts payable	31,414	18,396
Accounts payable – related parties	3,132	1,183
Deferred revenue – short-term	7,114	2,736
Dividends payable	2,626	10,498
Accrued expenses and other current liabilities	7,853	2,468
Total current liabilities	52,139	35,281
Deferred revenue – long-term	14,651	16,522
Other noncurrent liabilities	1,137	1,115
Noncurrent deferred income tax liability	17,430	21,049
Total noncurrent liabilities	33,218	38,686
Total liabilities	85,357	73,967
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, 43,743,243 and 43,741,670, issued and outstanding as of September 30, 2018 and December 31, 2017, respectively	4	4
Accumulated other comprehensive income	124	8,433
Additional paid in capital	282,109	281,964
Retained earnings	115,611	61,195
Total stockholders’ equity	397,848	351,596
Total Liabilities and Stockholders’ Equity	$ 483,205	$ 425,563

XML

Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Allowance for bad debt	$ 0	$ 0
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	75,000,000	75,000,000
Common stock, shares issued (in shares)	43,743,243	43,741,670
Common stock, shares outstanding (in shares)	43,743,243	43,741,670

XML

Consolidated Statements of Operations and Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017		Sep. 30, 2018	Sep. 30, 2017
Revenue	$ 81,422	$ 77,606	[1]	$ 225,505	$ 199,765	[1]
Cost of goods sold	61,559			146,916
Gross profit	12,653	5,526		58,431	13,454
Selling, general, and administrative expenses
Compensation expense	933	876		3,054	3,170
Other expense	476	477		1,482	1,562
Related party expense	138	38		416	138
Research and development expenses	877	935		2,843	2,535
Total expenses	2,424	2,326		7,795	7,405
Income from operations	10,229	3,200		50,636	6,049
Interest and dividend income	2,543	1,965		6,688	5,679
Interest expense	(43)	(43)		(129)	(129)
Gain/(loss) on marketable securities	815	26		(3,273)	(543)
Other expense	(87)	(84)		(264)	(117)
Total other income/(expense)	3,228	1,864		3,022	4,890
Income before income taxes	13,457	5,064		53,658	10,939
Provision for income taxes	4,012	1,730		2,336	3,375
Net income	$ 9,445	$ 3,334		$ 51,322	$ 7,564
Earnings per common share
Earnings per common share, basic (in dollars per share)	$ 0.22	$ 0.08		$ 1.17	$ 0.17
Earnings per common share, diluted (in dollars per share)	$ 0.22	$ 0.08		$ 1.17	$ 0.17
Weighted average shares outstanding
Weighted average shares outstanding, basic (in shares)	43,724,195	43,705,234		43,719,215	43,662,672
Weighted average shares outstanding, diluted (in shares)	43,732,920	43,714,753		43,725,370	43,671,420
Comprehensive Income
Net income	$ 9,445	$ 3,334		$ 51,322	$ 7,564
Other comprehensive income/(loss) from unrealized net gains/(losses) on available-for-sale debt securities	(27)	1,006		(46)	7,102
Income tax effect	6	(353)		10	(2,490)
Total unrealized gains/(losses), net of tax	(21)	653		(36)	4,612
Comprehensive income	9,424	3,987		51,286	12,176
Non-related Parties [Member]
Revenue	80,588	77,106		223,184	198,726
Cost of goods sold	61,559	61,088		146,916	165,469
Non-related Parties [Member] | Shipping and Handling [Member]
Cost of goods sold	1,512	1,072		4,329	2,730
Related Parties [Member]
Revenue	834	500		2,321	1,039
Cost of goods sold	5,651	9,880		15,682	17,995
Related Parties [Member] | Shipping and Handling [Member]
Cost of goods sold	$ 47	$ 40		$ 147	$ 117

[1] Prior periods have not been adjusted under the modified retrospective method for Topic 606.

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Cash flows provided by operating activities
Net income	$ 51,322	$ 7,564
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	8,244	8,735
Amortization of deferred financing costs	108	109
Benefit for deferred income taxes	(3,609)	(1,303)
Change in fair value of equity securities	5,597		[1]
Change in fair value of derivative instruments	(2,290)	(60)
Other than temporary impairment of marketable securities		177
Impairment of fixed assets	258	28
(Gain)/loss on the sale of investments	(2,324)	366
Stock based compensation	321	878
Loss on disposal of fixed assets	41	145
Noncash interest expense	22	20
Changes in operating assets and liabilities:
Accounts receivable	3,031	3,081
Accounts receivable – related parties	(2,382)	(1,181)
Inventory	(4,251)	8,570
Income tax receivable	6,458	5,546
Prepaid expenses	1,190	1,152
Prepaid expenses – related parties		(4)
Accrued interest on marketable securities	9	22
Other assets	(256)	37
Accounts payable	13,018	1,425
Accounts payable - related parties	1,949	2,780
Accrued expenses and other current liabilities	5,385	1,587
Accrued expenses and other current liabilities - related parties		(142)
Deferred revenue	(2,672)	(3,220)
Other noncurrent liabilities		128
Net cash provided by operating activities	79,169	36,440
Cash flows from investing activities
Collateralization of derivative instruments	2,384	(760)
Purchase of marketable securities	(19,664)	(25,795)
Proceeds from the sale of marketable securities	33,942	14,913
Proceeds from the sale of fixed assets	22	4
Capital expenditures	(3,084)	(2,614)
Net cash provided by/(used in) investing activities	13,600	(14,252)
Cash flows from financing activities
Minimum tax withholding on stock options exercised and awards vested	(176)	(121)
Excess tax benefits associated with stock options and awards		(31)
Payment of dividends	(7,872)	(108,063)
Net cash used in financing activities	(8,048)	(108,215)
Net change in cash and cash equivalents	84,721	(86,027)
Cash and cash equivalents at beginning of period	114,627	199,272
Cash and cash equivalents at end of period	199,348	113,245
Cash paid for interest
Cash paid for income taxes	$ 1,506	$ 55

[1] Prior periods have not been adjusted under the modified retrospective method for Topic 321.

XML

Note 1 - Nature of Operations and Basis of Presentation

9 Months Ended

Sep. 30, 2018

Notes to Financial Statements

Nature of Operations [Text Block]

1   ) NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Organization

FutureFuel Corp. (“FutureFuel”), through its wholly-owned subsidiary, FutureFuel Chemical Company (“FutureFuel Chemical”), owns and operates a chemical production facility located on approximately

2,200

acres of land

six

miles southeast of Batesville in north central Arkansas fronting the White River (the “Batesville Plant”). FutureFuel Chemical manufactures diversified chemical products, biobased products comprised of biofuels, and biobased specialty chemical products. FutureFuel Chemical’s operations are reported in

two

segments: chemicals and biofuels.

The chemicals segment manufactures a diversified portfolio of chemical products that are sold to

third

party customers. The majority of the revenues from the chemicals segment are derived from the custom manufacturing of specialty chemicals for specific customers.

The biofuels business segment primarily produces and sells biodiesel. FutureFuel Chemical also sells petrodiesel in blends with the company’s biodiesel and, from time to time, with

no

biodiesel added. Finally, FutureFuel Chemical is a shipper of refined petroleum products on common carrier pipelines and buys and sells petroleum products to maintain an active shipper status on these pipelines.

Basis

of

Presentation

The accompanying unaudited consolidated financial statements have been prepared by FutureFuel in accordance and consistent with the accounting policies stated in FutureFuel’s

2017

audited consolidated financial statements and should be read in conjunction with the

2017

audited consolidated financial statements of FutureFuel.

In the opinion of FutureFuel, all normal recurring adjustments necessary for a fair presentation have been included in the unaudited consolidated financial statements. The unaudited consolidated financial statements have been prepared in compliance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with instructions to Form

10

-Q adopted by the Securities and Exchange Commission (“SEC”). Accordingly, the financial statements do

not

include all the information and footnotes required by GAAP for complete financial statements, and do include amounts that are based upon management estimates and judgments. Future actual results could differ from such current estimates. The unaudited consolidated financial statements include assets, liabilities, revenues, and expenses of FutureFuel and its wholly owned subsidiaries; namely, FutureFuel Chemical, FFC Grain, L.L.C., FutureFuel Warehouse Company, L.L.C., and Legacy Regional Transport, L.L.C. Intercompany transactions and balances have been eliminated in consolidation.

XML

Note 2 - Reinstatement of the Biodiesel Blenders' Tax Credit and Small Agri-biodiesel Producer Tax Credit

9 Months Ended

Sep. 30, 2018

Notes to Financial Statements

Other Income and Other Expense Disclosure [Text Block]

2   ) R EINSTATEMENT OF THE BIODIESEL BLENDERS’ TAX CREDIT AND SMALL AGRI-BIODIESEL PRODUCER TAX CREDIT

The biodiesel Blenders’ Tax Credit (“BTC”) provides a 

$1.00

 per gallon tax credit to the blender of biomass-based diesel with at least 

0.1%

 petroleum-based diesel fuel.  When in effect, FutureFuel is the blender of record and recognizes the credit as a reduction to cost of goods sold.  The BTC expired on

December 31, 2016

and was

not

reinstated for

2017

until it was signed into law as part of The Bipartisan Budget Act of

2018

passed by Congress on

February 9, 2018. 

As this Act was passed into law in 

2018,

 FutureFuel recognized a net estimated pretax benefit from the reinstatement in the biofuels segment of

$28,869

(a reduction in sales revenue of

$13,559

for customer rebates (“BTC Rebates”) upon reinstatement and a reduction in cost of goods sold of

$42,428

). The gallons related to this credit were sold in the

twelve

months ended

December 31, 2017.

As part of the law from which the BTC was reinstated, small agri-biodiesel producers with production capacity 

not

 in excess of 

60

 million gallons were eligible for an additional tax credit of 

$0.10

per gallon on the 

first

 

15

 million gallons of agri-biodiesel sold (the “Small Agri-biodiesel Producer Tax Credit”).  The benefit of the Small Agri-biodiesel Producer Tax Credit was recognized as a benefit in the tax provision in the

first

three

months of the

nine

month period ended

September 30, 2018.

Neither the BTC nor the Small Agri-biodiesel Producer Tax Credit have been passed into law for

2018.

 

XML

Note 3 - Inventory

9 Months Ended

Sep. 30, 2018

Notes to Financial Statements

Inventory Disclosure [Text Block]

3 ) INVENTORY

The carrying values of inventory were as follows as of:  

	September 30, 2018			December 31, 2017
At average cost (approximates current cost)
Finished goods	$	18,668		$	22,998
Work in process		1,858			1,735
Raw materials and supplies		38,221			27,143
		58,747			51,876
LIFO reserve		(10,742	)		(8,122	)
Total inventory	$	48,005		$	43,754

Lower of Cost or Market ("LCM") adjustments are recorded as a decrease in inventory values and an increase in cost of goods sold.  The inventory is relieved at the LCM adjusted cost basis when sold.  There was

no

LCM adjustment in the

three

and

nine

months ended

September 30, 2018. 

For the

three

months ended

September 30, 2017,

there was

no

LCM adjustment. In the

nine

months ended

September 30, 2017,

there was an LCM adjustment of

$1,912

which impacted inventory sold prior to

September 30, 2017.

XML

Note 4 - Derivative Instruments

9 Months Ended

Sep. 30, 2018

Notes to Financial Statements

Derivative Instruments and Hedging Activities Disclosure [Text Block]

4  ) DERIVATIVE INSTRUMENTS

FutureFuel is exposed to certain risks relating to its ongoing business operations. Commodity price risk is the primary risk managed by using derivative instruments. Regulated fixed price futures and option contracts are utilized to manage the price risk associated with future purchases of feedstock used in FutureFuel’s biodiesel production along with physical feedstock and finished product inventories attributed to this process.

FutureFuel recognizes all derivative instruments as either assets or liabilities at fair value in its consolidated balance sheets. FutureFuel’s derivative instruments do

not

qualify for hedge accounting under the specific guidelines of ASC

815

-

20

-

25,

Derivatives and Hedging

.

None

of the derivative instruments are designated and accounted for as hedges primarily as a result of the extensive record keeping requirements.

The fair value of FutureFuel’s derivative instruments is determined based on the closing prices of the derivative instruments on relevant commodity exchanges at the end of an accounting period. Realized gains and losses on derivative instruments and changes in fair value of the derivative instruments are recorded in the statements of operations as a component of cost of goods sold, and amounted to a loss of

$676

and

$3,314

for the

three

months ended

September 30, 2018

and

2017,

respectively, and a loss of

$3,947

and

$1,511

for the

nine

months ended

September 30, 2018

and

2017,

respectively.

The volumes and carrying values of FutureFuel’s derivative instruments were as follows at: 

	September 30, 2018					December 31, 2017
	Contract quantity Short		Fair Value			Contract quantity Short		Fair Value
Regulated options, included in other current assets		-	$	-			200	$	(2,428	)
Regulated fixed price future commitments, included in other current assets		31	$	(138	)		-	$	-

The margin account maintained with a broker to collateralize these derivative instruments carried an account balance of

$276

and

$2,660

at

September 30, 2018

and

December 31, 2017,

respectively, and was classified as other current assets in the consolidated balance sheets. The carrying values of the margin account and of the derivative instruments are included net, in other current assets.

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Note 5 - Marketable Securities

9 Months Ended

Sep. 30, 2018

Notes to Financial Statements

Cash, Cash Equivalents, and Marketable Securities [Text Block]

5  ) MARKETABLE SECURITIES  

At

September 30, 2018

and

December 31, 2017,

FutureFuel had investments in certain debt securities (trust preferred securities and exchange traded debt instruments) and in preferred stock and other equity instruments. These investments are classified as current assets in the consolidated balance sheets. FutureFuel has designated the debt securities as being available-for-sale. Accordingly, debt securities were recorded at fair value, with the unrealized gains and losses, net of taxes, reported as a component of stockholders’ equity in the year ended

December 31, 2017.

For the

three

and

nine

months ended,

September 30, 2018,

in accordance with ASC

321,

the change in the fair value of equity securities was reported as (losses)/gains on marketable securities as a component of net income.

FutureFuel’s available for sale debt securities were comprised of the following at

September 30, 2018

and

December 31, 2017: 

	September 30, 2018
	Adjusted Cost		Unrealized Gains		Unrealized Losses			Fair Value
Exchange traded debt	$	1,428	$	83	$	(11	)	$	1,500
Trust preferred		3,147		86		(1	)		3,232
Total debt securities	$	4,575	$	169	$	(12	)	$	4,732

	December 31, 2017
	Adjusted Cost		Unrealized Gains		Unrealized Losses		Fair Value
Exchange traded debt	$	1,702	$	158	$	-	$	1,860
Trust preferred		3,147		114		-		3,261
Total debt securities	$	4,849	$	272	$	-	$	5,121

The aggregate fair value of debt securities with unrealized losses totaled

$578

at

September 30, 2018,

and the aggregate fair value of debt and equity securities with unrealized losses totaled

$14,103

at

December 31, 2017.

As of

September 30, 2018,

FutureFuel had investments in debt securities with a total value of

$103

that were in an unrealized loss position for a greater than a

12

-month period. As of

December 31, 2017,

FutureFuel had investments in debt and equity securities with a total value of

$2,903

that were in an unrealized loss position for a greater than

12

-month period. The unrealized loss position for those securities was 

$4

and

$124,

respectively, at

September 30, 2018

and

December 31, 2017.  

Those loss positions represented a minimal reduction for the securities and are expected to fully recover given changes in market value.

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Note 6 - Accrued Expenses and Other Current Liabilities

9 Months Ended

Sep. 30, 2018

Notes to Financial Statements

Accounts Payable, Accrued Liabilities, and Other Liabilities Disclosure, Current [Text Block]

6  ) ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities, including those associated with related parties, consisted of the following at:   

	September 30, 2018		December 31, 2017
Accrued employee liabilities	$	5,859	$	976
Accrued property, franchise, motor fuel and other taxes		1,516		1,387
Other		478		105
Total	$	7,853	$	2,468

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Note 7 - Borrowings

9 Months Ended

Sep. 30, 2018

Notes to Financial Statements

Debt Disclosure [Text Block]

7  ) BORROWINGS

On

April 16, 2015,

FutureFuel, with FutureFuel Chemical as the borrower, and certain of FutureFuel’s other subsidiaries, as guarantors, entered into a

$150,000

secured and committed credit facility with the lenders party thereto, Regions Bank as administrative agent and collateral agent, and PNC Bank, N.A., as syndication agent. On

May 25, 2016,

FutureFuel increased the credit facility by

$15,000.

The credit facility consists of a

five

-year revolving credit facility in a dollar amount of up to

$165,000,

which includes a sublimit of

$30,000

for letters of credit and

$15,000

for swingline loans (collectively, the “Credit Facility”).

The interest rate floats at the following margins over LIBOR or base rate based upon the leverage ratio from time to time:

Consolidated Leverage Ratio			Adjusted LIBOR Rate Loans and Letter of Credit Fee		Base Rate Loans		Commitment Fee
< 1.00:1.0				1.25%		0.25%		0.15%
≥ 1.00:1.0	And	< 1.50:1.0		1.50%		0.50%		0.20%
≥ 1.50:1.0	And	< 2.00:1.0		1.75%		0.75%		0.25%
≥ 2.00:1.0	And	< 2.50:1.0		2.00%		1.00%		0.30%
≥ 2.50:1.0				2.25%		1.25%		0.35%

The terms of the Credit Facility contain certain covenants and conditions including a maximum consolidated leverage ratio, a minimum consolidated fixed charge coverage ratio, and a minimum liquidity requirement. FutureFuel was in compliance with such covenants as of

September 30, 2018.

There were

no

borrowings under this credit agreement at

September 30, 2018

or

December 31, 2017.

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Note 8 - Provision for Income Taxes

9 Months Ended

Sep. 30, 2018

Notes to Financial Statements

Income Tax Disclosure [Text Block]

8  ) PROVISION FOR INCOME TAXES  

The following table summarizes the provision for income taxes.

	Three months ended September 30,						Nine months ended September 30,
	2018			2017			2018			2017
Provision for income taxes	$	4,012		$	1,730		$	2,336		$	3,375
Effective tax rate		29.8	%		34.2	%		4.4	%		30.9	%

The effective tax rate for the

three

months ended

September 30, 2018

and

2017

reflects our expected tax rate on reported operating income before income tax. This

three

-month effective rate is expected to materially continue for the remainder of

2018

absent the effect of the subsequent event impact as noted below.

The effective tax rate for the

nine

months ended

September 30, 2018

reflects our expected tax rate on reported operating income before income tax including the positive effect of the retroactive reinstatement of the

2017

BTC and Small Agri-biodiesel Producer Tax Credit. Our effective tax rate in the

nine

months ended

September 30, 2017

does

not

reflect the BTC and Small Agri-biodiesel Producer Tax Credit recognized in

2018

because these credits and incentives were retroactively extended through

December 31, 2017

on

February 9, 2018.

This rate is

not

expected to continue for the remainder of

2018

as these credits only benefited the

three

months ended

March 31, 2018

and

nine

months ended

September 30, 2018.

Unrecognized tax benefits totaled

$0

at

September 30, 2018

and

December 31, 2017.

FutureFuel records interest and penalties, net, as a component of provision for income taxes. Interest and penalties amounted to

$81

for the

three

and

nine

months ended

September 30, 2018,

and

$29

and

$402,

for the

three

and

nine

months ended

September 30 2017,

respectively.

In a decision dated

November 1, 2018,

the United States Court of Appeals for the Federal Circuit affirmed a

November 22, 2016

decision of the Federal Court of Claims pertaining to the income tax treatment of the blenders’ fuel mixture credit.  Like the Federal Court of Claims before it, the Court of Appeals found that the mixture credit is a reduction in excise tax liability and, to the extent the mixture credit reduces excise tax liabilities, the mixture credit is a component of taxable income.

As a result of the

November 1, 2018

decision, FutureFuel is assessing whether the recorded benefits associated with the mixture credit should be re-measured in the period of the decision.  If FutureFuel determines that ASC

740,

Income Tax’s recognition threshold of more-likely-than-

not

is

no

longer met because of the decision, FutureFuel

may

recognize additional income tax expense ranging from approximately

$4,000

to

$4,500

in the

fourth

quarter.      

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Note 9 - Earnings Per Share

9 Months Ended

Sep. 30, 2018

Notes to Financial Statements

Earnings Per Share [Text Block]

9  ) EARNINGS PER SHARE

The Company computes earnings per share using the

two

-class method in accordance with ASC Topic

No.

260,

“

Earnings per Share

.” The

two

-class method is an allocation of earnings between the holders of common stock and a company’s participating security holders. Outstanding non-vested shares of restricted stock contain non-forfeitable rights to dividends and, therefore, are considered participating securities for purposes of computing earnings per share pursuant to the

two

-class method. The Company had

no

other participating securities at

September 30, 2018

or

2017.

Contingently issuable shares associated with outstanding service-based restricted stock units were

not

included in the earnings per share calculations for the

three

and

nine

-month periods ended

September 30, 2018

or

2017

as the vesting conditions had

not

been satisfied.

Basic and diluted earnings per common share were computed as follows: 

	Three months ended September 30,						Nine months ended September 30,
	2018			2017			2018			2017
Numerator:
Net income	$	9,445		$	3,334		$	51,322		$	7,564
Less: distributed earnings allocated to non-vested stock		-			-			-			-
Less: undistributed earnings allocated to non-vested restricted stock		(4	)		(3	)		(26	)		(15	)
Numerator for basic earnings per share	$	9,441		$	3,331		$	51,296		$	7,549
Effect of dilutive securities:
Add: undistributed earnings allocated to non-vested restricted stock		4			3			26			15
Less: undistributed earnings reallocated to non-vested restricted stock		(4	)		(3	)		(26	)		(15	)
Numerator for diluted earnings per share	$	9,441		$	3,331		$	51,296		$	7,549
Denominator:
Weighted average shares outstanding – basic		43,724,195			43,705,234			43,719,215			43,662,672
Effect of dilutive securities:
Stock options and other awards		8,725			9,519			6,155			8,748
Weighted average shares outstanding – diluted		43,732,920			43,714,753			43,725,370			43,671,420
Basic earnings per share	$	0.22		$	0.08		$	1.17		$	0.17
Diluted earnings per share	$	0.22		$	0.08		$	1.17		$	0.17

Certain options to purchase FutureFuel’s common stock were

not

included in the computation of diluted earnings per share for the

three

and

nine

months ended 

September 30, 2018

and

2017

 because they were anti-dilutive in the periods. The weighted average number of options excluded on this basis was

0

and

20,000

for the

three

-months and

nine

-months ended

September 30, 2018,

respectively.  The weighted average number of options excluded on this basis was

0

and

10,000

for the

three

-months and

nine

-months ended

September 30, 2017,

respectively. 

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Note 10 - Segment Information

9 Months Ended

Sep. 30, 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 Renewable Identification Numbers (“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 control and title passing at the time of shipment from the Batesville Plant, although some sales are transacted with control and 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 September 30,				Nine months ended September 30,
	2018		2017		2018		2017
United States	$	81,152	$	76,711	$	223,943	$	197,044
All Foreign Countries		270		895		1,562		2,721
Total	$	81,422	$	77,606	$	225,505	$	199,765

Revenues from a single foreign country during the 

three

and

nine

months ended

September 30, 2018

and

2017

did

not

exceed

1%

of total revenues.    

Summary of

business

by

segment

	Three months ended September 30,						Nine months ended September 30,
	2018			2017			2018			2017
Revenue
Custom chemicals	$	23,973		$	23,593		$	74,465		$	65,189
Performance chemicals		4,049			4,574			14,165			12,686
Chemicals revenue		28,022			28,167			88,630			77,875
Biofuels revenue		53,400			49,439			136,875			121,890
Total Revenue	$	81,422		$	77,606		$	225,505		$	199,765
Segment gross profit/(loss)
Chemicals	$	8,898		$	8,060		$	24,470		$	20,401
Biofuels		3,755			(2,534	)		33,961			(6,947	)
Total gross profit		12,653			5,526			58,431			13,454
Corporate expenses		(2,424	)		(2,326	)		(7,795	)		(7,405	)
Income before interest and taxes		10,229			3,200			50,636			6,049
Interest and other income		3,358			1,965			6,688			5,679
Interest and other expense		(130	)		(101	)		(3,666	)		(789	)
Provision for income taxes		(4,012	)		(1,730	)		(2,336	)		(3,375	)
Net income	$	9,445		$	3,334		$	51,322		$	7,564

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.

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Note 11 - Fair Value Measurements

9 Months Ended

Sep. 30, 2018

Notes to Financial Statements

Fair Value Disclosures [Text Block]

1 1   )  FAIR VALUE MEASUREMENTS

Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. Fair value accounting pronouncements also include a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability developed based on market data obtained from sources independent of FutureFuel. Unobservable inputs are inputs that reflect FutureFuel’s assumptions about the factors market participants would use in valuing the asset or liability developed based upon the best information available in the circumstances. The hierarchy is broken down into

three

levels. Level

1

inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level

2

inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are

not

active, and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly. Level

3

inputs are unobservable inputs for the asset or liability. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The following tables provide information by level for assets and liabilities that are measured at fair value, on a recurring basis, at

September 30, 2018

and

December 31, 2017.

	Asset (Liability)
				Fair Value Measurements Using
	Fair Value at			Inputs Considered as:
Description	September 30, 2018			Level 1			Level 2		Level 3
Derivative instruments	$	(138	)	$	(138	)	$	-	$	-
Preferred stock, and other equity instruments	$	98,370		$	98,370		$	-	$	-
Trust preferred and exchange traded debt instruments	$	4,732		$	4,732		$	-	$	-

	Asset (Liability)
				Fair Value Measurements Using
	Fair Value at			Inputs Considered as:
Description	December 31, 2017			Level 1			Level 2		Level 3
Derivative instruments	$	(2,428	)	$	(2,428	)	$	-	$	-
Preferred stock, and other equity instruments	$	115,578		$	115,578		$	-	$	-
Trust preferred and exchange traded debt instruments	$	5,121		$	5,121		$	-	$	-

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Note 12 - Reclassifications From Accumulated Other Comprehensive Income

9 Months Ended

Sep. 30, 2018

Notes to Financial Statements

Comprehensive Income (Loss) Note [Text Block]

1 2   ) RECLASSIFICATIONS FROM ACCUMULATED OTHER COMPREHENSIVE INCOME:

The following tables summarize changes in accumulated other comprehensive income from unrealized gains and losses on available-for-sale securities in the

three

and

nine

months ended 

September 30, 2018

and

2017.

 

Changes in Accumulated Other Comprehensive Income From Unrealized

Gains and Losses on Available-for-Sale Securities

For the

three

months ended

September 30, 2018

and

2017

(net of tax)

	2018			2017
Balance at July 1	$	145		$	7,499
Other comprehensive income before reclassifications		(21	)		670
Amounts reclassified from accumulated other comprehensive income		-			(17	)
Net current-period other comprehensive income		(21	)		653
Balance at September 30	$	124		$	8,152

Changes in Accumulated Other Comprehensive Income From Unrealized

Gains and Losses on Available-for-Sale Securities

For the

nine

months ended

September 30, 2018

and

2017

(net of tax)

	2018			2017
Balance at January 1 [1]	$	160		$	3,540
Other comprehensive income before reclassifications		(36	)		4,259
Amounts reclassified from accumulated other comprehensive income		-			353
Net current-period other comprehensive income		(36	)		4,612
Balance at September 30	$	124		$	8,152

[1]

The beginning balance for

2018

was decreased

$8,273

to reflect the impact of the adoption of ASU

2016

-

01.

See Note

18

for additional information.

The following tables summarize amounts reclassified from accumulated other comprehensive income in the

three

and

nine

months ended

September 30, 2018

and

2017:

 

Reclassifications from Accumulated Other

Comprehensive Income for the

three

and

nine

months ended

September

30,

2018

and

2017

	Three months ended September 30,
	2018		2017			Affected Line Item in Statement of Operations
Unrealized gains on available-for-sale debt securities	$	-	$	26		Gain/(loss) on marketable securities
Total before tax		-		26
Tax provision		-		(9	)
Total reclassifications	$	-	$	17

	Nine months ended September 30,
	2018		2017			Affected Line Item in Statement of Operations
Unrealized losses on available-for-sale debt securities	$	-	$	(543	)	Gain/(loss) on marketable securities
Total before tax		-		(543	)
Tax benefit		-		190
Total reclassifications	$	-	$	(353	)

*Effective

January 1, 2018,

FutureFuel’s unrealized gains/(losses) on available-for-sale securities includes debt securities only in accordance with ASC

320

and ASC

321.

 The prior year was

not

restated under the modified retrospective approach in adoption of ASC

321.

Please see Note

18

for further details on the adoption of this standard.

XML

Note 13 - Legal Matters

9 Months Ended

Sep. 30, 2018

Notes to Financial Statements

Legal Matters and Contingencies [Text Block]

13   )  LEGAL MATTERS

From time to time, FutureFuel and its operations are parties to, or targets of, lawsuits, claims, investigations, regulatory matters, and proceedings, which are being handled and defended in the ordinary course of business. While FutureFuel is unable to predict the outcomes of these matters, it does

not

believe, based upon currently available facts, that the ultimate resolution of any such pending matters will have a material adverse effect on its overall financial condition, results of operations, or cash flows.

XML

Note 14 - Related Party Transactions

9 Months Ended

Sep. 30, 2018

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

14   )  RELATED PARTY TRANSACTIONS

FutureFuel enters into transactions with companies affiliated with or controlled by a director and significant shareholder. Revenues, expenses, prepaid amounts, and unpaid amounts related to these transactions are captured in the accompanying consolidated financial statements as related party line items.

Related party revenues are the result of sales of biodiesel, petrodiesel, blends, other petroleum products, and other similar or related products to these related parties.  

Related party cost of goods sold and distribution are the result of sales of biodiesel, petrodiesel, blends, and other petroleum products to these related parties along with the associated expense from the purchase of natural gas, storage and terminalling services, and income tax and consulting services by FutureFuel from these related parties.

Notes

to

Consolidated

Financial

Statements

of

FutureFuel

Corp.

(Dollars

in

thousands,

except

per

share

amounts)

(Unaudited)

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Note 15 - Intangible Asset

9 Months Ended

Sep. 30, 2018

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

15   )  INTANGIBLE ASSET

In

April

of

2015,

FutureFuel acquired additional historical line space on a pipeline for

$1,408.

The acquired line space was recorded as an intangible asset with an indefinite life as there was

no

foreseeable limit on the time period over which it is expected to contribute to cash flows. The carrying value of the asset was

$1,408

as of

September 30, 2018

and

December 31, 2017.

FutureFuel tests the intangible asset for impairment in accordance with ASC

350

-

30

-

35

-

18

through

35

-

20.

 

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Note 16 - Recently Issued Accounting Statements

9 Months Ended

Sep. 30, 2018

Notes to Financial Statements

Description of New Accounting Pronouncements Not yet Adopted [Text Block]

  16   )  RECENTLY ISSUED ACCOUNTING STATEMENTS

The following table provides a brief description of recent Accounting Standard Updates ("ASU") issued by the FASB:
Standard	Description	Effective Date	Effect on the Financial Statements or Other Significant Matters
In February 2016, the FASB issued ASU 2016 - 02, Leases. In July 2018, the FASB issued ASU 2018 - 11, Leases – Targeted Improvements	The new guidance supersedes the lease guidance under FASB ASC Topic 840, Leases, resulting in the creation of FASB ASC Topic 842, Leases. The guidance requires a lessee to recognize in the statement of financial position a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term for both finance and operating leases. The targeted improvements provide entities with an additional (and optional) transition method to adopt the new leases standard.	Annual periods beginning after December 15, 2018. Early adoption is permitted.	The Company is currently evaluating its population of leases, and is continuing to assess all potential impacts of the standard, but currently believes the most significant impact relates to its accounting for logistics equipment. The Company anticipates recognition of additional assets and corresponding liabilities related to leases upon adoption. The Company plans to adopt the standard effective January 1, 2019.
In February 2018, the FASB issued ASU 2018 - 02, Income Statement-Reporting Comprehensive Income.	The amendments in this Update allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act passed by congress on December 22, 2017 and certain disclosures related to those stranded tax effects.	Annual periods beginning after December 15, 2018. Early adoption is permitted.	The Company is currently evaluating the impact of this standard. The Company plans to adopt the standard on January 1, 2019.
In June 2018, the FASB issued ASU 2018 - 07,  Improvements to Nonemployee Share-Based Payment Accounting.	This Update is part of the FASB Simplification Initiative. Under the new standard, Topic 718 is expanded to include the nonemployee share-based payments. As a result, companies will no longer be required to value non-employee awards differently from employee awards. This means that companies will value all equity classified awards at their grant-date under ASC Topic 718 and forgo revaluing the award after that date as currently required under Subtopic 505 - 50.	Annual periods beginning after December 15, 2018. Early adoption is permitted.	The Company believes the adoption of the standard will have minimal impact on our financial statements. The Company plans to adopt the standard effective January 1, 2019.

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Note 17 - Revenue Recognition

9 Months Ended

Sep. 30, 2018

Notes to Financial Statements

Revenue from Contract with Customer [Text Block]

17 ) R EVENUE RECOGNITION

On

January 1, 2018,

FutureFuel adopted ASU

2014

-

09

Revenue Recognition and related subsequently issued ASU’s (“Topic

606”

). Under this standard, FutureFuel recognizes revenue when performance obligations of the sale are satisfied. FutureFuel sells to customers through master sales agreements or standalone purchase orders. The majority of FutureFuel's terms of sale have a single performance obligation to transfer products. Accordingly, FutureFuel recognizes revenue when control has been transferred to the customer, generally at the time of shipment or delivery of products. Under the previous revenue recognition accounting standard (“Topic

605”

), FutureFuel recognized revenue upon the transfer of title and risk of loss, generally upon shipment or delivery of goods, although some revenue was recognized on a bill and hold basis.

A select number of FutureFuel custom chemical contracts within the chemical segment contain a material right as defined by Topic

606

as a result of upfront payments provided by customers. Each contract also has a performance obligation to transfer products with

30

-day payment terms. FutureFuel recognizes revenue when the customer takes control of the inventory, either upon shipment or when the material is made available for pickup. FutureFuel has applied the renewal option approach in allocating the transaction price to these material rights and transfer of product. As a basis for allocating the transaction price to the material right and transfer of product, FutureFuel estimated the expected life of the product, the expected contractual volumes to be sold over that life, and the most likely expected sales price. Each estimate will be updated quarterly on a prospective basis. In applying the cumulative effect of Topic

606

as of

January 1, 2018,

FutureFuel recorded a gross reduction to opening retained earnings of

$6,900

and a net of tax reduction of

$5,178.

Additionally, the adoption of Topic

606

resulted in

one

contract recognizing revenue on a bill and hold basis, whereas under Topic

605

it was recognized at point of shipment. The adoption of Topic

606

also increased short term deferred revenue

$3,251

and long term deferred revenue

$3,293

and reduced inventory

$356

as of

January 1, 2018.

The majority of our revenue is from short term contracts with revenue recognized when a single performance obligation to transfer product under the terms of a contract with a customer are satisfied. Accordingly, FutureFuel recognizes revenue when control is transferred to the customer, which is when products are considered to meet customer specification and title and risk of loss are transferred. This typically occurs at the time of shipment or delivery, however, for certain contracts, this occurs upon delivery of the material to a FutureFuel storage location, ready for customer pickup and separated from other FutureFuel inventory. Revenue is measured as the amount of consideration FutureFuel expects to receive in exchange for transferring products and is generally based upon a negotiated price. FutureFuel sells its products directly to customers generally under agreements with payment terms of

30

to

75

days for chemical segment customers and

3

to

10

days for biofuel segment customers. For these short-term contracts, there was

no

material change in recognizing revenue under Topic

606

and Topic

605.

Contract Assets and Liabilities:

Contract assets consist of unbilled amounts typically resulting from revenue recognized through bill and hold arrangements. The contract assets are recorded as accounts receivable on the consolidated balance sheet. Contract liabilities consist of advance payments related to material rights. These amounts were historically recorded as deferred revenue which primarily related to upfront capital payments. The contract liabilities are recorded as deferred revenue in the consolidated balance sheets and are reduced as FutureFuel transfers product to the customer under the renewal option approach.

These contract assets and liabilities are reported on the consolidated balance sheets on a contract-by-contract basis at the end of each reporting period.

The following table reflects the changes in FutureFuel’s contract assets and contract liabilities for the

three

and

nine

months ended

September 30, 2018.

There were

no

contract assets recognized under Topic

605:

Contract assets - short-term

(included in accounts receivable)

	Three months ended September 30, 2018
Beginning balance at June 30, 2018	$	1,110
Additions		656
Reductions		(1,110	)
Ending balance at September 30, 2018	$	656

	Nine months ended September 30, 2018
Beginning balance at January 1, 2018	$	505
Additions		2,417
Reductions		(2,266	)
Ending balance at September 30, 2018	$	656

	As Reported			Under Prior Standard
Contract Liabilities	Topic 606			Topic 605			Change
Beginning balance at July 1, 2018	$	18,155		$	13,098		$	5,057
Additions		474			310			164
Revenue recognized for the three months ended September 30, 2018		(1,486	)		(965	)		(521	)
Ending balance at September 30, 2018	$	17,143		$	12,443		$	4,700
Beginning balance at January 1, 2018	$	21,013		$	14,469		$	6,544
Additions		932			768			164
Revenue recognized for the nine months ended September 30, 2018		(4,802	)		(2,794	)		(2,008	)
Ending balance at September 30, 2018	$	17,143		$	12,443		$	4,700

Transaction price allocated to the remaining performance obligations

As of

September 30, 2018,

approximately

$17,143

of revenue is expected to be recognized from remaining performance obligations. FutureFuel expects to recognize this revenue ratably over expected sales over the expected term of its long-term contracts which range from

one

to

five

years. Approximately

40%

of this revenue is expected to be recognized over the next

12

months, and

60%

is expected to be recognized between

one

and

5

years. These amounts are subject to change based upon changes in the estimated contract life and estimated quantities to be sold over the contract life.

We applied the practical expedient in ASC

606

-

10

-

50

-

14

and have excluded the value of unsatisfied performance obligations for (i) contracts with an original expected length of

one

year or less; and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed.

Disaggregation

of revenue – contractual and non-contractual

	Three months ended September 30,				Nine months ended September 30,
	2018		2017 (a)		2018			2017 (a)
Contract revenue from customers with > 1 year arrangements	$	14,587	$	14,779	$	47,745		$	40,706
Contract revenue from customers with < 1 year arrangement		66,780		62,772		191,194			158,894
Revenue from non-contractual arrangements		55		55		165			165
BTC rebate		-		-		(13,599	)		-
Total revenue	$	81,422	$	77,606	$	225,505		$	199,765

Timing of revenue

	Three months ended September 30,				Nine months ended September 30,
	2018		2017 (a)		2018		2017 (a)
Bill and hold revenue	$	11,576	$	4,519	$	32,470	$	12,477
Non-bill and hold revenue		69,846		73,087		193,035		187,288
Total revenue	$	81,422	$	77,606	$	225,505	$	199,765

(a) Prior periods have not been adjusted under the modified retrospective method for Topic 606.

For both long term and short-term contracts, FutureFuel has elected to account for shipping and handling as activities to fulfill the promise to transfer the good. As such, shipping and handling fees billed to customers in a sales transaction are recorded in net sales and shipping and handling costs incurred are recorded in cost of goods sold and distribution. FutureFuel has elected to exclude from net sales any taxes which it collects concurrent with revenue-producing activities. These accounting policy elections are consistent with the manner in which FutureFuel historically recorded shipping and handling fees and taxes.

The following table summarizes the impacts of Topic

606

adoption on the Company’s consolidated statement of operations and comprehensive income for the

three

and

nine

months ended

September 30, 2018.

	Three months ended September 30, 2018
	Balances Prior to Adoption of Topic 606		Adjustments			As Reported
Revenue	$	80,521	$	67		$	80,588
Cost of goods sold		61,879		(320	)		61,559
Gross profit		12,266		387			12,653
Income from operations		9,842		387			10,229
Income before income taxes		13,070		387			13,457
Provision for income taxes		3,915		97			4,012
Net income	$	9,155	$	290		$	9,445
Basic earnings per share	$	0.21	$	0.01		$	0.22
Diluted earnings per share	$	0.21	$	0.01		$	0.22
Comprehensive income	$	9,134	$	290		$	9,424

	Nine months ended September 30, 2018
	Balances Prior to Adoption of Topic 606		Adjustments		As Reported
Revenue	$	220,520	$	2,664	$	223,184
Cost of goods sold		146,823		93		146,916
Gross profit		55,860		2,571		58,431
Income from operations		48,065		2,571		50,636
Income before income taxes		51,087		2,571		53,658
Provision for income taxes		1,750		586		2,336
Net income	$	49,337	$	1,985	$	51,322
Basic earnings per share	$	1.13	$	0.04	$	1.17
Diluted earnings per share	$	1.13	$	0.04	$	1.17
Comprehensive income	$	49,301	$	1,985	$	51,286

The following table summarizes the impacts of Topic

606

adoption on the Company’s consolidated balance sheet which has been adjusted for the adoption of Topic

606

as of

September 30, 2018.

	Balances Prior to Adoption of Topic 606		Adjustments			As Re ported
Accounts receivable	$	18,286	$	656		$	18,942
Inventory		48,453		(448	)		48,005
Income tax receivable		519		(40	)		479
Total current assets		373,558		168			373,726
Total assets		483,037		168			483,205
Accounts payable		31,578		(164	)		31,414
Deferred revenue - short term		2,690		4,424			7,114
Total current liabilities		47,879		4,260			52,139
Deferred revenue - long term		14,375		276			14,651
Noncurrent deferred income tax liability		18,605		(1,175	)		17,430
Total noncurrent liabilities		34,117		(899	)		33,218
Total liabilities		81,996		3,361			85,357
Retained earnings		118,804		(3,193	)		115,611
Total stockholders' equity		401,041		(3,193	)		397,848
Total liabilities and stockholders' equity	$	483,037	$	168		$	483,205

The following table summarizes the impacts of our adoption of Topic

606

on the Company’s consolidated statement of cash flows for the

nine

months ended

September 30, 2018:

	Balances Prior to
	Adoption of						As Reported
	Topic 606			Adjustments			or Restated
Change in net income	$	49,337		$	1,985		$	51,322
Benefit for deferred income taxes		(2,434	)		(1,175	)		(3,609	)
Changes in operating assets and liabilities:
Accounts receivables		3,687			(656	)		3,031
Inventory		(4,699	)		448			(4,251	)
Income tax receivable		6,418			40			6,458
Accounts payable		13,182			(164	)		13,018
Deferred revenue		(2,194	)		(478	)		(2,672	)
Net cash provided by operating activities	$	79,169		$	-		$	79,169

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Note 18 - Change in Accounting Principle

9 Months Ended

Sep. 30, 2018

Notes to Financial Statements

Accounting Changes and Error Corrections [Text Block]

1 8 ) CHANGE IN ACCOUNTING PRINCIPLE

In

January 2016,

the FASB issued ASU

2016

-

01,

Financial Instruments - Overall (Subtopic

825

-

10

): Recognition and Measurement of Financial Assets and Financial Liabilities. One provision of this update requires that equity investments, except those accounted for under the equity method or resulting in consolidation, be measured at fair value and changes in fair value recognized in net income. The provisions of this update are recognized as a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. For public entities, this guidance was effective for years beginning after

December 15, 2017,

including interim periods within those years.

The new accounting standard related to the recognition and measurement of financial assets and liabilities makes the following changes to prior guidance and requires:

● certain equity investments to be measured at fair value with changes in fair value now recognized in net income. However, equity investments that do not have readily determinable fair values may be measured at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer;

● a qualitative assessment of equity investments without readily determinable fair values to identify impairment; and

● separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or in the accompanying notes to the financial statements.

We adopted the new accounting standard utilizing the modified retrospective method, and, therefore,

no

adjustments were made to amounts in our prior period financial statements. We recorded the cumulative effect of adopting the standard as an adjustment to increase the opening balance of retained earnings by 

$13,139

 on a pre-tax basis (

$8,273

 after-tax) related to the net impact of unrealized gains and losses primarily on equity securities and preferred stock.

	Three months ended September 30,				Nine months ended September 30,
	2018			2017*		2018			2017*
Net gains/(losses) recognized on equity securities	$	815	$	26	$	(3,273	)	$	(543	)
Less: net gains/(losses) recognized during the period on equity securities sold during the period		-		26		2,324			(543	)
Unrealized gains/(losses) during the reporting period on equity securities held at the reporting date	$	815	$	-	$	(5,597	)	$	-

*Prior periods have

not

been adjusted under the modified retrospective method for Topic

321.

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Note 3 - Inventory (Tables)

9 Months Ended

Sep. 30, 2018

Notes Tables

Schedule of Inventory, Current [Table Text Block]

	September 30, 2018			December 31, 2017
At average cost (approximates current cost)
Finished goods	$	18,668		$	22,998
Work in process		1,858			1,735
Raw materials and supplies		38,221			27,143
		58,747			51,876
LIFO reserve		(10,742	)		(8,122	)
Total inventory	$	48,005		$	43,754

XML

Note 4 - Derivative Instruments (Tables)

9 Months Ended

Sep. 30, 2018

Notes Tables

Schedule of Derivative Instruments [Table Text Block]

	September 30, 2018					December 31, 2017
	Contract quantity Short		Fair Value			Contract quantity Short		Fair Value
Regulated options, included in other current assets		-	$	-			200	$	(2,428	)
Regulated fixed price future commitments, included in other current assets		31	$	(138	)		-	$	-

XML

Note 5 - Marketable Securities (Tables)

9 Months Ended

Sep. 30, 2018

Notes Tables

Marketable Securities [Table Text Block]

	September 30, 2018
	Adjusted Cost		Unrealized Gains		Unrealized Losses			Fair Value
Exchange traded debt	$	1,428	$	83	$	(11	)	$	1,500
Trust preferred		3,147		86		(1	)		3,232
Total debt securities	$	4,575	$	169	$	(12	)	$	4,732

	December 31, 2017
	Adjusted Cost		Unrealized Gains		Unrealized Losses		Fair Value
Exchange traded debt	$	1,702	$	158	$	-	$	1,860
Trust preferred		3,147		114		-		3,261
Total debt securities	$	4,849	$	272	$	-	$	5,121

XML

Note 6 - Accrued Expenses and Other Current Liabilities (Tables)

9 Months Ended

Sep. 30, 2018

Notes Tables

Schedule of Accrued Liabilities [Table Text Block]

	September 30, 2018		December 31, 2017
Accrued employee liabilities	$	5,859	$	976
Accrued property, franchise, motor fuel and other taxes		1,516		1,387
Other		478		105
Total	$	7,853	$	2,468

XML

Note 7 - Borrowings (Tables)

9 Months Ended

Sep. 30, 2018

Notes Tables

Schedule of Long-term Debt Instruments [Table Text Block]

Consolidated Leverage Ratio			Adjusted LIBOR Rate Loans and Letter of Credit Fee		Base Rate Loans		Commitment Fee
< 1.00:1.0				1.25%		0.25%		0.15%
≥ 1.00:1.0	And	< 1.50:1.0		1.50%		0.50%		0.20%
≥ 1.50:1.0	And	< 2.00:1.0		1.75%		0.75%		0.25%
≥ 2.00:1.0	And	< 2.50:1.0		2.00%		1.00%		0.30%
≥ 2.50:1.0				2.25%		1.25%		0.35%

XML

Note 8 - Provision for Income Taxes (Tables)

9 Months Ended

Sep. 30, 2018

Notes Tables

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

	Three months ended September 30,						Nine months ended September 30,
	2018			2017			2018			2017
Provision for income taxes	$	4,012		$	1,730		$	2,336		$	3,375
Effective tax rate		29.8	%		34.2	%		4.4	%		30.9	%

XML

Note 9 - Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2018

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three months ended September 30,						Nine months ended September 30,
	2018			2017			2018			2017
Numerator:
Net income	$	9,445		$	3,334		$	51,322		$	7,564
Less: distributed earnings allocated to non-vested stock		-			-			-			-
Less: undistributed earnings allocated to non-vested restricted stock		(4	)		(3	)		(26	)		(15	)
Numerator for basic earnings per share	$	9,441		$	3,331		$	51,296		$	7,549
Effect of dilutive securities:
Add: undistributed earnings allocated to non-vested restricted stock		4			3			26			15
Less: undistributed earnings reallocated to non-vested restricted stock		(4	)		(3	)		(26	)		(15	)
Numerator for diluted earnings per share	$	9,441		$	3,331		$	51,296		$	7,549
Denominator:
Weighted average shares outstanding – basic		43,724,195			43,705,234			43,719,215			43,662,672
Effect of dilutive securities:
Stock options and other awards		8,725			9,519			6,155			8,748
Weighted average shares outstanding – diluted		43,732,920			43,714,753			43,725,370			43,671,420
Basic earnings per share	$	0.22		$	0.08		$	1.17		$	0.17
Diluted earnings per share	$	0.22		$	0.08		$	1.17		$	0.17

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Note 10 - Segment Information (Tables)

9 Months Ended

Sep. 30, 2018

Notes Tables

Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area [Table Text Block]

	Three months ended September 30,				Nine months ended September 30,
	2018		2017		2018		2017
United States	$	81,152	$	76,711	$	223,943	$	197,044
All Foreign Countries		270		895		1,562		2,721
Total	$	81,422	$	77,606	$	225,505	$	199,765

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	Three months ended September 30,						Nine months ended September 30,
	2018			2017			2018			2017
Revenue
Custom chemicals	$	23,973		$	23,593		$	74,465		$	65,189
Performance chemicals		4,049			4,574			14,165			12,686
Chemicals revenue		28,022			28,167			88,630			77,875
Biofuels revenue		53,400			49,439			136,875			121,890
Total Revenue	$	81,422		$	77,606		$	225,505		$	199,765
Segment gross profit/(loss)
Chemicals	$	8,898		$	8,060		$	24,470		$	20,401
Biofuels		3,755			(2,534	)		33,961			(6,947	)
Total gross profit		12,653			5,526			58,431			13,454
Corporate expenses		(2,424	)		(2,326	)		(7,795	)		(7,405	)
Income before interest and taxes		10,229			3,200			50,636			6,049
Interest and other income		3,358			1,965			6,688			5,679
Interest and other expense		(130	)		(101	)		(3,666	)		(789	)
Provision for income taxes		(4,012	)		(1,730	)		(2,336	)		(3,375	)
Net income	$	9,445		$	3,334		$	51,322		$	7,564

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Note 11 - Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2018

Notes Tables

Fair Value, Assets Measured on Recurring Basis [Table Text Block]

	Asset (Liability)
				Fair Value Measurements Using
	Fair Value at			Inputs Considered as:
Description	September 30, 2018			Level 1			Level 2		Level 3
Derivative instruments	$	(138	)	$	(138	)	$	-	$	-
Preferred stock, and other equity instruments	$	98,370		$	98,370		$	-	$	-
Trust preferred and exchange traded debt instruments	$	4,732		$	4,732		$	-	$	-

	Asset (Liability)
				Fair Value Measurements Using
	Fair Value at			Inputs Considered as:
Description	December 31, 2017			Level 1			Level 2		Level 3
Derivative instruments	$	(2,428	)	$	(2,428	)	$	-	$	-
Preferred stock, and other equity instruments	$	115,578		$	115,578		$	-	$	-
Trust preferred and exchange traded debt instruments	$	5,121		$	5,121		$	-	$	-

XML

Note 12 - Reclassifications From Accumulated Other Comprehensive Income (Tables)

9 Months Ended

Sep. 30, 2018

Notes Tables

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

	2018			2017
Balance at July 1	$	145		$	7,499
Other comprehensive income before reclassifications		(21	)		670
Amounts reclassified from accumulated other comprehensive income		-			(17	)
Net current-period other comprehensive income		(21	)		653
Balance at September 30	$	124		$	8,152

	2018			2017
Balance at January 1 [1]	$	160		$	3,540
Other comprehensive income before reclassifications		(36	)		4,259
Amounts reclassified from accumulated other comprehensive income		-			353
Net current-period other comprehensive income		(36	)		4,612
Balance at September 30	$	124		$	8,152

Reclassification out of Accumulated Other Comprehensive Income [Table Text Block]

	Three months ended September 30,
	2018		2017			Affected Line Item in Statement of Operations
Unrealized gains on available-for-sale debt securities	$	-	$	26		Gain/(loss) on marketable securities
Total before tax		-		26
Tax provision		-		(9	)
Total reclassifications	$	-	$	17

	Nine months ended September 30,
	2018		2017			Affected Line Item in Statement of Operations
Unrealized losses on available-for-sale debt securities	$	-	$	(543	)	Gain/(loss) on marketable securities
Total before tax		-		(543	)
Tax benefit		-		190
Total reclassifications	$	-	$	(353	)

XML

Note 17 - Revenue Recognition (Tables)

9 Months Ended

Sep. 30, 2018

Notes Tables

Contract with Customer, Asset and Liability [Table Text Block]

	Three months ended September 30, 2018
Beginning balance at June 30, 2018	$	1,110
Additions		656
Reductions		(1,110	)
Ending balance at September 30, 2018	$	656

	Nine months ended September 30, 2018
Beginning balance at January 1, 2018	$	505
Additions		2,417
Reductions		(2,266	)
Ending balance at September 30, 2018	$	656

	As Reported			Under Prior Standard
Contract Liabilities	Topic 606			Topic 605			Change
Beginning balance at July 1, 2018	$	18,155		$	13,098		$	5,057
Additions		474			310			164
Revenue recognized for the three months ended September 30, 2018		(1,486	)		(965	)		(521	)
Ending balance at September 30, 2018	$	17,143		$	12,443		$	4,700
Beginning balance at January 1, 2018	$	21,013		$	14,469		$	6,544
Additions		932			768			164
Revenue recognized for the nine months ended September 30, 2018		(4,802	)		(2,794	)		(2,008	)
Ending balance at September 30, 2018	$	17,143		$	12,443		$	4,700

Disaggregation of Revenue [Table Text Block]

	Three months ended September 30,				Nine months ended September 30,
	2018		2017 (a)		2018			2017 (a)
Contract revenue from customers with > 1 year arrangements	$	14,587	$	14,779	$	47,745		$	40,706
Contract revenue from customers with < 1 year arrangement		66,780		62,772		191,194			158,894
Revenue from non-contractual arrangements		55		55		165			165
BTC rebate		-		-		(13,599	)		-
Total revenue	$	81,422	$	77,606	$	225,505		$	199,765

	Three months ended September 30,				Nine months ended September 30,
	2018		2017 (a)		2018		2017 (a)
Bill and hold revenue	$	11,576	$	4,519	$	32,470	$	12,477
Non-bill and hold revenue		69,846		73,087		193,035		187,288
Total revenue	$	81,422	$	77,606	$	225,505	$	199,765

Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block]

	Three months ended September 30, 2018
	Balances Prior to Adoption of Topic 606		Adjustments			As Reported
Revenue	$	80,521	$	67		$	80,588
Cost of goods sold		61,879		(320	)		61,559
Gross profit		12,266		387			12,653
Income from operations		9,842		387			10,229
Income before income taxes		13,070		387			13,457
Provision for income taxes		3,915		97			4,012
Net income	$	9,155	$	290		$	9,445
Basic earnings per share	$	0.21	$	0.01		$	0.22
Diluted earnings per share	$	0.21	$	0.01		$	0.22
Comprehensive income	$	9,134	$	290		$	9,424

	Nine months ended September 30, 2018
	Balances Prior to Adoption of Topic 606		Adjustments		As Reported
Revenue	$	220,520	$	2,664	$	223,184
Cost of goods sold		146,823		93		146,916
Gross profit		55,860		2,571		58,431
Income from operations		48,065		2,571		50,636
Income before income taxes		51,087		2,571		53,658
Provision for income taxes		1,750		586		2,336
Net income	$	49,337	$	1,985	$	51,322
Basic earnings per share	$	1.13	$	0.04	$	1.17
Diluted earnings per share	$	1.13	$	0.04	$	1.17
Comprehensive income	$	49,301	$	1,985	$	51,286

	Balances Prior to Adoption of Topic 606		Adjustments			As Re ported
Accounts receivable	$	18,286	$	656		$	18,942
Inventory		48,453		(448	)		48,005
Income tax receivable		519		(40	)		479
Total current assets		373,558		168			373,726
Total assets		483,037		168			483,205
Accounts payable		31,578		(164	)		31,414
Deferred revenue - short term		2,690		4,424			7,114
Total current liabilities		47,879		4,260			52,139
Deferred revenue - long term		14,375		276			14,651
Noncurrent deferred income tax liability		18,605		(1,175	)		17,430
Total noncurrent liabilities		34,117		(899	)		33,218
Total liabilities		81,996		3,361			85,357
Retained earnings		118,804		(3,193	)		115,611
Total stockholders' equity		401,041		(3,193	)		397,848
Total liabilities and stockholders' equity	$	483,037	$	168		$	483,205

	Balances Prior to
	Adoption of						As Reported
	Topic 606			Adjustments			or Restated
Change in net income	$	49,337		$	1,985		$	51,322
Benefit for deferred income taxes		(2,434	)		(1,175	)		(3,609	)
Changes in operating assets and liabilities:
Accounts receivables		3,687			(656	)		3,031
Inventory		(4,699	)		448			(4,251	)
Income tax receivable		6,418			40			6,458
Accounts payable		13,182			(164	)		13,018
Deferred revenue		(2,194	)		(478	)		(2,672	)
Net cash provided by operating activities	$	79,169		$	-		$	79,169

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Note 18 - Change in Accounting Principle (Tables)

9 Months Ended

Sep. 30, 2018

Notes Tables

Gain (Loss) on Securities [Table Text Block]

	Three months ended September 30,				Nine months ended September 30,
	2018			2017*		2018			2017*
Net gains/(losses) recognized on equity securities	$	815	$	26	$	(3,273	)	$	(543	)
Less: net gains/(losses) recognized during the period on equity securities sold during the period		-		26		2,324			(543	)
Unrealized gains/(losses) during the reporting period on equity securities held at the reporting date	$	815	$	-	$	(5,597	)	$	-

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Note 1 - Nature of Operations and Basis of Presentation (Details Textual)	9 Months Ended
	Sep. 30, 2018 a
Number of Operating Segments	2
Batesville, Arkansas [Member]
Area of Land	2,200

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Note 2 - Reinstatement of the Biodiesel Blenders' Tax Credit and Small Agri-biodiesel Producer Tax Credit (Details Textual) $ in Thousands, gal in Millions	9 Months Ended	12 Months Ended
	Sep. 30, 2018 USD ($)	Dec. 31, 2017 $ / item gal
Biodiesel Blenders Credit [Member]
Benefit From Tax Credit, Pretax	$ 28,869
Income Tax Credits and Adjustments	42,428
Biodiesel Blenders Credit [Member] | Owed to Customers [Member]
Income Tax Credits and Adjustments	$ 13,559
Small Agri Biodiesel Producers Credit [Member]
Tax Credit Per Gallon Of Agri Biodiesel Sold | $ / item		0.1
Number of Gallons Sold | gal		15

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Note 3 - Inventory (Details Textual) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Inventory Write-down	$ 0	$ 0	$ 0	$ 1,912

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Note 3 - Inventory - Carrying Values of Inventory (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Finished goods	$ 18,668	$ 22,998
Work in process	1,858	1,735
Raw materials and supplies	38,221	27,143
Inventory, gross	58,747	51,876
LIFO reserve	(10,742)	(8,122)
Total inventory	$ 48,005	$ 43,754

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Note 4 - Derivative Instruments (Details Textual) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net, Total	$ (676)	$ (3,314)	$ (3,947)	$ (1,511)
Restricted Cash and Cash Equivalents, Total	$ 276		$ 276		$ 2,660

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Note 4 - Derivative Instruments - Carrying Value of Derivative Instruments (Details) $ in Thousands	Sep. 30, 2018 USD ($)	Dec. 31, 2017 USD ($)
Commodity Option [Member]
Quantity (contracts) Short		200
Fair Value Liabilities		$ (2,428)
Future [Member]
Quantity (contracts) Short	31
Fair Value Liabilities
Fair Value Liabilities	$ (138)

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Note 5 - Marketable Securities (Details Textual) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value, Total	$ 578	$ 14,103
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	103	2,903
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	$ 4	$ 124

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Note 5 - Marketable Securities - Marketable Securities (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Adjusted Cost	$ 4,575	$ 4,849
Unrealized Gains	169	272
Unrealized Losses	(12)
Fair Value	4,732	5,121
Corporate Debt Securities [Member]
Adjusted Cost	1,428	1,702
Unrealized Gains	83	158
Unrealized Losses	(11)
Fair Value	1,500	1,860
Trust Preferred Securities [Member]
Adjusted Cost	3,147	3,147
Unrealized Gains	86	114
Unrealized Losses	(1)
Fair Value	$ 3,232	$ 3,261

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Note 6 - Accrued Expenses and Other Current Liabilities - Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Accrued employee liabilities	$ 5,859	$ 976
Accrued property, franchise, motor fuel and other taxes	1,516	1,387
Other	478	105
Total	$ 7,853	$ 2,468

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Note 7 - Borrowings (Details Textual) - Revolving Credit Facility [Member] - USD ($) $ in Thousands	May 25, 2016	Sep. 30, 2018	Dec. 31, 2017	May 25, 2015	Apr. 16, 2015
Long-term Line of Credit, Total		$ 0	$ 0
Regions Bank and PNC Bank N.A. [Member]
Line of Credit Facility, Maximum Borrowing Capacity	$ 165,000				$ 150,000
Line of Credit, Additional Borrowing Capacity	$ 15,000
Line of Credit Facility, Expiration Period	5 years
Line of Credit Facility Sublimit for Letters of Credit				$ 30,000
Line of Credit Facility Swingline Loans				$ 15,000

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Note 7 - Borrowings - Leverage Ratio (Details)	9 Months Ended
	Sep. 30, 2018
Leverage Ratio1 [Member]
Commitment fee	0.15%
Leverage Ratio1 [Member] | London Interbank Offered Rate (LIBOR) [Member]
Spread on variable rate	1.25%
Leverage Ratio1 [Member] | Base Rate [Member]
Spread on variable rate	0.25%
Leverage Ratio1 [Member] | Minimum [Member]
Leverage ratio	1
Leverage Ratio 2 [Member]
Commitment fee	0.20%
Leverage Ratio 2 [Member] | London Interbank Offered Rate (LIBOR) [Member]
Spread on variable rate	1.50%
Leverage Ratio 2 [Member] | Base Rate [Member]
Spread on variable rate	0.50%
Leverage Ratio 2 [Member] | Minimum [Member]
Leverage ratio	1
Leverage Ratio 2 [Member] | Maximum [Member]
Leverage ratio	1.5
Leverage Ratio 3 [Member]
Commitment fee	0.25%
Leverage Ratio 3 [Member] | London Interbank Offered Rate (LIBOR) [Member]
Spread on variable rate	1.75%
Leverage Ratio 3 [Member] | Base Rate [Member]
Spread on variable rate	0.75%
Leverage Ratio 3 [Member] | Minimum [Member]
Leverage ratio	1.5
Leverage Ratio 3 [Member] | Maximum [Member]
Leverage ratio	2
Leverage Ratio 4 [Member]
Commitment fee	0.30%
Leverage Ratio 4 [Member] | London Interbank Offered Rate (LIBOR) [Member]
Spread on variable rate	2.00%
Leverage Ratio 4 [Member] | Base Rate [Member]
Spread on variable rate	1.00%
Leverage Ratio 4 [Member] | Minimum [Member]
Leverage ratio	2
Leverage Ratio 4 [Member] | Maximum [Member]
Leverage ratio	2.5
Leverage Ratio 5 [Member]
Commitment fee	0.35%
Leverage Ratio 5 [Member] | London Interbank Offered Rate (LIBOR) [Member]
Spread on variable rate	2.25%
Leverage Ratio 5 [Member] | Base Rate [Member]
Spread on variable rate	1.25%
Leverage Ratio 5 [Member] | Minimum [Member]
Leverage ratio	2.5

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Note 8 - Provision for Income Taxes (Details Textual) - USD ($)	3 Months Ended			9 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Unrecognized Tax Benefits, Ending Balance		$ 0		$ 0		$ 0
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense, Total		$ 81,000	$ 29,000	$ 81,000	$ 402,000
Minimum [Member] | Scenario, Forecast [Member]
Tax Adjustments, Settlements, and Unusual Provisions	$ 4,000,000
Maximum [Member] | Scenario, Forecast [Member]
Tax Adjustments, Settlements, and Unusual Provisions	$ 4,500,000

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Note 8 - Provision for Income Taxes - Summary of Provisions for Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Provision for income taxes	$ 4,012	$ 1,730	$ 2,336	$ 3,375
Effective tax rate	29.80%	34.20%	4.40%	30.90%

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Note 9 - Earnings Per Share (Details Textual) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	0	0	20,000	10,000

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Note 9 - Earnings Per Share - Computation of Basic and Diluted Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Net income	$ 9,445	$ 3,334	$ 51,322	$ 7,564
Less: distributed earnings allocated to non-vested stock
Less: undistributed earnings allocated to non-vested restricted stock	(4)	(3)	(26)	(15)
Numerator for basic earnings per share	9,441	3,331	51,296	7,549
Effect of dilutive securities:
Add: undistributed earnings allocated to non-vested restricted stock	4	3	26	15
Less: undistributed earnings reallocated to non-vested restricted stock	(4)	(3)	(26)	(15)
Numerator for diluted earnings per share	$ 9,441	$ 3,331	$ 51,296	$ 7,549
Weighted average shares outstanding – basic (in shares)	43,724,195	43,705,234	43,719,215	43,662,672
Stock options and other awards (in shares)	8,725	9,519	6,155	8,748
Weighted average shares outstanding – diluted (in shares)	43,732,920	43,714,753	43,725,370	43,671,420
Basic earnings per share (in dollars per share)	$ 0.22	$ 0.08	$ 1.17	$ 0.17
Diluted earnings per share (in dollars per share)	$ 0.22	$ 0.08	$ 1.17	$ 0.17

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Note 10 - Segment Information (Details Textual)	9 Months Ended
	Sep. 30, 2018
Number of Reportable Segments	2
Chemicals [Member]
Number of Reportable Segments	2

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Note 10 - Segment Information - Revenues by Geographical Areas (Details) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017		Sep. 30, 2018	Sep. 30, 2017
Revenues	$ 81,422	$ 77,606	[1]	$ 225,505	$ 199,765	[1]
UNITED STATES
Revenues	81,152	76,711		223,943	197,044
All Foreign Countries [Member]
Revenues	$ 270	$ 895		$ 1,562	$ 2,721

[1] Prior periods have not been adjusted under the modified retrospective method for Topic 606.

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Note 10 - Segment Information - Summary of Business by Segment (Details) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017		Sep. 30, 2018	Sep. 30, 2017
Revenues	$ 81,422	$ 77,606	[1]	$ 225,505	$ 199,765	[1]
Segment gross profit/(loss)
Gross profit	12,653	5,526		58,431	13,454
Income before interest and taxes	10,229	3,200		50,636	6,049
Interest and other income	3,358	1,965		6,688	5,679
Interest and other expense	(130)	(101)		(3,666)	(789)
Provision for income taxes	(4,012)	(1,730)		(2,336)	(3,375)
Net income	9,445	3,334		51,322	7,564
Operating Segments [Member] | Chemicals [Member]
Revenues	28,022	28,167		88,630	77,875
Segment gross profit/(loss)
Gross profit	8,898	8,060		24,470	20,401
Operating Segments [Member] | Chemicals [Member] | Custom Chemicals [Member]
Revenues	23,973	23,593		74,465	65,189
Operating Segments [Member] | Chemicals [Member] | Performance Chemicals [Member]
Revenues	4,049	4,574		14,165	12,686
Operating Segments [Member] | Biofuels [Member]
Revenues	53,400	49,439		136,875	121,890
Segment gross profit/(loss)
Gross profit	3,755	(2,534)		33,961	(6,947)
Corporate, Non-Segment [Member]
Segment gross profit/(loss)
Corporate expenses	$ (2,424)	$ (2,326)		$ (7,795)	$ (7,405)

[1] Prior periods have not been adjusted under the modified retrospective method for Topic 606.

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Note 11 - Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Trust preferred and exchange traded debt instruments	$ 4,732	$ 5,121
Fair Value, Measurements, Recurring [Member]
Derivative instruments	(138)	(2,428)
Preferred stock, and other equity instruments	98,370	115,578
Trust preferred and exchange traded debt instruments	4,732	5,121
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Derivative instruments	(138)	(2,428)
Preferred stock, and other equity instruments	98,370	115,578
Trust preferred and exchange traded debt instruments	4,732	5,121
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Derivative instruments
Preferred stock, and other equity instruments
Trust preferred and exchange traded debt instruments
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Derivative instruments
Preferred stock, and other equity instruments
Trust preferred and exchange traded debt instruments

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Note 12 - Reclassifications From Accumulated Other Comprehensive Income (Details Textual) $ in Thousands	Jan. 01, 2018 USD ($)
Accounting Standards Update 2016-01 [Member] | AOCI Attributable to Parent [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	$ (8,273)

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Note 12 - Reclassifications From Accumulated Other Comprehensive Income - Changes in Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018		Sep. 30, 2017
Beginning balance			$ 351,596
Ending balance	$ 397,848		397,848
AOCI Attributable to Parent [Member]
Beginning balance	145	$ 7,499	160	[1]	$ 3,540	[1]
Other comprehensive income before reclassifications	(21)	670	(36)		4,259
Amounts reclassified from accumulated other comprehensive income		(17)			353
Net current-period other comprehensive income	(21)	653	(36)		4,612
Ending balance	$ 124	$ 8,152	$ 124		$ 8,152

[1] The beginning balance for 2018 was decreased $8,273 to reflect the impact of the adoption of ASU 2016-01. See Note 18 for additional information.

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Note 12 - Reclassifications From Accumulated Other Comprehensive Income - Reclassifications From Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Gain/(loss) on marketable securities	$ 815	$ 26	$ (3,273)	$ (543)
Total before tax	13,457	5,064	53,658	10,939
Tax (provision) benefit	(4,012)	(1,730)	(2,336)	(3,375)
Net income	9,445	3,334	51,322	7,564
Reclassification out of Accumulated Other Comprehensive Income [Member]
Gain/(loss) on marketable securities		26		(543)
Total before tax		26		(543)
Tax (provision) benefit		(9)		190
Net income		$ 17		$ (353)

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Note 15 - Intangible Asset (Details Textual) - USD ($) $ in Thousands	1 Months Ended
	Apr. 30, 2015	Sep. 30, 2018	Dec. 31, 2017
Payments to Acquire Intangible Assets	$ 1,408
Intangible Assets, Net (Excluding Goodwill), Total		$ 1,408	$ 1,408

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Note 17 - Revenue Recognition 1 (Details Textual) - USD ($)	Jan. 01, 2018	Sep. 30, 2018	Jun. 30, 2018	Dec. 31, 2017
Contract with Customer, Liability, Current		$ 17,143,000	$ 18,155,000	$ 21,013,000
Inventory, Net, Total		48,005,000		$ 43,754,000
Contract with Customer, Asset, Net, Total		0
Revenue, Remaining Performance Obligation, Amount		$ 17,143
Minimum [Member]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period		1 year
Maximum [Member]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period		5 years
Accounting Standards Update 2014-09 [Member]
Cumulative Effect on Retained Earnings, before Tax	$ (6,900,000)
Cumulative Effect on Retained Earnings, Net of Tax, Total	(5,178,000)
Contract with Customer, Liability, Current	3,251,000
Contract with Customer, Liability, Noncurrent	3,293,000
Inventory, Net, Total	$ (356,000)

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Note 17 - Revenue Recognition 2 (Details Textual)	Sep. 30, 2018
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-10-01
Revenue, Remaining Performance Obligation, Percentage	40.00%
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01
Revenue, Remaining Performance Obligation, Percentage	60.00%

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Note 17 - Revenue Recognition - Contract Assets and Contract Liabilities (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2018
Beginning balance	$ 1,110	$ 505
Contract assets, additions	656	2,417
Reductions	(1,110)	(2,266)
Ending balance	656	656
Contract liabilities, current	18,155	21,013
Contract liabilities, additions	474	932
Revenue recognized, current	(1,486)	(4,802)
Contract liabilities, current	17,143	17,143
Calculated under Revenue Guidance in Effect before Topic 606 [Member]
Contract liabilities, current	13,098	14,469
Contract liabilities, additions	310	768
Revenue recognized, current	(965)	(2,794)
Contract liabilities, current	12,443	12,443
Difference between Revenue Guidance in Effect before and after Topic 606 [Member]
Contract liabilities, current	5,057	6,544
Contract liabilities, additions	164	164
Revenue recognized, current	(521)	(2,008)
Contract liabilities, current	$ 4,700	$ 4,700

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Note 17 - Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	[1]	Sep. 30, 2018	Sep. 30, 2017	[1]
Revenue	$ 81,422	$ 77,606		$ 225,505	$ 199,765
Revenue from non-contractual arrangements	55	55		165	165
BTC rebate				(13,599)
Bill and Hold Revenue [Member]
Revenue	11,576	4,519		32,470	12,477
Non-bill and Hold Revenue [Member]
Revenue	69,846	73,087		193,035	187,288
Long-term Contract Revenue [Member]
Revenue	14,587	14,779		47,745	40,706
Short-term Contract Revenue [Member]
Revenue	$ 66,780	$ 62,772		$ 191,194	$ 158,894

[1] Prior periods have not been adjusted under the modified retrospective method for Topic 606.

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Note 17 - Revenue Recognition - Adoption of ASC 606 (Details) - USD ($)	3 Months Ended			9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017		Sep. 30, 2018	Sep. 30, 2017		Jan. 01, 2018	Dec. 31, 2017
Revenue	$ 81,422,000	$ 77,606,000	[1]	$ 225,505,000	$ 199,765,000	[1]
Cost of goods sold	61,559,000			146,916,000
Gross profit	12,653,000	5,526,000		58,431,000	13,454,000
Income from operations	10,229,000	3,200,000		50,636,000	6,049,000
Total before tax	13,457,000	5,064,000		53,658,000	10,939,000
Provision for income taxes	4,012,000	1,730,000		2,336,000	3,375,000
Net income	$ 9,445,000	$ 3,334,000		$ 51,322,000	$ 7,564,000
Basic earnings per share (in dollars per share)	$ 0.22	$ 0.08		$ 1.17	$ 0.17
Diluted earnings per share (in dollars per share)	$ 0.22	$ 0.08		$ 1.17	$ 0.17
Comprehensive income	$ 9,424,000	$ 3,987,000		$ 51,286,000	$ 12,176,000
Accounts receivable	18,942,000			18,942,000				$ 21,973,000
Inventory	48,005,000			48,005,000				43,754,000
Income tax receivable	479,000			479,000				6,937,000
Total current assets	373,726,000			373,726,000				310,358,000
Total assets	483,205,000			483,205,000				425,563,000
Accounts payable	31,414,000			31,414,000				18,396,000
Deferred revenue – short-term	7,114,000			7,114,000				2,736,000
Total current liabilities	52,139,000			52,139,000				35,281,000
Deferred revenue – long-term	14,651,000			14,651,000				16,522,000
Noncurrent deferred income tax liability	17,430,000			17,430,000				21,049,000
Total noncurrent liabilities	33,218,000			33,218,000				38,686,000
Total liabilities	85,357,000			85,357,000				73,967,000
Retained earnings	115,611,000			115,611,000				61,195,000
Total stockholders' equity	397,848,000			397,848,000				351,596,000
Total liabilities and stockholders' equity	483,205,000			483,205,000				$ 425,563,000
Change in net income	9,445,000	3,334,000		51,322,000	7,564,000
Benefit for deferred income taxes				(3,609,000)	(1,303,000)
Accounts receivable				3,031,000	3,081,000
Inventory				(4,251,000)	8,570,000
Income tax receivable				6,458,000	5,546,000
Accounts payable				13,018,000	1,425,000
Deferred revenue				(2,672,000)	(3,220,000)
Net cash provided by operating activities				79,169,000	36,440,000
Accounting Standards Update 2014-09 [Member]
Inventory							$ (356,000)
Non-related Parties [Member]
Revenue	80,588,000	77,106,000		223,184,000	198,726,000
Cost of goods sold	61,559,000	$ 61,088,000		146,916,000	$ 165,469,000
Calculated under Revenue Guidance in Effect before Topic 606 [Member]
Cost of goods sold	61,879,000			146,823,000
Gross profit	12,266,000			55,860,000
Income from operations	9,842,000			48,065,000
Total before tax	13,070,000			51,087,000
Provision for income taxes	3,915,000			1,750,000
Net income	$ 9,155,000			$ 49,337,000
Basic earnings per share (in dollars per share)	$ 0.21			$ 1.13
Diluted earnings per share (in dollars per share)	$ 0.21			$ 1.13
Comprehensive income	$ 9,134,000			$ 49,301,000
Accounts receivable	18,286,000			18,286,000
Inventory	48,453,000			48,453,000
Income tax receivable	519,000			519,000
Total current assets	373,558,000			373,558,000
Total assets	483,037,000			483,037,000
Accounts payable	31,578,000			31,578,000
Deferred revenue – short-term	2,690,000			2,690,000
Total current liabilities	47,879,000			47,879,000
Deferred revenue – long-term	14,375,000			14,375,000
Noncurrent deferred income tax liability	18,605,000			18,605,000
Total noncurrent liabilities	34,117,000			34,117,000
Total liabilities	81,996,000			81,996,000
Retained earnings	118,804,000			118,804,000
Total stockholders' equity	401,041,000			401,041,000
Total liabilities and stockholders' equity	483,037,000			483,037,000
Change in net income	9,155,000			49,337,000
Benefit for deferred income taxes				(2,434,000)
Accounts receivable				3,687,000
Inventory				(4,699,000)
Income tax receivable				6,418,000
Accounts payable				13,182,000
Deferred revenue				(2,194,000)
Net cash provided by operating activities				79,169,000
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | Non-related Parties [Member]
Revenue	80,521,000			220,520,000
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Accounting Standards Update 2014-09 [Member]
Cost of goods sold	(320,000)			93,000
Gross profit	387,000			2,571,000
Income from operations	387,000			2,571,000
Total before tax	387,000			2,571,000
Provision for income taxes	97,000			586,000
Net income	$ 290,000			$ 1,985,000
Basic earnings per share (in dollars per share)	$ 0.01			$ 0.04
Diluted earnings per share (in dollars per share)	$ 0.01			$ 0.04
Comprehensive income	$ 290,000			$ 1,985,000
Accounts receivable	656,000			656,000
Inventory	(448,000)			(448,000)
Income tax receivable	(40,000)			(40,000)
Total current assets	168,000			168,000
Total assets	168,000			168,000
Accounts payable	(164,000)			(164,000)
Deferred revenue – short-term	4,424,000			4,424,000
Total current liabilities	4,260,000			4,260,000
Deferred revenue – long-term	276,000			276,000
Noncurrent deferred income tax liability	(1,175,000)			(1,175,000)
Total noncurrent liabilities	(899,000)			(899,000)
Total liabilities	3,361,000			3,361,000
Retained earnings	(3,193,000)			(3,193,000)
Total stockholders' equity	(3,193,000)			(3,193,000)
Total liabilities and stockholders' equity	168,000			168,000
Change in net income	290,000			1,985,000
Benefit for deferred income taxes				(1,175,000)
Accounts receivable				(656,000)
Inventory				448,000
Income tax receivable				40,000
Accounts payable				(164,000)
Deferred revenue				(478,000)
Net cash provided by operating activities
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Non-related Parties [Member] | Accounting Standards Update 2014-09 [Member]
Revenue	$ 67,000			$ 2,664,000

[1] Prior periods have not been adjusted under the modified retrospective method for Topic 606.

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Note 18 - Change in Accounting Principle (Details Textual) - Accounting Standards Update 2016-01 [Member] $ in Thousands	Jan. 01, 2018 USD ($)
Cumulative Effect on Retained Earnings, before Tax	$ 13,139
Cumulative Effect on Retained Earnings, Net of Tax, Total	$ 8,273

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Note 18 - Change in Accounting Principle - Unrealized Gains and Losses on Equity Securities (Details) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	[1]	Sep. 30, 2018	Sep. 30, 2017	[1]
Net gains/(losses) recognized on equity securities	$ 815	$ 26		$ (3,273)	$ (543)
Less: net gains/(losses) recognized during the period on equity securities sold during the period		26		2,324	(543)
Unrealized gains/(losses) during the reporting period on equity securities held at the reporting date	$ 815			$ (5,597)

[1] Prior periods have not been adjusted under the modified retrospective method for Topic 321.