Fourth Quarter 2022 Financial Highlights (all comparisons are with the fourth quarter of 2021)
- Revenues were
$117 .8 million, up 10% from$107 .1 million. - Net income decreased to
$14 .9 million, or$0 .34 per diluted share, from$22 .3 million, or$0 .51 per diluted share. - Adjusted EBITDA* was
$16 .9 million, down 35% from$25 .9 million.
2022 Financial Highlights (all comparisons are with the year ended
- Revenues were
$396 .0 million, up 23% from$321 .4 million. - Net income decreased to
$15 .2 million, or$0 .35 per diluted share, from$26 .3 million, or$0 .60 per diluted share. - Adjusted EBITDA* was
$52 .5 million, up 55% from$33 .8 million.
[*A non-GAAP financial measure. See "Non-GAAP Financial Measures" for a description of the measure.]
“The results for the financial year 2022 reflect positive developments within our chemical segment which were unfortunately offset by negative external factors impacting our biodiesel segment.
In our Chemical segment, we experienced positive results particularly due to strong prices for our glycerin and growth of higher value products in our production mix. In addition, three new products from both new and existing customers were trialled in our plant which had a further positive impact during the fourth quarter.
The results for the biodiesel segment were severely impacted by low volumes in the first half of the year and unprecedented volatility in the heating oil futures market in Q2 which resulted in a basis risk loss of
2023 Regular Cash Dividends
Financial Overview and Key Operating Metrics
Financial and operating metrics, which include non-GAAP financial measures (see "Non-GAAP Financial Measures" for additional information), include dollars in thousands, except per share amounts:
Certain Financial and Operating Metrics (Unaudited) | ||||||||||||||||
Three months ended | ||||||||||||||||
Dollar | % | |||||||||||||||
2022 | 2021 | Change | Change | |||||||||||||
Revenues | $ | 117,816 | $ | 107,070 | $ | 10,746 | 10 | % | ||||||||
Income from operations | $ | 11,778 | $ | 23,132 | $ | (11,354 | ) | (49 | %) | |||||||
Net income | $ | 14,933 | $ | 22,345 | $ | (7,412 | ) | (33 | %) | |||||||
Earnings per common share: | ||||||||||||||||
Basic | $ | 0.34 | $ | 0.51 | $ | (0.17 | ) | (33 | %) | |||||||
Diluted | $ | 0.34 | $ | 0.51 | $ | (0.17 | ) | (33 | %) | |||||||
Adjusted EBITDA | $ | 16,853 | $ | 25,861 | $ | (9,008 | ) | (35 | %) |
Twelve months ended | ||||||||||||||||
Dollar | % | |||||||||||||||
2022 | 2021 | Change | Change | |||||||||||||
Revenues | $ | 396,014 | $ | 321,386 | $ | 74,628 | 23 | % | ||||||||
Income from operations | $ | 17,546 | $ | 12,898 | $ | 4,648 | 36 | % | ||||||||
Net income | $ | 15,211 | $ | 26,255 | $ | (11,044 | ) | (42 | %) | |||||||
Earnings per common share: | ||||||||||||||||
Basic | $ | 0.35 | $ | 0.60 | $ | (0.25 | ) | (42 | %) | |||||||
Diluted | $ | 0.35 | $ | 0.60 | $ | (0.25 | ) | (42 | %) | |||||||
Adjusted EBITDA | $ | 52,466 | $ | 33,848 | $ | 18,618 | 55 | % |
Consolidated Financial Results Q4 2022 versus Q4 2021
Fourth quarter revenue increased 10% or $10,746 primarily from higher average selling prices of biodiesel and glycerin products in the biofuel segment. Chemical sales revenue also rose 2% over the prior year quarter.
Income from operations decreased
Net income was $14,933 or
Consolidated Financial Results 2022 versus 2021
Consolidated sales revenue increased
Gross profit increased
Capital Expenditures
Capital expenditures were
Cash and
Cash and cash equivalents and marketable securities totaled
About
Forward-Looking Statements
This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements deal with FutureFuel’s current plans, intentions, beliefs, and expectations, and statements of future economic performance. Statements containing such terms as “believe,” “do not believe,” “plan,” “expect,” “intend,” “estimate,” “anticipate,” and other phrases of similar meaning are considered to contain uncertainty and are forward-looking statements. In addition, from time-to-time
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, 2022 and in its future filings made with the
Non-GAAP Financial Measures
In this press release,
Adjusted EBITDA allows FutureFuel’s chief operating decision makers to assess the performance and liquidity of FutureFuel’s business on a consolidated basis to assess the ability of its operating segments to produce operating cash flow to fund working capital needs, to fund capital expenditures, and to pay dividends. In particular,
A table included in this earnings release reconciles adjusted EBITDA with net income, the most directly comparable GAAP performance financial measure, and a table reconciles adjusted EBITDA with cash flows from operations, the most directly comparable GAAP liquidity financial measure.
Condensed Consolidated Balance Sheets (Dollars in thousands) (Unaudited) | ||||||||
Assets | ||||||||
Cash and cash equivalents | $ | 175,640 | $ | 137,521 | ||||
Accounts receivable, inclusive of the blenders' tax credit of | 26,204 | 29,374 | ||||||
Inventory | 26,761 | 26,920 | ||||||
Marketable securities | 37,126 | 47,190 | ||||||
Other current assets | 8,045 | 14,828 | ||||||
Total current assets | 273,776 | 255,833 | ||||||
Property, plant and equipment, net | 76,941 | 82,901 | ||||||
Other assets | 5,252 | 5,596 | ||||||
Total noncurrent assets | 82,193 | 88,497 | ||||||
Total Assets | $ | 355,969 | $ | 344,330 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Accounts payable, inclusive of the blenders' tax credit rebates due customers of | $ | 36,345 | $ | 22,823 | ||||
Dividends payable | 10,503 | - | ||||||
Other current liabilities | 9,250 | 12,233 | ||||||
Total current liabilities | 56,098 | 35,056 | ||||||
Deferred revenue – long-term | 15,079 | 16,755 | ||||||
Other noncurrent liabilities | 1,792 | 3,591 | ||||||
Total noncurrent liabilities | 16,871 | 20,346 | ||||||
Total liabilities | 72,969 | 55,402 | ||||||
Commitments and contingencies: | ||||||||
Preferred stock, | - | - | ||||||
Common stock, | 4 | 4 | ||||||
Accumulated other comprehensive (loss) income | (1 | ) | 178 | |||||
Additional paid in capital | 282,489 | 282,443 | ||||||
Retained earnings | 508 | 6,303 | ||||||
Total Stockholders’ Equity | 283,000 | 288,928 | ||||||
Total Liabilities and Stockholders’ Equity | $ | 355,969 | $ | 344,330 | ||||
Condensed Consolidated Statements of Income and Comprehensive Income (Dollars in thousands, except per share amounts) (Unaudited) | ||||||||
Three months ended | ||||||||
2022 | 2021 | |||||||
Revenue | $ | 117,816 | $ | 107,070 | ||||
Cost of goods sold and distribution | 102,630 | 80,946 | ||||||
Gross profit | 15,186 | 26,124 | ||||||
Selling, general, and administrative expenses | 2,394 | 1,894 | ||||||
Research and development expenses | 1,014 | 1,098 | ||||||
3,408 | 2,992 | |||||||
Income from operations | 11,778 | 23,132 | ||||||
Interest and dividend income | 2,249 | 670 | ||||||
(Loss) gain on marketable securities | (590 | ) | 122 | |||||
Other (expense) income | (32 | ) | 133 | |||||
Other income | 1,627 | 925 | ||||||
Income before income taxes | 13,405 | 24,057 | ||||||
Income tax (benefit) provision | (1,528 | ) | 1,712 | |||||
Net income | $ | 14,933 | $ | 22,345 | ||||
Earnings per common share | ||||||||
Basic | $ | 0.34 | $ | 0.51 | ||||
Diluted | $ | 0.34 | $ | 0.51 | ||||
Weighted average shares outstanding | ||||||||
Basic | 43,763,243 | 43,763,243 | ||||||
Diluted | 43,764,227 | 43,763,243 | ||||||
Comprehensive income | ||||||||
Net income | $ | 14,933 | $ | 22,345 | ||||
Other comprehensive (loss) income from unrealized net gains on available-for-sale securities | (8 | ) | 29 | |||||
Income tax effect | 2 | (6 | ) | |||||
Total unrealized (losses) gains, net of tax | (6 | ) | 23 | |||||
Comprehensive income | $ | 14,927 | $ | 22,368 | ||||
Condensed Consolidated Statements of Income and Comprehensive Income (Dollars in thousands, except per share amounts) (Unaudited) | ||||||||
Twelve months ended | ||||||||
2022 | 2021 | |||||||
Revenue | $ | 396,014 | $ | 321,386 | ||||
Cost of goods sold and distribution | 367,021 | 297,849 | ||||||
Gross profit | 28,993 | 23,537 | ||||||
Selling, general, and administrative expenses | 8,032 | 7,155 | ||||||
Research and development expenses | 3,415 | 3,484 | ||||||
11,447 | 10,639 | |||||||
Income from operations | 17,546 | 12,898 | ||||||
Interest and dividend income | 4,870 | 3,119 | ||||||
Loss on marketable securities | (8,546 | ) | (70 | ) | ||||
Other expense | (132 | ) | (17 | ) | ||||
Other (expense) income | (3,808 | ) | 3,032 | |||||
Income before income taxes | 13,738 | 15,930 | ||||||
Income tax benefit | (1,473 | ) | (10,325 | ) | ||||
Net income | $ | 15,211 | $ | 26,255 | ||||
Earnings per common share | ||||||||
Basic | $ | 0.35 | $ | 0.60 | ||||
Diluted | $ | 0.35 | $ | 0.60 | ||||
Weighted average shares outstanding | ||||||||
Basic | 43,763,243 | 43,756,065 | ||||||
Diluted | 43,763,489 | 43,756,113 | ||||||
Comprehensive income | ||||||||
Net income | $ | 15,211 | $ | 26,255 | ||||
Other comprehensive loss from unrealized net losses on available-for-sale securities | (227 | ) | (38 | ) | ||||
Income tax effect | 48 | 8 | ||||||
Total unrealized losses, net of tax | (179 | ) | (30 | ) | ||||
Comprehensive income | $ | 15,032 | $ | 26,225 | ||||
Consolidated Statements of Cash Flows For the Years Ended December 31, 2021 and 2020 (Dollars in thousands) (Unaudited) | ||||||||
2022 | 2021 | |||||||
Cash flows from operating activities | ||||||||
Net income | $ | 15,211 | $ | 26,255 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation | 10,454 | 10,452 | ||||||
Amortization of deferred financing costs | 95 | 95 | ||||||
Benefit for deferred income taxes | (1,822 | ) | (10,454 | ) | ||||
Change in fair value of equity securities | 8,297 | 904 | ||||||
Change in fair value of derivative instruments | (343 | ) | 609 | |||||
Loss (gain) on the sale of investments | 248 | (834 | ) | |||||
Stock based compensation | 46 | - | ||||||
Loss on disposal of property and equipment | 64 | 11 | ||||||
Impairment of intangible asset | - | 1,315 | ||||||
Noncash interest expense | 33 | 32 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 3,118 | (7,929 | ) | |||||
Accounts receivable – related parties | 52 | 1,368 | ||||||
Inventory | 162 | 6,969 | ||||||
Income tax receivable | 7,801 | 7,908 | ||||||
Prepaid expenses | (106 | ) | 379 | |||||
Prepaid expenses – related party | (8 | ) | (4 | ) | ||||
Other assets | 799 | 732 | ||||||
Accounts payable | 13,790 | 2,095 | ||||||
Accounts payable – related parties | (112 | ) | 6,927 | |||||
Accrued expenses and other current liabilities | (948 | ) | 870 | |||||
Accrued expenses and other current liabilities – related parties | - | 1 | ||||||
Deferred revenue | (4,055 | ) | (2,931 | ) | ||||
Other noncurrent liabilities | (325 | ) | (686 | ) | ||||
Net cash provided by operating activities | 52,541 | 44,084 | ||||||
Cash flows from investing activities | ||||||||
Collateralization of derivative instruments | (404 | ) | (750 | ) | ||||
Purchase of marketable securities | - | (23,546 | ) | |||||
Proceeds from the sale of marketable securities | 1,292 | 40,652 | ||||||
Proceeds from the sale of property and equipment | 61 | - | ||||||
Proceeds from the sale of intangible asset | - | 93 | ||||||
Capital expenditures | (4,778 | ) | (1,456 | ) | ||||
Net cash provided by investing activities | (3,829 | ) | 14,993 | |||||
Cash flows from financing activities | ||||||||
Proceeds from the issuance of stock | - | 231 | ||||||
Minimum tax withholding on stock options exercised | - | (3 | ) | |||||
Payment of dividends | (10,503 | ) | (119,906 | ) | ||||
Net cash used in financing activities | (10,503 | ) | 119,678 | |||||
Net change in cash and cash equivalents | 38,119 | (60,601 | ) | |||||
Cash and cash equivalents at beginning of period | 137,521 | 198,122 | ||||||
Cash and cash equivalents at end of period | $ | 175,640 | $ | 137,521 | ||||
Cash paid for interest | $ | 3 | $ | 47 | ||||
Cash paid for income taxes | $ | 69 | $ | 83 | ||||
Noncash investing and financing activities: | ||||||||
Noncash capital expenditures | $ | 208 | $ | 364 | ||||
Noncash operating leases | $ | 707 | $ | 269 | ||||
Noncash items incurred for dividends | $ | 10,503 | $ | - | ||||
Reconciliation of Non-GAAP Financial Measure to Financial Measure (Dollars in thousands) (Unaudited) | ||||||||||||||||
Reconciliation of Adjusted EBITDA to Net Income | ||||||||||||||||
Three months ended | Twelve months ended | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Net income | $ | 14,933 | $ | 22,345 | $ | 15,211 | $ | 26,255 | ||||||||
Depreciation | 2,604 | 2,565 | 10,454 | 10,452 | ||||||||||||
Non-cash stock-based compensation | - | - | 46 | - | ||||||||||||
Interest and dividend income | (2,249 | ) | (670 | ) | (4,870 | ) | (3,119 | ) | ||||||||
Non-cash interest expense and amortization of deferred financing costs | 56 | 31 | 128 | 127 | ||||||||||||
Loss on disposal of property and equipment | 4 | - | 64 | 11 | ||||||||||||
Loss on derivative instruments | 2,443 | - | 24,360 | 10,377 | ||||||||||||
Loss (gain) on marketable securities | 590 | (122 | ) | 8,546 | 70 | |||||||||||
Income tax (benefit) provision | (1,528 | ) | 1,712 | (1,473 | ) | (10,325 | ) | |||||||||
Adjusted EBITDA | $ | 16,853 | $ | 25,861 | $ | 52,466 | $ | 33,848 |
Reconciliation of Adjusted EBITDA to Net Cash Provided by Operating Activities
Twelve months ended | ||||||||
2022 | 2021 | |||||||
Net cash provided by operating activities | $ | 52,451 | $ | 44,084 | ||||
Benefit for deferred income taxes | 1,822 | 10,454 | ||||||
Interest and dividend income | (4,870 | ) | (3,119 | ) | ||||
Income tax provision | (1,473 | ) | (10,325 | ) | ||||
Loss on derivative instruments | 24,360 | 10,377 | ||||||
Change in fair value of derivative instruments | 343 | (609 | ) | |||||
Changes in operating assets and liabilities, net | (20,168 | ) | (15,699 | ) | ||||
Other non-operating income | 1 | - | ||||||
Impairment of intangible asset | - | (1,315 | ) | |||||
Adjusted EBITDA | $ | 52,466 | $ | 33,848 | ||||
Condensed Consolidated Segment Income (Dollars in thousands) (Unaudited) | ||||||||||||||||
Three months ended | Twelve months ended | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Revenue | ||||||||||||||||
Custom chemicals | $ | 14,709 | $ | 15,020 | $ | 58,737 | $ | 50,675 | ||||||||
Performance chemicals | 4,923 | 4,174 | 22,156 | 16,867 | ||||||||||||
Chemicals revenue | $ | 19,632 | $ | 19,194 | $ | 80,893 | $ | 67,542 | ||||||||
Biofuels revenue | 98,184 | 87,876 | 315,121 | 253,844 | ||||||||||||
Total Revenue | $ | 117,816 | $ | 107,070 | $ | 396,014 | $ | 321,386 | ||||||||
Segment gross profit | ||||||||||||||||
Chemicals | $ | 7,669 | $ | 5,881 | $ | 25,645 | $ | 13,970 | ||||||||
Biofuels | 7,517 | 20,243 | 3,348 | 9,567 | ||||||||||||
Total gross profit | $ | 15,186 | $ | 26,124 | $ | 28,993 | $ | 23,537 |
Depreciation is allocated to segment cost of goods sold based on plant usage. The total assets and capital expenditures of
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COMPANY CONTACT | |
(314) 854-8352 | |
www.futurefuelcorporation.com |
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