What changed in this filing

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Item 1. Financial Statements

2021-08-09 compared with 2021-05-10 · 342 added, 196 removed, 670 unchanged (45% of the section changed)

3 unchanged sentences

(Dollars in thousands)

March 31, 2021

June 30, 2021

December 31, 2020

2 unchanged sentences

$ 198,122  

Accounts receivable, inclusive of the blenders' tax credit of $ 11,276  and $ 8,300  at March 31, 2021 and December 31, 2020, respectively, and net of allowances for bad debt of $ 112  and $ 63  at March 31, 2021 and December 31, 2020, respectively

Accounts receivable, inclusive of the blenders' tax credit of $ 12,160  and $ 8,300 at June 30, 2021 and December 31, 2020, respectively, and net of allowances for bad debt of $ 50  and $ 63 at June 30, 2021 and December 31, 2020, respectively

31,333  

26 unchanged sentences

$ 441,304  

Liabilities and Stockholders ’

Accounts payable, inclusive of the blenders' tax credit rebates due customers of $ 890  and $ 1,116

Accounts payable, inclusive of the blenders' tax credit rebates due customers of $ 890 and $ 1,116 at June 30, 2021 and December 31, 2020 respectively

$ 35,578  

22 unchanged sentences

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 , issued and outstanding at March 31, 2021 and December 31, 2020

Accumulated other comprehensive (loss) income

Common stock, $ 0.0001 par value, 75,000,000 shares authorized, 43,763,243 and 43,743,243  issued and outstanding at June 30, 2021 and December 31, 2020 respectively

Accumulated other comprehensive income

Additional paid in capital

1 unchanged sentence

282,215  

Retained earnings

Retained (deficit) earnings

( 25,244 )  

10 unchanged sentences

(Dollars in thousands, except per share amounts)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

$ 73,813  

$ 47,310  

$ 114,971  

$ 99,682  

Revenue –

3 unchanged sentences

43,469  

111,138  

76,250  

Cost of goods sold –

related parties

11,937  

Distribution –

3 unchanged sentences

( 10,779 )  

17,310  

Selling, general, and administrative expenses

7 unchanged sentences

(15,061)  

12,840  

Interest and dividend income

1 unchanged sentence

( 32 )  

Loss on marketable securities

( 64 )  

Gain (loss) on marketable securities

Other (expense) income

(1,355)  

income before taxes

( 1,355 )  

11,409  

(Loss) income before taxes

( 988 )  

10,270  

( 14,148 )  

16,101  

Income tax benefit

( 4,469 )  

Net (loss) income

( 8,856 )  

Net income (loss)

$ 3,481  

(Loss) earnings per common share

$ 15,159  

1 unchanged sentence

$ 34,202  

Earnings (loss) per common share

$ 0.08  

$ 0.35  

$ ( 0.12 )  

$ 0.78  

$ 0.08  

$ 0.35  

$ ( 0.12 )  

$ 0.78  

Weighted average shares outstanding

3 unchanged sentences

43,743,243  

Comprehensive income

Net (loss) income

43,754,422  

43,743,740  

Other comprehensive loss from unrealized net loss on available-for-sale debt securities

43,748,768  

43,743,491  

Comprehensive income (loss)

Net income (loss)

$ 3,481  

$ 15,159  

$ ( 5,292 )  

$ 34,202  

Other comprehensive income (loss) from unrealized net gains (losses) on available-for-sale debt securities

Income tax effect

Total other comprehensive loss income, net of tax

( 16 )  

Comprehensive (loss) income

Total other comprehensive income (loss), net of tax

Comprehensive income (loss)

$ 3,525  

$ 15,309  

$ ( 5,292 )  

$ 34,039  

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

2 unchanged sentences

(Dollars in thousands)

For the Three Months Ended March 31, 2021

For the Six Months Ended June 30, 2021

Comprehensive

1 unchanged sentence

Income (Loss)

Earnings (Deficit)

Balance - December 31, 2020

43,743,243  

$ 282,215  

$ 89,456  

$ 371,883  

Other comprehensive loss

( 8,773 )  

Balance - March 31, 2021

For the Three Months Ended March 31, 2020

43,743,243  

$ 282,215  

$ 80,683  

$ 363,050  

Cash dividends declared, $2.50 per share  

( 109,408 )  

Proceeds for the issuance of stock  

20,000  

Other comprehensive income

Balance - June 30, 2021

43,763,243  

$ 282,446  

$ ( 25,244 )  

$ 257,414  

For the Six Months Ended June 30, 2020

Comprehensive

7 unchanged sentences

Prior period adjustment:

change in accounting principle  

( 12 )  

Balance - January 1, 2020, As adjusted  

change in accounting principle

Balance –

January 1, 2020, As adjusted

43,743,243  

3 unchanged sentences

Cash dividends declared, $ 3.00 per share

( 131,230 )  

Stock based compensation

2 unchanged sentences

19,043  

Balance - March 31, 2020

3 unchanged sentences

$ 354,635  

Other comprehensive income

15,159  

Balance - June 30, 2020

43,743,243  

$ 282,215  

$ 87,592  

$ 369,944  

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

3 unchanged sentences

(Unaudited) 

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities

8 unchanged sentences

Change in fair value of derivative instruments

( 695 )  

(Gain) loss on the sale of investments

2 unchanged sentences

Loss on disposal of property and equipment

Impairment of intangible asset

Noncash interest expense

2 unchanged sentences

( 9,946 )  

81,029  

Accounts receivable –

3 unchanged sentences

Prepaid expenses

Prepaid expenses - related parties  

( 12 )  

Prepaid expenses –

related parties

( 12 )  

Accounts payable

23,074  

Accounts payable –

1 unchanged sentence

Accrued expenses and other current liabilities

( 509 )  

Accrued expenses and other current liabilities –

4 unchanged sentences

( 342 )  

Net cash (used in) provided by operating activities

Net cash (used in) provided by operating activities

( 2,349 )  

Cash flows from investing activities

84,201  

Cash flows from investing activities

Collateralization of derivative instruments

5 unchanged sentences

Proceeds from the sale of property and equipment

Proceeds from the sale of intangible asset  

Capital expenditures

( 488 )  

Net cash provided by investing activities

Net cash from (used in) investing activities

16,248  

Cash flows from financing activities

Loan proceeds

Payment on loan

Deferred financing costs

Proceeds from the issuance of stock  

Payment of dividends

13 unchanged sentences

Noncash investing and financing activities:

Cash dividends declared, not paid

$ 131,230  

Noncash capital expenditures

Noncash operating leases

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

12 unchanged sentences

FutureFuel Chemical also sells petrodiesel in blends with the Company’s biodiesel and, from time to time, with no biodiesel added.

Until April 2021, FutureFuel Chemical was a shipper of refined petroleum products on common carrier pipelines and bought and sold petroleum products to maintain an active shipper status on these pipelines. 

Intangible Assets, and Note 17 Subsequent Event.

FutureFuel Chemical is also a shipper of petroleum-based products on a common carrier pipeline and buys and sells petroleum products to maintain an active shipper status on this pipeline. 

In April 2021, FutureFuel sold a portion of its historical line space.

See Note 8 for additional information.

Basis of Presentation

The unaudited consolidated financial statements have been prepared by FutureFuel in accordance and consistent with the accounting policies stated in FutureFuel’s 2020  audited consolidated financial statements and should be read in conjunction with these financial statements.

In the opinion of FutureFuel, all normal recurring adjustments necessary for a fair presentation have been included in the unaudited consolidated financial statements.

8 unchanged sentences

GOVERNMENT TAX CREDITS

REINSTATEMENT OF THE BIODIESEL BLENDERS ’

TAX CREDIT AND SMALL AGRI-BIODIESEL PRODUCER TAX CREDIT

Reinstatement of the Biodiesel Blenders’

Tax Credit and Small Agri-Biodiesel Producer Tax Credit

The biodiesel Blenders’

3 unchanged sentences

The Company records the credit as a reduction to cost of goods sold.

Notes to Consolidated Financial Statements of FutureFuel Corp.

(Dollars in thousands, except per share amounts)

(Unaudited)  

As the law from which the BTC mentioned above 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 Company was eligible for this credit and recognized its benefit in the three months ended December 31, 2019 for both periods ( 2018 and 2019 ) as part of the tax provision.

CARES ACT –

EMPLOYEE RENTENTION TAX CREDIT

The Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"), was enacted on March 27, 2020, to encourage eligible employers to retain employees on their payroll. 

FutureFuel did not qualify for this credit, however, the Consolidated Appropriations Act, effective January 1, 2021 broadened the eligibility of the Employee Retention Tax Credit. 

FutureFuel is continuing to monitor whether it would qualify for this credit. 

CARES Act –

Employee Retention Tax Credit

The Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"), was enacted on March 27, 2020, to encourage eligible employers to retain employees on their payroll.

FutureFuel did not qualify for this credit, however, the Consolidated Appropriations Act, effective January 1, 2021 broadened the eligibility of the Employee Retention TaxCredit.

FutureFuel is continuing to monitor whether it would qualify for this credit.

Notes to Consolidated Financial Statements of FutureFuel Corp.

(Dollars in thousands, except per share amounts)

 REVENUE RECOGNITION

15 unchanged sentences

Contract assets consist of unbilled amounts typically resulting from revenue recognized through bill-and-hold arrangements.

The contract assets at March 31, 2021 

The contract assets at June 30, 2021 

and December 31, 2020 

1 unchanged sentence

Contract liabilities consist of advance payments related to material rights recorded as deferred revenue in the consolidated balance sheets.

Increases to contract liabilities from cash received for a performance obligation of chemical segment plant expansions were $ 209  and $ 2,307  for the three months ended March 31, 2021 

Increases to contract liabilities from cash received for a performance obligation of chemical segment plant expansions were $ 320  and $ 1,051  and $ 529  and $ 3,358  for the three and six months ended June 30, 2021 

and 2020, respectively.

Contract liabilities are reduced as the Company transfers product to the customer under the renewal option approach.

Revenue recognized in the chemical segment from the contract liability reductions were $ 723  and $ 1,327  in the three months ended March 31, 2021 

Revenue recognized in the chemical segment from the contract liability reductions were $ 1,014  and $ 2,579  for the three months, and $ 1,737  and $ 3,906  for the six months ended June 30, 2021 

and 2020, respectively.

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

Notes to Consolidated Financial Statements of FutureFuel Corp.

(Dollars in thousands, except per share amounts)

The following table provides the balances of receivables, contract assets, and contract liabilities from contracts with customers.

Contract Assets and Liability Balances

March 31, 2021

June 30, 2021

December 31, 2020

12 unchanged sentences

Transaction price allocated to the remaining performance obligations:

At March 31, 2021, approximately $ 21,199  of revenue is expected to be recognized from remaining performance obligations.

At June 30, 2021, approximately $ 20,505  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 three  to five years.

3 unchanged sentences

and (ii) contracts for which the Company recognizes revenue at the amount to which it has the right to invoice for services performed.

Notes to Consolidated Financial Statements of FutureFuel Corp.

(Dollars in thousands, except per share amounts)

The following tables provide revenue from customers disaggregated by the type of arrangement and by the timing of the recognized revenue.

Disaggregation of revenue - contractual and non-contractual :

Three Months Ended March 31,

Three Months Ended June 30 ,

Six Months Ended June 30,

Contract revenue from customers with > 1 year arrangements

1 unchanged sentence

$ 4,909  

$ 10,877  

$ 14,523  

Contract revenue from customers with < 1 year arrangements

1 unchanged sentence

42,458  

104,646  

87,887  

Revenue from non-contractual arrangements

2 unchanged sentences

$ 47,422  

$ 115,634  

$ 100,504  

Timing of revenue :

Three Months Ended March 31,

Three Months Ended June 30 ,

Six Months Ended June 30,

Bill-and-hold revenue

1 unchanged sentence

$ 7,335  

$ 15,427  

$ 17,488  

Non-bill-and-hold revenue

1 unchanged sentence

40,087  

100,207  

83,016  

Total revenue

1 unchanged sentence

$ 47,422  

As of March 31, 2021, $ 2,911 of the three months bill and hold revenue had not shipped. 

In addition, $ 173 of bill and hold revenue recognized in the three months ended December 31, 2020 had not shipped.

Notes to Consolidated Financial Statements of FutureFuel Corp.

(Dollars in thousands, except per share amounts)

$ 115,634  

$ 100,504  

As of June 30, 2021, $ 3,421  of the bill and hold revenue had not shipped.

The carrying values of inventory were as follows as of:

March 31, 2021

June 30, 2021

December 31, 2020

1 unchanged sentence

Finished goods

$ 24,152  

$ 15,452  

Work in process

Raw materials and supplies

40,882  

22,674  

66,411  

39,758  

( 12,897 )  

Total inventory

$ 53,514  

$ 33,889  

Notes to Consolidated Financial Statements of FutureFuel Corp.

(Dollars in thousands, except per share amounts)

DERIVATIVE INSTRUMENTS

8 unchanged sentences

The Company has elected the normal purchase and normal sales exception for certain feedstock purchase contracts and supply agreements.

Realized gains and losses on derivative instruments and changes in fair value of the derivative instruments are recorded in the consolidated statements of operations as a component of cost of goods sold and amounted to a loss of $ 2,625  for the three months ended March 31, 2021 and a gain of $ 6,857  for the three months ended March 31, 2020.

loss  of $ 5,404  and $ 8,029  for the three months and six months ended June 30, 2021, respectively and a loss of $ 935 and a gain of $ 5,922  for the three months and six months ended June 30, 2020, respectively.

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

Asset (Liability)

March 31, 2021

June 30, 2021

December 31, 2020

2 unchanged sentences

Regulated fixed price future commitments

The margin account maintained with a broker to collateralize these derivative instruments carried an account balance of $ 1,040  and $ 933  at March 31, 2021 

$ ( 1,013 )  

The margin account maintained with a broker to collateralize these derivative instruments carried an account balance of $ 2,994  and $ 933  at June 30, 2021 

and December 31, 2020, 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.

Notes to Consolidated Financial Statements of FutureFuel Corp.

(Dollars in thousands, except per share amounts)

MARKETABLE SECURITIES

At March 31, 2021 

At June 30, 2021 

and December 31, 2020, 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.

The unrealized loss on equity securities held for the three months ended March 31, 2021 

and 2020  were $ 1,765  and $ 9,570 , respectively. 

The unrealized gain  on equity securities held for the three months ended June 30, 2021 

and 2020  were $ 1,543  and $ 2,164 , respectively.

The unrealized loss on equity securities held for the six months ended June 30, 2021 and 2020 were $ 222  and $ 7,405 , respectively. 

Available for sale s ecurities :

1 unchanged sentence

The following comprises the available-for-sale debt securities balances included within marketable securities in the consolidated balance sheets at the respective dates:

March 31, 2021

June 30, 2021

Adjusted Cost

11 unchanged sentences

$ 3,940  

The aggregate fair value of debt securities with unrealized losses totaled $ 0  at March 31, 2021 

December 31, 2020.

The Company determined an allowance for credit losses for these debt securities was not necessary as of March 31, 2021.

The aggregate fair value of debt securities with unrealized losses totaled $ 0  at June 30, 2021 

and $ 0 at December 31, 2020.

The Company determined an allowance for credit losses for these debt securities was not necessary as of June 30, 2021.

The large financial institutions have strong credit ratings with no recent history of defaulting on outstanding obligations, nor is the Company aware of any long-term credit risk related to delinquency under these obligations.

There were no sales of debt securities in the three months ended March 31, 2021 

The debt securities held at March 31, 2021, had a contractual maturity of greater than ten years.

There were no sales of debt securities in the six  months ended June 30, 2021 

The debt securities held at June 30, 2021, had a contractual maturity of greater than ten years.

Notes to Consolidated Financial Statements of FutureFuel Corp.

10 unchanged sentences

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 March 31, 2021 

The following tables provide information by level for assets and liabilities that are measured at fair value, on a recurring basis, at June 30, 2021 

and December 31, 2020. 

Asset (Liability)

Fair Value Measurements Using

Fair Value at

Inputs Considered as:

March 31, 2021

Fair Value Measurements Using Inputs Considered as:

June 30, 2021

Derivative instruments

$ ( 1,013 )  

Preferred stock and other equity instruments

$ 42,298  

Trust preferred stock and exchange-traded debt instruments

$ 3,939  

Asset (Liability)

Fair Value Measurements Using

Fair Value at

Inputs Considered as:

Fair Value Measurements Using Inputs Considered as:

December 31, 2020

1 unchanged sentence

Preferred stock and other equity instruments

$ 60,464  

Trust preferred stock and exchange-traded debt instruments

$ 3,940  

 INTANGIBLE ASSET S

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 at March 31, 2021 

and December 31, 2020 

FutureFuel tests the intangible asset for impairment in accordance with Topic 350, Intangibles-Goodwill and Other . 

Please see Note 17, Subsequent Event, regarding this intangible asset.

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 was expected to contribute to cash flows.

In April of 2021, FutureFuel made the strategic decision to reduce its status as a regular shipper on the pipeline and sold a portion of its line space.

At that time, it was also determined that the value of the remaining line space had declined. 

As a result, an impairment charge was recorded in Other Expense for $ 1,315 to further reduce the intangible asset carrying value to $0  at June 30, 2021 from $ 1,408 at December 31, 2020.

Notes to Consolidated Financial Statements of FutureFuel Corp.

3 unchanged sentences

Accrued expenses and other current liabilities consisted of the following at:   

March 31, 2021

June 30, 2021

December 31, 2020

Accrued employee liabilities

$ 2,573  

$ 2,609  

Accrued property, franchise, motor fuel and other taxes

Lease liability, current

$ 5,218  

$ 5,077  

On March 30, 2020, FutureFuel, with FutureFuel Chemical as the borrower and certain of FutureFuel’s other subsidiaries as guarantors, amended and restated its credit agreement (the “Credit Agreement”) originally entered into on April 16, 2015 ( as amended, the “Prior Credit Agreement”) with the lenders party, Regions Bank as administrative agent and collateral agent, and PNC Bank, N.A., as syndication agent.

24 unchanged sentences

The terms of the Credit Facility contain certain negative covenants and conditions including a maximum consolidated leverage ratio and a consolidated minimum interest coverage ratio.

There were no borrowings under the Credit Agreement at March 31, 2021 

or the Prior Credit Agreement at December 31, 2020.

There were no borrowings under the Credit Agreement at June 30, 2021 

or at December 31, 2020.

INCOME TAX PROVISION

The following table summarizes the income tax provision.  

Three Months Ended March 31,

Income tax (benefit) provision

Three Months Ended June 30,

Six Months Ended June 30,

Income tax benefit

$ ( 4,469 )  

$ ( 8,856 )  

Effective tax rate

452.3 %  

62.6 %  

Because the Company was unable to reliably estimate its annual effective tax rate for the three and six months ended June 30, 2021, it determined its income tax benefit by applying its actual year-to-date effective tax rate to year-to-date pretax loss. 

In contrast, the tax benefit for the three and six months ended June 30, 2020 reflected the application of an estimated annual effective tax rate to year-to-date pretax income. 

The effective tax rates for both periods reflect the positive effects of certain tax credits and incentives, the most significant of which were the BTC and Small Agri-biodiesel Producer Tax Credit. 

Additionally, the effective rate for the three and six months ended June 

30, 2020 was favorably impacted by the enhanced NOL carryback provisions of the CARES Act.

This law, enacted on March 27, 2020, allowed the Company to carry back its 2020 federal tax loss to a year with a higher tax rate rather than forward to a year with a lower rate.

Notes to Consolidated Financial Statements of FutureFuel Corp.

(Dollars in thousands, except per share amounts)

Because the Company is unable to reliably estimate its annual effective tax rate for the three months ended March 31, 2021, it has determined its income tax benefit by applying its actual year-to-date effective tax rate to year-to-date pretax income. 

In contrast, the tax benefit for the three months ended March 31, 2020 reflects the application of an estimated annual effective tax rate to year-to-date pretax income. 

The effective tax rates for both periods reflect the positive effects of certain tax credits and incentives, the most significant of which are the BTC and Small Agri-biodiesel Producer Tax Credit. 

Additionally, the effective rate for the three months ended March 31, 2020 was favorably impacted by the enhanced NOL carryback provisions of the CARES Act.

This law, enacted on March 27, 2020, allowed the Company to carry back its 2020 federal tax loss to a year with a higher tax rate rather than forward to a year with a lower rate.

EARNINGS PER SHARE

In the three months ended March 31, 2021 

In the three and six months ended June 30, 2021 

and 2020, FutureFuel used the treasury method in computing earnings per share.

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

Three Months Ended March 31,

Net (loss) income

Three Months Ended June 30,

Six Months Ended June 30,

Net income (loss)

$ 3,481  

$ 15,159  

$ ( 5,292 )  

$ 34,202  

Weighted average shares outstanding –

43,754,232  

43,743,243  

43,748,768  

43,743,243  

Effect of dilutive securities:

1 unchanged sentence

Weighted average shares outstanding –

Basic (loss) earnings per share

Diluted (loss) earnings per share

For the three months ended March 31, 2021 all 44,000 options to purchase FutureFuel’s common stock were excluded in the computation of diluted earnings per share as all were anti-dilutive.

In the three months ended March 31, 2020, no options were excluded.

43,754,422  

43,743,740  

43,748,768  

43,743,491  

Basic earnings (loss) per share

$ 0.08  

$ 0.35  

$ ( 0.12 )  

$ 0.78  

Diluted earnings (loss) per share

$ 0.08  

$ 0.35  

$ ( 0.12 )  

$ 0.78  

In the three and six months ended June 30, 2021, 11,905  and 33,905  options to purchase FutureFuel’s common stock were excluded in the computation of diluted earnings per share as all were anti-dilutive, respectively.

In the three  and six months ended June 30, 2020, 50,000 and 62,000  options were excluded, respectively.

RELATED PARTY TRANSACTIONS

1 unchanged sentence

Revenues, expenses, prepaid amounts, and unpaid amounts related to these transactions are captured in the accompanying consolidated financial statements as related party line items.

Notes to Consolidated Financial Statements of FutureFuel Corp.

(Dollars in thousands, except per share amounts)

(Unaudited)   

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 by FutureFuel from 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 third parties for items that were purchased from these related parties along with the associated expense from the purchase of natural gas, storage and terminalling services by FutureFuel from these related parties.

A related party manages natural gas purchases for FutureFuel, initially pays for the natural gas, and subsequently invoices FutureFuel for the same plus a nominal fee for such services. 

The natural gas matter as discussed in Note 17, Legal Matters, is in reference to the natural gas supplier, not the related party.

Notes to Consolidated Financial Statements of FutureFuel Corp.

(Dollars in thousands, except per share amounts)

(Unaudited)   

SEGMENT INFORMATION

8 unchanged sentences

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;

Biofuels revenue also include the sale of biodiesel blends with petrodiesel;

petrodiesel with no biodiesel added;

7 unchanged sentences

Summary of business by segment

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Custom chemicals

1 unchanged sentence

$ 18,041  

$ 41,801  

Performance chemicals

2 unchanged sentences

22,838  

31,657  

50,531  

Biofuels revenue

1 unchanged sentence

24,584  

83,977  

49,973  

Total Revenue

1 unchanged sentence

$ 47,422  

Segment gross 

(loss) profit

$ 115,634  

$ 100,504  

Segment gross (loss) profit

$ 4,285  

$ 7,577  

$ 2,984  

$ 15,591  

( 4,328 )  

( 13,763 )  

Total gross (loss) profit

1 unchanged sentence

$ ( 10,779 )  

$ 17,310  

Depreciation is allocated to segment cost of goods sold based on plant usage.

3 unchanged sentences

(Unaudited)   

 RECENTLY ISSUED ACCOUNTING STA NDARDS  

Recently Issued Accounting Standards Adopted  

In December 2019, the FASB issued ASU 2019 - 12, "Income Taxes (Topic 740 ):

Simplifying the Accounting for Income Taxes." The amendments simplify the accounting for income taxes by removing certain exceptions to the general principles of Topic 740, "Income Taxes" and improve consistent application by clarifying and amending existing guidance.

The new standard was adopted on a prospective basis and had an immaterial effect on the financials. 

 SPECIAL CASH DIVIDEND

On May 10, 2021, the Company declared a special cash dividend of $ 2.50 per share on common stock and paid $ 109,408 on June 4, 2021.

In the three months ended March 31, 2020, we declared a special cash dividend of $ 3.00 per share and paid $ 131,230 on April 17, 2020.

 RECENTLY ISSUED ACCOUNTING STA NDARDS

ASU 2020 - 04,  

3 unchanged sentences

This guidance will ease the accounting burden associated with transitioning away from reference rates that are expected to be discontinued within our credit facility as described in Note 10.

Notes to Consolidated Financial Statements of FutureFuel Corp.

(Dollars in thousands, except per share amounts)

LEGAL MATTERS

3 unchanged sentences

At this time the company is disputing the February 2021 natural gas bill and payment thereof is pending further investigation.

The natural gas expense was a component of Cost of goods sold-related parties in the Consolidated Statements of Operations and Comprehensive Income in the three months ended March 31, 2021. 

However, as discussed in Note 13, Related Party Transactions, the natural gas supplier is not a related party of FutureFuel.

SUBSEQUENT EVENT

Upon making the strategic decision to exit its status as a regular shipper on a common carrier pipeline in April 2021, FutureFuel may record an impairment charge of its intangible asset.

The natural gas expense was a component of Cost of goods sold-related parties in the Consolidated Statements of Operations and Comprehensive Income in the three months ended March 31, 2021 and six months ended June 30, 2021. 

However, as discussed in Note 13, Related Party Transactions, the "ultimate" natural gas supplier is not a related party of FutureFuel.

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

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While the pandemic has reduced the overall level of activity across much of the economy, we have largely met these objectives.

While the worst effects of the pandemic may be behind us in the United States, the virus is still spreading worldwide and the long-term economic consequences globally are still unclear, making its impact on our performance still difficult to predict. 

The three principles areas where COVID-19 may still negatively impact our financial performance are customer demand, raw material procurement, and our ability to operate our manufacturing facility.

The effects of the pandemic are still uncertain.

The virus (including variants thereof) are still spreading. The three principle areas where COVID-19 may still negatively impact our financial performance are customer demand, raw material procurement, and our ability to operate our manufacturing facility.

Customer Demand – 

Several of our major chemical customers sell the products we produce for them in to markets that have been significantly impacted by COVID-19.

The energy and automotive markets in particular have drastically been impacted since April, 2020 and have not yet fully recovered to pre-pandemic levels. 

Several of our major chemical customers sell the products we produce for them into markets that have been significantly impacted by COVID-19.

The energy and automotive markets in particular have drastically been impacted since April 2020, and have not yet fully recovered to pre-pandemic levels. 

However, diesel prices and the value of Renewable Identification Numbers (RINs) have improved significantly in 2021 and while promising, this recovery is still fragile.

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

Three Months Ended March 31,

Three Months Ended June 30,

Loss from operations

Earnings per common share:

Adjusted EBITDA

Six Months Ended June 30,

(Loss) income from operations

Net (loss) income

Earnings per common share:

(Loss) earnings per common share:

Adjusted EBITDA

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

Three Months Ended March 31,

Net (loss) income

Three Months Ended June 30,

Six Months Ended June 30,

Net income (loss)

Non-cash stock-based compensation

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Non-cash interest expense and amortization of deferred financing costs

Loss on disposal of property and equipment

Losses on disposal of property and equipment

Loss (gain) on derivative instruments

Loss on marketable securities

(Gain) loss on marketable securities

Income tax benefit

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

Three Months Ended March 31,

Net cash 

(used in) provided by operating activities

Six Months Ended June 30,

Net cash (used in) provided by operating activities

Benefit for deferred income taxes

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Income tax benefit

(Loss) gain on derivative instruments

Loss (gain) on derivative instruments

Change in fair value of derivative instruments

Change in operating assets and liabilities, net

Impairment of intangible asset

Adjusted EBITDA

Results of Operations  

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Volume/product mix effect

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Operating expenses

Other expense

Income tax benefit

Net (loss) income

Consolidated revenue in the three months ended March 31, 2021 decreased $11,566 compared to the three months ended March 31, 2020.

This decrease primarily resulted from decreased sales volumes in both the chemicals and biofuels segments that were partially offset by increased prices of biodiesel in the three-month period.

Gross loss in the three months ended March 31, 2021 was $10,736 as compared to gross profit of $16,399 in the three months ended March 31, 2020.

Net income (loss)

Consolidated revenue in the three and six months ended June 30, 2021 increased $26,696 and $15,130, compared to the three and six months ended June 30, 2020.

This increase primarily resulted from increased prices in the biofuels segment partially offset by lower sales volumes in the chemicals segment. 

Biofuels volume increased sales revenue in the current three-month period, but reduced revenue in the six-month period, as compared to the same prior year periods.

Gross loss 

in the three months ended June 30, 2021 was $43 as compared to gross profit of $911 in the three months ended June 30, 2020.

This decline primarily resulted from: 

i) reduced sales volumes of two custom chemicals we no longer sell;

ii) the adjustment in the carrying value of our inventory as determined utilizing the LIFO method of inventory accounting which decreased gross profit $3,115 in the current three-month period as compared to an increase in gross profit of $1,575 in the same prior year period and iii) the change in the unrealized and realized postitions in derivative instruments with a loss of $5,404 in the current three-month period as compared to a loss of $935 in the same prior year period. 

Mostly offsetting these declines was improved margins in the biofuel segment.

Gross loss in the six months ended June 30, 2021 was $10,779 as compared to gross profit of $17,310 in the three months ended June 30, 2020. 

This decline primarily resulted from:

i) exorbitant natural gas prices invoiced from Winter Storm Uri which resulted in an increase of $7,800 as compared to the prior year quarter, ii) a reduction in production volumes given the natural gas curtailment, iii) the change in the unrealized and realized activity in derivative instruments with a 

loss of $2,625 in the three months ended March 31, 2021 as compared to a gain of $6,857 in the three months ended March 31, 2020 and iv) the change in the adjustment in the carrying value of our inventory as determined utilizing the LIFO method of inventory accounting. 

This adjustment decreased gross profit $3,913 in the three months ended March 31, 2021 as compared to an increase in gross profit of $1,319 in the prior year quarter.

As a result of the extraordinary increase in natural gas prices, the Attorney General of Arkansas has launched a civil investigative demand against several natural gas suppliers. 

i) exorbitant natural gas prices invoiced from Winter Storm Uri which resulted in an increase of $7,800 as compared to the prior year quarter; ii) a reduction in production volumes given the natural gas curtailment; iii) reduced sales volumes of two custom chemicals we no longer sale;

iv) the change in the unrealized and realized positions in derivative instruments with a 

loss of $8,029 in the six months ended June 30, 2021 as compared to a gain of $5,922 in the six months ended June 30, 2020 and iv) the change in the adjustment in the carrying value of our inventory as determined utilizing the LIFO method of inventory accounting. 

This adjustment decreased gross profit $7,028 in the six months ended June 30, 2021 as compared to an increase in gross profit of $2,894 in the same prior period.

Partially offsetting these declines was improved margins in the biofuel segment.

As a result of the extraordinary increase in natural gas prices, the Attorney General of Arkansas launched a civil investigative demand against several natural gas suppliers. 

At this time the company is disputing the February 2021 natural gas bill and payment thereof is pending further investigation.

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Operating  e xpenses

Operating expenses decreased $98 in the three months ended March 31, 2021, as compared to the three-months ended March 31, 2020.

Operating expenses decreased $90 and $188 in the three and six months ended June 30, 2021, as compared to the same periods of 2020.

This slight decrease was primarily from decreased compensation expenses.

Other expense

Other expense was $102 in the three months ended March 31, 2021, as compared to the same period of the prior year of $8,148 which was primarily from the change in unrealized losses on marketable securities.

Income tax benefit

Because the Company is unable to reliably estimate its annual effective tax rate for the three months ended March 31, 2021, it has determined its income tax benefit by applying its actual year to date effective tax rate to year-to-date pretax income. 

In contrast, the tax benefit for the three months ended March 31, 2020 reflects the application of an estimated annual effective tax rate to year-to-date pretax income.

The effective tax rates for both periods reflect the positive effects of certain tax credits and incentives, the most significant of which are the BTC and Small Agri-biodiesel Producer Tax Credit. 

Additionally, the effective rate for the three months ended March 31, 2020 was favorably impacted by the enhanced NOL carryback provisions of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”).

Other income decreased $10,394 in the three months ended June 30, 2021 as compared to the same period of the 2020. 

This decrease was primarily from a legal resolution reached in the prior year on a contractual matter for which an accrual of $8,350 was relieved as Other income. 

Other income in the three-month comparison period was also reduced by the impairment of intangible assets of $1,315.

In the six months ended June 30, 2021, Other income decreased $2,348 as compared to the same period in the prior year. 

In addition to the items noted for the change in three months ended June 30, 2021 compared to the prior year, the gain on marketable securities (including unrealized gains) improved to $537 in the six months ended June 30, 2021 as compared to a loss (including unrealized losses) of $8,486.

Income tax benefit 

In contrast, the tax benefit for the three and six months ended June 30, 2020 reflected the application of an estimated annual effective tax rate to year-to-date pretax income. 

The effective tax rates for both periods reflect the positive effects of certain tax credits and incentives, the most significant of which were the BTC and Small Agri-biodiesel Producer Tax Credit. 

Additionally, the effective rate for the three and six months ended June 30, 2020 was favorably impacted by the enhanced NOL carryback provisions of the CARES Act.

This law, enacted on March 27, 2020, allowed the Company to carry back its 2020 federal tax loss to a year with a higher tax rate rather than forward to a year with a lower rate.

Net income for the three months ended March 31, 2021 decreased $27,816 as compared to the same period in 2020.

This decrease resulted primarily from the changes explained in gross (loss) profit as previously noted, Other expense, and Income tax benefit.  

Net income for the three and six months ended June 30, 2021 decreased $11,678 and $39,494 as compared to the same period in 2020, respectively.

This decrease resulted primarily from the changes explained in gross (loss) profit as previously noted, Other income, and Income tax benefit.  

Chemical Segment

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Volume/product mix effect

Gross (loss) profit

Chemical revenue in the three months ended March 31, 2021 decreased 41.8% or $11,583 compared to the three months ended March 31, 2020.

Revenue for our custom chemicals (unique chemicals produced for specific customers) for the three months ended March 31, 2021 totaled $10,675, a decrease of $13,085 from the same period in 2020. 

Two products we no longer sell benefited the prior year revenue $8,097, the remaining decrease was primarily from lower sales volumes with the natural gas curtailment and COVID-19. 

Performance chemicals (composed of multi-customer products which are sold based on specification) revenue was $5,435, an increase of $1,502 from the three months ended March 31, 2020.

This increase was primarily from increased sales volume of glycerin and the timing of campaign products, although market conditions were more supportive than during the same period of last year.

Gross profit for the chemical segment for the three months ended March 31, 2021, decreased $9,315 when compared to the same period of 2020 driven mostly by the unusually high natural gas price, the loss of sales volume in our custom chemical products primarily driven by the effects of COVID-19 on customer demand, and the loss of two custom chemical products we no longer sale. 

Also reducing gross profit in three-month periods ended March 31, 2021 was the change in adjustments in the carrying value of our inventory as determined utilizing the LIFO method of inventory accounting as compared to an increase in gross profit in the same period of 2020;

this adjustment decreased gross profit $670 and increased gross profit $502, respectively.

Chemical revenue in the three and six months ended June 30, 2021 decreased 31.9% or $7,291 and 37.4% or $18,874 compared to the three and six months ended June 30, 2020.

Revenue for our custom chemicals (unique chemicals produced for specific customers) for the three and six months ended June 30, 2021 totaled $12,260 and $22,935, a decrease of $5,781 and $18,866 from the same period in 2020.

Two products we no longer sell benefited the prior year revenue $7,526 and $15,623, respectively. 

The remaining decrease in the six-month comparison period was primarily from lower sales volumes with the natural gas curtailment and COVID-19. 

Performance chemicals (composed of multi-customer products which are sold based on specification) revenue for the three and six months was $3,287 and $8,722, a decrease of $1,510 from the three months ended June 30, 2020.

This decrease was primarily from decreased sales volume of glycerin and the timing of campaign products, although market conditions were more supportive than during the same period of last year. 

Performance chemicals sales revenue in the six-month comparison periods were unchanged.

Gross profit for the chemical segment for the three and six months ended June 30, 2021, decreased $3,292 and $12,607 when compared to the same period of 2020 driven mostly by the unusually high natural gas price, the loss of sales volume in our custom chemical products primarily driven by the effects of COVID-19 on customer demand, and the loss of two custom chemical products we no longer sell. 

Also reducing gross profit in the three and six months ended June 30, 2021 as compared to the same prior year periods was the change in adjustments in the carrying value of our inventory as determined utilizing the LIFO method of inventory accounting. 

This change in adjustments decreased gross profit $324 and $1,064 in the three and six months ended June 30, 2021, and increased gross profit $258 and $760, in the same periods of 2020, respectively.

Biofuels Segment

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Volume/product mix effect

Gross (loss) profit

Biofuels revenue in the three months ended March 31, 2021 was flat as compared to the same period of 2020.

The biodiesel and biodiesel blend volumes decreased as compared to the prior year, primarily from the impact of Winter Storm Uri of approximately $3,000.

Offsetting this volume decrease as compared to the same period of 2020, was higher selling prices with the overall improvement in fuel and RIN prices. 

Biofuels revenue in the three and six months ended June 30, 2021 increased $33,987 and $34,004 compared to the same periods of 2020, respectively.

This increase was primarily driven from the overall improvement in fuel and RIN prices. 

The biodiesel and biodiesel blend volumes decreased approximately $3,000 in the six-month comparison period primarily from the impact of Winter Storm Uri.

A significant portion of our biodiesel sold was to two major refiner/blenders in the three months ended March 31, 2021 and in the first quarter of 2020 there were no significant customer concentrations. 

A significant portion of our biodiesel sold was to two major refiners in the three months ended June 30, 2021 and to three major refiner/blenders in the six months ended June 30, 2021. In the same periods of the 2020, one major refiner was greater than 10% of revenue.

No assurances can be given that we will continue to sell to such major refiners, 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 because:

We do not believe that the loss of these customers would have a material adverse effect on our biofuels segment or on us as a whole because:

(i) we believe that we could readily sell our biodiesel to other customers as potential demand from other customers for biodiesel exceeds our production capacity;

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and (iii) 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 loss was $9,435 in the three months ended March 31, 2021, as compared to a gross profit of $8,385 in the same period of 2020, primarily from:

i) the impact of Winter Storm Uri which dramatically increased the price of natural gas and consequently reduced sales volumes when production was curtailed to minimize natural gas consumption, further exacerbated by delays in restarting caused by the freezing weather, ii) the change in the activity in derivative instruments with a loss of $2,625 in the three months ended March 31, 2021, as compared to a gain of $6,857 in the three months ended March 31, 2020, and iii) the change in adjustments in the carrying value of our inventory as determined utilizing the LIFO method of inventory accounting as compared to an increase in gross profit in the same period of 2020;

Biofuels gross loss was $4,328 in the three months ended June 30, 2021, as compared to a gross loss of $6,666 in the same period of 2020, primarily from:

i) the impact of Winter Storm Uri which dramatically increased the price of natural gas and consequently reduced sales volumes when production was curtailed to minimize natural gas consumption, further exacerbated by delays in restarting caused by the freezing weather; ii) the change in the activity in derivative instruments with a loss of $5,404 in the three months ended June 30, 2021, as compared to a loss of $935 in the three months ended June 30, 2020 and iii) the change in adjustments in the carrying value of our inventory as determined utilizing the LIFO method of inventory accounting in the three months ended June 30, 2021 as compared to the same period of 2020;

this adjustment decreased gross profit $,2,791 and increased gross profit $1,317, respectively.

Biofuels gross loss was $13,763 in the six months ended June 30, 2021, as compared to a gross profit of $1,719 in the same period of 2020, primarily from: 

i) the impact of Winter Storm Uri which dramatically increased the price of natural gas and consequently reduced sales volumes when production was curtailed to minimize natural gas consumption, further exacerbated by delays in restarting caused by the freezing weather; ii) the change in the activity in derivative instruments with a loss of $8,029 in the six months ended June 30, 2021, as compared to a gain of $5,922 in the six months ended June 30, 2020 and iii) the change in adjustments in the carrying value of our inventory as determined utilizing the LIFO method of inventory accounting in the six months ended June 30, 2021 as compared the same period of 2020;

this adjustment decreased gross profit $5,964 and increased gross profit $2,134, respectively.

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Asset (Liability)

March 31, 2021

June 30, 2021

December 31, 2020

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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 March 31, 2021 and 2020 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.

Bill-and-hold transactions for the three months ended June 30, 2021 and 2020 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.

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Credit and payment terms for bill-and-hold customers are similar to other custom chemicals customers.

Revenue under bill-and-hold arrangements were $7,549 and $10,153 for the three months ended March 31, 2021 and 2020, respectively.

Revenue under bill-and-hold arrangements was $7,878 and $7,335 for the three months ended June 30, 2021 and 2020, respectively. 

For the six months ended June 30, 2021 and 2020 bill and hold sales revenue was $15,427 and $17,488, respectively.

Liquidity and Capital Resources

Our net cash from operating activities, investing activities, and financing activities for the three months ended March 31, 2021 and 2020 are set forth in the following table.

Three Months Ended March 31,

Our net cash from operating activities, investing activities, and financing activities for the six months ended June 30, 2021 and 2020 are set forth in the following table.

Six Months Ended June 30,

Net cash (used in) provided by operating activities

Net cash provided by investing activities

Net cash provided by (used in) investing activities

Net cash used in financing activities

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Operating Activities

Cash was used by operating activities of $14,347 in the first quarter of 2021 as compared to cash provided by in the first quarter of 2020 of $4,034.

This decrease was primarily attributable to the change in net income of $19,043 in the first quarter of 2020 compared to a net loss of $8,773 for the same period in 2021 for a net decrease of $27,816.

Also contributing to the change in cash from operating activities in the first quarter of 2021, by comparison to the first quarter of 2020, was a net reduction in the cash adjustment from the change in fair value of equity securities of $7,805 and from higher cash outflows from inventory of $7,511 during the first quarter of 2021 compared to the first quarter of 2020.

Partially offsetting these net cash outflows was a net change in the income tax receivable, demonstrating a cash outflow of $13,587 in the first quarter of 2020 as compared to a cash inflow of $774, and a net change in accounts payable, including accounts payable-related parties, demonstrating a higher cash inflow of $10,539 in the first quarter of 2021 as compared to the first quarter of 2020.

Cash was used by operating activities of $2,349 in the first six months of 2021 as compared to cash provided by in the first six months of 2020 of $84,201, for a net decrease of $86,550.

This decrease was primarily attributable to the change in accounts receivable, including accounts receivable-related parties, of $93,860. 

This change resulted from the receipt of $85,319 in the first half of 2020, primarily from BTC payments, compared to an $8,541 increase in accounts receivable for the same period in 2021.

Also contributing to the net decrease was the change in net income of $34,202 in the first half of 2020 to a net loss of $5,292 for the same period in 2021 for a net decrease of $39,494, and higher cash outflows from inventory of $15,015 in the first half of 2021 compared to the first half of 2020.

Partially offsetting these net cash outflows was a net change in accounts payable, including accounts payable-related parties, demonstrating a cash inflow of $31,033 in the first half of 2021 as compared to a cash outflow of $29,482 in the first half of 2020, also primarily related to BTC rebates due to customers paid in 2020.

In addition, there was a net change in income tax receivable, demonstrating a cash inflow of $801 in the first half of 2021 as compared to a cash outflow of $19,380 in the same period of 2020.

Investing Activities

Cash from investing activities increased to $12,828 of cash provided by investing activities in the first three months of 2021 as compared to of $3,838 in the first three months of 2020.

Of the $8,990 change, $9,560 was the result of an increase in net sales of marketable securities in the first three months of 2021 compared to the first three months of 2020.

Such net sales totaled $13,080, in the first three months of 2021, compared to $3,520 in net sales in the first three months of 2020. 

Cash from investing activities increased to $16,248 of cash provided by in the first six months of 2021 as compared to cash used in of $2,753 in the first six months of 2020.

Of the $19,001 change, $15,870 was the result of an increase in net sales of marketable securities in the first six months of 2021 compared to the first six months of 2020.

Such net sales totaled $18,703, in the first six months of 2021, compared to $2,833 in net sales in the first six months of 2020. 

Financing Activities

Cash used in financing activities was $2,624 and $3,101, in the three months ended March 31, 2021 and 2020, respectively.

The decrease of $477 was related to Debt origination costs in the three months ended March 31, 2020 from the amendment of our existing credit facility.

The remaining $2,624 resulted from payments of dividends on our common stock in the first three months of 2021 and 2020.

Cash used in financing activities was $114,427 and $136,956, in the six months ended June 30, 2021 and 2020, respectively.

This $22,529 difference primarily resulted from the payment of the special dividend of $109,408 on our common stock in the first six months of 2021 compared to the payment of the special dividend of $131,230 in the same period of 2020, for a net difference of $21,822.

Credit Facility

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We do not believe there will be a need to issue any securities to fund such capital requirements.

In the first three months of 2021 and 2020, we paid a regular quarterly cash dividend in the amount of $0.06 per share on our common stock.

In the first three and six months of 2021 and 2020, we paid a regular quarterly cash dividend in the amount of $0.06 per share on our common stock.

The regular cash dividend amounted to $2,624 in each period.

In the three months ended March 31, 2020, we also declared a special cash dividend of $3.00 per share in the amount of $131,230 that was payable on April 17, 2020.

On May 10, 2021 we declared a special cash dividend of $2.50 per share and paid $109,408 on June 4, 2021. In the three months ended March 31, 2020, we declared a special cash dividend of $3.00 per share and paid $131,230 on April 17, 2020.

Capital Management

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A significant portion of these funds was held in cash or cash equivalents at multiple financial institutions.

In the periods ended March 31, 2021 and December 31, 2020, we also had investments in certain preferred stock, debt securities, and other equity instruments.

In the periods ended June 30, 2021 and December 31, 2020, we also had investments in certain preferred stock, debt securities, 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.”

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These equity instruments are recorded at fair value, with the unrealized gains and losses reported as a component of net income.

The fair value of the debt securities and equity instruments totaled $50,173 and $64,404 at March 31, 2021 and December 31, 2020, respectively.

The fair value of the debt securities and equity instruments totaled $46,238 and $64,404 at June 30, 2021 and December 31, 2020, 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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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 in our consolidated balance sheets at March 31, 2021 and December 31, 2020.

This activity was captured in our consolidated balance sheets at June 30, 2021 and December 31, 2020.

Second, we hedge our biofuels feedstock through the execution of purchase contracts and supply agreements with certain vendors or they meet the normal purchase and normal sales exception of ASC 815 

Derivatives and Hedging .

These hedging transactions are recognized in earnings and were not recorded in our consolidated balance sheets at March 31, 2021 or December 31, 2020 because they do not meet the definition of a hedge instrument as defined under GAAP.

These hedging transactions are recognized in earnings and were not recorded in our consolidated balance sheets at June 30, 2021 or December 31, 2020 because they do not meet the definition of a hedge instrument as defined under GAAP.

The purchase of biofuels feedstock generally involves two risk components:

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements