Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared by FutureFuel Corp. (“FutureFuel” or “the Company”) in accordance and consistent with the accounting policies stated in the Company's 2025 Annual Report on Form 10-K, inclusive of the audited consolidated financial statements, and should be read in conjunction with these consolidated financial statements. Certain reclassifications were made to prior year amounts to conform to the 2026 presentation.

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 unaudited consolidated 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 direct and indirect wholly owned subsidiaries; namely, FutureFuel Chemical Company; FutureFuel Warehouse Company, L.L.C.; and Legacy Regional Transport, L.L.C. Intercompany transactions and balances have been eliminated in consolidation.

Some of the Company's manufacturing equipment requires periodic, planned shutdowns of significant parts of our facility in order to perform necessary inspections, cleanings, and maintenance activities, referred to as turnarounds. The cost of turnarounds incurred for routine repairs and maintenance or unplanned outages at our facility are expensed as incurred. 

A component of Other expense, net, in the consolidated statement of operations and net income (loss) for the three and six months ended June 30, 2026, includes $260 and $1,617, respectively, of incremental, non-recurring costs associated with the Winter Storm Fern freeze event, which caused a 30-day shutdown for the majority of our manufacturing plant, and $281 and $281, respectively, of incremental, non-recurring costs associated with a fire in our tank farm area that was promptly and safely contained. These expenditures primarily consisted of idle labor and emergency repairs and are abnormal to the Company's standard operations. 

Effective  January 1, 2026, the Company elected to change its method of accounting for certain inventory from last in, first out ("LIFO") to weighted average cost. The Company believes the change to weighted average cost is preferable because it provides a better matching of costs and revenues, conforms the Company's inventory to a single method of accounting and improves comparability with the Company's peers. Comparative financial statements for prior years have been adjusted to apply the new method retrospectively. The tables below illustrate the impacts for the prior three- and six-month periods ended June 30, 2025, had the Company reported under the weighted average cost basis of accounting:

The following tables summarize the effect of the change on the Company's financial condition as of, and results of operations for the three and six months ended, June 30, 2026.

Recently Adopted Accounting Standards

In July 2025, the FASB issued Accounting Standards Update (“ASU”) 2025-05 “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets.” ASU 2025-05 permits the use of certain estimates and assumptions in developing forecasts used for determining expected credit losses on accounts receivable. This guidance was effective for us  January 1, 2026 and did not materially impact our consolidated financial statements.

Accounting Standards Issued, Not Yet Adopted

In  November 2024, the FASB issued ASU 2024-03 “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” ASU 2024-03 requires disaggregated disclosure of income statement expenses for public business entities. The ASU does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. This guidance will be effective for us on January 1, 2027. The Company is currently evaluating the impact of the changes required by the new standard on the Company's financial statements and disclosures.

In September 2025, the FASB issued ASU 2025-06 “Intangibles – Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software.” ASU 2025-06 eliminates the consideration of project development stages in determining whether a cost is eligible for capitalization. Instead, cost capitalization will be based on a “probable to complete” threshold. This guidance will be effective for us on January 1, 2028. We are evaluating the impact, if any, that the adoption of ASU 2025-06 may have on the Company's financial statements and disclosures.

In December 2025, the FASB issued ASU 2025-10 “Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities.” ASU 2025-10 finalizes proposed ASU No. 2024-ED700 of the same name and establishes authoritative guidance for business entities on the recognition, measurement, and presentation of government grants. A government grant is defined, in part, as a transfer of a monetary asset from a government to a business entity. A government grant should not be recognized until it is probable that the business will comply with the conditions attached to the grant and that the grant will be received. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2029, and for interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. The Company is evaluating this accounting standard and currently does not expect the adoption to have a material impact on its financial statements and disclosures. 

In May 2026, the FASB issued ASU 2026-02 “Environmental Credits and Environmental Credit Obligations (Topic 818).” This update establishes comprehensive recognition, measurement, presentation, and disclosure guidance for participants in voluntary and compliance-based environmental credit programs, including Renewable Identification Numbers (“RINs”). Under the standard, internally generated environmental credits are measured initially at transaction or registration costs incurred, if any. The standard also expands disclosure requirements regarding an entity's involvement in environmental credit programs, including volumes generated, held, and transferred, as well as accounting policies for related compliance obligations. ASU 2026-02 is effective for the Company for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, with early adoption permitted. The standard permits adoption on a modified retrospective or prospective basis. While the Company historically does not allocate production costs to internally generated RINs, it is currently evaluating the impact of the new disclosure, measurement, and presentation requirements on its consolidated financial statements and footnote disclosures.