FutureFuel reported a sharp year-over-year increase in third-quarter revenue, but it remained loss-making as extended maintenance at customer chemical facilities and costly biofuel feedstocks weighed on results. The Batesville, Arkansas-based chemicals and biodiesel producer said production has normalized in chemicals and expects positive adjusted EBITDA in both the fourth quarter and full-year 2026.
Management also outlined growth and efficiency efforts, including a new European chemicals customer, plans to increase the value of biodiesel byproducts, and improving biodiesel market conditions.
Third-quarter results
- Revenue was $104.7 million, up $82.0 million from the third quarter of 2025.
- FutureFuel recorded a GAAP net loss of $8.4 million, or $0.19 per diluted share. The loss widened by $0.8 million, or $0.02 per share, from a year earlier.
- Adjusted EBITDA was a loss of $4.9 million, an improvement of $0.4 million year over year. Adjusted EBITDA is a non-GAAP measure.
- The company expects positive adjusted EBITDA in the fourth quarter and for full-year 2026.
Chemicals: maintenance disrupted volumes
- Chemicals sales volume fell 27% year over year, as maintenance at two customer production units reduced orders and FutureFuel’s operating leverage.
- Chemicals revenue nevertheless rose $1.3 million to $16.9 million, supported by capacity added in late 2025.
- The two turnarounds reduced third-quarter adjusted EBITDA by about $4.3 million. One was planned; the other was brought forward after a customer paused its usual orders to rebalance inventory.
- That customer has committed $41 million of customer-funded investment at FutureFuel’s Batesville site over the next two years and expects to resume its normal ordering pattern in the fourth quarter. FutureFuel said chemicals production has returned to normal rates.
Biofuels: more production, but costs offset stronger sales
- Biofuels sales volume increased by 11.3 million gallons from a year earlier. Strong demand and improved plant reliability helped lift utilization to 83%, compared with 56% in the second quarter, and production reached a multi-year high.
- Higher sales volumes and improved pricing were offset by elevated feedstock costs and losses on derivatives, leaving the segment with a gross loss for the quarter.
- FutureFuel expects to sell $1.5 million of renewable identification number credits (RINs) generated from third-quarter biodiesel production in the fourth quarter. It also expects to recover $2.3 million in derivative losses tied to the corresponding sale of physical inventory.
- Through early November, the company had booked orders for more than 90% of its fourth-quarter biodiesel production capacity.
- Management expects demand to strengthen into 2027, citing regulatory changes that narrow an advantage renewable diesel producers previously had in RIN treatment and improve biodiesel’s competitive position.
Growth and efficiency plans
- FutureFuel established a relationship with a large European chemicals customer that is moving production to the United States. Initial production batches are expected in the first quarter of 2027, with full production rates targeted by mid-2027.
- The company is pursuing more business with existing chemicals customers, new customer wins and opportunities tied to manufacturers shifting production to the United States. Management pointed to the company’s U.S. manufacturing footprint and lower natural-gas costs relative to Europe.
- A recently launched productivity initiative, supported by outside advisers, is intended to improve efficiency and optimize costs at Batesville.
- One opportunity is refining glycerin, FutureFuel’s largest biodiesel waste stream, into a higher-value product. The company estimates this could generate $5 million to $10 million of additional annual profit beginning in 2027, with minimal incremental cost.
- FutureFuel also said customer agreements allow it to pass through higher energy, materials and labor costs through cost indexing.
The quarter showed a split between the two businesses: chemicals earnings were hit by temporary customer maintenance, while biodiesel production and demand improved but did not overcome input costs and derivative losses. The company’s positive adjusted EBITDA outlook for the fourth quarter and full year rests alongside its stated plans to restore biodiesel production to more optimal levels and improve efficiency and product value.