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Ladies and gentlemen, thank you for standing by. Welcome to the FutureFuel 2012 First Quarter Conference Call. [Operator Instructions] As a reminder, this conference is being recorded today, May 10, 2012. I'd now like to turn the call over to Mr. Lee Mikles, CEO of FutureFuel. Please go ahead, sir.

Good morning. This is Lee Mikles from FutureFuel. Thank you, all, for participating in today's call to discuss FutureFuel's 2012 first quarter financial results and business progress. Joining me from FutureFuel this morning is Chris Schmitt, our Chief Financial Officer. I'd like to remind the listeners that comments that are made during this call will include forward-looking statements within the meaning of the federal securities laws. These forward-looking statements involve risks and uncertainties that could cause actual results to be materially different from any anticipated results. For a list and descriptions of these risks and uncertainties, please review FutureFuel's filings with the Securities and Exchange Commission. Please note that the comments of this call contain time-sensitive information that is accurate only as of today, May 10, 2012. FutureFuel disclaims any intention or obligation to update or revise any financial projections or forward-looking statements, whether as a result of new information, future events or otherwise. With that out of the way, I'd like to turn the attention to the first quarter results. If this is your first time with FutureFuel, I'll just briefly go through the 2 business lines we're going to talk about principally today: one, our custom chemical business; and two, our biodiesel manufacturing business. So those will be the 2 lines that we talk about today. We had very strong first quarter financial results. Our revenues increased 55% during the first quarter over -- year-over-year. Our net income increased to $7.1 million versus $2.7 million last year, that's $0.17 a share versus $0.07 a share last year. It's 143% increase. Our adjusted EBITDA is $16.6 million versus $8.9 million, which is an 87% increase. Now I'll turn the call over, to get a little bit more granular on the financial information, to our Chief Financial Officer, Chris Schmitt.

Thank you, Lee, and welcome, everybody, to today's call. As Lee indicated just a moment ago, our revenue was up approximately 55% to $85.7 million. This compares against $55.2 million in the first quarter of 2011. This increase was driven by biofuel revenue growth. Biofuel revenues totaled $47.3 million, and this compares against about $10.5 million in the first quarter of last year. Now the $1 biodiesel blenders' credit did expire at 12/31/2011; and its reinstitution, while it might be possible, does not appear to be imminent at this point in time. Regardless, demand was steady in the first quarter due to the RFS2 mandates, whereas biofuel sales in the first quarter of 2011 were somewhat limited due to the -- our initial conversion to lower-grade feedstocks and to the adaptation to the improvement in biodiesel economics at that point in time. In the first quarter of 2012, biofuel revenues were favorably impacted by approximately $8.9 million in revenue, which was derived from sales of refined petroleum products as a shipper on a common carrier pipeline. Such revenues totaled approximately $2.7 million in the first quarter of 2011. These sales generate little in the way of gross profit. Chemical revenues decreased approximately 14% to $38.4 million in the first quarter of 2012. This compares against $44.7 million in the first quarter of 2011. This was driven by decrease in sales of the bleach activator product and of the proprietary herbicide, due to reduced volumes. Partially offsetting these decreases were increased sales in other chemicals, which included some commercial sales of the graphite anode material for lithium-ion batteries. Our discussions continue with both the customers of the bleach activator product and of the proprietary herbicide. In terms of gross profit, chemicals segment gross profit increased about 50% to $11.7 million. This compares against $7.8 million in the first quarter of 2011. As stated in the prior year disclosures, in Q1 2011, we incurred certain expenses, which we were not able to pass along to our customers. And in the first quarter of 2012, these expenditures were not incurred. Additionally, as sales in our biofuels segment has increased, the fixed costs that may have more -- that may have previously been more heavily allocated to the chemicals segment are being allocated in greater proportion to the biofuels segment. Basically, as the sales activities of our company as a whole increase, all products are benefited to a certain degree, as our fixed costs are spread over a larger product base. Biofuels segment gross profit increased to $1.1 million. This compared against the $2.8 million negative gross profit in the first quarter of 2011. Again, we've witnessed steady demand from biodiesel, driven primarily by the mandates of RFS2. As we have discussed in the past, our gains and losses on derivative instruments can cause variability in our financial results. In the first quarter of 2012, we incurred approximately $3.4 million in losses on derivative instruments. This compares against $3.8 million of losses in the first quarter of last year. Income from operations increased to approximately $10.6 million from $3.1 million in the first quarter of 2011. Additionally, net income increased to $7.1 million, or $0.17 per diluted share, against $2.7 million or $0.07 per diluted share in the first quarter of 2011. And lastly, adjusted EBITDA totaled $16.6 million compared to $8.9 million in the first quarter of 2011. With that, I'll turn the call back over to Lee.

Thanks, Chris. I appreciate it. I'm going to go through a couple of business items here that I think will give you a clearer view of where we are and where we might be going, and try to anticipate some of the questions that you might have and address them head-on. First off, with the bleach activator customer and that contract, we continue to have discussions with the customer. Those discussions have been productive, to say the least, and we are optimistic that we'll reach a definitive agreement sometime in the second quarter of this year .No assurance can be given, but we're quite optimistic about that prospect. On the biodiesel production side, the capacity and the debottlenecking process continues. Since our last call, a number of process improvements have been implemented. We're currently running at a rate of about a little in excess of 45 million gallons per year, and the process improvements continue. And again, that's a little bit hard to anticipate how long until we get back to the 59 million total capacity, because this is -- we're pioneering here. So you run until your next bottleneck, and it's very hard to anticipate when or what that would be. The one big issue hanging out -- there is a couple of big issues. One of the big issues has to do with the dollar credit that Chris talked about on the biodiesel side, per gallon. We haven't seen a huge impact from them in the first quarter due to mandates with RFS2, Renewable Fuel Standard 2, and the demand is quite steady, remembering that we were gone from last year of 800 million gallons of required usage to 1 billion this year. There is a very large issue out there around RIN fraud. And RIN is the renewable identification number. And that identifies that a obligated party, typically, a refiner, is using the renewable fuel and the obligated parties are becoming very choosy from whom they purchase their RINs. Whether it be RIN outright because it's detachable from the gallon or included in the gallon, they want to make sure that the party that they're buying from, that, a, the RINs are valid because there has been a fraud issue out there, people producing RINs that had no backup for it or had no documentation for it. And when the EPA comes in and deems those to be invalid, they've got to go back to whom they bought those RINs from. So they want to make sure that, that party is going to be around, that they have the financial stability to stand behind them. So I think this actually inures to our benefit, to say the least, given our financial strength and given that we've had 0 issue on this front with our product. So I think that, that's an issue that is out there, but I think it's one that is good for us. On the front of the graphite anode material for the lithium-ion battery, which we've got great hopes for, as does our customer, we've had limited commercial sales in the first quarter. I think that you'll see limited financial -- commercial sales in the next couple of quarters as well. And although we are excited about the product, the customer demand for the final product has been quite sluggish. And I don't think that's a big surprise given, what we call, the slow uptake in the Electric Car business. So I don't think that, that's a big surprise. We have a take-or-pay agreement there that protects our profitability to a certain extent, but it's off to a relatively modest start. I think that the chemical pipeline, in terms of new business, our sales force remains active, looking for new business. Again, reminding that these new projects don't come in like smart bombs, it's not as if they fly in the window and go right into the reactor. Typically, there needs to be some modification. Again, typically, we compete for these products against internals, meaning can these people do it internally or is it cheaper to do it with us. That's usually our competition for business. So we continue to go out there each day, trying to mine new business. The growth strategy for the business remains not only the internal growth of the business on both sides, both chemical and biodiesel, but also on the acquisition front. And I think that the fact that we've got a lot of cash on our balance sheet, have been very prudent stewards, I think, of that capital, please be reminded that we work constantly on acquisition proposals. We're looking at transactions. We bid on transactions, we just have not prevailed yet. We have taken, I think, a more conservative view and we think is a more prudent view towards those acquisitions. So -- but please be reminded that, that is something that we work on and are mindful of on a day-to-day basis. So with those comments, I'd like to open it up to questions. Operator?

[Operator Instructions] You have a question from Craig Irwin of Wedbush Securities.

This is David in for Craig. A couple of questions. On the roughly $0.05 headwind to EPS from the derivatives, is there any thought on changing your accounting for commodity accounting?

Chris, you'd probably better to handle that.

Sure, I'd be happy to. Not at this point in time. The -- there is pretty extensive documentational requirements for affecting that change, and at this point in time, we don't see that the cost benefit for such a change is there.

Okay. Can you update on the debottlenecking progress and then maybe talk a bit more about total capacity? I believe you have 2 lines at the plant, though I haven't visited yet. And then where do you sit with -- I noticed that tax rate increased. Was that because you guys are producing more and no longer get the small producer tax credit? Or could you talk about that, please?

I'll let Chris handle the tax issues, but I'll talk about the debottlenecking a little bit. The stated capacity of the biodiesel site has been 59 million, and that's really what the -- what we call the higher-value feedstocks, David. As you move down the food chain to the lower-value feedstocks, it gets tougher, obviously, with a high free fatty acid content and the inconsistency of that material. So that knocked our capacity down quite a bit. Again, to move this back up is just going from one bottleneck to the other. So we hope to be able to take the entire plant back up to that number and look to increase that if the market demand is there, and we can increase that capacity at some point in the future. But again, we're doing some pioneering work here on the front end of it. And I think that if you look at the cash contribution that we make out of this business, I think it's quite clear that, that was probably the right decision to make, but we continue to invest in that business. And Chris, do you want to handle the tax, the other issues?

I'll be happy to, Lee. David, I think there are 2 things that are primarily impacting that change in the tax rate, one as you hit on is exactly right. When the $1 federal blenders' credit went away, the small producer tax credit also went away, and that's the permanent item that does impact our tax rate. The other item that impacts our tax rate is that we do, from time to time, incur some expenses that -- they are only deductible to the extent that we have similar gains. And when that happens, we take what I think is a reasonably conservative approach in that we reserve against those deductions until we are actually able to take advantage of them. And that gets into the issue of the valuation allowance, which I believe we discussed in the income tax footnote. Those 2 items are both combined impact that affect the tax rate.

[Operator Instructions] Our next question is from Greg Kapoustin of Burlingame.

You've answered some of my questions regarding the intermediate anode material shipment. But can you provide any color on the nameplate capacity of the facility or the total capital invested to help us characterize total, kind of, blue sky revenue potential of the facility?

Greg, a couple of things. I don't think we've ever disclosed the capacity of that particular facility. Again, we had a $12.5 million grant from the government on the dual submission that we made with our customer. Our customer reimbursed, again, our expense on that. And Chris can go a little more of the detail on, basically, how that burns off over time. But again, I think that our investment has been the contribution of a shuttered building that had some, what I'll call, blocks and bans that were applicable to this particular process. But Chris, you might want to talk about how that burns off on the customer reimbursement and the grant.

Sure. I mean, the money that we were reimbursed by, as that comes in and we spend it to build the capital asset, that gets recorded as deferred revenue. So you're going to see a fairly sizable deferred revenue balance on our balance sheet. That doesn't strictly relates to the anode material project as we've had a couple of projects whereby we are reimbursed for the capital on them, but that's a large portion of it, that deferred revenue that has brought in to income as an element of revenue over the anticipated life of the customer relationship.

Thank you. There are no further questions at this time. I'd like to turn the call over to Mr. Mikles for any closing remarks.

Thank you, all, very much for participating today. I appreciate it very much. The company appreciates it. But we appreciate your continued interest, and we look forward to talking to you next quarter. Thank you very much for your time this morning.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program. You may now disconnect. Have a wonderful day.