FF - NYSE

Lee Mikles – President Rose Sparks – CFO

Jonathan Tanwanteng – CJS Securities Gavin Richey – Rockwood Investment

Ladies and gentlemen, thank you for standing by. Welcome to the FutureFuel 2013 Third Quarter Conference Call. At this time, all participants are in a listen only mode. Following management's prepared remarks we will hold a question-and-answer session. (Operator Instructions) As a reminder, this conference is being recorded today, November 8, 2013. I’d now like to turn the call over Mr. Lee Mikles, President of FutureFuel Corp. Please go ahead sir.

Good morning, this is Lee Mikles from FutureFuel Corp. Thank you for participating in today's call to discuss FutureFuel's 2013 third quarter financial results and business progress. Joining me today from FutureFuel is Rose Sparks, our Chief Financial Officer. I like to remind listeners that comments 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 content of this call contains time sensitive information that is accurate only as of today, November 8, 2013. 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 our attention to our third quarter results. In Q3 we had a very strong quarter in terms of financial performance. Revenues were up 37% for Q3 - from Q3 2012 a new record at $121 million in revenues. Adjusted EBITDA totaled $28.2 million up 17%; net income increased to $15.3 million or $0.35 per diluted share from $12.5 million or $0.30 a year ago. Rose will walk us through the details and then we will be available for questions. Rose?

Thank you Lee. Good morning everyone. For the third quarter ending September 30, 2013 sales revenue increased 37% to $121.1 million from $88.3 million in 2012, we came 14% stronger than the second quarter of 2013. Biofuels revenue increased 61% to $77.4 million from $47.9 million in the third quarter 2012 on stronger sales volumes and sales price. Chemicals revenue increased 8% to $43.7 million from $40.3 million in the third quarter of ‘12. This change was attributed to higher sales volume with sales revenue increasing 39% for the antimicrobial intermediate, 27% for CPOs, 23% for performance chemicals, and 47% for other custom chemicals which included the first year shortfall payment of $2.3 million from the anode powder. Slightly offsetting these increases in revenues was a 25% reduction in DIPB sales revenue. There was no change in the bleach activator for the comparable quarters. From a gross profit perspective biofuels increases from $6.6 million in the third quarter of ‘12 to $12.2 million. This increase resulted from improved market conditions with the dollar blenders credit in effect, which was not in effect in the prior year quarter, and the continued demand for biodiesel in the United States given the government mandated Renewable Fuel Standard. The Chemicals segment gross profit decreased from $15.4 million in the third quarter of ‘12 to $13.8 million. This decrease included a net impairment on fixed assets for the anode powder in the amount of $1.4 million, and a reduction in gross profit from the bleach activator and proprietary herbicides. Partially offsetting these decreases was a shortfall payment of $2.3 million from the anode powder customer as increased sales volumes of products from other custom chemicals and anti-microbial intermediate. Income before interest and taxes was $23.5 million in the third quarter of ‘13 as compared to $19.2 million in the same period of 2012. Net income totaled $15.3 million for the third quarter or $0.35 per diluted share. This compares against $12.5 million for the third quarter of ‘12 or $0.30 per diluted share. For the nine months ending September 30, 2013 revenues increased 15% to $319.3 million as compared to $277.2 million in ‘12. Biofuels revenue increased 23% to $193.5 million from $157.6 million in the first nine months as compared to ‘12, The gallons sold increased year-over-year as did the average selling price. Revenues from chemical sales increased 15% in the first nine months from $119.6 million in ‘12 to $125.8 million. This change was attributed to increased sales revenue from both the antimicrobial intermediate at 44% and the other custom chemicals of 34% which again included the first year shortfall payment of $2.3 million from the anode powder. Partially offsetting these increases was a reduction in the sales revenue from the proprietary herbicide down 16%, DIPB down 15% and the bleach activator down 4%. Gross profit for the first nine months of 2013 was $75 million up from $49.2 million in 2012. Gross profit from the Biofuels segment increased to $33.3 million or 206% from $10.9 million in ’12, the increase was from improved market conditions as previously discussed and partly attributed to the retroactive reinstatement of the 2012 dollar blenders credit of $2.5 million recognized in the first quarter of 2013. This credit is set to expire at December 31, 2013. No such credit existed in ‘12. Also impacting gross profit was reduced [inaudible] which totaled $1.7 in 2013 as compared to $3.1 million in the first nine months of 2012. Gross profit from the Chemicals segment increased to $41.7 million or 9% from $38.3 million. The proprietary herbicide and bleach activator gross profits declined during the first nine months of 2013 as compared to 2012. But that decline was more than offset by the increased profits in the other custom chemicals and antimicrobial intermediate. Income before interest and taxes was $67.4 million in the first nine months of ‘13 as compared to $41.3 million in ‘12. Net income totaled $47.5 million for the first nine months or $1.10 per diluted share. This compares against $28.1 million for the first nine months of 2012 or $0.68 per diluted share. Lee, that concludes my remarks and I’ll turn the call back over to you.

Thank you rose, I appreciate it very much. I think there was a typo that appeared that Rose happened to mention and I just caught it as she was talking, the revenues for the chemicals increased actually 5% not 15%, from $119.6 million to $125.8 million; Rose had the numbers exactly right, we just had the increase – we added a digit to that so I just wanted to mention that. Comments about the business, the biodiesel margins and profitability continue to be very strong, with the dollar credit the blender’s credit, in spite of softening RIN prices it was still a terrific quarter in terms of that. The RVO, which is, required usage mandate we anxiously wait to hear from the EPA what they’ll do for the 2014 RVO, we actually thought it was come during the government shutdown, we have not heard about it yet. We expect it any time. It is evident without a strong mandate in the dollar credit the margins will suffer dramatically for the whole industry, as the market adjust to capacity that remains. We strongly believe that they will continue to support the continued growth of biofuels as they consider the proposal for next year's mandate. We also hope that our legislature will take a serious look now at the dollar federal blender’s credit and not let it lapse at year-end as they did in 2009 and then they retroactively brought it back in and they did in 2011 as well then reinstated it in January ‘13 retroactive to the first of ‘12, the starting and stoppings don’t help. So we are hopeful that they will get out in front of it this time. Chemicals remain strong with the bleach activator continuing to slow as expected. The pre-emergent herbicide contract expired again as expected on September 1. We sold product on a purchased order basis in September to that customer while we’ve discussed with them a path forward on a modified tolling basis. We signed a new agreement in the third quarter with another customer for a different herbicide intermediate. The revenue from the new customer will be less than 10% of our total revenues but it will certainly help to fill the gap from the expected cancellation of the pre-emergent herbicide as we’ve discussed before. As Rose mentioned we impaired fixed assets related to the anode intermediate product with a net pretax amount of $1.4 million this quarter, that’s a non-cash charge. The customer’s terminated the contract effective August 9, 2014; we do not expect any further product to be shipped under this contract. The customer is liable for the last shortfall of this payment and is due upon the termination of the contract. We certainly remain optimistic about the prospects for both segments of our business, chemicals and biodiesel. With that I’d like to open the call up to questions. Operator?

(Operator Instructions)

While we have a second, as people queue up for questions, it’s a good time to really thank our associates in our company. I think we've done an extremely good job; I think they have done an extremely good job of replacing some of the runoff business in the chemicals side. They've replaced and grown that business and I think they are to be commended for that. And the 32% margins on the chemical business the type of chemicals that we do is terrific. And 16% biofuels given the reduction in RIN prices during the quarter I think is a really commendable result and I think it performed at a high level, so I want to thank all of our associates for their performance. I think as senior management we are very pleased with the performance of the underlying businesses and how they have been operated.

Thank you, Jon.

No, it'll be bigger. Rose, you might comment on that. And it holds in the deferred revenue line, but Rose, what's that amount?

The amount that we'll collect next year, Lee?

Yes.

Thank you, Jon.

Thank you. I'm showing no further questions at this time. I would now like to turn the call back to Lee Mikles for any closing remarks.

Thank you all very much. I appreciate your time and your consideration and we'll endeavor to continue to grow the business, and I'm very pleased with the job that the associates are doing and the direction of both of our businesses, so we look forward to talking to you next quarter. Thank you for your time and consideration.