Page 4 - RosboroAR2020

Letter to Our
gripped the nation. Dif culty was everywhere, and Rosboro certainly felt the impact. But just as Einstein postulated, those challenges also created opportunity.
At the onset of the pandemic, Rosboro scaled back business activity as a reaction to rapidly diminishing sales and an unpredictable business climate. It seemed a safe bet that the market for building materials would remain depressed as the world dealt with COVID-19. The market had other ideas. Within a few short weeks, demand for wood products soared and has yet to let up. People stuck at home began to tackle home improvement projects at a frenetic pace. Families who were planning to purchase a home in the mid-term accelerated their moves, in many cases to vacate the close quarters of high- density housing. Millennials who as a group had underpurchased compared to previous generations nally jumped into the market, highlighting the country’s 3-4 million housing unit shortage. Chaos
in densely populated urban centers drove signi cant migration to quieter communities. Opportunity began to present itself.
Rosboro recognized the changing tide and quickly got to work. Rebuilding staff and production crews proved very dif cult in an upset labor market
where coming back to work was in many ways disincentivized. As employees returned, new work procedures were implemented to keep people safe and minimize the potential for exposure to the virus. The teams kept their focus and started to hit their
stride as the summer building rush arrived. Fire season was now upon us, and forest res once again ravaged the West Coast. Unlike the res of the last several years, this one occurred in Rosboro’s back yard. The Holiday Farm re burned almost 175,000 acres and was nally contained just 15 miles from the company’s main production facilities. Thick smoke blanketed the area, creating hazardous air quality that forced Rosboro to cease operations
for several days. Log supply dwindled to a trickle, putting pressure on already limited inventories.
Our community rallied, Rosboro included, to help displaced families during this dif cult time. We
were fortunate not to lose any employees in this deadly re, but it was such a signi cant local
event that almost everybody knows someone who was impacted by the re. Still, demand for wood products marched on and so did Rosboro.
2020 was a year of dichotomy; extraordinary dif culty paired with unanticipated opportunity.
Results: Rosboro posted strong pro tability in 2020, nding ways to capitalize on the available opportunities in one of the most dif cult and unpredictable times in recent memory. Net sales were $211.6 million, 9% higher than 2019, and 9% above plan on less sales volume across the company. This led to increased margins as price increases outpaced rising log costs. Material margins at the log using mills were above 2019 levels for most of the year. Cash ow (EBITDA) was $36.5 million for the year, $19.3 million more
OWNERS
AND
LENDERS
Albert Einstein famously observed that “In the middle of dif culty lies opportunity.” By all accounts, 2020 was the most dif cult year in recent collective memory. The year started on strong footing for those reliant on residential construction, with housing markets nally returning to normal levels after
more than a decade of anemic growth following
the Great Recession. Enthusiasm quickly waned
as a global pandemic brought sickness and death, caused the closure of businesses and most public locales, and forced people everywhere to adapt
and adjust to rapidly changing conditions. Wild res across the Western U.S., and speci cally in Rosboro’s backyard, destroyed forestlands and wounded communities. Protests, riots, and political unrest
4 — ROSBORO ANNUAL REPORT 2020