Page 17 - RosboroAR2018

Rosboro recently acquired Western Structures, a manufacturer of top-quality custom laminated beams located in Eugene, Oregon. This move will increase glulam revenues by approximately 20% while delivering a critical facet of the company’s long-term growth strategy by making us a true full-service glulam supplier to our wholesale distribution partners. Integration of this new line of business will continue throughout 2019.
NOTES NOTE 1
DESCRIPTION OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION - The nancial statements include the consolidated accounts of Rosboro Holdings, Inc., a Delaware corporation, along with its wholly owned subsidiary Rosboro Company, LLC (“Company”), a Delaware limited liability company. All signi cant intercompany balances and transactions have been eliminated in the consolidated nancial statements.
DESCRIPTION OF OPERATIONS - Rosboro Company, LLC (“Rosboro”) consists of a stud mill, dimension mill, glulam beam plant and veneer mill at one site in Spring eld, Oregon and two glulam beam plants in Veneta, Oregon. The Company employs approximately 350 employees and strives to provide the most e cient conversion of logs. Rosboro has maintained a focus on capital expenditures in
the key processing centers to stay current with technology,
and is a signi cant producer in its wood basket and the
Paci c Northwest. Principal customers are manufacturers, wholesalers and retailers located throughout the United States and Canada. The Company has an expanded product line, and
TO CONSOLIDATED FINANCIAL
STATEMENTS
is continuously looking for new product opportunities.
USE OF ESTIMATES - The preparation of the nancial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that
a ect the amounts reported in the nancial statements and accompanying notes. Actual results could di er from those estimates. Signi cant estimates used in preparing these nancial statements include estimated timber volumes used in determining annual depletion and future harvest plans, and assumptions used to calculate the fair value of stock option awards. These estimates have a direct e ect on gross margin, working capital and stockholders’ equity.
CASH & CASH EQUIVALENTS - For nancial statement purposes, the Company considers all liquid investments purchased with an initial maturity of three months or less to be cash equivalents. The Company may maintain cash balances in federally insured nancial institutions in excess of the insured limit. The Company’s banking system provides for the daily replenishment of major bank accounts as checks are presented for payment. Accordingly, there was
a negative book cash balance of approximately $707,000 at December 31, 2018 ($1,634,000 at December 31, 2017). Such balances result from outstanding checks that had not yet been
paid by the bank and are re ected in accounts payable
in the consolidated balance sheets.
ACCOUNTS
RECEIVABLE - The Company generally does not require collateral or other security to support accounts receivable. Credit risk associated with accounts receivable is periodically reviewed by management and an allowance, if required, is established. No allowance was deemed to be necessary at December 31, 2018 and 2017.
INVENTORIES - Inventories
are stated at the lower of cost or net realizable value. Cost is determined using a 12-month rolling average.
17 ANNUAL REPORT 2018