Page 6 - RosboroAR2017

projected. The remaining 64.7 mmbf of volume was obtained through open market purchases and was 5.8 mmbf above plan due to the higher than planned production levels. Logging and associated costs were also about 6% less than forecast.
Creativity among the sales, operations and log acquisition departments, coupled with the new drying capacity and opportunistic available margins on non-traditional sizes and species, resulted in a much broader mix of
logs that needed to be acquired. The team did a fantastic job of being nimble and active in the market to ensure we obtained the raw materials we needed at the right prices and timing.
Another milestone achieved by the timber department this year was to increase our volume remaining on timber contracts by 58%. The timber contract volume had been depleted leading up to the sale process due to the uncertainty of the ability to transfer those contracts to an ultimate buyer. Replenishing the timber contract volume was of high priority through the year and was another signi cant achievement for the timber department last year.
OPERATIONS: Balancing operations for optimum return to the log was vital to exceeding pro tability from the company’s core manufacturing operations. For that reason, both the Veneer and Plywood operations remained curtailed in 2017 and resulted in combined income of $121,000 with veneer chip revenue more than o setting ongoing xed costs such as taxes, insurance and depreciation expense.
Mill A (the dimension lumber facility) generated operating pro t of $5.3 million in 2017, $1.9 million better than projected. This newly remodeled facility (in 2014) ran very e ectively throughout the year. Production volume exceeded projection by 4.3 mmbf, averaging 429 mbf/day compared to the 425 mbf/day projected and running 8 days more than forecast due to increased demand for lamstock from our glulam operations as well as producing external dimension lumber sales for the rst time in many years. The additional production helped to mitigate rising manufacturing costs and o set the higher than projected log costs, improving overall pro tability.
Lamstock prices came in 6.7% higher than forecast to keep pace with increasing log prices and to match the increase in Glulam beam nished prices that occurred at the start of the second quarter.
Glulam sales returns nished the year $28/mbf higher than projection because of the timing of the price increase compared to what we had in the plan. Sales volumes and production volumes were essentially on plan. Spring eld glulam averaged 270 mbf/day, 16 mbf/day less than forecast and running nine days less than projected. The Vaughn glulam plant picked up the di erence, moving from just producing 4” and 10” beams at the beginning of the year to running a half shift beginning in June, producing the full range of beam products. Production volume for Vaughn nished above plan for the year and averaged 57 mbf/
day from June through December. The combined glulam operations nished with a gross margin of $18.1 million, about $1.5 million less than plan primarily because raw material costs were $2.9 million more than expected.
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