Kmani Gray
Culminating Project
BUSBTC 330
Professor Frank Ilett
8/11/18
Table of Contents
Title Page ………………………………………………………………………. 1
Executive Summary ……………………………………………………………. 3
Introduction …………………………………………………………………….. 4
Who Boise Cascade is? ………………………………………………………… 5
Findings ………………………………………………………………………… 6
Diagrams ……………………………………………………………………….. 8
Conclusion ……………………………………………………………………… 9
Recommendations ……………………………………………………………..... 10
Appendices ……………………………………………………………………… 11
Executive Summary
The Boise Cascade Company is a well operated company that provides services like Wood, Lumber, and others as well. Since the company started in 2004 they have come a long way and have maintained a standard of excellence.
The Company has many functions and many people in charge they have made head way in investments, stock and the loans that they have received. They don’t have a lot of debt and the company has made opportunities for employers and employees to buy into the company. From what I notice, even though company is solid in providing wood, lumber, and other base materials they are looking to be at the top of other companies that other companies provide as well.
While looking at the company financial report, I can see that the company has invested a lot to keep the company a float and have understood the value of time is money. Because if you have the money now than you should invest it because in the long run it will have more money in a few years than you would if you didn’t invest. All in all the company has been able to be successful in making sure that they are at the top of the game and having the opportunity to thrive and succeed.
Introduction
The point of this project is about how the Boise Cascade Company business functions and how they function. The Boise Cascade Company is a Boise Cascade is a large, vertically-integrated wood products manufacturer and building materials distributor with widespread operations throughout the U.S and one manufacturing facility in Canada. They are one of the largest producers of engineered wood products (EWP) and plywood in North America and a leading U.S. wholesale distributor of building products. There broad line of products is used primarily in new residential construction, residential repair-and-remodeling projects, light commercial construction, and industrial applications. They have a broad base of more than 4,500 customers, which includes a diverse mix of retail lumberyards, home improvement centers, leading wholesalers, specialty distributors, and industrial converters. The company believes that they are a large, vertically-integrated operations provide us with significant advantages over less integrated competitors and position us to optimally serve our customers.
In North America the building products manufacturing and distribution industry is highly competitive, with several producers manufacturing and selling a broad range of products. Demand for the company’s products is principally influenced by new residential construction, residential repair-and-remodeling activity, and light commercial construction in the U.S. Drivers of new residential construction, residential repair-and-remodeling activity, and light commercial construction include new household formation, the age of the housing stock, availability of credit and other macroeconomic factors, such as GDP growth, population growth and migration, interest rates, employment, and consumer sentiment. Purchasing decisions is made by the customers who buy our products are generally based on price, quality, availability, and customer service.
One of the purposes of the report is to show how effective the business is by looking at the different financial segments, what kind of business it is, and where the company is going.
Who Boise Cascade is?
Boise Cascade Company manufactures wood products and distributes building materials in the United States and Canada. It operates in two segments, Wood Products and Building Materials Distribution. The Wood Products segment manufactures laminated veneer lumber and laminated beams used in headers and beams; I-joists for residential and commercial flooring and roofing systems, and other structural applications; structural, appearance, and industrial plywood panels; and ponderosa pine lumber, studs, and particleboards. This segment's products are used in new residential construction, residential repair-and-remodeling projects, light commercial construction, and industrial applications. It sells its products to wholesalers, home improvement centers, retail lumberyards, and industrial converters. The Building Materials Distribution segment distributes a line of building materials, including engineered wood products, oriented strand boards, plywood, and lumber; and general line items, such as siding, metal products, insulation, roofing, and composite decking. Its products are used in the construction of new residential housing, including single-family, multi-family, and manufactured homes; the repair and remodeling of existing housing; the construction of light industrial and commercial buildings; and other industrial applications. This segment sells its products to retail lumberyards, home improvement centers, and specialty distributors. The company was founded in 2004 and is headquartered in Boise, Idaho. Some of the companies that distributes the products of building materials are, including OSB, plywood, and lumber (collectively commodities), general line items such as siding, composite decking, metal products, insulation, and roofing, and EWP. Except for EWP, we purchase most of these building materials from a vendor base of approximately 1,000 third-party suppliers ranging from large manufacturers, such as James Hardie Building Products, Trex Company, Huber Engineered Woods, and Louisiana-Pacific Corporation, to small regional producers.
Some of the competitors that the company has can have different effects on the company and because the company has different products there are different companies that can be competitors for those different products. Some of those companies are for Wood Products are Weyerhaeuser Company and Louisiana-Pacific Corporation, as well as several other smaller firms. For Building Materials Distribution include BlueLinx Holdings Inc. and Weyerhaeuser Company. Regional wholesale distribution competitors include Cedar Creek, OrePac, and U.S. Lumber Group. We also compete with wholesale brokers, specialty distributors, and certain buying cooperatives.
Findings
Within my examinations of the Boise Cascade company I saw a few trends among the working capital and the way the stocks are presented. Also, in my findings I have found the different answers for different equations for different years and the after-tax that can affect the company. I will be describing my findings and showing them though diagrams as well. What I noticed about the debt and the term loans of Boise Cascade, is that the Term Loan Agreement that they have allows them to prepay the Term Loan and subsequently reborrow amounts prepaid on or before December 31, 2018. The option to reborrow applicable prepaid principal amounts expires on December 31, 2019. Reborrowing’s may be made in up to three instances in minimum amounts of $10 million each. In addition, amounts prepaid and eligible for reborrowing are subject to an unused line fee of 0.325% per annum times the average daily amount of the unused commitments. Then with the stocks and stockholder’s equity I notice was that in February 2013, we adopted the 2013 Incentive Compensation Plan (2013 Incentive Plan), which was superseded by the 2016 Boise Cascade Omnibus Incentive Plan (2016 Incentive Plan), which was approved by our stockholders and became effective in April 2016. After the effective date of the 2016 Incentive Plan, no awards were granted under the 2013 Incentive Plan. The 2016 Incentive Plan provides for grants of stock options, stock appreciation rights, restricted stock, other stock-based awards, other cash-based compensation, and performance awards. Directors, officers, and other employees, as well as others performing consulting or advisory services for us, are eligible for grants under the 2016 Incentive Plan.
What I have is the different analysis that I was able to evaluate for the company to understand how it is ran and what I can learn from these results.
Conclusion
There are a few things that I have learned about the company. Some of the things that I have learned are when I think about time value of money, I think the obvious that it’s the value that money has at the time. but after reading about now I understand it as if you have the money to invest now than it will have value in the future but if you have the money, but you don't invest or can't, then there is no value on the money you have now of in the future. I think this applies to not only repaying student loans, but I also think it applies to investing in retirement or investing in buying a house because you can put money towards those goals and when you feel like the time is right, you not only have money you can use but you have more than what you started with. Also, I have learned that starting and running a business can be good and a bad thing but as long as you have a need that people want no matter the competition, you will some type of success. With the Boise Cascade Company, I have notice that with have multiple aspects and services that the company provides, that they are doing really well business wise and is still able to supply the needs of not only Idaho but all across the United States.
Recommendations
I recommend that, the company should:
· Invest more time and money making sure the company can expand its services to multiple avenues and other countries to gain more revenue.
· Be more of a presence in Boise so people and potential customers can know more about them and use their services.
· I would say one of the reasons why people will do anything to maximize profits to not only make their business strong or seem that way but they also do to make their pockets fuller, so they can do what they want with. But sometimes they maximize their profits at the expense of others whether it can hurt others in the company or hurt the company itself in some way it will become damaging to everyone else than the person who is gaining the profit. I believe that if Boise Cascade goes down that road than they will run the business into the ground I recommend that they shouldn’t take this route of management.
Appendices
BCC link
https://finance.yahoo.com/quote/BCC?p=BCC
U.S. Securities and Exchange Commission website
The artifact here represents what I have learned by helping me understand what a successful business looks like and how to maintain it by looking at their financial report. Also, that even though a business has multiple avenues of revenue, they still maintain that they do what is best for the company and their employees.