EX-99.1 2 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

 

FOR IMMEDIATE RELEASE    LOGO

LUMBER LIQUIDATORS ANNOUNCES SECOND QUARTER 2009

FINANCIAL RESULTS AND PROVIDES UPDATED FULL YEAR OUTLOOK

~ Second Quarter Net Sales Increased 11.8% to $143.1 Million ~

~ Second Quarter Net Income Increased 18.1% to $6.9 Million, or $0.25 per Diluted Share ~

~ Company Raises Full Year Revenue Guidance to a range of $528 million to $538 million and

EPS Guidance to a range of $0.85 to $0.91 ~

TOANO, Va, August 5, 2009 – Lumber Liquidators, Inc., (NYSE: LL) the largest specialty retailer of hardwood flooring in the U.S., today announced financial results for the second quarter and six months ended June 30, 2009.

Second Quarter Results

Net sales increased $15.1 million, or 11.8%, to $143.1 million in the second quarter of 2009 from $128.0 million in the second quarter of 2008. Comparable store net sales decreased 1.8% for the quarter, in comparison to an increase of 2.7% for the second quarter of the prior year and a decrease of 5.8% for the first quarter of 2009. Non-comparable store net sales increased $17.3 million over the prior year period. The Company opened eight new stores during the second quarter.

Gross margin increased to 35.3% in the second quarter of 2009 compared to 34.6% in the same period of 2008. The improvement in gross margin was primarily due to continued changes in product line sales mix, as well as a continued shift by customers to premium products within the product lines. In addition, the continued execution of operational initiatives, including improvements within store operations, merchandising and logistics, contributed to gross margin expansion, as well as generally lower fuel costs.

Selling, general and administrative (SG&A) expenses were $39.2 million, or 27.4% of net sales, for the second quarter of 2009 compared to $34.9 million, or 27.3% of net sales, for the second quarter of 2008. The slight increase in SG&A as a percentage of net sales reflects both new store growth and continued investment in the Company’s infrastructure to drive long-term margin expansion. These increases were effectively offset by the Company’s continued ability to leverage national advertising spend.

Net income increased 18.1% to $6.9 million, or $0.25 per diluted share, in the second quarter of 2009 compared to $5.9 million, or $0.22 per diluted share, in the second quarter of the prior year. The effective tax rate was 39.6% in the second quarter of 2009 compared to 38.0% in the second quarter of 2008 due primarily to increases in certain state income taxes and a reduction in tax-exempt interest income.

Jeffrey W. Griffiths, President and Chief Executive Officer, commented, “We are pleased with our ability to maintain our momentum and generate strong second quarter results. We continued to drive increases in traffic and gain market share despite the current economic environment by leveraging the appeal of Lumber Liquidators’ value proposition. We expanded our footprint, successfully entering seven new markets during the quarter. Further, by continuing to make the right investments in our infrastructure, we have achieved additional operational efficiencies and continued to expand our operating margin. Overall, we are very pleased with our team’s ongoing ability to execute on our business plan.”


First Six Months Results

Net sales increased 10.1% to $267.0 million in the first six months of 2009 from $242.6 million in the first six months of 2008. Comparable store net sales decreased 3.7% for the first half of 2009, compared to an increase of 4.7% for the first half of the prior year. Non-comparable store net sales increased $33.2 million over the prior year. The Company opened 18 new stores during the first six months of 2009 and currently operates 168 stores in 45 states.

Gross margin increased to 35.6% in the first half of 2009 compared to 34.8% in the same period of 2008. SG&A expenses were $75.5 million, or 28.3% of net sales for the first half of 2009 compared to $67.2 million, or 27.7% of net sales for the first half of 2008.

Net income increased 18.1% to $12.0 million, or $0.44 per diluted share, in the first half of 2009 compared to $10.2 million, or $0.38 per diluted share, in the first half of the prior year. Net income for the first six months of 2009 reflects an effective tax rate of 39.4% compared to 41.8% in the first six months of 2008.

Company Outlook

Based upon year-to-date results and current visibility, the Company has updated its fiscal 2009 expectations. The Company now expects the following:

 

   

Net sales for the full year in the range of $528 million to $538 million compared to the previously expected range of $515 million to $530 million.

 

   

A decrease in comparable store net sales in the low-single digit range, compared to a decrease in comparable store net sales in the low to mid-single digit range.

 

   

Full year 2009 earnings per diluted share in the range of $0.85 to $0.91, based on a diluted share count of 27.7 million shares, compared to the previously expected range of $0.76 to $0.86 based on a diluted share count of 27.5 million shares.

 

   

The opening of 14 to 18 new store locations in the second half of the year, for a total of 32 to 36 new store locations in 2009, compared to a previous range of 30 to 36 new store locations.

Mr. Griffiths concluded, “While there are still challenges ahead, we are beginning to see signs of stabilization in the marketplace and we are pleased with where we stand at the midpoint of the year. The operational improvements that we have made in our business have enabled us to achieve strong financial results and increase our cash position through very challenging economic times. We plan to continue to invest in our infrastructure, including information technology and product procurement and allocation, to ensure that we are well-positioned to execute on our long-term growth strategy. Our value proposition continues to resonate well with consumers in this environment and, as we look to the back half of the year, we are confident in our ability to continue to improve our operations, expand our operating margin, drive traffic, and grow our footprint.”

Conference Call and Webcast Information

The Company will host a conference call and audio webcast today, August 5, 2009, at 10:00 a.m. Eastern Time. The conference may be accessed by dialing (888) 206-4913 or (913) 312-1408. A replay will be available approximately one hour after the call through August 19, 2009 and may be accessed by dialing (888) 203-1112 or (719) 457-0820 and entering pin number 1209490. The live conference call and replay can also be accessed via audio webcast at the Investor Relations section of the Company’s website, www.lumberliquidators.com.


About Lumber Liquidators, Inc.

Lumber Liquidators is the largest specialty retailer of hardwood flooring in the United States. With more than 170 stores and 150 varieties of flooring, including solid and engineered hardwood, bamboo, cork and laminate, and featuring premier brands such as Bellawood (which features a 50-year warranty), Dream Home, Schön, Virginia Mill Works, and Morning Star, Lumber Liquidators has one of the most extensive selections of prefinished and unfinished hardwood flooring in the industry. Its hardwood line is made up of more than 25 domestic and exotic wood species in both prefinished and unfinished brands of various lengths and widths.

While keeping costs down is part of the Company’s philosophy, Lumber Liquidators is also committed to offering high-quality, name-brand products that it stands behind with confidence.

Forward-Looking Statements

This press release and accompanying financial tables may contain “forward-looking statements” as defined in the Private Securities Litigation Reform Act. These statements are based on currently available information as of the date of such statements and are subject to risks and uncertainties that may cause actual results to differ. The Company specifically disclaims any obligation to update these statements which speak only as of their respective dates, except as may be required under the federal securities laws. Information regarding these additional risks and uncertainties is contained in the Company’s most recent periodic filings with the Securities and Exchange Commission.

For further information contact:

 

Lumber Liquidators, Inc.   FD
Daniel Terrell/Ashleigh McDermott   Leigh Parrish/Jessica Greenberger
Tel: 757.566.7512   Tel. 212.850.5600

(Tables Follow)


Lumber Liquidators, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share data)

 

     June 30,
2009
   December 31,
2008
     (unaudited)     

Assets

     

Current Assets:

     

Cash and Cash Equivalents

   $ 43,305    $ 35,139

Merchandise Inventories

     106,775      88,731

Prepaid Expenses

     3,896      5,033

Other Current Assets

     3,716      3,731
             

Total Current Assets

     157,692      132,634

Property and Equipment, net

     17,116      13,780

Deferred Income Taxes

     2,317      2,317

Other Assets

     3,647      3,674
             

Total Assets

   $ 180,772    $ 152,405
             

Liabilities and Stockholders’ Equity

     

Current Liabilities:

     

Accounts Payable

   $ 24,721    $ 15,373

Customer Deposits and Store Credits

     13,788      10,418

Other Current Liabilities

     11,690      10,598
             

Total Current Liabilities

     50,199      36,389

Deferred Rent

     1,862      1,619

Stockholders’ Equity:

     

Common Stock ($0.001 par value; 35,000,000 authorized; 26,913,269 and 26,796,891 outstanding, respectively)

     27      27

Additional Capital

     89,895      87,613

Retained Earnings

     38,789      26,757
             

Total Stockholders’ Equity

     128,711      114,397
             

Total Liabilities and Stockholders’ Equity

   $ 180,772    $ 152,405
             


Lumber Liquidators, Inc.

Condensed Consolidated Statements of Income

(in thousands, except share data and per share amounts)

(unaudited)

 

     Three Months Ended
June 30,
    Six Months Ended
June 30,
 
     2009     2008     2009     2008  

Net Sales

   $ 143,116      $ 128,037      $ 266,968      $ 242,586   

Cost of Sales

     92,538        83,782        171,828        158,209   
                                

Gross Profit

     50,578        44,255        95,140        84,377   

Selling, General and Administrative Expenses

     39,247        34,934        75,542        67,248   
                                

Operating Income

     11,331        9,321        19,598        17,129   

Interest and Other Income, net

     (150     (159     (272     (372
                                

Income Before Income Taxes

     11,481        9,480        19,870        17,501   

Provision for Income Taxes

     4,542        3,604        7,838        7,313   
                                

Net Income

   $ 6,939      $ 5,876      $ 12,032      $ 10,188   
                                

Net Income per Common Share—Basic

   $ 0.26      $ 0.22      $ 0.45      $ 0.38   
                                

Net Income per Common Share—Diluted

   $ 0.25      $ 0.22      $ 0.44      $ 0.38   
                                

Weighted Average Common Shares Outstanding:

        

Basic

     26,863,599        26,760,119        26,830,575        26,751,686   

Diluted

     27,534,297        27,261,011        27,355,657        27,031,200   


Lumber Liquidators, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

     Six Months Ended
June 30,
 
     2009     2008  

Cash Flows from Operating Activities:

    

Net Income

   $ 12,032      $ 10,188   

Adjustments to Reconcile Net Income to Net Cash Provided by (Used in) Operating Activities:

    

Depreciation and Amortization

     2,341        2,190   

Stock-Based Compensation Expense

     1,651        1,416   

Changes in Operating Assets and Liabilities:

    

Merchandise Inventories

     (18,044     (27,940

Accounts Payable

     6,632        3,904   

Customer Deposits and Store Credits

     3,370        2,824   

Prepaid Expenses and Other Current Assets

     1,152        (188

Other Assets and Liabilities

     1,510        680   
                

Net Cash Provided by (Used in) Operating Activities

     10,635        (6,926

Cash Flows from Investing Activities:

    

Purchases of Property and Equipment

     (3,099     (3,966
                

Net Cash Used in Investing Activities

     (3,099     (3,966

Cash Flows from Financing Activities:

    

Payments of Long-Term Debt and Capital Lease Obligations

     (1     (76

Proceeds from the Exercise of Stock Options

     663        143   

Excess Tax Benefits on Stock Option Exercises

     —          33   

Common Stock Purchased Pursuant to Equity Compensation Plans

     (32     (51
                

Net Cash Provided by Financing Activities

     630        49   
                

Net Increase (Decrease) in Cash and Cash Equivalents

     8,166        (10,843

Cash and Cash Equivalents, Beginning of Period

     35,139        33,168   
                

Cash and Cash Equivalents, End of Period

   $ 43,305      $ 22,325