~ Fourth Quarter Net Sales Increased 17.6% to $137.1 Million ~ ~
Fourth Quarter Net Income Increased 9.7% to $7.1 Million, or $0.25
Per Diluted Share ~ ~ Full Year 2010 Net Sales Expected to be $620
Million to $645 Million, an Increase of 14% to 18% ~ ~ Full Year
2010 EPS Expected to be $1.10 to $1.20 Per Share, an Increase of
13% to 24% ~ TOANO, Va., Feb. 18 /PRNewswire-FirstCall/ -- Lumber
Liquidators (NYSE: LL), the largest specialty retailer of hardwood
flooring in the U.S., today announced financial results for the
fourth quarter and year ended December 31, 2009, as well as its
outlook for 2010. Fourth Quarter Results Net sales increased $20.6
million, or 17.6%, to $137.1 million in the fourth quarter of 2009
from $116.5 million in the fourth quarter of 2008. Comparable store
net sales increased 5.5% for the quarter, in comparison to an
increase of 1.9% for the third quarter of 2009 and a decrease of
4.6% for the fourth quarter of the prior year. Non-comparable store
net sales increased $14.2 million over the prior year period. The
Company opened nine new stores during the fourth quarter of 2009,
for a total of 36 new locations for the year. Gross margin was
35.3% for the fourth quarter of 2009, up from 34.2% in the fourth
quarter of 2008. Gross margin continued to benefit from changes in
the Company's product line sales mix, generally lower
transportation costs and effective execution of initiatives within
store operations, merchandising and logistics. Selling, general and
administrative (SG&A) expenses were $36.8 million, or 26.8% of
net sales, for the fourth quarter of 2009 compared to $28.8
million, or 24.7% of net sales, for the fourth quarter of 2008.
SG&A expenses as a percentage of net sales for the fourth
quarter of 2009 reflects leverage in advertising, legal and
professional expenses which was partially offset by the costs of
store base expansion and infrastructure investments. SG&A
expenses in the fourth quarter of 2008 were 27.3% of net sales
exclusive of a benefit of $3.0 million from reduced stock-based
compensation expense resulting from the reversal of an accrual
related to the final accounting for a certain equity plan. Net
income increased 9.7% to $7.1 million, or $0.25 per diluted share,
in the fourth quarter of 2009 compared to $6.5 million, or $0.24
per diluted share, in the fourth quarter of 2008, which included
the benefit of $0.07 per diluted share related to the
aforementioned reversal of the stock-based compensation expense
accrual. The effective tax rate was 38.9% in the fourth quarter of
2009 compared to 42.3% in the fourth quarter of 2008. The 2009
effective tax rate decreased primarily due to certain reductions in
state income taxes and excess tax benefits on stock option
exercises. Jeffrey W. Griffiths, President and Chief Executive
Officer, commented, "We experienced a strong finish to 2009 as our
team continued to execute and we leveraged our infrastructure
enhancements to increase net sales and margin. We are very pleased
with our performance for both the fourth quarter and full year, as
our bottom line results came in at the high end of our revised
expectations. Customers continued to respond positively to our
value proposition of price, selection, quality and availability and
we experienced strong foot traffic throughout the quarter that
helped drive our comparable store net sales growth. Further, we
continued to open new stores and achieved our expansion goals for
the year. The investments we are making in our business are
generating immediate efficiencies as well as long-term benefits.
Overall, we built positive momentum throughout the year, continued
to gain share in our highly-fragmented market and ended the year
well positioned to generate sustainable growth." Full Year Results
Net sales increased $62.4 million, or 12.9%, to $544.6 million in
2009 from $482.2 million in 2008. Comparable store net sales were
unchanged comparing 2009 to 2008, on top of an increase of 1.6% for
the prior year. The Company ended the year with 186 stores in 45
states. Gross margin increased to 35.7% in 2009 compared to 34.8%
in the prior year. SG&A expenses in 2009 were $151.1 million,
or 27.7% of net sales, compared to SG&A expenses in 2008 of
$130.7 million, or 27.1% of net sales. SG&A expenses in 2008
were 27.7% of net sales exclusive of the aforementioned $3.0
million benefit related to the reduction of certain stock-based
compensation expense in the fourth quarter. Net income in 2009 was
$26.9 million, or $0.97 per diluted share, compared to $22.1
million, or $0.82 per diluted share, in 2008. The 2008 net income
per diluted share included the aforementioned fourth quarter 2008
benefit of $0.07 per diluted share, partially offset by a $0.03 per
diluted share first quarter increase in tax expense primarily
related to the non-deductible portion of a certain equity plan's
cumulative compensation cost. The Company's effective tax rate was
39.0% for 2009. The effective tax rate was 41.4% for 2008, but
39.7% exclusive of the impact from the equity plan. Company Outlook
In 2010, the Company expects to achieve the following: -- Net sales
for the full year in the range of $620 million to $645 million. --
A comparable store net sales increase in the low to mid-single
digits. -- The opening of a total of 36 to 40 new store locations.
-- Full year 2010 earnings per diluted share in the range of $1.10
to $1.20, based on a diluted share count of approximately 28.4
million shares and an effective tax rate in the range of 38.5% to
38.8%. -- Positive free cash flow for the year. To date in 2010,
the Company has opened nine stores, including one in North Dakota,
the Company's 46th state of operation. Mr. Griffiths concluded,
"While the past year was challenging for the industry, we believe
that we have established a business and growth strategy that will
allow us to deliver long-term shareholder value despite the
difficult economic conditions. As we look toward 2010, we are
continuing to make investments in our business to further enhance
our unique value proposition. Through our increased emphasis on
in-stock inventory and broad assortment of high-quality products,
we are able to strengthen our competitive position and meet
consumer demand. Further, we remain focused on leveraging our
proven store model to open additional stores in new and existing
markets and gaining additional share in the fragmented hardwood
flooring market. We are pleased that we have been able to maintain
our strong capital structure and debt-free balance sheet, which we
believe will enable us to continue our growth this year and
beyond." Conference Call and Webcast Information The Company plans
to host a conference call and audio webcast on February 18, 2010,
at 10:00 a.m. Eastern Time. The conference may be accessed by
dialing (877) 407-9039 or (201) 689-8470. A replay will be
available approximately one hour after the call through March 4,
2010 and may be accessed by dialing (877) 660-6853 or (201)
612-7415 and entering account number 3055 and conference ID number
344048. The live conference call and replay can also be accessed
via audio webcast at the Investor Relations section of the
Company's website, http://www.lumberliquidators.com/. About Lumber
Liquidators Lumber Liquidators is the largest specialty retailer of
hardwood flooring in the United States. With more than 195 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,
Schon, 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 FD Daniel
Terrell/Ashleigh McDermott Leigh Parrish/Jessica Greenberger Tel:
757.566.7512 Tel. 212.850.5600 Lumber Liquidators Holdings, Inc.
Consolidated Balance Sheets (in thousands, except share data)
December 31, ------------ 2009 2008 ---- ---- Assets Current
Assets: Cash and Cash Equivalents $35,675 $35,139 Merchandise
Inventories 133,342 88,731 Prepaid Expenses 5,988 5,033 Other
Current Assets 4,356 3,731 -------- -------- Total Current Assets
179,361 132,634 Property and Equipment, net 20,491 13,780 Deferred
Income Taxes 2,002 2,317 Other Assets 4,026 3,674 -------- --------
Total Assets $205,880 $152,405 ======== ======== Liabilities and
Stockholders' Equity Current Liabilities: Accounts Payable $32,608
$15,373 Customer Deposits and Store Credits 9,805 10,418 Accrued
Compensation 4,512 2,857 Sales and Income Tax Liabilities 2,770
3,296 Other Current Liabilities 5,566 4,445 -------- -------- Total
Current Liabilities 55,261 36,389 Deferred Rent 2,185 1,619
Stockholders' Equity: Common Stock ($0.001 par value; 35,000,000
authorized; 27,234,222 and 26,796,891 outstanding, respectively) 27
27 Additional Capital 94,726 87,613 Retained Earnings 53,681 26,757
-------- -------- Total Stockholders' Equity 148,434 114,397
-------- -------- Total Liabilities and Stockholders' Equity
$205,880 $152,405 ======== ======== Lumber Liquidators Holdings,
Inc. Consolidated Statements of Income (in thousands, except share
data and per share amounts) Three Months Ended Year Ended December
31, December 31, ------------------ ------------ 2009 2008 2009
2008 ---- ---- ---- ---- (unaudited) Net Sales $137,080 $116,530
$544,568 $482,179 Cost of Sales 88,727 76,646 349,891 314,501
---------- ---------- ---------- ---------- Gross Profit 48,353
39,884 194,677 167,678 Selling, General and Administrative Expenses
36,801 28,838 151,070 130,693 ---------- ---------- ----------
---------- Operating Income 11,552 11,046 43,607 36,985 Interest
and Other Income, net (110) (215) (498) (807) ---------- ----------
---------- ---------- Income Before Income Taxes 11,662 11,261
44,105 37,792 Provision for Income Taxes 4,531 4,763 17,181 15,643
---------- ---------- ---------- ---------- Net Income $7,131
$6,498 $26,924 $22,149 ========== ========== ========== ==========
Net Income per Common Share-Basic $0.26 $0.24 $1.00 $0.83
========== ========== ========== ========== Net Income per Common
Share-Diluted $0.25 $0.24 $0.97 $0.82 ========== ==========
========== ========== Weighted Average Common Shares Outstanding:
Basic 27,215,546 26,792,205 26,983,689 26,772,288 Diluted
28,129,091 26,988,560 27,684,547 27,090,593 Lumber Liquidators
Holdings, Inc. Consolidated Statements of Cash Flows (in thousands)
Year Ended December 31, ------------ 2009 2008 ---- ---- Cash Flows
from Operating Activities: Net Income $26,924 $22,149 Adjustments
to Reconcile Net Income to Net Cash Provided by Operating
Activities: Depreciation and Amortization 4,714 4,350 Deferred
Income Taxes (1,110) (486) Stock-Based Compensation Expense 2,955 9
Other - (40) Changes in Operating Assets and Liabilities:
Merchandise Inventories (44,611) (16,707) Accounts Payable 17,235
(281) Customer Deposits and Store Credits (613) 809 Prepaid
Expenses and Other Current Assets (155) (504) Other Assets and
Liabilities 2,473 62 ------- ------- Net Cash Provided by Operating
Activities 7,812 9,361 Cash Flows from Investing Activities:
Purchases of Property and Equipment (11,433) (6,560) Purchase of
1-800-HARDWOOD - (800) ------- ------- Net Cash Used in Investing
Activities (11,433) (7,360) Cash Flows from Financing Activities:
Proceeds from Exercise of Stock Options 3,281 203 Excess Tax
Benefits on Stock Option Exercises 1,200 40 Repayments of Long-Term
Debt and Capital Lease Obligations (1) (121) Common Stock Purchased
Pursuant to Equity Compensation Plans (323) (152) ------- -------
Net Cash Provided by (Used In) Financing Activities 4,157 (30)
------- ------- Net Increase in Cash and Cash Equivalents 536 1,971
Cash and Cash Equivalents, Beginning of Year 35,139 33,168 -------
------- Cash and Cash Equivalents, End of Year $35,675 $35,139
======= ======= DATASOURCE: Lumber Liquidators CONTACT: Daniel
Terrell or Ashleigh McDermott, both of Lumber Liquidators,
+1-757-566-7512; or Leigh Parrish or Jessica Greenberger, both of
FD, +1-212-850-5600 Web Site: http://www.lumberliquidators.com/
Copyright