Lumber Liquidators Announces Second Quarter 2014 Financial Results And Reiterates Full Year 2014 Outlook

    Lumber Liquidators Announces Second Quarter 2014 Financial Results And
                      Reiterates Full Year 2014 Outlook

~ Net Sales Increased 2.3% to $263.1 Million

~~ Net Income of $16.6 Million, or $0.60 per Diluted Share

PR Newswire

TOANO, Va., July 30, 2014

TOANO, Va., July 30, 2014 /PRNewswire/ --Lumber Liquidators (NYSE: LL), the
largest specialty retailer of hardwood flooring in North America, today
announced financial results for the second quarter and six months ended June
30, 2014.

Lumber Liquidators

Second Quarter Results

Net sales increased $6.0 million, or 2.3%, to $263.1 million in the second
quarter of 2014 from $257.1 million in the second quarter of 2013. In
comparable stores, net sales decreased 7.1% in the second quarter of 2014.
The Company's average sale declined 1.8% in the second quarter of 2014,
indicating a 5.3% decrease in the number of customers invoiced. Reduced
customer traffic has coincided with certain weak macroeconomic trends and has
remained particularly low in geographic areas most severely impacted by the
unusually harsh winter weather. Additionally, constrained inventory levels in
certain key merchandise categories reduced the conversion of customer interest
into invoiced sales. The Company estimates an aggregate net sales shortfall
in the second quarter of up to $18 million in those products impacted.
Non-comparable store net sales increased $24.1 million and included net sales
from 13 new stores opened during the second quarter of 2014.

Gross margin was 40.4% in the second quarter of 2014 compared to 41.3% in the
second quarter of 2013 due primarily to adverse net shifts in sales mix,
greater discounting at the point of sale and higher net transportation costs.

Selling, general and administrative ("SG&A") expenses in the second quarter of
2014 increased $6.1 million, or 8.3%, to $79.1 million primarily due to higher
advertising, occupancy, legal and professional expenses. SG&A expenses were
30.1% of net sales in the second quarter of 2014, up from 28.4% of net sales
in the second quarter of 2013.

Net income decreased 18.7% to $16.6 million, or $0.60 per diluted share, in
the second quarter of 2014 from $20.4 million, or $0.73 per diluted share, in
the second quarter of the prior year.

Cash and cash equivalents at June 30, 2014 totaled $48.1 million compared with
$84.7 million at June 30, 2013 and $80.6 million at December 31, 2013.

Robert M. Lynch, President and Chief Executive Officer, commented, "Our second
quarter net sales and earnings per diluted share were in-line with our revised
expectations communicated earlier this month. Despite the challenges we faced
in the second quarter and results that were not at the level we would have
hoped, our value proposition is as strong and relevant as ever to our
customers. We remain focused on continuous improvement across our operations
and implementing our multi-year strategic initiatives to position the Company
for long-term growth."

First Six Months Results

Net sales increased 4.5% to $509.4 million in the first six months of 2014
from $487.5 million in the first six months of 2013. Comparable store net
sales decreased 4.0% for the first half of 2014. Non-comparable store net
sales increased $41.4 million over the prior year. The Company opened 26 new
stores during the first six months of 2014 and as of June 30, 2014, operated
344 stores in 46 states and Canada.

Gross margin decreased to 40.7% for the first six months of 2014 from 40.8% in
the same period of 2013. SG&A expenses were 31.0% of net sales for the first
half of 2014, compared to 28.8% of net sales for the first half of 2013.

Net income decreased 16.3% to $30.3 million, or $1.09 per diluted share, in
the first half of 2014 compared to $36.2 million, or $1.30 per diluted share,
in the first half of the prior year.

Company Outlook

The Company has reiterated its outlook for the full year 2014 released earlier
this month and expects the following:

  oNet sales in the range of $1.05 billion to $1.10 billion.
  oChange in comparable store net sales in the low single digits, either
    positive or negative.
  oThe opening of a total of 33 to 37 new store locations in the expanded
    showroom format.
  oThe remodeling of a total of 15 to 20 existing stores in the expanded
    showroom format, from a previous range of 25 to 30 existing stores.
  oCapital expenditures between $80 million and $85 million, including up to
    $50 million for supply chain investments, from a previous range of $80
    million to $90 million.
  oEarnings per diluted share in the range of $2.65 to $3.00 based on a
    diluted share count of 27.6 million shares, which is exclusive of any
    future impact of the stock repurchase program.

Mr. Lynch concluded, "We continue to invest record capital into the
infrastructure that enables us to deliver on our value proposition and our
long-term growth plans, with the expansion of our distribution capacity
progressing as planned. Further, we are executing our real estate strategy
and remain confident in our ability to expand our store base. Overall, our
team is focused and motivated, and we are positioned well to capture share in
our highly fragmented market. We expect to drive growth in the second half of
the year and set the stage for operating margin expansion in 2015 and
beyond."

Conference Call and Webcast Information

The Company plans to host a conference call and audio webcast today, July 30,
2014, 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
two hours after the call ends through August 6, 2014 and may be accessed by
dialing (877) 870-5176 or (858) 384-5517 and entering pin number 13585249.
The live conference call and replay may also be accessed via audio webcast at
the Investor Relations section of the Company's website,
www.lumberliquidators.com.

About Lumber Liquidators

In its 20th year and withmore than345 locations, Lumber Liquidators is North
America's largest specialty retailer of hardwood flooring. Lumber Liquidators
features more than 350top quality flooring varieties, including solid and
engineered hardwood, bamboo, cork, laminate and resilient vinyl. Additionally,
Lumber Liquidators provides a wide selection of flooring enhancements and
accessories to complement, install and maintain your new floor. Every location
is staffed with flooring experts who can provide advice and useful information
about Lumber Liquidators' low priced product, much of which is in-stock and
ready for delivery.

Withpremierbrands including Bellawood Prefinished Hardwood and Morning Star
Bamboo, Lumber Liquidators' flooring is often featured on popular television
shows such as HGTV's Dream Home and This Old House.

For more information, please visitwww.LumberLiquidators.comor call
1.800.HARDWOOD. You can also follow the company onFacebookandTwitter,and
learn more about its corporate giving program
atLayItForward.LumberLiquidators.com.

Forward-Looking Statements

This press release and accompanying financial tables may contain
"forward-looking statements" within the meanings of the Private Securities
Litigation Reform Act of 1995. These statements, which may be identified by
words such as "may," "will," "should," "expects," "intends," "plans,"
"anticipates," "believes," "thinks," "estimates," "seeks," "predicts,"
"could," "projects," "potential" and other similar terms and phrases, are
based on the beliefs of the Company's management, as well as assumptions made
by, and information currently available to, the Company's management as of the
date of such statements. These statements are subject to risks and
uncertainties, all of which are difficult to predict and many of which are
beyond the Company's control. Forward-looking statements in this press release
may include, without limitation, statements regarding sales growth, comparable
store net sales, impact of cannibalization, price changes, earnings
performance, stock-based compensation expense, margins, return on invested
capital, strategic direction, the demand for the Company's products, and store
openings. The Company's actual results could differ materially from those
projected in or contemplated by the forward-looking statements as a result of
potential risks, uncertainties and other factors including, but not limited
to, changes in general economic and financial conditions, such as the rate of
unemployment, consumer access to credit, and interest rate; the volatility in
mortgage rates; the legislative/regulatory climate; political unrest in the
countries of the Company's suppliers; the availability of sufficient suitable
hardwood; the strength of the Company's competitors and their ability to
increase their market share; slower growth in personal income; changes in
business and consumer spending; changes in transportation costs; the rate of
growth of residential remodeling and new home construction; the impact weather
may have on customer traffic and sales; and inventory levels. The Company
specifically disclaims any obligation to update these statements, which speak
only as of the dates on which such statements are made, except as may be
required under the federal securities laws. Information regarding these
additional risks and uncertainties is contained in the Company's other reports
filed with the Securities and Exchange Commission, including the Item 1A,
"Risk Factors," section of the Form 10-K for the year ended December 31, 2013.

For further information contact:

Lumber Liquidators Investor Relations
Ashleigh McDermott
Tel: 757.566.7512



(Tables Follow)
Lumber Liquidators Holdings, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share data)
                                                   June 30,     December31,
                                                   2014         2013
                                                   (unaudited)
Assets
Current Assets:
Cash and Cash Equivalents                        $    48,062 $    80,634
Merchandise Inventories                          272,740        252,428
Prepaid Expenses                                 6,171          6,229
Other Current Assets                             15,591         12,916
Total Current Assets                             342,564        352,207
Property and Equipment, net                      100,628        65,947
Goodwill                                         9,693          9,693
Other Assets                                     1,678          1,712
Total Assets                                     $  454,563    $  429,559
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts Payable                                 $    66,211 $    56,327
Customer Deposits and Store Credits              31,256         22,377
Accrued Compensation                             3,918          11,709
Sales and Income Tax Liabilities                 4,451          4,878
Other Current Liabilities                        23,493         11,709
Total Current Liabilities                        129,329        107,000
Deferred Rent                                    5,562          4,169
Deferred Tax Liability                           9,374          9,061
Stockholders' Equity:
Common Stock ($0.001 par value; 35,000,000
shares authorized;                               30             30
 27,282,138 and 27,557,570 shares outstanding,
respectively)
Treasury Stock, at cost (2,558,013 and 2,133,307 (123,889)      (85,382)
shares, respectively)
Additional Capital                               173,365        164,581
Retained Earnings                                260,963        230,662
Accumulated Other Comprehensive Loss             (171)          (562)
Total Stockholders' Equity                       310,298        309,329
Total Liabilities and Stockholders' Equity       $  454,563    $  429,559





Lumber Liquidators Holdings, Inc.
Condensed Consolidated Statements of Income
(in thousands, except share data and per share amounts)
(unaudited)
                       Three Months Ended          Six Months Ended
                       June 30,                    June 30,
                       2014           2013         2014          2013
Net Sales              $  263,085   $  257,111 $   509,376 $   487,530
Cost of Sales          156,847        151,032      301,851       288,453
Gross Profit           106,238        106,079      207,525       199,077
Selling, General and
Administrative         79,066         72,992       157,932       140,582
Expenses
Operating Income       27,172         33,087       49,593        58,495
Other (Income) Expense 70             (150)        164           (360)
Income Before Income   27,102         33,237       49,429        58,855
Taxes
Provision for Income   10,495         12,815       19,128        22,652
Taxes
Net Income             $    16,607 $         $          $   
                                      20,422       30,301        36,203
Net Income per Common  $         $       $        $     
Share—Basic            0.61           0.74         1.10          1.32
Net Income per Common  $         $       $        $     
Share—Diluted          0.60           0.73         1.09          1.30
Weighted Average
Common Shares
Outstanding:
Basic                  27,384,255     27,535,034   27,452,470    27,374,164
Diluted                27,610,969     27,973,457   27,721,161    27,879,428





Lumber Liquidators Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
                                               Six Months Ended

                                               June 30,
                                               2014            2013
Cash Flows from Operating Activities:
Net Income                                     $    30,301 $    36,203
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Depreciation and Amortization                  7,085           5,595
Stock-Based Compensation Expense               2,777           2,633
Changes in Operating Assets and Liabilities:
Merchandise Inventories                        (20,462)        (23,921)
Accounts Payable                               3,509           (1,957)
Customer Deposits and Store Credits            8,899           4,568
Prepaid Expenses and Other Current Assets      (2,470)         (4,202)
Other Assets and Liabilities                   (1,551)         4,819
Net Cash Provided by Operating Activities      28,088          23,738
Cash Flows from Investing Activities:
Purchases of Property and Equipment            (28,269)        (6,767)
Net Cash Used in Investing Activities          (28,269)        (6,767)
Cash Flows from Financing Activities:
Payments for Stock Repurchases                 (38,507)        (14,637)
Proceeds from the Exercise of Stock Options    2,644           6,744
Excess Tax Benefit from Stock-Based            3,236           11,794
Compensation
Net Cash (Used in) Provided by Financing       (32,627)        3,901
Activities
Effect of Exchange Rates on Cash and Cash      236             (375)
Equivalents
Net (Decrease) Increase in Cash and Cash       (32,572)        20,497
Equivalents
Cash and Cash Equivalents, Beginning of Period 80,634          64,167
Cash and Cash Equivalents, End of Period       $   48,062   $   84,664





Lumber Liquidators Holdings, Inc.
Other Supporting Schedules
(dollars in thousands)
(unaudited)
The tables below reflect a segregation of those stores the Company believes
were impacted by weather or Hurricane Sandy from all other stores when
comparing second quarter and first half of 2014 net sales and the percentage
change to the second quarter and first half of 2013:
                    Three Months Ended June 30, 2014
                                                Stores
                    All Stores       All Other  Significantly   Hurricane
                                     Stores     Impacted by     Sandy Stores^2
                                                Weather^1
Number of stores at 344              206        131             7
June 30, 2014
Net sales           $             $       $    93,176  $    6,027
                    263,085          163,882
 Percentage     2.3%             5.5%       0.4%            (32.5)%
increase (decrease)
                                   percentage increase
                                  (decrease)
Comparable
stores^3:
 Net sales      (7.1)%           (2.1)%     (12.9)%         (32.5)%
 Customers      (5.3)%           (1.9)%     (9.6)%          (25.7)%
invoiced^4
 Average sale^5 (1.8)%           (0.2)%     (3.3)%          (6.8)%
                    Six Months Ended June 30, 2014
                                                Stores
                    All Stores       All Other  Significantly   Hurricane
                                     Stores     Impacted by     Sandy Stores^2
                                                Weather^1
Number of stores at 344              206        131             7
June 30, 2014
Net sales           $ 509,376        $ 316,545  $ 181,181       $ 11,650
 Percentage     4.5%             9.7%       0.5%            (37.7)%
increase (decrease)
                                   percentage increase
                                  (decrease)
Comparable
stores^3:
 Net sales      (4.0)%           2.8%       (11.4)%         (37.7)%
 Customers      (4.3)%           0.0%       (9.0)%          (29.0)%
invoiced^4
 Average sale^5 0.3%             2.8%       (2.4)%          (8.7)%
_________________

^1 Segregation of those stores the Company believes were significantly
impacted by the unusually severe weather is consistent with that presented in
the first quarter of 2014, except that those stores impacted by Hurricane
Sandy are further segregated.

^2 Includes store locations serving communities that were impacted by
Hurricane Sandy and benefited net sales from the fourth quarter of 2012
through the third quarter of 2013.

^3A store is generally considered comparable on the first day of the
thirteenth full calendar month after opening.

^4 Change in number of customers invoiced is calculated by applying our
average sale to total net sales at comparable stores.

^5Average sale, calculated on a total company basis, is defined as the average
invoiced sale per customer, measured on a monthly basis and excluding
transactions of less than $250 (which are generally sample orders, or add-ons
or fill-ins to previous orders) and of more than $30,000 (which are usually
contractor orders).



Logo - http://photos.prnewswire.com/prnh/20130529/NY21644LOGO

SOURCE Lumber Liquidators

Website: http://www.lumberliquidators.com
 
Press spacebar to pause and continue. Press esc to stop.