Lumber Liquidators Holdings, Inc. Agrees to Settle with the Environment and Natural Resources Division of the Department of Justice
Oct 7 15
Lumber Liquidators Holdings, Inc. announced it agreed to settle with the Environment and Natural Resources Division of the Department of Justice (DOJ) related to the company's compliance with the Lacey Act, a U.S. conservation law regarding the protection of plants, fish and wildlife. This concludes the DOJ's inquiry launched in 2013, which primarily related to certain foreign suppliers harvesting more timber than their permits allowed in foreign jurisdictions, such as Eastern Russia, and the company's importation of flooring products made from this timber. Lumber Liquidators agreed to plead guilty to violations of a Customs law and the Lacey Act, and pay a combined total of $10.0 million in fines, community service payments and forfeited proceeds. The payments include a $7.8 million fine, community service contributions of $880,825 and $350,000 to the National Fish and Wildlife Foundation and the Rhinoceros and Tiger Conservation fund, respectively, and a $969,175 forfeiture payment. The company reserved for this amount in the first quarter of 2015. It also reached a settlement with the DOJ related to $3.2 million of suspended engineered hardwood flooring. In the settlement, the DOJ will accept a $3.2 million payment in lieu of a civil forfeiture of this product, and the company will be permitted to sell the suspended engineered hardwood flooring and retain any proceeds of the sale. The company reserved for the payment in the second quarter of 2015. Both the $10.0 million payment related to the 2013 inquiry and the $3.2 million payment in lieu of civil forfeiture, which remain subject to court approval, will be paid in various phases over the next two years.
Lumber Liquidators Hires Jill Witter as Chief Compliance and Legal Officer
Aug 18 15
Lumber Liquidators announced the hiring of Jill Witter as the company's chief compliance and Legal Officer. Ms. Witter will report directly to Founder and Acting Chief Executive Officer, Thomas D. Sullivan, and has been consulting and advising the company's compliance team since early July. Ms. Witter brings with her a deep background in compliance and legal experience in forest products, serving as General Counsel at Rayonier Inc. and the Forest Resources Division of the International Paper Company. Ms. Witter's duties will include directing all aspects of legal matters, including complex litigation management, compliance and compliance program development, quality assurance and public affairs for the Company.
Lumber Liquidators Holdings, Inc. Announces Unaudited Consolidated Earnings Results for the Second Quarter and Six Months Ended June 30, 2015; Provides Earnings Guidance for the Second Half and Capital Expenditure Guidance for the Full Year Ending December 2015
Aug 5 15
Lumber Liquidators Holdings, Inc. announced unaudited consolidated earnings results for the second quarter and six months ended June 30, 2015. For the quarter, the company reported that net sales of $247,944,000 compared to $263,085,000 a year ago. Operating loss was $28,267,000 compared to operating income of $27,172,000 a year ago. Loss before income taxes was $28,332,000 compared to income before income taxes of $27,102,000 a year ago. Net loss was $20,347,000 or $0.75 per diluted share compared to net income of $16,607,000 or $0.60 per diluted share a year ago. The company believes net sales were negatively impacted by unfavorable allegations surrounding the product quality of its laminates sourced from China as well as its decision to suspend sales of such products, although a specific quantification of the impact was impracticable. The company implemented aggressive promotional pricing during the quarter, which it believes partially offset the decrease in the number of customers invoiced. The financial results reflect the impact of the recent disruptions in the business.
For the six months ended June 30, 2015, the company reported that net sales of $507,905,000 compared to $509,376,000 a year ago. Operating loss was $34,335,000 compared to operating income of $49,593,000 a year ago. Loss before income taxes was $34,416,000 compared to income before income taxes of $49,429,000 a year ago. Net loss was $28,127,000 or $0.1.04 per diluted share compared to net income of $30,301,000 or $1.09 per diluted share a year ago. Net cash provided by operating activities was $19,220,000 compared to $28,088,000 a year ago. Purchases of property and equipment were $14,251,000 compared to $28,269,000 a year ago.
The company provided earnings guidance for the second half and capital expenditure guidance for the full year ending December 2015. For the second half, the company believes gross margin will be adversely impacted as compared to the second half of 2014 as they continue to invest in its value proposition to drive customer traffic, primarily through pricing, increase its sales of laminate sourced outside of China and modify assortment of engineered hardwoods to those not subject to antidumping duties. Additionally, they believe gross margin and sales mix trends will continue to be adversely impacted until its full assortment of laminates and engineered hardwood are available.
For the year 2015, the company expects capital expenditures between $20 million and $25 million.