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8-K - FORM 8-K - Lumber Liquidators Holdings, Inc.d525607d8k.htm

Exhibit 99.1

 

FOR IMMEDIATE RELEASE     LOGO

LUMBER LIQUIDATORS ANNOUNCES FIRST QUARTER 2013

FINANCIAL RESULTS AND RAISES FULL YEAR OUTLOOK

~ Net Sales Increased 22.5% to $230.4 Million ~

~ Comparable Store Net Sales Increased 15.2% ~

~ Net Income Increased 92.5% to $15.8 Million, or $0.57 per Diluted Share ~

TOANO, Va, April 24, 2013 – Lumber Liquidators (NYSE: LL), the largest specialty retailer of hardwood flooring in North America, today announced financial results for the first quarter ended March 31, 2013, and updated its outlook for 2013.

First Quarter Results

Net sales increased $42.4 million, or 22.5%, to $230.4 million in the first quarter of 2013 from $188.0 million in the first quarter of 2012. Comparable store net sales increased 15.2% for the quarter, driven by equivalent percent increases in the number of customers invoiced and the average sale. Non-comparable store net sales increased $13.9 million. The Company opened five new stores during the first quarter of 2013.

Gross margin was 40.4% in the first quarter of 2013 compared to 37.3% in the first quarter of 2012. The increase in gross margin reflects generally lower net product costs, which include shifts in sales mix and benefits from sourcing initiatives, and a net increase in the average retail price per unit sold.

Selling, general and administrative expenses decreased as a percentage of net sales to 29.3% for the first quarter of 2013 compared to 30.2% for the first quarter of 2012. Operating margin increased 390 basis points to 11.0% in the first quarter of 2013, from 7.1% in the first quarter of 2012.

Net income increased 92.5% to $15.8 million, or $0.57 per diluted share, in the first quarter of 2013 from $8.2 million, or $0.29 per diluted share, in the first quarter of the prior year.

Cash and cash equivalents at March 31, 2013 totaled $72.7 million compared with $61.4 million at March 31, 2012 and $64.2 million at December 31, 2012.

Robert M. Lynch, President and Chief Executive Officer, commented, “Our powerful store model and value proposition continued to drive record results in the first quarter as we entered the important spring home improvement season. As we continued the implementation of our multi-year strategic initiatives, we saw consistent strength during the quarter in our top-line and an expansion of both our gross and operating margins to deliver a solid bottom line. Also during the quarter, we opened our first locations in our “store of the future” format which feature an expanded showroom. Though the results are early, across the five new store openings, four relocations of existing stores and two major remodels completed during the first quarter with the new format, we are pleased with the performance to date.”


Company Outlook

Based on the first quarter results and current trends, the Company now expects to achieve the following for the full year:

 

   

Net sales in the range of $913 million to $942 million, up from the previous range of $885 million to $920 million.

 

   

Comparable store net sales increasing in the mid to high-single digits, up from the previous range of mid-single digits.

 

   

The opening of a total of 25 to 35 new store locations.

 

   

Earnings per diluted share in the range of $2.10 to $2.35, based on a diluted share count of approximately 28.0 million shares, which is exclusive of any future impact of the stock repurchase program, up from the previous range of $1.90 to $2.15.

Mr. Lynch concluded, “Our team remains focused on implementing the key strategic initiatives that will drive our business for years to come. We continue to aggressively pursue share in our highly fragmented market, and while successful in this first quarter, we are even more excited by the opportunities ahead. As we move forward, we believe we are well-positioned to further expand our footprint and deliver multi-year expansion of our net sales and operating margin.”

Conference Call and Webcast Information

The Company plans to host a conference call and audio webcast today, April 24, 2013, 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 through May 1, 2013 and may be accessed by dialing (877) 870-5176 or (858) 384-5517 and entering conference ID number 411542. 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

With over 290 locations, Lumber Liquidators is North America’s largest specialty retailer of hardwood flooring. The Company features more than 340 first 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.

With quality brands including Bellawood Prefinished Hardwood and Morning Star Bamboo, Lumber Liquidators’ flooring is often featured on popular television shows such as HGTV’s Dream Home.

For more information, please visit www.lumberliquidators.com or call 1.800.HARDWOOD. You can also follow the Company on Facebook and Twitter.

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 filings with the Securities and Exchange Commission.


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)

 

     March 31,
2013
    December 31,
2012
 
     (unaudited)        

Assets

    

Current Assets:

    

Cash and Cash Equivalents

   $ 72,728      $ 64,167   

Merchandise Inventories

     210,087        206,704   

Prepaid Expenses

     6,785        5,168   

Other Current Assets

     8,639        12,106   
  

 

 

   

 

 

 

Total Current Assets

     298,239        288,145   

Property and Equipment, net

     47,490        47,764   

Goodwill

     9,693        9,693   

Other Assets

     1,782        1,785   
  

 

 

   

 

 

 

Total Assets

   $ 357,204      $ 347,387   
  

 

 

   

 

 

 

Liabilities and Stockholders’ Equity

    

Current Liabilities:

    

Accounts Payable

   $ 39,003      $ 55,110   

Customer Deposits and Store Credits

     28,613        25,747   

Accrued Compensation

     6,424        7,969   

Sales and Income Tax Liabilities

     8,655        4,314   

Other Current Liabilities

     11,201        7,887   
  

 

 

   

 

 

 

Total Current Liabilities

     93,896        101,027   

Deferred Rent

     3,719        3,653   

Deferred Tax Liability

     8,178        8,166   

Stockholders’ Equity:

    

Common Stock ($0.001 par value; 35,000,000 authorized; 27,315,147 and 27,214,144 outstanding, respectively)

     29        29   

Treasury Stock, at cost (1,797,044 and 1,719,706 shares, respectively)

     (54,828     (50,552

Additional Capital

     137,411        131,724   

Retained Earnings

     169,047        153,267   

Accumulated Other Comprehensive (Loss) Income

     (248     73   
  

 

 

   

 

 

 

Total Stockholders’ Equity

     251,411        234,541   
  

 

 

   

 

 

 

Total Liabilities and Stockholders’ Equity

   $ 357,204      $ 347,387   
  

 

 

   

 

 

 


Lumber Liquidators Holdings, Inc.

Condensed Consolidated Statements of Income

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

(unaudited)

 

     Three Months Ended
March 31,
 
     2013     2012  

Net Sales

   $ 230,419      $ 188,034   

Cost of Sales

     137,422        117,897   
  

 

 

   

 

 

 

Gross Profit

     92,997        70,137   

Selling, General and Administrative Expenses

     67,589        56,819   
  

 

 

   

 

 

 

Operating Income

     25,408        13,318   

Other (Income) Expense

     (210     (42
  

 

 

   

 

 

 

Income Before Income Taxes

     25,618        13,360   

Provision for Income Taxes

     9,837        5,163   
  

 

 

   

 

 

 

Net Income

   $ 15,781      $ 8,197   
  

 

 

   

 

 

 

Net Income per Common Share—Basic

   $ 0.58      $ 0.29   
  

 

 

   

 

 

 

Net Income per Common Share—Diluted

   $ 0.57      $ 0.29   
  

 

 

   

 

 

 

Weighted Average Common Shares Outstanding:

    

Basic

     27,211,506        27,926,544   

Diluted

     27,783,611        28,509,475   


Lumber Liquidators Holdings, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

     Three Months Ended
March 31,
 
     2013     2012  

Cash Flows from Operating Activities:

    

Net Income

   $ 15,781      $ 8,197   

Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:

    

Depreciation and Amortization

     2,716        2,366   

Stock-Based Compensation Expense

     1,107        1,133   

Changes in Operating Assets and Liabilities:

    

Merchandise Inventories

     (3,522     (27,737

Accounts Payable

     (15,966     13,295   

Customer Deposits and Store Credits

     2,874        8,087   

Prepaid Expenses and Other Current Assets

     1,952        (3,063

Other Assets and Liabilities

     6,122        8,059   
  

 

 

   

 

 

 

Net Cash Provided by Operating Activities

     11,064        10,337   

Cash Flows from Investing Activities:

    

Purchases of Property and Equipment

     (2,589     (3,180
  

 

 

   

 

 

 

Net Cash Used in Investing Activities

     (2,589     (3,180

Cash Flows from Financing Activities:

    

Payments for Stock Repurchases

     (4,276     (9,077

Proceeds from the Exercise of Stock Options

     1,278        1,234   

Excess Tax Benefit from Stock-Based Compensation

     3,367        337   
  

 

 

   

 

 

 

Net Cash Provided by (Used in) Financing Activities

     369        (7,506

Effect of Exchange Rates on Cash and Cash Equivalents

     (283     110   
  

 

 

   

 

 

 

Net Increase (Decrease) in Cash and Cash Equivalents

     8,561        (239

Cash and Cash Equivalents, Beginning of Period

     64,167        61,675   
  

 

 

   

 

 

 

Cash and Cash Equivalents, End of Period

   $ 72,728      $ 61,436