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Press release from Business Wire

Lumber Liquidators Announces First Quarter 2012 Financial Results and Provides Updated Full Year Outlook

<p class='bwalignc'> <i><b>~ First Quarter Net Sales Increased 17.8% to $188.0 Million ~</b></i> </p> <p class='bwalignc'> <i><b>~ Comparable Store Net Sales Increased 7.5% for the First Quarter ~</b></i> </p> <p class='bwalignc'> <i><b>~ First Quarter Net Income Increased 41.9% to $8.2 Million, or $0.29 per Diluted Share ~</b></i> </p>

Wednesday, April 25, 2012

Lumber Liquidators Announces First Quarter 2012 Financial Results and Provides Updated Full Year Outlook07:00 EDT Wednesday, April 25, 2012 TOANO, Va. (Business Wire) -- Lumber Liquidators (NYSE: LL), the largest specialty retailer of hardwood flooring in the U.S., today announced financial results for the first quarter ended March 31, 2012, and updated its outlook for 2012. First Quarter Results Net sales increased $28.4 million, or 17.8%, to $188.0 million in the first quarter of 2012 from $159.7 million in the first quarter of 2011. Comparable store net sales increased 7.5% for the quarter, driven by an 8.0% increase in the number of customers invoiced at these stores. Non-comparable store net sales increased $16.4 million. The Company opened four new stores during the first quarter of 2012. Gross margin was 37.3% in the first quarter of 2012 compared to 36.2% in the first quarter of 2011. The increase in gross margin reflects generally lower costs of product due to both sourcing initiatives and sales mix, and lower net transportation costs. Selling, general and administrative expenses improved to 30.2% of net sales for the first quarter of 2012 compared to 30.3% of net sales for the first quarter of 2011. Operating margin increased to 7.1% in the first quarter of 2012, from 5.9% in the first quarter of 2011. Net income increased 41.9% to $8.2 million, or $0.29 per diluted share, in the first quarter of 2012 from $5.8 million, or $0.20 per diluted share, in the first quarter of the prior year. Cash and cash equivalents at March 31, 2012 totaled $61.4 million, compared with $43.1 million at March 31, 2011 and $61.7 million at December 31, 2011. During the first quarter of 2012, pursuant to its previously announced stock repurchase program, the Company repurchased approximately 387,000 shares of its common stock for $8.9 million, and has approximately $41.1 million remaining under the repurchase program for future repurchases. Robert M. Lynch, President and Chief Executive Officer, commented, “Our team delivered a solid start to the year, driving the top line through successful marketing combined with conversion of strong customer traffic, increasing gross margin through sourcing and logistics initiatives and expanding operating margin by 120 basis points. Our value proposition combining price, selection, quality and availability with the expertise and service provided by our people resonated with customers during the quarter as we continued to build on our momentum from the second half of 2011.” Company Outlook Based on the first quarter results and current trends, the Company now expects to achieve the following in 2012: Net sales for the full year in the range of $720 million to $750 million, up from the previous range of $710 million to $740 million. The change in comparable store net sales to range from slightly negative to low single digits positive. The opening of a total of 20 to 25 new store locations, including two to four in Canada. Full year earnings per diluted share in the range of $1.10 to $1.25, based on a diluted share count of approximately 28.4 million shares, up from the previous range of $1.05 to $1.20 based on a diluted share count of 28.7 million shares. Mr. Lynch concluded, “We entered the important spring remodeling season well-positioned to serve customer demand and continue to capture share in our fragmented market. Our key strategic initiatives and infrastructure investments are generating positive results, which we believe will be cumulative in the coming years. Our team is motivated and excited by the opportunities ahead, and we are pleased with the coordinated efforts across store operations and support to provide the industry's best value proposition to our customers. We remain confident in our ability to continue to grow and expand operating margin in 2012 and beyond.” Conference Call and Webcast Information The Company plans to host a conference call and audio webcast today, April 25, 2012, 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 2, 2012 and may be accessed by dialing (877) 870-5176 or (858) 384-5517 and entering conference ID number 392435. 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 With over 265 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. 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 Extreme Makeover: Home Edition and 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 StatementsThis 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. (Tables Follow)     Lumber Liquidators Holdings, Inc.Condensed Consolidated Balance Sheets(in thousands, except share data)   March 31,2012December 31,2011Assets(unaudited)Current Assets: Cash and Cash Equivalents $ 61,436 $ 61,675 Merchandise Inventories 191,751 164,139 Prepaid Expenses 5,996 4,292 Other Current Assets   9,367     7,863     Total Current Assets268,550237,969 Property and Equipment, net 45,189 44,147 Goodwill 9,693 9,693 Other Assets   2,990     3,045     Total Assets$326,422   $294,854     Liabilities and Stockholders' EquityCurrent Liabilities: Accounts Payable $ 51,710 $ 38,161 Customer Deposits and Store Credits 26,207 18,120 Accrued Compensation 4,609 2,509 Sales and Income Tax Liabilities 9,188 5,092 Other Current Liabilities   8,760     6,839     Total Current Liabilities100,47470,721   Deferred Rent 3,396 3,328 Deferred Tax Liability 5,540 5,721   Stockholders' Equity: Common Stock ($0.001 par value; 35,000,000 authorized; 27,669,312 and 27,894,543 outstanding, respectively) 28 28 Treasury Stock, at cost (447,323 and 53,085 shares, respectively) (10,193 ) (1,116 ) Additional Capital 112,867 110,163 Retained Earnings 114,400 106,203 Accumulated Other Comprehensive Loss   (90 )   (194 )   Total Stockholders' Equity   217,012     215,084     Total Liabilities and Stockholders' Equity$326,422   $294,854       Lumber Liquidators Holdings, Inc.Condensed Consolidated Statements of Income(in thousands, except share data and per share amounts)(unaudited)   Three Months EndedMarch 31,2012   2011   Net Sales$188,034$159,680 Cost of Sales   117,897     101,887     Gross Profit70,13757,793   Selling, General and Administrative Expenses   56,819     48,453     Operating Income 13,318 9,340   Other (Income) Expense   (42 )   (87 )   Income Before Income Taxes 13,360 9,427   Provision for Income Taxes   5,163     3,650     Net Income$8,197   $5,777     Net Income per Common Share—Basic$0.29   $0.21     Net Income per Common Share—Diluted$0.29   $0.20     Weighted Average Common Shares Outstanding: Basic 27,926,544 27,572,244 Diluted 28,509,475 28,378,063     Lumber Liquidators Holdings, Inc.Condensed Consolidated Statements of Cash Flows(in thousands)(unaudited)   Three Months EndedMarch 31,2012   2011   Cash Flows from Operating Activities: Net Income $ 8,197 $ 5,777 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation and Amortization 2,366 1,910 Stock-Based Compensation Expense 1,133 922 Changes in Operating Assets and Liabilities: Merchandise Inventories (27,737 ) (7,861 ) Accounts Payable 13,295 (1,168 ) Customer Deposits and Store Credits 8,087 8,104 Prepaid Expenses and Other Current Assets (3,063 ) (737 ) Other Assets and Liabilities   8,059     4,111     Net Cash Provided by Operating Activities10,33711,058   Cash Flows from Investing Activities: Purchases of Property and Equipment   (3,180 )   (4,159 )   Net Cash Used in Investing Activities(3,180)(4,159)   Cash Flows from Financing Activities: Payments for Share Repurchases (9,077 ) (126 ) Proceeds from the Exercise of Stock Options 1,234 870 Excess Tax Benefits on Stock Option Exercises   337     659     Net Cash (Used in) Provided by Financing Activities(7,506)1,403   Effect of Exchange Rates on Cash and Cash Equivalents   110     (2)   Net (Decrease) Increase in Cash and Cash Equivalents(239)8,300Cash and Cash Equivalents, Beginning of Period   61,675     34,830     Cash and Cash Equivalents, End of Period$61,436   $43,130     Lumber LiquidatorsInvestor RelationsAshleigh McDermott, 757-566-7512