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    Lumber Liquidators Announces Second Quarter 2013 Financial Results And Raises Full Year Outlook

    ~ Net Sales Increased 22.2% to $257.1 Million

    ~~ Comparable Store Net Sales Increased 14.9% ~

    ~ Operating Margin of 12.9%

    ~~ Net Income Increased 67.7% to $20.4 Million, or $0.73 per Diluted Share

    ~~ Company Raises Full Year Revenue Guidance to a Range of $940 million to $963 million and EPS Guidance to a Range of $2.45 to $2.60

    Jul 24, 2013

    TOANO, Va., July 24, 2013 /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, 2013, and raised its outlook for 2013.

    (Logo: http://photos.prnewswire.com/prnh/20130604/MM25930LOGO )

    Second Quarter Results

    Net sales increased $46.8 million, or 22.2%, to $257.1 million in the second quarter of 2013 from $210.3 million in the second quarter of 2012.  Comparable store net sales increased 14.9% for the quarter, driven by a 9.1% increase in the number of customers invoiced and a 5.4% increase in the average sale.  Non-comparable store net sales increased $15.4 million.  The Company opened seven new stores during the second quarter.

    Gross margin was 41.3% in the second quarter of 2013 compared to 37.3% in the second quarter of 2012.  The increase in gross margin reflects generally lower net product costs, a net increase in the average retail price per unit sold and operational efficiencies across the organization. 

    Selling, general and administrative ("SG&A") expenses increased as a percentage of net sales to 28.4% for the second quarter of 2013 compared to 27.9% for the second quarter of 2012.  Operating margin increased 350 basis points to 12.9% in the second quarter of 2013, from 9.4% in the second quarter of 2012. 

    Net income increased 67.7% to $20.4 million, or $0.73 per diluted share, in the second quarter of 2013 from $12.2 million, or $0.43 per diluted share, in the second quarter of the prior year.

    Cash and cash equivalents at June 30, 2013 totaled $84.7 million compared with $31.5 million at June 30, 2012 and $64.2 million at December 31, 2012. 

    Robert M. Lynch, President and Chief Executive Officer, commented, "The team focused on our key strategic initiatives and achieved outstanding results through the important spring remodeling season.  Our value proposition of price, selection, quality, availability and expertise continues to be recognized by a growing customer base, and our commitment to continuous improvement drove strong performance throughout the organization.  We are pleased that our coordinated efforts enabled us to capture additional market share and deliver record operating margin."

    First Six Months Results

    Net sales increased 22.4% to $487.5 million in the first six months of 2013 from $398.4 million in the first six months of 2012.  Comparable store net sales increased 15.0% for the first half of 2013, compared to 10.1% for the first half of the prior year.  Non-comparable store net sales increased $29.3 million over the prior year.  The Company opened 12 new stores during the first six months of 2013 and as of June 30, 2013, operated 300 stores in 46 states and Canada. 

    Gross margin increased to 40.8% for the first six months of 2013 from 37.3% in the same period of 2012.  SG&A expenses improved to 28.8% of net sales for the first half of 2013, compared to 29.0% of net sales for the first half of 2012.  Operating margin increased 370 basis points to 12.0% in the first six months of 2013, from 8.3% in the first six months of 2012.

    Net income increased 77.7% to $36.2 million, or $1.30 per diluted share, in the first half of 2013 compared to $20.4 million, or $0.72 per diluted share, in the first half of the prior year. 

    Company Outlook

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

    • Net sales for the full year in the range of $940 million to $963 million, from a previous range of $913 million to $942 million.

    • Comparable store net sales increasing in the high-single to low double-digits.

    • The opening of a total of 16 to 20 new store locations in the second half of the year, for a total of 28 to 32 new store locations in 2013, narrowing the previous range of 25 to 35 new store locations.

    • Earnings per diluted share in the range of approximately $2.45 to $2.60, 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 a previous range of $2.10 to $2.35.

    Mr. Lynch concluded, "We were thrilled to open our 300th store in the second quarter.  Since the end of 2008, we have doubled our footprint and provided more than 1.9 million customers with their flooring solution.  We believe our new 'store of the future' format is resonating well with a broader base of customers, and we look forward to bringing our total store count in this new format to approximately 50 by year-end.  Our success in expanding gross margin allows us to reinvest across our industry-leading value proposition, and we see multi-year opportunities to expand operating margin while we continue to grow our store base."

    Conference Call and Webcast Information

    The Company plans to host a conference call and audio webcast today, July 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 August 1, 2013 and may be accessed by dialing (877) 870-5176 or (858) 384-5517 and entering conference ID number 416775.  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.

    Canaccord Genuity Growth Conference

    The Company today also announced that Mr. Lynch and Daniel E. Terrell, Chief Financial Officer, will present at the Canaccord Genuity Growth Conference.  The Company's presentation is scheduled for Wednesday, August 14, 2013 at 9:00 a.m. Eastern Time in Boston.  The live webcast and replay of the Company's presentation may be accessed via audio webcast at the Investor Relations section of the Company's website, www.lumberliquidators.com.

    About Lumber Liquidators

    With over 300 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)



    June 30,

    2013

    December 31,

    2012

    Assets

    (unaudited)


    Current Assets:



          Cash and Cash Equivalents

    $       84,664

    $       64,167

          Merchandise Inventories

    230,499

    206,704

          Prepaid Expenses

    5,895

    5,168

          Other Current Assets

    15,292

    12,106




                Total Current Assets

    336,350

    288,145

    Property and Equipment, net

    48,748

    47,764

    Goodwill

    9,693

    9,693

    Other Assets

    1,747

    1,785




    Total Assets

    $   396,538

    $   347,387




    Liabilities and Stockholders' Equity



    Current Liabilities:



          Accounts Payable

    $       52,950

    $       55,110

          Customer Deposits and Store Credits

    30,299

    25,747

          Accrued Compensation

    8,765

    7,969

          Sales and Income Tax Liabilities

    4,748

    4,314

          Other Current Liabilities

    11,150

    7,887




                Total Current Liabilities

    107,912

    101,027




    Deferred Rent

    3,775

    3,653

    Deferred Tax Liability

    8,348

    8,166




    Stockholders' Equity:



          Common Stock ($0.001 par value; 35,000,000 authorized; 27,564,902
              and 27,214,144 outstanding, respectively)

    29

    29

          Treasury Stock, at cost (1,923,682 and 1,719,706 shares, respectively)

    (65,189)

    (50,552)

          Additional Capital

    152,813

    131,724

          Retained Earnings

    189,470

    153,267

          Accumulated Other Comprehensive (Loss) Income

    (620)

    73




          Total Stockholders' Equity

    276,503

    234,541




    Total Liabilities and Stockholders' Equity

    $   396,538

    $   347,387




     

    Lumber Liquidators Holdings, Inc.

    Condensed Consolidated Statements of Income

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

    (unaudited)



    Three Months Ended

    June 30,

    Six Months Ended

    June 30,


    2013

    2012

    2013

    2012






    Net Sales

    $   257,111

    $   210,347

    $    487,530

    $   398,381

    Cost of Sales

    151,032

    131,867

    288,453

    249,764






    Gross Profit

    106,079

    78,480

    199,077

    148,617






    Selling, General and Administrative Expenses

    72,992

    58,685

    140,582

    115,503






    Operating Income

    33,087

    19,795

    58,495

    33,114






    Other (Income) Expense

    (150)

    (32)

    (360)

    (73)






    Income Before Income Taxes

    33,237

    19,827

    58,855

    33,187






    Provision for Income Taxes

    12,815

    7,650

    22,652

    12,813






    Net Income

    $      20,422

    $      12,177

    $      36,203

    $     20,374






    Net Income per Common Share—Basic

    $           0.74

    $           0.44

    $           1.32

    $          0.74






    Net Income per Common Share—Diluted

    $           0.73

    $           0.43

    $           1.30

    $          0.72






    Weighted Average Common Shares Outstanding:





    Basic

    27,535,034

    27,506,529

    27,374,164

    27,716,537

    Diluted

    27,973,457

    28,032,391

    27,879,428

    28,270,934

     

    Lumber Liquidators Holdings, Inc.

    Condensed Consolidated Statements of Cash Flows

    (in thousands)

    (unaudited)



    Six Months Ended

    June 30,


    2013

    2012




    Cash Flows from Operating Activities:



          Net Income

    $        36,203

    $        20,374

          Adjustments to Reconcile Net Income to Net Cash Provided by Operating

                Activities:



                      Depreciation and Amortization

    5,595

    4,822

                      Stock-Based Compensation Expense

    2,633

    2,150

                      Changes in Operating Assets and Liabilities:



                            Merchandise Inventories

    (23,921)

    (47,605)

                            Accounts Payable

    (1,957)

    12,894

                            Customer Deposits and Store Credits

    4,568

    4,889

                            Prepaid Expenses and Other Current Assets

    (4,202)

    1,441

                            Other Assets and Liabilities

    4,819

    3,487




                      Net Cash Provided by Operating Activities

    23,738

    2,452




    Cash Flows from Investing Activities:



          Purchases of Property and Equipment

    (6,767)

    (6,675)




                      Net Cash Used in Investing Activities

    (6,767)

    (6,675)




    Cash Flows from Financing Activities:



          Payments for Share Repurchases

    (14,637)

    (34,483)

          Proceeds from the Exercise of Stock Options

    6,744

    6,469

          Excess Tax Benefit from Stock-Based Compensation

    11,794

    1,934




                      Net Cash Provided by (Used in) Financing Activities

    3,901

    (26,080)




    Effect of Exchange Rates on Cash and Cash Equivalents

    (375)

    149




    Net Increase (Decrease) in Cash and Cash Equivalents

    20,497

    (30,154)

    Cash and Cash Equivalents, Beginning of Period

    64,167

    61,675




    Cash and Cash Equivalents, End of Period

    $      84,664

    $      31,521




     

     

    SOURCE Lumber Liquidators


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