TOANO, Va., April 29 /PRNewswire-FirstCall/ -- Lumber Liquidators, Inc.,
(NYSE: LL) the largest specialty retailer of hardwood flooring in the U.S.,
today announced financial results for the first quarter ended March 31, 2008.
First Quarter Results
Net sales increased 24.5% to $114.5 million in the first quarter of 2008
from $92.0 million in the first quarter of 2007. Comparable store net sales
increased 7.0% for the quarter on top of an increase of 8.5% for the first
quarter of the prior year. Non-comparable store net sales increased $16.1
million, and represented 71.3% of the total increase in the Company's net
sales. The Company opened nine new stores during the first quarter.
Gross margin increased to 35.0% in the first quarter of 2008 compared to
33.2% in the same period of 2007. The improvement in gross margin reflects an
increase in sales of higher-margin, premium products and strong sell-through
of opportunistic liquidation purchases completed during the quarter.
Selling, general and administrative (SG&A) expenses were $32.3 million, or
28.2% of net sales, for the first quarter of 2008 compared to $26.8 million,
or 29.1% of net sales, for the first quarter of 2007. The improvement in SG&A
as a percentage of net sales was due to the Company's strong sales growth and
ability to leverage expenses as well as a shift in timing of certain
advertising programs.
Net income nearly doubled to $4.3 million, or $0.16 per diluted share, in
the first quarter of 2008 compared to $2.2 million, or $0.10 per diluted
share, in the first quarter of the prior year.
The Company's first quarter 2008 net income reflects an effective tax rate
of 46.2% compared to 38.6% in the first quarter of 2007. The higher effective
tax rate is due to approximately $0.7 million of additional income tax expense
that was recorded in the first quarter of 2008 related to the non-deductable
portion of the Variable Plan's cumulative compensation cost.
Jeffrey W. Griffiths, President and Chief Executive Officer, commented,
"We are very pleased with our strong results in the first quarter and our
ability to maintain the positive momentum we experienced in the second half of
last year. While our gross margin expansion reflects opportunistic
liquidation buys, we believe much of the improvement is sustainable as a
result of our enhanced merchandise selection and retail pricing discipline.
As planned, we are also beginning to more fully achieve the benefits of
increased operational efficiencies as evidenced by our ability to leverage
expenses. Additionally, we are pleased with the strong contributions of new
stores that we have opened in the last year as their results are exceeding our
expectations. Overall, our performance in the first quarter demonstrates the
continuing appeal of our value proposition of price, selection, quality, and
availability and our ability to bring that proposition to an expanding base of
customers."
Company Outlook
Based upon first quarter results and current trends, the Company
reiterated its fiscal 2008 guidance. The Company continues to anticipate
fiscal 2008 net sales in the range of $475 million to $490 million and expects
comparable store net sales will increase in the mid-single digit range. The
Company expects earnings per diluted share in 2008 will be in the range of
$0.70 to $0.78. The Company also anticipates that its tax rate for the full
year of 2008 will be approximately 38.5% to 39.5%. Actual results may vary
significantly from current expectations.
Additionally, the Company is maintaining its plans to open approximately
30 to 40 stores in 2008. To date in 2008, Lumber Liquidators has opened
fifteen stores comprised of one each in Arizona, Colorado, Maryland, Michigan,
Missouri, New Hampshire, New York, North Carolina, Ohio, South Carolina, and
Texas and two each in Illinois and Pennsylvania.
Mr. Griffiths concluded, "As we drive top line growth and extend our
footprint, we are confident that we will be able to further leverage the solid
foundation we have established for our business. Further, despite challenges
in the macroeconomic environment, we continue to believe that we are poised
for continued strong growth as we gain additional benefits from our improved
operating structure."
Conference Call and Webcast Information
The Company will host a conference call and audio webcast today, April 29,
2008, at 10:00 a.m. Eastern Time. The conference may be accessed by dialing
(800) 762-8779 or (480) 248-5081. A replay will be available approximately
one hour after the call through May 6, 2008 and may be accessed by dialing
(800) 406-7325 or (303) 590-3030 and referencing PIN code 3865253. 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, Inc.
Lumber Liquidators is the largest specialty retailer of hardwood flooring
in the United States. With more than 130 stores and 150 varieties of flooring,
including solid and engineered hardwood, bamboo, cork and laminate, and
featuring premier brands such as Bellawood (which features a 50-year
warranty), Dream Home, Schon, Virginia Mill Works, and Morning Star, Lumber
Liquidators has one of the most extensive selections of prefinished and
unfinished hardwood flooring in the industry. Its hardwood line is made up of
more than 25 domestic and exotic wood species in both prefinished and
unfinished brands of various lengths and widths.
While keeping costs down is part of the Company's philosophy, Lumber
Liquidators is also committed to offering high-quality, name-brand products
that it stands behind with confidence.
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 most recent periodic filings with the Securities and Exchange
Commission.
For further information contact:
Lumber Liquidators, Inc. Financial Dynamics
Daniel Terrell Leigh Parrish/Caren Barbara
Tel: 757.259.4280 Tel. 212.850.5600
Lumber Liquidators. Inc.
Condensed Statements of Income
(in thousands, except share data and per share amounts)
(unaudited)
Three Months Ended
March 31,
2008 2007
Net Sales $114,549 $92,022
Cost of Sales 74,427 61,451
Gross Profit 40,122 30,571
Selling, General and Administrative Expenses 32,314 26,816
Operating Income 7,808 3,755
Interest Expense 25 174
Other (Income) Expense (238) (55)
Income Before Income Taxes 8,021 3,636
Provision for Income Taxes 3,709 1,405
Net Income $4,312 $2,231
Net Income per Common Share-Basic $0.16 $0.15
Net Income per Common Share-Diluted $0.16 $0.10
Weighted Average Common Shares Outstanding:
Basic 26,748,726 15,000,100
Diluted 26,806,861 22,952,118
Lumber Liquidators. Inc.
Condensed Balance Sheet
(in thousands, except share data)
March 31, December 31,
2008 2007
Assets (unaudited)
Current Assets:
Cash and Cash Equivalents $32,563 $33,168
Merchandise Inventories 95,947 72,024
Prepaid Expenses 3,641 4,011
Other Current Assets 4,541 3,862
Total Current Assets 136,692 113,065
Property and Equipment, net 12,065 11,580
Deferred Income Taxes 1,409 1,220
Other Assets 2,532 2,559
Total Assets $152,698 $128,424
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts Payable $26,720 $15,654
Customer Deposits and Store Credits 12,243 9,609
Other Current Liabilities 16,753 10,973
Total Current Liabilities 55,716 36,236
Stockholders' Equity:
Common Stock ($0.001 par value; 35,000,000
authorized; 26,746,702 and 26,752,118 issued
and outstanding, respectively) 27 27
Additional Capital 88,035 87,553
Retained Earnings 8,920 4,608
Total Stockholders' Equity 96,982 92,188
Total Liabilities and Stockholders' Equity $152,698 $128,424
SOURCE Lumber Liquidators, Inc.
