TOANO, Va., Nov. 6, 2019 /PRNewswire/ -- Lumber
Liquidators (NYSE: LL), a leading specialty retailer of
hard-surface flooring in North
America, today announced financial results for the third
quarter and nine months ended September 30,
2019.
"We had a challenging quarter that included soft demand in July
as well as a network security incident in August, but despite these
headwinds, we made solid progress during the quarter implementing
our strategic initiatives, including actions to mitigate the impact
of tariffs," said Chief Executive Officer Dennis Knowles. "We continue to work hard
to evolve our business to better serve customers and build on our
unique value proposition. During the quarter, we continued to
leverage enhanced visual selling tools that we believe resonate
with consumers as we guide them along their flooring project
journey. This has been supported by a robust marketing strategy,
including the launch of a new advertising campaign in mid-September 2019 that highlights our
differentiated service and quality products while also emphasizing
the great value we offer consumers."
"Looking ahead, we are lowering our full-year 2019 sales and
operating margin guidance to reflect our weaker-than-expected third
quarter results that included the impact of the network security
incident," Knowles continued. "Encouragingly, we had positive
comparable store sales in October as we completed a successful
October Yard Sale, our premier fourth-quarter promotion, and we see
a generally more supportive macro environment as housing turnover
strengthens, home equity levels continue to rise, mortgage rates
tick lower and employment remains strong, nevertheless we feel it
is prudent to lower our annual guidance at this time. We
remain focused on executing our transformation plan to better
position us to serve both retail and professional flooring
consumers and create long-term value for our shareholders."
Third Quarter Results
Net sales for the third quarter of 2019 decreased $6.5 million, or 2.4%, to $264 million as compared to the third quarter of
2018. Net sales in comparable stores decreased 3.6% as
compared to the third quarter of 2018 driven by soft sales at the
beginning of the quarter and compounded by a network security
incident in late August discussed in the "Network Security
Incident" section that follows. However, comparable
store sales showed significant improvement in the month of
September driven by growth in transaction count and higher average
ticket. The Company opened four new stores and relocated one store
in the third quarter of 2019.
Gross profit decreased 5% in the third quarter of 2019 to
$96 million as compared to
$101 million in the comparable period
in 2018. Gross margin decreased to 36.2% in the third quarter of
2019 from 37.2% in the third quarter of 2018. Both years were
impacted by antidumping rate changes but in opposite directions.
Excluding these items as shown on the table that follows, adjusted
gross profit (a non-GAAP measure) decreased by $1.4 million and adjusted gross margin (a
non-GAAP measure) improved to 36.5% from 36.2% in the third quarter
of 2018. The margin increase was driven by a larger mix of
higher margin manufactured products, reduced discounting in the
stores, merchandising cost-out efforts, including shifting
production to lower-cost countries of supply, and retail price
increases related to tariff mitigation. The improvement in adjusted
gross margin was achieved despite higher tariff-related costs and
with an increased mix of lower margin installation sales.
Selling, general and administrative ("SG&A") expenses
decreased 0.5% in the third quarter of 2019 to $93 million from $94
million in the comparable period in 2018 but included
certain costs in both years related to investigations and lawsuits
and a $1.8 million impairment of
certain assets related to the Company's decision to exit the
hardwood flooring finishing business in the third quarter of
2018. Excluding these items as shown in the table that
follows, adjusted SG&A (a non-GAAP measure) increased
$3.9 million primarily as a result of
costs related to ten new stores compared to the third quarter a
year ago, higher year-over-year incentive and equity accruals
driven by a reduction in last year's third quarter to align with
lower performance expectations, severance, and costs related to the
corporate headquarters relocation occurring in this year's fourth
quarter.
Operating income was $2.2 million
and $6.7 million for the three months
ended September 30, 2019 and 2018,
respectively. Excluding the gross profit and SG&A items
discussed above and summarized in the table that follows, adjusted
operating income (a non-GAAP measure) was $3.4 million for the third quarter of 2019, down
from $8.6 million for the third
quarter of 2018. The most significant drivers of the decrease
were higher adjusted SG&A in this year's third quarter in
addition to the impact of the network security incident in
August 2019 and soft sales in
July 2019.
Net income for the three months ended September 30, 2019 was $1
million, or $0.04 per diluted
share, compared to net income of $5.9
million, or $0.21 per diluted
share, for the three months ended September
30, 2018. Adjusted net income and adjusted EPS
(non-GAAP measures) for the three months ended September 30, 2019 were $2.2 million and $0.08 per diluted share, compared to $7.9 million and $0.27 per diluted share, for the three months
ended September 30, 2018.
As of September 30, 2019, the
Company had $64.5 million outstanding
under its revolver and $25 million
outstanding under its FILO Term Loan, which collectively, is
unchanged from the end of the second quarter. Considering these
borrowings, at September 30, 2019,
the Company had $114 million in
liquidity, comprised of $6 million of
cash and cash equivalents and availability under the Credit
Agreement of $108 million.
Network Security Incident
In August 2019, the Company
experienced a network security incident caused by malware that
encrypted certain information technology systems and impacted the
ability to electronically process transactions. Stores
remained open during the event and executed the Company's business
continuity plan which included utilization of manual processes to
transact sales and serve customers. While it is challenging to know
the precise impact, the Company estimates the disruption caused by
the event negatively impacted total revenue in the range of
approximately $6 million to
$8 million. Since SG&A, net
of insurance proceeds, was not materially impacted by the event,
the Company estimates the revenue impact flowed-through to
operating income at approximately the Company's gross margin
rate. The Company maintains cybersecurity and other insurance
coverage and has been working collaboratively with its insurers
throughout the incident and recovery process. Certain direct
expenses related to the incident have been reimbursed and a
receivable has been recorded in association with other reimbursable
expenses. In addition, the Company is pursuing a recovery of
lost profit under the business interruption portion of its
policies, although recovery is not guaranteed.
Commenting on the network security incident, Mr. Knowles stated
"I was extremely appreciative of employees' cross functional effort
to lessen the impact of the network event, and I would like to
thank everyone for their tremendous efforts. I would also like to
thank our customers for their patience and understanding as our
teams worked diligently to effectively serve them during the
event. Importantly, based on the results of the forensic IT
analysis, there has been no evidence that any confidential
customer, employee or company data was compromised or
extracted."
Appointment of Chief Financial Officer
As announced on August 19, 2019,
Nancy A. Walsh has been appointed
the Company's Chief Financial Officer, effective September 9, 2019. Ms. Walsh brings over 30
years of public company finance and capital markets experience, a
deep background in financial planning and operational management,
and extensive knowledge of the retail industry. She most
recently served as Executive Vice President and Chief Financial
Officer of Pier 1 Imports, Inc. Prior to that, she served as
Executive Vice President and Chief Financial Officer of The Bon-Ton
Stores, Inc. and in various finance and leadership positions with
Tapestry, Inc., formerly known as Coach, Inc.
2019 Outlook
The Company's current 2019 full-year outlook assumes the
continuation of the current 25% tariff applicable to products
imported from China for the
balance of 2019 and is as follows:
|
Current
Outlook
|
Previous
Outlook
|
Total revenue
growth percentage
|
Flat to slightly
positive
|
Low single
digits
|
Comparable store
sales
|
-2.0% to
flat
|
Approximately
flat
|
Adjusted operating
margin (a non-GAAP measure)
|
1.0% to
1.4%
|
1.4% to
1.9%
|
New store
openings
|
Approximately
11
|
10 to 15
|
Capital
spending
|
$15 to $17
million
|
$15 to $18
million
|
Conference Call and Webcast Information
The Company plans to host a conference call and audio webcast on
November 6, 2019, at 8:00 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 ends through
November 13, 2019 and may be accessed
by dialing (844) 512-2921 or (412) 317-6671 and entering pin number
13695123. 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
Lumber Liquidators is one of North America's leading specialty
retailers of hard-surface flooring with 419 stores as of
September 30, 2019. The Company
features more than 400 varieties of floors in the latest
styles, including solid and engineered hardwood, bamboo, cork,
laminate, waterproof vinyl plank and porcelain tile flooring.
Additionally, Lumber Liquidators provides a wide selection of
flooring enhancements and accessories to complement, install and
maintain new floors. Every location is staffed with flooring
experts who can provide advice, pro services and installation
options for all of Lumber Liquidators' products, much of which is
in stock and ready for delivery.
Learn more about Lumber Liquidators:
- Commitment to compliance, quality and the communities it
serves: https://www.lumberliquidators.com/quality.
- Corporate giving: LayItForward.LumberLiquidators.com.
- Follow on social media: Facebook, Instagram and Twitter.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This press release includes statements of the Company's
expectations, intentions, plans and beliefs that constitute
"forward-looking statements" within the meanings of the Private
Securities Litigation Reform Act of 1995. These statements, which
may be identified by words such as "may," "will," "should,"
"expects," "intends," "plans," "anticipates," "believes," "thinks,"
"estimates," "seeks," "predicts," "could," "projects," "potential"
and other similar terms and phrases, are based on the beliefs of
the Company's management, as well as assumptions made by, and
information currently available to, the Company's management as of
the date of such statements. These statements are subject to risks
and uncertainties, all of which are difficult to predict and many
of which are beyond the Company's control. These risks include,
without limitation, the impact on us of any of the following:
- the outcomes of legal proceedings, and the related impact on
liquidity;
- reputational harm;
- obligations related to and impacts of new laws and regulations,
including pertaining to tariffs;
- obtaining products from abroad, including the effects of
tariffs, as well as the effects of antidumping and countervailing
duties;
- obligations under various settlement agreements and other
compliance matters;
- disruption due to cybersecurity threats, including any impacts
from a network security incident;
- disruptions related to our corporate headquarters
relocation;
- inability to open new stores, find suitable locations for our
new store concept, and fund other capital expenditures;
- inability to execute on our key initiatives or such key
initiatives do not yield desired results;
- managing growth;
- transportation costs;
- damage to our assets;
- disruption in our ability to distribute our products;
- operating stores in Canada and
an office in China;
- managing third-party installers and product delivery
companies;
- renewing store or warehouse leases;
- having sufficient suppliers;
- our, and our suppliers', compliance with complex and evolving
rules, regulations, and laws at the federal, state, and local
level;
- disruption in our ability to obtain products from our
suppliers;
- product liability claims;
- availability of suitable hardwood, including due to disruptions
from the impacts of severe weather;
- changes in economic conditions, both domestic and abroad;
- sufficient insurance coverage, including cybersecurity
insurance;
- access to and costs of capital;
- the handling of confidential customer information, including
the impacts from the California Consumer Privacy Act;
- management information systems disruptions;
- alternative e-commerce offerings;
- our advertising and overall marketing strategy;
- anticipating consumer trends;
- competition;
- impact of changes in accounting guidance, including the
implementation guidelines and interpretations;
- maintenance of valuation allowances on deferred tax assets and
the impacts thereof;
- internal controls including those over tariffs;
- stock price volatility; and
- anti-takeover provisions.
The Company specifically disclaims any obligation to update
these statements, which speak only as of the dates on which such
statements are made, except as may be required under the federal
securities laws. Information regarding these and other
additional risks and uncertainties is contained in the Company's
other reports filed with the Securities and Exchange Commission,
including the Item 1A, "Risk Factors," section of the Form 10-K for
the year ended December 31, 2018.
Non-GAAP and Other Information
To supplement the financial measures prepared in accordance with
U.S. generally accepted accounting principles (GAAP), the Company
uses the following non-GAAP financial measures: (i) Adjusted Gross
Profit, (ii) Adjusted Gross Margin; (iii) Adjusted SG&A; (iv)
Adjusted Operating (Loss) Income; (v) Adjusted Operating Margin;
(vi) Adjusted Net Income; and (vii) Adjusted EPS. These
non-GAAP financial measures should be viewed in addition to, and
not in lieu of, financial measures calculated in accordance with
GAAP. These supplemental measures may vary from, and may not
be comparable to, similarly titled measures by other companies.
The non-GAAP financial measures are presented because management
uses these non-GAAP financial measures to evaluate the Company's
operating performance and to determine incentive compensation.
Therefore, the Company believes that the presentation of non-GAAP
financial measures provides useful supplementary information to,
and facilitates additional analysis by, investors. The presented
non-GAAP financial measures exclude items that management does not
believe reflect the Company's core operating performance, which
include regulatory and legal settlements and associated legal and
operating costs, changes in antidumping and countervailing duties,
as such items are outside the control of the Company or are due to
their inherent unusual, non-operating, unpredictable, non-recurring
or non-cash nature.
For further information contact:
Lumber Liquidators Investor Relations
ir@lumberliquidators.com
Tel: 757.566.7512
(Tables Follow)
Lumber Liquidators
Holdings, Inc.
|
Condensed
Consolidated Balance Sheets
|
(Unaudited, in
thousands)
|
|
|
|
September
30,
|
|
December 31,
|
|
|
2019
|
|
2018
|
Assets
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
|
Cash and Cash
Equivalents
|
|
$
|
5,605
|
|
$
|
11,565
|
Merchandise
Inventories
|
|
|
306,881
|
|
|
318,272
|
Prepaid
Expenses
|
|
|
9,170
|
|
|
6,299
|
Deposit for Legal
Settlement
|
|
|
21,500
|
|
|
21,500
|
Other Current
Assets
|
|
|
9,360
|
|
|
8,667
|
Total Current
Assets
|
|
|
352,516
|
|
|
366,303
|
Property and
Equipment, net
|
|
|
94,052
|
|
|
93,689
|
Operating Lease
Right-of-Use
|
|
|
111,364
|
|
|
—
|
Goodwill
|
|
|
9,693
|
|
|
9,693
|
Other
Assets
|
|
|
5,724
|
|
|
5,832
|
Total
Assets
|
|
$
|
573,349
|
|
$
|
475,517
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
|
|
Accounts
Payable
|
|
$
|
59,200
|
|
$
|
73,412
|
Customer Deposits and
Store Credits
|
|
|
45,036
|
|
|
40,332
|
Accrued
Compensation
|
|
|
10,870
|
|
|
9,265
|
Sales and Income Tax
Liabilities
|
|
|
4,906
|
|
|
4,200
|
Accrual for Legal
Matters and Settlements Current
|
|
|
68,475
|
|
|
97,625
|
Operating Lease
Liabilities - Current
|
|
|
30,708
|
|
|
—
|
Other Current
Liabilities
|
|
|
18,476
|
|
|
17,290
|
Total Current
Liabilities
|
|
|
237,671
|
|
|
242,124
|
Other Long-Term
Liabilities
|
|
|
13,645
|
|
|
20,203
|
Operating Lease
Liabilities - Long-Term
|
|
|
88,103
|
|
|
—
|
Deferred Tax
Liability
|
|
|
898
|
|
|
792
|
Credit
Agreement
|
|
|
89,500
|
|
|
65,000
|
Total
Liabilities
|
|
|
429,817
|
|
|
328,119
|
|
|
|
|
|
|
|
Stockholders'
Equity:
|
|
|
|
|
|
|
Common Stock ($0.001
par value; 35,000 shares authorized; 29,953 and 31,578
shares issued and 28,710 and 28,627 shares outstanding,
respectively)
|
|
|
30
|
|
|
32
|
Treasury Stock, at
cost (1,243 and 2,951 shares, respectively)
|
|
|
(142,299)
|
|
|
(141,828)
|
Additional
Capital
|
|
|
217,365
|
|
|
213,744
|
Retained
Earnings
|
|
|
70,100
|
|
|
76,835
|
Accumulated Other
Comprehensive Loss
|
|
|
(1,664)
|
|
|
(1,385)
|
Total
Stockholders' Equity
|
|
|
143,532
|
|
|
147,398
|
Total Liabilities
and Stockholders' Equity
|
|
$
|
573,349
|
|
$
|
475,517
|
Lumber Liquidators
Holdings, Inc.
|
Condensed
Consolidated Statements of Operations
|
(Unaudited, in
thousands, except per share amounts)
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Merchandise
Sales
|
|
$
|
229,241
|
|
$
|
236,380
|
|
$
|
717,799
|
|
$
|
721,822
|
Net Services
Sales
|
|
|
34,719
|
|
|
34,089
|
|
|
100,949
|
|
|
93,893
|
Total Net
Sales
|
|
|
263,960
|
|
|
270,469
|
|
|
818,748
|
|
|
815,715
|
Cost of
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Merchandise
Sold
|
|
|
142,404
|
|
|
144,490
|
|
|
451,631
|
|
|
449,508
|
Cost of Services
Sold
|
|
|
25,882
|
|
|
25,297
|
|
|
75,345
|
|
|
69,243
|
Total Cost of
Sales
|
|
|
168,286
|
|
|
169,787
|
|
|
526,976
|
|
|
518,751
|
Gross
Profit
|
|
|
95,674
|
|
|
100,682
|
|
|
291,772
|
|
|
296,964
|
Selling, General and
Administrative Expenses
|
|
|
93,495
|
|
|
93,987
|
|
|
294,392
|
|
|
292,628
|
Operating Income
(Loss)
|
|
|
2,179
|
|
|
6,695
|
|
|
(2,620)
|
|
|
4,336
|
Other
Expense
|
|
|
909
|
|
|
547
|
|
|
3,265
|
|
|
1,214
|
Income (Loss) Before
Income Taxes
|
|
|
1,270
|
|
|
6,148
|
|
|
(5,885)
|
|
|
3,122
|
Income Tax
Expense
|
|
|
225
|
|
|
225
|
|
|
850
|
|
|
625
|
Net Income
(Loss)
|
|
$
|
1,045
|
|
$
|
5,923
|
|
$
|
(6,735)
|
|
$
|
2,497
|
Net Income (Loss)
per Common Share—Basic
|
|
$
|
0.04
|
|
$
|
0.21
|
|
$
|
(0.23)
|
|
$
|
0.09
|
Net Income (Loss)
per Common Share—Diluted
|
|
$
|
0.04
|
|
$
|
0.21
|
|
$
|
(0.23)
|
|
$
|
0.09
|
Weighted Average
Common Shares Outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
28,706
|
|
|
28,602
|
|
|
28,681
|
|
|
28,552
|
Diluted
|
|
|
28,786
|
|
|
28,757
|
|
|
28,681
|
|
|
28,769
|
Lumber Liquidators
Holdings, Inc.
|
Condensed
Consolidated Statements of Cash Flows
|
(Unaudited, in
thousands)
|
|
|
|
Nine Months Ended
Septemeber 30,
|
|
|
2019
|
|
2018
|
|
|
|
|
|
|
Cash Flows from
Operating Activities:
|
|
|
|
|
|
|
Net (Loss)
Income
|
|
$
|
(6,735)
|
|
$
|
2,497
|
Adjustments to
Reconcile Net (Loss) Income:
|
|
|
|
|
|
|
Depreciation and
Amortization
|
|
|
12,903
|
|
|
14,042
|
Stock-Based
Compensation Expense
|
|
|
3,621
|
|
|
3,131
|
(Gain) Loss on
Disposal of Fixed Assets
|
|
|
(284)
|
|
|
1,812
|
Changes in Operating
Assets and Liabilities:
|
|
|
|
|
|
|
Merchandise
Inventories
|
|
|
10,270
|
|
|
(44,450)
|
Accounts
Payable
|
|
|
(14,186)
|
|
|
(3,196)
|
Customer Deposits and
Store Credits
|
|
|
4,810
|
|
|
5,079
|
Prepaid Expenses and
Other Current Assets
|
|
|
(3,665)
|
|
|
1,153
|
Accrual for Legal
Matters and Settlements
|
|
|
4,575
|
|
|
2,951
|
Payments for Legal
Matters and Settlements
|
|
|
(33,725)
|
|
|
(2,264)
|
Other Assets and
Liabilities
|
|
|
5,341
|
|
|
(6,584)
|
Net Cash Used in
Operating Activities
|
|
|
(17,075)
|
|
|
(25,829)
|
|
|
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
|
|
Purchases of Property
and Equipment
|
|
|
(13,523)
|
|
|
(10,651)
|
Other Investing
Activities
|
|
|
419
|
|
|
553
|
Net Cash Used in
Investing Activities
|
|
|
(13,104)
|
|
|
(10,098)
|
|
|
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
|
|
Borrowings on Credit
Agreement
|
|
|
85,500
|
|
|
37,000
|
Payments on Credit
Agreement
|
|
|
(61,000)
|
|
|
(9,000)
|
Payments on Financed
Insurance Obligations
|
|
|
-
|
|
|
(612)
|
Other Financing
Activities
|
|
|
(1,104)
|
|
|
(163)
|
Net Cash Provided
by Financing Activities
|
|
|
23,396
|
|
|
27,225
|
Effect of Exchange
Rates on Cash and Cash Equivalents
|
|
|
823
|
|
|
595
|
Net Decrease in
Cash and Cash Equivalents
|
|
|
(5,960)
|
|
|
(8,107)
|
Cash and Cash
Equivalents, Beginning of Period
|
|
|
11,565
|
|
|
19,938
|
Cash and Cash
Equivalents, End of Period
|
|
$
|
5,605
|
|
$
|
11,831
|
Lumber Liquidators
Holdings, Inc.
|
GAAP to Non-GAAP
Reconciliation
|
(in thousands,
except percentages)
|
|
Items impacting gross
margin with comparisons to the prior-year periods
include:
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2019
|
2018
|
|
2019
|
2018
|
|
|
(dollars in thousands)
|
Gross Profit, as
reported (GAAP)
|
|
$
|
95,674
|
|
$
|
100,682
|
|
$
|
291,772
|
|
$
|
296,964
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Antidumping
Adjustments 1
|
|
|
780
|
|
|
(2,822)
|
|
|
780
|
|
|
(4,948)
|
HTS Classification
Adjustments 2
|
|
|
—
|
|
|
—
|
|
|
(779)
|
|
|
—
|
Sub-Total Items
above
|
|
|
780
|
|
|
(2,822)
|
|
|
1
|
|
|
(4,948)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Gross Profit
(non-GAAP measures)
|
|
$
|
96,454
|
|
$
|
97,860
|
|
$
|
291,773
|
|
$
|
292,016
|
|
1
Represents countervailing and antidumping expense (income)
associated with applicable prior-year shipments of engineered
hardwood from China.
|
2
Represents classification adjustments related to the Harmonized
Tariff Schedule ("HTS") duty categorization in prior periods during
the nine months ended September 30, 2019.
|
Items impacting
SG&A with comparisons to the prior-year period
includes:
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
(dollars in thousands)
|
SG&A, as reported
(GAAP)
|
$
|
93,495
|
|
$
|
93,987
|
|
$
|
294,392
|
|
$
|
292,628
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrual for Legal
Matters and Settlements 3
|
|
—
|
|
|
—
|
|
|
4,575
|
|
|
2,951
|
Legal and
Professional Fees4
|
|
408
|
|
|
2,991
|
|
|
3,403
|
|
|
9,382
|
All Other
5
|
|
—
|
|
|
1,769
|
|
|
—
|
|
|
1,769
|
Sub-Total Items
above
|
|
408
|
|
|
4,760
|
|
|
7,978
|
|
|
14,102
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted SG&A (a
non-GAAP measure)
|
$
|
93,087
|
|
$
|
89,227
|
|
$
|
286,414
|
|
$
|
278,526
|
|
3
This amount represents the charge to earnings for the Kramer
employment case and certain Related Laminate Matters, which is
described more fully in Note 8 to the condensed consolidated
financial statements in the September 30, 2019 Form
10-Q.
|
4
Represents charges to earnings related to our defense of certain
significant legal actions during the period. This does not include
all legal costs incurred by the Company.
|
5
All Other in 2018 represents an impairment of certain assets
related to the Company's decision to exit the finishing
business.
|
Items impacting
operating income (loss) and operating margin with comparisons to
the prior-year period includes:
|
|
|
Three Months Ended
September 30,
|
|
|
|
Nine Months Ended
September 30,
|
|
|
|
(dollars in thousands)
|
|
|
|
(dollars in thousands)
|
|
|
|
2019
|
%
Sales
|
|
2018
|
%
Sales
|
|
2019
|
%
Sales
|
|
2018
|
%
Sales
|
Operating Income
(Loss), as reported (GAAP)
|
$
|
2,179
|
0.8
|
%
|
|
$
|
6,695
|
2.5
|
%
|
|
$
|
(2,620)
|
(0.3)
|
%
|
|
$
|
4,336
|
0.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Margin
Items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Antidumping
Adjustments 1
|
|
780
|
0.3
|
%
|
|
|
(2,822)
|
(1.0)
|
%
|
|
|
780
|
0.1
|
%
|
|
|
(4,948)
|
(0.6)
|
%
|
HTS Classification
Adjustments 2
|
|
—
|
—
|
%
|
|
|
—
|
—
|
|
|
|
(779)
|
(0.1)
|
%
|
|
|
—
|
—
|
|
Gross Margin
Subtotal
|
|
780
|
0.3
|
%
|
|
|
(2,822)
|
(1.0)
|
%
|
|
|
1
|
0.0
|
%
|
|
|
(4,948)
|
(0.6)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SG&A
Items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrual for Legal
Matters and Settlements3
|
|
—
|
—
|
|
|
|
—
|
—
|
|
|
|
4,575
|
0.6
|
%
|
|
|
2,951
|
0.4
|
%
|
Legal and
Professional Fees4
|
|
408
|
0.2
|
%
|
|
|
2,991
|
1.1
|
%
|
|
|
3,403
|
0.4
|
%
|
|
|
9,382
|
1.2
|
%
|
All Other
5
|
|
—
|
—
|
|
|
|
1,769
|
0.7
|
%
|
|
|
—
|
—
|
|
|
|
1,769
|
0.2
|
%
|
SG&A
Subtotal
|
|
408
|
0.2
|
|
|
|
4,760
|
1.8
|
|
|
|
7,978
|
1.0
|
|
|
|
14,102
|
1.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating
Income (a non-GAAP
measure)
|
$
|
3,367
|
1.3
|
%
|
|
$
|
8,633
|
3.3
|
%
|
|
$
|
5,359
|
0.7
|
%
|
|
$
|
13,490
|
1.7
|
%
|
|
1,2,3,4,5 See the Gross Profit and
SG&A sections above for more detailed explanations of these
individual items.
|
Items impacting
earnings per diluted share with comparisons to the prior-year
periods include:
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
(dollars in thousands, except per
share amounts)
|
|
(dollars in thousands, except per
share amounts)
|
Net Income (Loss), as
reported (GAAP)
|
$
|
1,045
|
|
$
|
5,923
|
|
$
|
(6,735)
|
|
$
|
2,497
|
Net Income (Loss),
per Diluted Share as reported (GAAP)
|
$
|
0.04
|
|
$
|
0.21
|
|
$
|
(0.23)
|
|
$
|
0.09
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Margin
Items:
|
|
|
|
|
|
|
|
|
|
|
|
Antidumping
Adjustments 1
|
|
780
|
|
|
(2,822)
|
|
|
780
|
|
|
(4,948)
|
HTS Classification
Adjustments 2
|
|
—
|
|
|
—
|
|
|
(779)
|
|
|
—
|
Gross Margin
Subtotal
|
|
780
|
|
|
(2,822)
|
|
|
1
|
|
|
(4,948)
|
|
|
|
|
|
|
|
|
|
|
|
|
SG&A
Items:
|
|
|
|
|
|
|
|
|
|
|
|
Accrual for Legal
Matters and Settlements3
|
|
—
|
|
|
—
|
|
|
4,575
|
|
|
2,951
|
Legal and
Professional Fees4
|
|
408
|
|
|
2,991
|
|
|
3,403
|
|
|
9,382
|
All Other
5
|
|
—
|
|
|
1,769
|
|
|
—
|
|
|
1,769
|
SG&A
Subtotal
|
|
408
|
|
|
4,760
|
|
|
7,978
|
|
|
14,102
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
Earnings
|
$
|
2,233
|
|
$
|
7,861
|
|
$
|
1,244
|
|
$
|
11,651
|
Adjusted Earnings per
Diluted Share (a non-GAAP measure)
|
$
|
0.08
|
|
$
|
0.27
|
|
$
|
0.04
|
|
$
|
0.40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,2,3,4,5 See the Gross Profit and
SG&A sections above for more detailed explanations of these
individual items.
|
View original
content:http://www.prnewswire.com/news-releases/lumber-liquidators-announces-third-quarter-2019-financial-results-300952410.html
SOURCE Lumber Liquidators