RICHMOND, Va., May 5, 2021 /PRNewswire/ -- Lumber
Liquidators ("LL Flooring" or "Company") (NYSE: LL), a leading
specialty retailer of hard-surface flooring in North America, today announced financial
results for the first quarter ended March
31, 2021.
"During the first quarter, we delivered positive 6.9% comparable
sales and increased our operating income from the first quarter of
2020, driven by continued execution on our transformation
initiatives, strong demand for home improvement projects and
accelerating year-over-year growth in our installation business,"
said President and Chief Executive Officer Charles Tyson. "I want to thank all of our
associates for driving our strategic priorities forward during the
quarter, demonstrating progress on our four pillars of people and
culture, improving the customer experience, driving traffic and
transactions, and improving profitability.
"We are intently focused on executing our strategies to drive
sales and profitability in 2021. With more than 400 varieties
of hard-surface floors featuring a range of quality styles and
on-trend designs, we offer our customers quality choices and
provide high-touch service and advice to help them achieve their
flooring project needs. We will continue to pursue gross
margin rate mitigation strategies and disciplined expense
management to optimize profitability, and our strong balance sheet
and liquidity support the investment in our strategies to position
LL Flooring as the customer's first choice in hard surface flooring
over the long term."
First Quarter Results
First quarter 2021 net sales of $283.5
million increased $16.1
million, or 6.0%, from the first quarter of 2020.
Comparable store sales for the first quarter of 2021 increased 6.9%
from the first quarter of 2020. We had one fewer selling day
in the first quarter of 2021 relative to the prior-year period due
to leap year in 2020. Comparable sales growth in 2021
primarily reflected continued execution on the Company's
transformation initiatives and strong consumer demand for
installation and home improvement projects, as well as the impact
from the onset of COVID-19 shutdowns in March 2020. Net merchandise sales increased
4.7% while net services sales (install and freight) increased 16.8%
over the prior year. During the first quarter of 2021, the Company
opened three new stores and closed one store, bringing total store
count to 412 as of March 31,
2021.
Gross profit increased 10.1% in the first quarter of 2021 to
$115.6 million from $105.0 million in the comparable period in 2020
and gross margin increased 150 basis points to 40.8% in the first
quarter of 2021 from 39.3% in the first quarter of 2020. For
the first quarter of 2021, the Company reported a positive
$6.6 million impact from anti-dumping
duty rate changes compared to 2020. Excluding this item as
shown on the table that follows, Adjusted Gross Profit (a non-GAAP
measure) increased by $4.1 million
and Adjusted Gross Margin (a non-GAAP measure) of 38.5% decreased
by 80 basis points. The decrease in adjusted gross margin was
due primarily to the reinstatement of tariffs on certain flooring
products imported from China
(discussed in the "Section 301 Tariffs" section that follows)
partially offset by pricing and promotion strategies, and, to a
lesser extent, alternative country sourcing efforts.
SG&A expense increased 6.5% to $102.5
million, or 36.2% of sales, up 20 basis points in the first
quarter of 2021 from the comparable period in 2020. SG&A in
both quarters included certain costs related to legal
matters. In April 2021, the
Company settled two employment litigation matters and, as a result,
accrued within SG&A a $7.7
million liability during the quarter ended March 31, 2021. Please refer to the
Company's Form 10-Q for the period ended March 31, 2021 for more details.
Excluding these items as shown in the table that follows,
Adjusted SG&A (a non-GAAP measure) decreased 0.8% to
$94.7 million. As a percent of
sales, adjusted SG&A improved 230 basis points, to 33.4% of
sales, compared to 35.7% for the same period in the prior
year. The decrease in adjusted SG&A was primarily driven
by lower advertising costs, reflecting the Company's strategy to
shift spend away from traditional channels into more efficient and
effective digital channels, and disciplined expense
management.
Operating income was $13.1 million
for the first quarter of 2021 compared to $8.8 million for the first quarter of 2020.
Adjusted Operating Income (a non-GAAP measure) was $14.4 million for the first quarter of 2021, a
year-over-year increase of $4.8
million compared to adjusted operating income of
$9.6 million for the first quarter of
2020. As a percent of net sales, adjusted operating margin
for the first quarter of 2021 was 5.1%, up 150 basis points from
the first quarter of 2020.
The Company had other income of $0.8
million for the three months ended March 31, 2021 compared to other expense of
$0.9 million for the three months
ended March 31, 2020. Both years
included interest on borrowings on our Credit Agreement. The
interest expense on borrowings in 2021 was offset by a favorable
adjustment of $1.8 million, which has
been excluded from Adjusted Earnings, for the reversal of interest
expense associated with the $6.6
million anti-dumping duty rate change recognized during the
first quarter.
For the three months ended March 31,
2021, the Company recognized income tax expense of
$3.3 million, an effective tax rate
of 23.4%, compared to income tax benefit of $4.4 million, an effective tax rate of (55.2)%,
for the three months ended March 31,
2020. The benefit in 2020 was driven by a $4.7 million benefit related to the provisions of
the CARES Act.
Net income for the first quarter of 2021 decreased $1.6 million to $10.6
million compared to $12.2
million for the first quarter of 2020. Adjusted Earnings (a
non-GAAP measure) for the first quarter of 2021 were $10.2 million, a year-over-year decrease of
$2.6 million compared to adjusted
earnings of $12.8 million for the
first quarter of 2020, reflecting the income tax benefit in
2020.
Earnings per diluted share was $0.36 for the first quarter of 2021 versus
$0.42 in the year ago quarter, and
first quarter 2021 Adjusted Earnings Per Diluted Share (a non-GAAP
measure) was $0.34 compared to
$0.44 for the first quarter of 2020,
reflecting the income tax benefit in 2020.
Cash Flow & Liquidity
As of March 31, 2021, the Company
had liquidity of $239.9 million,
consisting of excess availability under its Credit Agreement of
$31.0 million, and cash and cash
equivalents of $208.9 million.
This represents an increase in liquidity of $108.9 million from March
31, 2020. In addition, the Company's debt balance as
of March 31, 2021 was $101.0 million, unchanged since amending the
Credit Agreement on April 17,
2020.
During the first quarter of 2021, the Company generated
$44.5 million of cash flows from
operating activities compared to $36.0
million for the first quarter of 2020, primarily reflecting
increased working capital.
Credit Agreement Amendment
On April 30, 2021, the Company
entered into a Second Amendment to the Credit Agreement (the
"Second Amendment") with the Lenders. The execution of the Second
Amendment, among other things, converted the FILO Term Loan into
the Revolving Credit Facility. The total size of the Credit
Agreement remained at $200 million,
and the Company still has an option to increase the Revolving
Credit Facility to a maximum total amount of $250 million. The maturity date of the Credit
Agreement was extended to April 30,
2026.
The Second Amendment decreased the margin for LIBOR Rate Loans
(as defined in the Second Amendment) by 1.25% over the applicable
LIBOR Rate (as defined in the Second Amendment) with respect to
Revolving Loans (as defined in the Second Amendment), and reduced
the LIBOR floor from 1.00% to 0.25%. The Second Amendment
also decreased the unused commitment fee by 0.25% per annum.
Except as set forth in the Second Amendment, all other terms and
conditions of the Credit Agreement remain in place.
"We were pleased to amend our credit agreement to reduce our
interest expense and fees, extend our maturity date and increase
our financial flexibility," said Chief Financial Officer
Nancy Walsh. "We are
monitoring the current macro-economic conditions and the impact of
COVID-19, especially as vaccine administration continues, and are
considering the timing of repayment of some or all of our debt
balance, perhaps as soon as the end of the second quarter of
2021."
Section 301 Tariffs
The Company's financial statements have been impacted by Section
301 tariffs on certain products imported from China in recent years. A subset of these
imports for certain click vinyl and other engineered products (the
"Subset Products") received an exemption that was made retroactive
to the beginning of the Section 301 Tariffs for a period of time
but were reinstated in August 2020. The tariffs flow through
the income statement as product is sold. The Company has
deployed strategies to mitigate tariffs and improve gross
margin, primarily through adjusting its pricing and promotion
strategies and alternative country sourcing. Please refer to
the table on page 11 of this release for a detailed timeline and
tariff levels for the key events related to Section 301
Tariffs.
2021 Outlook
The uncertainty surrounding the duration and extent of the
impact of COVID-19 as it relates to consumer spending as well as
global supply chain disruptions makes it uniquely challenging to
accurately forecast future financial performance, and as such, the
Company is not providing financial guidance.
Conference Call and Webcast Information
The Company plans to host a conference call and audio webcast on
May 5, 2021, 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
May 12, 2021 and may be accessed by
dialing (844) 512-2921 or (412) 317-6671 and entering pin number
13718863. The live conference call and replay can also be accessed
via audio webcast at the Investor Relations section of the
Company's website, www.LLFlooring.com.
About LL Flooring
LL Flooring is one of North
America's leading specialty retailers of hard-surface
flooring with 412 stores as of March 31,
2021. The Company seeks to offer the best customer
experience online and in stores, with more than 400 varieties of
hard-surface floors featuring a range of quality styles and
on-trend designs. LL Flooring's online tools also help
empower customers to find the right solution for the space they've
envisioned. LL Flooring's extensive selection includes vinyl
plank, solid and engineered hardwood, laminate, bamboo, porcelain
tile, and cork, with a wide range of flooring enhancements and
accessories to complement. Our stores are staffed with
flooring experts who provide advice, pro partnership services and
installation options for all of LL Flooring's products, the
majority of which is in stock and ready for delivery.
Learn More about LL Flooring
- Our commitment to quality, compliance, the communities we serve
and corporate giving: https://www.LLFlooring.com/quality
- Follow us 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.
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. For a discussion of the risks and
uncertainties that could cause actual results to differ from those
contained in the forward looking statements, see the "Risk Factors"
section of the Company's annual report on Form 10-K for the year
ended December 31, 2020, and the
Company's other filings with the Securities and Exchange Commission
("SEC"). Such filings are available on the SEC's website at
www.sec.gov and the Company's Investor Relations website at
investors.llflooring.com.
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 SG&A as a percentage of net sales; (v) Adjusted
Operating Income; (vi) Adjusted Operating Margin; (vii) Adjusted
Other (Income) Expense; (viii) Adjusted Earnings; and (ix) Adjusted
Earnings per Diluted Share. 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, in certain cases, 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:
LL Flooring Investor Relations
ir@lumberliquidators.com
Tel: 804-338-1195
(Tables Follow)
LL
Flooring Consolidated Balance Sheets
(Unaudited, in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
December 31,
|
|
|
2021
|
|
2020
|
Assets
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
|
Cash and Cash
Equivalents
|
|
$
|
208,864
|
|
$
|
169,941
|
Merchandise
Inventories
|
|
|
225,404
|
|
|
244,409
|
Prepaid
Expenses
|
|
|
9,661
|
|
|
9,370
|
Tariff Recovery
Receivable
|
|
|
1,070
|
|
|
4,078
|
Other Current
Assets
|
|
|
9,348
|
|
|
10,354
|
Total Current
Assets
|
|
|
454,347
|
|
|
438,152
|
Property and
Equipment, net
|
|
|
95,679
|
|
|
97,557
|
Operating Lease
Right-of-Use Assets
|
|
|
111,775
|
|
|
109,475
|
Goodwill
|
|
|
9,693
|
|
|
9,693
|
Deferred Tax
Asset
|
|
|
11,584
|
|
|
11,611
|
Other
Assets
|
|
|
8,227
|
|
|
7,860
|
Total
Assets
|
|
$
|
691,305
|
|
$
|
674,348
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
|
|
Accounts
Payable
|
|
$
|
75,103
|
|
$
|
70,543
|
Customer Deposits and
Store Credits
|
|
|
68,211
|
|
|
61,389
|
Accrued
Compensation
|
|
|
8,588
|
|
|
15,347
|
Sales and Income Tax
Liabilities
|
|
|
6,244
|
|
|
5,793
|
Accrual for Legal
Matters and Settlements - Current
|
|
|
36,594
|
|
|
30,398
|
Operating Lease
Liabilities - Current
|
|
|
32,005
|
|
|
33,024
|
Other Current
Liabilities
|
|
|
26,449
|
|
|
25,761
|
Total Current
Liabilities
|
|
|
253,194
|
|
|
242,255
|
Other Long-Term
Liabilities
|
|
|
6,825
|
|
|
13,293
|
Operating Lease
Liabilities - Long-Term
|
|
|
92,162
|
|
|
90,194
|
Credit
Agreement
|
|
|
101,000
|
|
|
101,000
|
Total
Liabilities
|
|
|
453,181
|
|
|
446,742
|
|
|
|
|
|
|
|
Stockholders'
Equity:
|
|
|
|
|
|
|
Common Stock ($0.001
par value; 35,000 shares authorized; 30,398 and 30,229 shares
issued and 29,025 and 28,911 shares outstanding,
respectively)
|
|
|
30
|
|
|
30
|
Treasury Stock, at cost
(1,373 and 1,318 shares, respectively)
|
|
|
(144,352)
|
|
|
(142,977)
|
Additional
Capital
|
|
|
223,899
|
|
|
222,628
|
Retained
Earnings
|
|
|
158,547
|
|
|
147,925
|
Total Stockholders'
Equity
|
|
|
238,124
|
|
|
227,606
|
Total Liabilities
and Stockholders' Equity
|
|
$
|
691,305
|
|
$
|
674,348
|
LL
Flooring Consolidated Statements of Operations
(Unaudited, in thousands, except per share
amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
2021
|
|
2020
|
|
|
|
|
|
|
Net
Sales
|
|
|
|
|
|
|
Net Merchandise
Sales
|
|
$
|
250,043
|
|
$
|
238,782
|
Net Services
Sales
|
|
|
33,407
|
|
|
28,592
|
Total Net
Sales
|
|
|
283,450
|
|
|
267,374
|
Cost of
Sales
|
|
|
|
|
|
|
Cost of Merchandise
Sold
|
|
|
142,010
|
|
|
140,745
|
Cost of Services
Sold
|
|
|
25,848
|
|
|
21,657
|
Total Cost of
Sales
|
|
|
167,858
|
|
|
162,402
|
Gross
Profit
|
|
|
115,592
|
|
|
104,972
|
Selling, General and
Administrative Expenses
|
|
|
102,487
|
|
|
96,207
|
Operating
Income
|
|
|
13,105
|
|
|
8,765
|
Other (Income)
Expense
|
|
|
(769)
|
|
|
883
|
Income Before Income
Taxes
|
|
|
13,874
|
|
|
7,882
|
Income Tax Expense
(Benefit)
|
|
|
3,252
|
|
|
(4,353)
|
Net
Income
|
|
$
|
10,622
|
|
$
|
12,235
|
Net Income per
Common Share—Basic
|
|
$
|
0.37
|
|
$
|
0.43
|
Net Income per
Common Share—Diluted
|
|
$
|
0.36
|
|
$
|
0.42
|
Weighted Average
Common Shares Outstanding:
|
|
|
|
|
|
|
Basic
|
|
|
28,943
|
|
|
28,739
|
Diluted
|
|
|
29,547
|
|
|
28,853
|
LL
Flooring Consolidated Statements of Cash Flows
(Unaudited, in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
2021
|
|
2020
|
|
|
|
|
|
|
Cash Flows from
Operating Activities:
|
|
|
|
|
|
|
Net Income
|
|
$
|
10,622
|
|
$
|
12,235
|
Adjustments to
Reconcile Net Income:
|
|
|
|
|
|
|
Depreciation and
Amortization
|
|
|
4,664
|
|
|
4,493
|
Deferred Income Taxes
Provision
|
|
|
27
|
|
|
378
|
Income on Vouchers
Redeemed for Legal Settlements
|
|
|
(503)
|
|
|
—
|
Stock-Based
Compensation Expense
|
|
|
1,230
|
|
|
120
|
Provision for
Inventory Obsolescence Reserves
|
|
|
26
|
|
|
452
|
Gain on Disposal of
Fixed Assets
|
|
|
(30)
|
|
|
(743)
|
Changes in Operating
Assets and Liabilities:
|
|
|
|
|
|
|
Merchandise
Inventories
|
|
|
18,002
|
|
|
16,379
|
Accounts
Payable
|
|
|
6,042
|
|
|
9,055
|
Accrued
Compensation
|
|
|
(6,759)
|
|
|
(1,805)
|
Customer Deposits and
Store Credits
|
|
|
6,822
|
|
|
(3,735)
|
Tariff Recovery
Receivable
|
|
|
3,008
|
|
|
(132)
|
Prepaid Expenses and
Other Current Assets
|
|
|
1,301
|
|
|
1,998
|
Accrual for Legal
Matters and Settlements
|
|
|
7,698
|
|
|
—
|
Payments for Legal
Matters and Settlements
|
|
|
(23)
|
|
|
(5)
|
Other Assets and
Liabilities
|
|
|
(7,632)
|
|
|
(2,725)
|
Net Cash Provided
by Operating Activities
|
|
|
44,495
|
|
|
35,965
|
|
|
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
|
|
Purchases of Property
and Equipment
|
|
|
(4,296)
|
|
|
(4,480)
|
Other Investing
Activities
|
|
|
58
|
|
|
306
|
Net Cash Used in
Investing Activities
|
|
|
(4,238)
|
|
|
(4,174)
|
|
|
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
|
|
Borrowings on Credit
Agreement
|
|
|
—
|
|
|
8,000
|
Payments on Credit
Agreement
|
|
|
—
|
|
|
(26,000)
|
Common Stock
Repurchased
|
|
|
(1,375)
|
|
|
(316)
|
Other Financing
Activities
|
|
|
41
|
|
|
—
|
Net Cash Used in
Financing Activities
|
|
|
(1,334)
|
|
|
(18,316)
|
Effect of Exchange
Rates on Cash and Cash Equivalents
|
|
|
—
|
|
|
(44)
|
Net Increase in
Cash and Cash Equivalents
|
|
|
38,923
|
|
|
13,431
|
Cash and Cash
Equivalents, Beginning of Period
|
|
|
169,941
|
|
|
8,993
|
Cash and Cash
Equivalents, End of Period
|
|
$
|
208,864
|
|
$
|
22,424
|
|
|
|
|
|
|
|
Supplemental
disclosure of non-cash operating activities:
|
|
|
|
|
|
|
Relief of Inventory for
Vouchers Redeemed for Legal Settlements
|
|
$
|
977
|
|
$
|
—
|
|
|
|
|
|
|
|
Supplemental
disclosure of non-cash investing activities:
|
|
|
|
|
|
|
Tenant Improvement
Allowance for Leases
|
|
$
|
(585)
|
|
$
|
(496)
|
LL Flooring
GAAP to Non-GAAP
Reconciliation
(Unaudited, in thousands, except
percentages)
Items impacting gross margin with comparisons to the prior-year
period include:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
2021
|
|
2020
|
|
|
|
|
$
|
|
% of Sales
|
|
$
|
|
% of Sales
|
|
|
|
|
(dollars in thousands)
1
|
Gross Profit/Margin,
as reported (GAAP)
|
|
|
$
|
115,592
|
|
40.8
|
%
|
$
|
104,972
|
|
39.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Antidumping
Adjustments 2
|
|
|
|
(6,566)
|
|
(2.3)
|
%
|
|
—
|
|
—
|
%
|
Sub-Total Items
above
|
|
|
|
(6,566)
|
|
(2.3)
|
%
|
|
—
|
|
—
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Gross
Profit/Margin (non-GAAP measures)
|
|
|
$
|
109,026
|
|
38.5
|
%
|
$
|
104,972
|
|
39.3
|
%
|
|
____________________________
|
1
|
Amounts may not sum
due to rounding.
|
2
|
Represents
antidumping income associated with applicable prior-year shipments
of engineered hardwood from China.
|
Items impacting SG&A with comparisons to the prior-year
period include:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
2021
|
|
2020
|
|
|
|
$
|
|
% of Sales
|
|
$
|
|
% of Sales
|
|
|
|
(dollars in thousands)
3
|
SG&A, as reported
(GAAP)
|
|
$
|
102,487
|
|
36.2
|
%
|
$
|
96,207
|
|
36.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrual for Legal
Matters and Settlements 4
|
|
|
7,675
|
|
2.7
|
%
|
|
—
|
|
—
|
%
|
Legal and
Professional Fees 5
|
|
|
148
|
|
0.1
|
%
|
|
793
|
|
0.3
|
%
|
Sub-Total Items
above
|
|
|
7,823
|
|
2.8
|
%
|
|
793
|
|
0.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
SG&A/Adjusted SG&A as a % of Sales (a non-GAAP
measure)
|
|
$
|
94,664
|
|
33.4
|
%
|
$
|
95,414
|
|
35.7
|
%
|
|
|
____________________________
|
3
|
Amounts may not sum
due to rounding.
|
4
|
This amount
represents the charge to earnings for the Mason and Savidis
matters, which are described more fully in Item 1, Note 7 to the
condensed consolidated financial statements filed in the March 31,
2021 10-Q.
|
5
|
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.
|
LL Flooring
GAAP to Non-GAAP
Reconciliation
(Unaudited, in thousands, except
percentages)
Items impacting operating income and operating margin with
comparisons to the prior-year period include:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
2021
|
|
2020
|
|
|
|
$
|
|
% of Sales
|
|
$
|
|
% of Sales
|
|
|
|
(dollars
in thousands) 1
|
Operating Income, as
reported (GAAP)
|
|
$
|
13,105
|
|
4.6
|
%
|
$
|
8,765
|
|
3.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Margin
Items:
|
|
|
|
|
|
|
|
|
|
|
|
Antidumping
Adjustments 2
|
|
|
(6,566)
|
|
(2.3)
|
%
|
|
—
|
|
—
|
%
|
Gross Margin
Subtotal
|
|
|
(6,566)
|
|
(2.3)
|
%
|
|
—
|
|
—
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
SG&A
Items:
|
|
|
|
|
|
|
|
|
|
|
|
Accrual for Legal
Matters and Settlements 4
|
|
|
7,675
|
|
2.7
|
%
|
|
—
|
|
—
|
%
|
Legal and
Professional Fees 5
|
|
|
148
|
|
0.1
|
%
|
|
793
|
|
0.3
|
%
|
SG&A
Subtotal
|
|
|
7,823
|
|
2.8
|
%
|
|
793
|
|
0.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating
Income/Margin (a non-GAAP measure)
|
|
$
|
14,362
|
|
5.1
|
%
|
$
|
9,558
|
|
3.6
|
%
|
|
|
____________________________
|
1,2,3,4,5
|
See the Gross Profit
and SG&A sections above for more detailed explanations of these
individual items.
|
Items impacting other (income) expense with comparisons to the
prior year periods include:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
2021
|
|
2020
|
|
|
|
$
|
|
% of Sales
|
|
$
|
|
% of Sales
|
|
|
|
(dollars
in thousands) 6
|
Other (Income)
Expense, as reported (GAAP)
|
|
$
|
(769)
|
|
(0.3)
|
%
|
$
|
883
|
|
0.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest impact
related to antidumping adjustment 7
|
|
|
(1,841)
|
|
(0.6)
|
%
|
|
—
|
|
—
|
%
|
Sub-Total Items
above
|
|
|
(1,841)
|
|
(0.6)
|
%
|
|
—
|
|
—
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Other
Expense/Adjusted Other Expense as a % of Sales (a non-GAAP
measure)
|
|
$
|
1,072
|
|
0.4
|
%
|
$
|
883
|
|
0.3
|
%
|
|
|
____________________________
|
6
|
Amounts may not sum
due to rounding.
|
7
|
Represents
antidumping interest income associated with applicable prior-year
shipments of engineered hardwood from China.
|
LL Flooring
GAAP to Non-GAAP
Reconciliation
(Unaudited, in thousands, except per share
data)
Items impacting earnings per diluted share with comparisons to
the prior-year periods include:
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
2021
|
2020
|
|
|
(in thousands)1
|
Net Income, as
reported (GAAP)
|
|
$
|
10,622
|
|
$
|
12,235
|
Net Income per
Diluted Share (GAAP)
|
|
$
|
0.36
|
|
$
|
0.42
|
|
|
|
|
|
|
|
Gross Margin
Items:
|
|
|
|
|
|
|
Antidumping
Adjustments 2
|
|
|
(4,852)
|
|
|
—
|
Gross Margin
Subtotal
|
|
|
(4,852)
|
|
|
—
|
|
|
|
|
|
|
|
SG&A
Items:
|
|
|
|
|
|
|
Accrual for Legal
Matters and Settlements 4
|
|
|
5,672
|
|
|
—
|
Legal and
Professional Fees 5
|
|
|
109
|
|
|
586
|
SG&A
Subtotal
|
|
|
5,781
|
|
|
586
|
|
|
|
|
|
|
|
Other (Income)
Expense Items:
|
|
|
|
|
|
|
Antidumping
Adjustments Interest 7
|
|
|
(1,360)
|
|
|
—
|
Other (Income) Expense
Subtotal
|
|
|
(1,360)
|
|
|
—
|
|
|
|
|
|
|
|
Adjusted
Earnings
|
|
$
|
10,190
|
|
$
|
12,821
|
Adjusted Earnings per
Diluted Share (a non-GAAP measure)
|
|
$
|
0.34
|
|
$
|
0.44
|
|
|
__________________________
|
1,2,3,4,5,6,7
|
See the Gross Profit,
SG&A and Other (Income) Expense sections above for more
detailed explanations of these individual items. These items
have been tax affected at the Company's federal incremental rate of
26.1%.
|
The following chart provides a timeline and tariff levels for
the key events related to Section 301 tariffs (unaudited):
|
|
|
|
|
|
|
Section
301
|
|
Corresponding
approximate
|
Event
|
Timing
|
tariff level
on
|
Tariff level
on
|
percentage of
Company's
|
|
|
imports from
China
|
Subset
Products
|
merchandise
subject to tariff
|
Imposition of
Tariffs
|
September
2018
|
10%
|
10% then
0%8
|
48%
|
Increase in
Tariff's
|
June 2019
|
25%
|
25% then
0%8
|
44%
|
Retroactive Exemption
on Subset Products8
|
November
2019
|
25%
|
0%
|
10%
|
Exemption Not Renewed
and Tariffs Re-imposed on Subset Products
|
August
2020
|
25%
|
25%
|
32%
|
|
March 31,
2021
|
25%
|
25%
|
23%
|
|
|
___________________________
|
8
|
On November 7, 2019,
the U.S. Trade Representative granted a retroactive exclusion to
September 2018 on Subset Products as defined in the Section 301
Tariffs section above bringing the rate to 0%.
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/ll-flooring-reports-first-quarter-2021-financial-results-301283883.html
SOURCE Lumber Liquidators