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Exhibit 99.1
FOR IMMEDIATE RELEASE
LUMBER LIQUIDATORS REPORTS SECOND QUARTER 2020 FINANCIAL RESULTS
RICHMOND, Va., August 5, 2020 – Lumber Liquidators (NYSE: LL), a leading specialty retailer of hard-surface flooring in North America, today announced financial results for the second quarter ended June 30, 2020.
“I would like to thank our associates for their commitment, flexibility and dedication to providing outstanding service to our customers during these uncertain times,” said President and Chief Executive Officer Charles Tyson. “As a result of their perseverance, and despite the headwinds of COVID-19 and its impacts on consumers, we delivered meaningful improvement in gross margin and effectively managed expenses to preserve liquidity and increase profitability. While comparable store sales declined 21.3% in in the quarter, execution against our strategic pillars helped deliver a $5.5 million increase in net income and a $2.9 million increase in Adjusted Operating Income compared to prior year. Our strong results would not have been possible without the contributions from all associates, and I am thankful to be a part of such a strong and dedicated team.”
“We were encouraged by improving sales trends through the quarter as markets reopened and consumers began to more fully engage in home improvement projects,” Tyson continued. “I am confident that our continued focus on our transformation plan and strategic pillars, including developing a strong people-centric, diverse and collaborative culture, will position us well for long-term success.”
Second Quarter Results
Net sales in the second quarter of 2020 decreased $58 million, or 20.2%, to $230 million from the second quarter of 2019. Comparable store sales for the second quarter of 2020 were down 21.3% driven by the impact of COVID-19, but improved sequentially as the quarter progressed and improved compared to the previously reported quarter-to-date decline of approximately 30% through May 23. The Company opened two net new stores in the second quarter of 2020 bringing total store count to 422 as of June 30, 2020.
Gross profit decreased 14% in the second quarter of 2020 to $88 million from $102 million in the comparable period in 2019, including the 2019 positive impact of classification adjustments related to tariffs as shown in the tables that follow. Without this item, Adjusted Gross Profit (a non-GAAP measure) decreased approximately $13 million. Adjusted Gross Margin (a non-GAAP measure) increased 309 basis points to 38.3% in the second quarter of 2020 from 35.2% in the second quarter of 2019 as margin enhancement efforts, Section 301 tariff exclusions and supply chain efficiency positively impacted results. Adjusted Gross Margin was also aided by a larger mix of higher-margin manufactured products, a lower mix of lower-margin installation labor sales, and reduced discounting in stores. These items were somewhat offset by a higher year-over-year inventory obsolescence charge and higher customer delivery costs associated with delivery promotions.
SG&A expense decreased 21% to $82 million in the second quarter of 2020 from the comparable period in 2019 but included certain costs in both periods related to investigations and lawsuits. Excluding these items as shown in the table that follows, Adjusted SG&A (a non-GAAP measure) decreased 17%, or $16 million, compared to the same period in the prior year. The reduction in Adjusted SG&A was primarily driven by lower advertising expense as the Company reduced its promotional cadence in response to COVID-19; lower payroll and benefits expense as the Company took steps to align staffing with demand levels while also implementing temporary salary reductions for corporate office personnel and the Board of Directors; and lower transaction- and business-related costs due to lower sales. The Company’s focus on expense management, liquidity preservation measures and process efficiency helped deliver the year-over-year reduction in Adjusted SG&A in the quarter.
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Lumber Liquidators Holdings, Inc.'s Definitive Proxy Statement (Form DEF 14A) filed after their 2020 10-K Annual Report includes:
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To supplement the financial measures prepared in accordance with GAAP, we use 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 sales, (v) Adjusted Operating Income, (vi) Adjusted Operating Margin, (vii) Adjusted Earnings and (viii) Adjusted Earnings per Diluted Share.
The third quarter of 2019 was unfavorably impacted by a network security incident in late August, which the Company believes negatively impacted total revenue by approximately $6 million to $8 million with an accompanying reduction in gross profit.
The third quarter of 2019 was unfavorably impacted by a network security incident in late August, which the Company believes negatively impacted total revenue by approximately $6 million to $8 million with an accompanying reduction in gross profit.
On an adjusted basis, third quarter earnings per diluted share increased $0.60 to $0.67 compared to an Adjusted Earnings per Diluted Share of $0.07 for the third quarter of 2019.
On an adjusted basis, third quarter earnings per diluted share increased $0.60 to $0.67 compared to an Adjusted Earnings per Diluted Share (a non-GAAP measure) of $0.07 for the third quarter of 2019.
Comparable store sales for the...Read more
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SG&A expense decreased 7.7% to...Read more
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The year-over-year increase was primarily...Read more
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Adjusted Operating Income (a non-GAAP...Read more
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- Inventory buying increased to...Read more
Excluding these items as shown...Read more
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Collectively, this is a $19...Read more
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COVID-19 Update Since the onset...Read more
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29 For the three months...Read more
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Gross profit increased 22% in...Read more
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Lumber Liquidators Holdings, Inc. provided additional information to their SEC Filing as exhibits
Ticker: LL
CIK: 1396033
Form Type: 10-Q Quarterly Report
Accession Number: 0001558370-20-012176
Submitted to the SEC: Fri Oct 30 2020 6:57:25 PM EST
Accepted by the SEC: Mon Nov 02 2020
Period: Wednesday, September 30, 2020
Industry: Retail Lumber And Other Building Materials Dealers