Lumber Liquidators' Q1 earnings grew 41.9% from a year ago to US$8.2M as sales increased 17.8% to US$188M; company revises its 2012 sales, EPS forecasts upward
April 25, 2012
– Lumber Liquidators (NYSE: LL), the largest specialty retailer of hardwood flooring in the U.S., today announced financial results for the first quarter ended March 31, 2012, and updated its outlook for 2012.
First Quarter Results
Net sales increased $28.4 million, or 17.8%, to $188.0 million in the first quarter of 2012 from $159.7 million in the first quarter of 2011. Comparable store net sales increased 7.5% for the quarter, driven by an 8.0% increase in the number of customers invoiced at these stores. Non-comparable store net sales increased $16.4 million. The Company opened four new stores during the first quarter of 2012.
Gross margin was 37.3% in the first quarter of 2012 compared to 36.2% in the first quarter of 2011. The increase in gross margin reflects generally lower costs of product due to both sourcing initiatives and sales mix, and lower net transportation costs.
Selling, general and administrative expenses improved to 30.2% of net sales for the first quarter of 2012 compared to 30.3% of net sales for the first quarter of 2011. Operating margin increased to 7.1% in the first quarter of 2012, from 5.9% in the first quarter of 2011.
Net income increased 41.9% to $8.2 million, or $0.29 per diluted share, in the first quarter of 2012 from $5.8 million, or $0.20 per diluted share, in the first quarter of the prior year.
Cash and cash equivalents at March 31, 2012 totaled $61.4 million, compared with $43.1 million at March 31, 2011 and $61.7 million at December 31, 2011. During the first quarter of 2012, pursuant to its previously announced stock repurchase program, the Company repurchased approximately 387,000 shares of its common stock for $8.9 million, and has approximately $41.1 million remaining under the repurchase program for future repurchases.
Robert M. Lynch, President and Chief Executive Officer, commented, "Our team delivered a solid start to the year, driving the top line through successful marketing combined with conversion of strong customer traffic, increasing gross margin through sourcing and logistics initiatives and expanding operating margin by 120 basis points. Our value proposition combining price, selection, quality and availability with the expertise and service provided by our people resonated with customers during the quarter as we continued to build on our momentum from the second half of 2011."
Based on the first quarter results and current trends, the Company now expects to achieve the following in 2012:
Net sales for the full year in the range of $720 million to $750 million, up from the previous range of $710 million to $740 million.
The change in comparable store net sales to range from slightly negative to low single digits positive.
The opening of a total of 20 to 25 new store locations, including two to four in Canada.
Full year earnings per diluted share in the range of $1.10 to $1.25, based on a diluted share count of approximately 28.4 million shares, up from the previous range of $1.05 to $1.20 based on a diluted share count of 28.7 million shares.
Mr. Lynch concluded, "We entered the important spring remodeling season well-positioned to serve customer demand and continue to capture share in our fragmented market. Our key strategic initiatives and infrastructure investments are generating positive results, which we believe will be cumulative in the coming years. Our team is motivated and excited by the opportunities ahead, and we are pleased with the coordinated efforts across store operations and support to provide the industry's best value proposition to our customers. We remain confident in our ability to continue to grow and expand operating margin in 2012 and beyond."
Conference Call and Webcast Information
The Company plans to host a conference call and audio webcast today, April 25, 2012, 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 May 2, 2012 and may be accessed by dialing (877) 870-5176 or (858) 384-5517 and entering conference ID number 392435. 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
With over 265 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. 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 Extreme Makeover: Home Edition and 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.
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.
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