LL Flooring Reports Fourth Quarter and Full Year 2022 Financial Results
LL Flooring reported disappointing financial results for Q4 and FY 2022, with net sales down 7.5% to $263.9 million and full-year sales decreasing 3.6% to $1,110.7 million. Comparable store sales dropped 9.5% in Q4 and 5.8% for the year. The gross margin fell to 35.9%, primarily due to rising material and transportation costs. The company faced an operating loss of (6.6)%, with a significant non-cash charge for goodwill impairment amounting to $9.7 million. Despite these challenges, LL Flooring plans to enhance brand awareness and improve efficiency in 2023 while navigating a volatile economic landscape.
- Pro customer sales showed double-digit growth.
- Continued investment in strategic growth initiatives.
- Expecting improved gross margins in the second half of 2023.
- Comparable store sales decreased 9.5% in Q4.
- Operating loss of (6.6)% in Q4, down 1,040 basis points.
- Goodwill impairment of $9.7 million due to lower market capitalization.
"2022 was a challenging year for
"In 2023, we plan to further broaden and grow our brand awareness among consumers to drive traffic, and deliver an improved customer experience across our omnichannel network to drive conversion. In addition, we are looking to improve operating efficiencies and are actively working to right-size our cost structure."
Tyson continued, "In the near term, we continue to navigate a dynamic macroeconomic environment yet we are confident the long-term fundamentals of our business are strong. We believe we are successfully gaining traction on several of our operating strategies, such as our Pro growth strategy and innovating new products, which gives us confidence in achieving long-term sustainable growth.
"Our continued progress on our strategic initiatives and our unique positioning differentiates us from the competition. We believe that delivering the high-touch service of an independent flooring retailer combined with the value, assortment and convenience of a national brand, will position us well to take advantage of the medium- to long-term tailwinds for repair and remodel spending and drive sustainable long-term growth."
Fourth Quarter Financial Highlights
-
Net sales of
$263.9 million 7.5% compared to the same period last year, as growth in sales to Pro customers partially offset a decrease in consumer sales. -
Total comparable store sales decreased
9.5% versus the same period last year. -
Gross margin of
35.9% decreased 140 basis points as a percentage of sales and Adjusted gross margin1 of35.7% decreased 170 basis points as a percentage of net sales compared to the same period last year, primarily reflecting significantly higher material and transportation costs (collectively up more than 800 basis points) that the Company was able to partially mitigate through pricing, promotion and alternative country/vendor sourcing strategies. -
SG&A as a percentage of net sales of
42.5% increased 900 basis points compared to the fourth quarter of last year, and included a$9.7 million 38.8% increased 510 basis points compared to the fourth quarter of last year.- The increases in both SG&A and Adjusted SG&A as a percentage of net sales were due primarily to expense deleverage from lower sales volumes.
- In addition, operating expenses were higher due to the planned investments in our growth strategies including: costs associated with opening 18 new stores; higher staffing to support our strength in Pro sales; higher marketing spend to build brand awareness; and competitive wage increases for customer facing associates.
- Operating margin of (6.6)% decreased 1,040 basis points compared to the fourth quarter of last year. Adjusted operating margin1 of (3.1)% decreased 690 basis points compared to the fourth quarter of last year.
-
Loss per Diluted Share of
$0.53 $0.88 $0.29 $0.64 -
During the fourth quarter, the Company opened three new stores, bringing total stores to 442 as of
December 31, 2022 . -
Through its sourcing strategy, the Company reduced the percent of merchandise receipts subject to Section 301 tariffs to
12% from15% in the fourth quarter of last year.
1Please refer to the “Non-GAAP and Other Information” section and the GAAP to non-GAAP reconciliation tables below for more information.
Full Year Financial Highlights
-
Net sales of
$1,110.7 million 3.6% compared to last year, with double-digit growth in sales to Pro customers more than offset by a decrease in sales to consumers. -
Total comparable store sales decreased
5.8% versus last year. -
Gross margin of
36.1% decreased 210 basis points as a percentage of sales compared to 2021 and Adjusted gross margin1 of36.2% decreased 140 basis points as a percentage of net sales compared to 2021. Both decreases primarily reflect significantly higher material and transportation costs (collectively up more than 1,000 basis points) that the Company was able to partially mitigate through pricing, promotion and alternative country/vendor sourcing strategies. -
SG&A as a percentage of net sales of
37.2% increased 360 basis points compared to last year. Included in the current year SG&A was a$9.7 million 36.3% increased 330 basis points compared to last year.- Both SG&A and Adjusted SG&A increased as a percentage of sales primarily due to investment in our growth strategies including new stores, higher marketing spend and Pro sales; as well as competitive wage increases for customer facing associates.
- In addition, SG&A and adjusted SG&A deleveraged on lower net sales.
-
Operating margin of (1.1)% decreased 570 basis points compared to last year. Adjusted operating margin1
of (0.2)% decreased 490 basis points compared to last year. -
Loss per Diluted Share of
$0.42 $1.83 $0.17 $1.56 -
During 2022, the Company opened 18 new stores, bringing total stores to 442 as of
December 31, 2022 . -
Through its sourcing strategy, the Company reduced the percent of merchandise receipts subject to Section 301 tariffs to
14% from20% last year.
1Please refer to the “Non-GAAP and Other Information” section and the GAAP to non-GAAP reconciliation tables below for more information.
Cash Flow & Liquidity
As of
During 2022, the Company used
Share Repurchase Program
During 2022, the Company repurchased
Repurchases under the program will be funded from the Company’s existing cash and cash equivalents, borrowings against the Company’s Credit Agreement and future cash flow.
2023 Business Outlook
The Company continues to navigate uncertainty in the macroeconomic environment due to consumer confidence, inflation, a volatile interest and mortgage rate environment and continued declines in existing home sales. As a result, the Company is not providing financial guidance at this time.
The Company is, however, providing the following commentary. The Company expects:
- In terms of our sales outlook for 2023, while we strongly believe that our strategy to increase brand awareness and improve the customer experience will gain traction and drive improved store productivity throughout the year, our visibility is limited as to when the macroeconomic environment will normalize.
- Adjusted gross margins are expected to improve year-over-year, with a stronger second half, driven primarily by a reduction in international shipping rates and sourcing costs. The Company will continue to monitor the competitive pricing environment to inform its pricing and promotion strategies. In addition, the Company expects its gross margin rate in 2023 to benefit from a greater mix of higher margin products that deliver on customer needs for scratch proof and water proof flooring.
- SG&A dollar spend and SG&A spend as a percentage of sales are expected to increase year-over-year, primarily due to inflationary pressures on wages and benefits, and productivity investments such as its customer relationship management platform, which it expects will support higher sales levels and make its operating structure more efficient over time.
-
Capital expenditures in the range of approximately
$15 million $20 million
- The Company expects to open three new stores in 2023.
Learn More about
- Our commitment to quality, compliance, the communities we serve and corporate giving: https://llflooring.com/corp/quality.html
-
Follow us on social media: Facebook, Instagram and
Twitter .
Conference Call and Webcast Information
The Company plans to host a conference call and audio webcast on
About
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,” "assumes," “believes,” “thinks,” “estimates,” “seeks,” “predicts,” “could,” “projects,” "targets," “potential,” "will likely result," 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
Non-GAAP and Other Information
To supplement the financial measures prepared in accordance with
The non-GAAP financial measures are presented because we believe the non-GAAP financial measures provide useful information to management and investors regarding certain financial and business trends related to our financial condition and results of operations, These measures provide an additional tool for investors to use in evaluating our ongoing operating performance, and management, in certain cases, uses them to determine incentive compensation. The presented non-GAAP financial measures exclude items that management does not believe reflect our core operating performance, which include regulatory and legal settlements and associated legal and operating costs, changes in antidumping and countervailing duties, and goodwill impairment, as such items are outside of our control or due to their inherent unusual, non-operating, unpredictable, non-recurring, or non-cash nature. Reconciliations of these non-GAAP financial measures are provided on the pages that follow (certain numbers may not sum due to rounding).
(Tables Follow)
|
||||||||
Condensed Consolidated Balance Sheets |
||||||||
(in thousands) |
||||||||
|
|
|
|
|
||||
|
|
2022 |
|
2021 |
||||
Assets |
|
|
|
|
||||
Current Assets: |
|
|
|
|
||||
Cash and Cash Equivalents |
|
$ |
10,800 |
|
|
$ |
85,189 |
|
Merchandise Inventories |
|
|
332,296 |
|
|
|
254,385 |
|
Prepaid Expenses |
|
|
9,054 |
|
|
|
9,160 |
|
Other Current Assets |
|
|
17,598 |
|
|
|
11,094 |
|
Total Current Assets |
|
|
369,748 |
|
|
|
359,828 |
|
Property and Equipment, net |
|
|
101,758 |
|
|
|
96,926 |
|
Operating Lease Right-of-Use Assets |
|
|
123,172 |
|
|
|
119,510 |
|
|
|
|
— |
|
|
|
9,693 |
|
Net Deferred Tax Assets |
|
|
13,697 |
|
|
|
11,336 |
|
Other Assets |
|
|
5,578 |
|
|
|
8,599 |
|
Total Assets |
|
$ |
613,953 |
|
|
$ |
605,892 |
|
|
|
|
|
|
||||
Liabilities and Stockholders’ Equity |
|
|
|
|
||||
Current Liabilities: |
|
|
|
|
||||
Accounts Payable |
|
$ |
47,733 |
|
|
$ |
63,464 |
|
Customer Deposits and Store Credits |
|
|
43,767 |
|
|
|
67,063 |
|
Accrued Compensation |
|
|
9,070 |
|
|
|
10,128 |
|
Sales and Income Tax Liabilities |
|
|
3,574 |
|
|
|
4,297 |
|
Accrual for Legal Matters and Settlements |
|
|
22,159 |
|
|
|
33,611 |
|
Operating Lease Liabilities - Current |
|
|
34,509 |
|
|
|
33,060 |
|
Other Current Liabilities |
|
|
19,712 |
|
|
|
20,717 |
|
Total Current Liabilities |
|
|
180,524 |
|
|
|
232,340 |
|
Other Long-Term Liabilities |
|
|
6,162 |
|
|
|
4,268 |
|
Operating Lease Liabilities - Long-Term |
|
|
99,186 |
|
|
|
97,163 |
|
Credit Agreement |
|
|
72,000 |
|
|
|
— |
|
Total Liabilities |
|
|
357,872 |
|
|
|
333,771 |
|
|
|
|
|
|
||||
Commitments and Contingencies |
|
|
|
|
||||
|
|
|
|
|
||||
Stockholders’ Equity: |
|
|
|
|
||||
Common Stock ( |
|
|
31 |
|
|
|
31 |
|
Treasury Stock, at cost (2,063 and 1,423 shares, respectively) |
|
|
(153,331 |
) |
|
|
(145,337 |
) |
|
|
|
231,839 |
|
|
|
227,804 |
|
Retained Earnings |
|
|
177,542 |
|
|
|
189,623 |
|
Total Stockholders’ Equity |
|
|
256,081 |
|
|
|
272,121 |
|
Total Liabilities and Stockholders’ Equity |
|
$ |
613,953 |
$ |
605,892 |
|
||
|
|||||||||||||||||||
Condensed Consolidated Statements of Operations |
|||||||||||||||||||
(in thousands, except per share amounts) |
|||||||||||||||||||
|
|
Three Months Ended
|
|
Year Ended
|
|||||||||||||||
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
2020 |
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net Merchandise Sales |
|
$ |
226,883 |
|
|
$ |
243,555 |
|
$ |
957,927 |
|
|
$ |
993,943 |
|
|
$ |
974,829 |
|
Net Services Sales |
|
|
36,986 |
|
|
|
41,726 |
|
|
152,752 |
|
|
|
158,401 |
|
|
|
122,873 |
|
Total |
|
|
263,869 |
|
|
|
285,281 |
|
|
1,110,679 |
|
|
|
1,152,344 |
|
|
|
1,097,702 |
|
Cost of Sales |
|
|
|
|
|
|
|
|
|
|
|||||||||
Cost of Merchandise Sold |
|
|
139,732 |
|
|
|
145,252 |
|
|
589,719 |
|
|
|
588,166 |
|
|
|
574,944 |
|
Cost of Services Sold |
|
|
29,385 |
|
|
|
33,510 |
|
|
119,797 |
|
|
|
124,136 |
|
|
|
95,046 |
|
Total Cost of Sales |
|
|
169,117 |
|
|
|
178,762 |
|
|
709,516 |
|
|
|
712,302 |
|
|
|
669,990 |
|
Gross Profit |
|
|
94,751 |
|
|
|
106,519 |
|
|
401,163 |
|
|
|
440,042 |
|
|
|
427,712 |
|
Selling, General and Administrative Expenses |
|
|
112,080 |
|
|
|
95,589 |
|
|
412,885 |
|
|
|
387,356 |
|
|
|
371,430 |
|
Operating (Loss) Income |
|
|
(17,329 |
) |
|
|
10,930 |
|
|
(11,722 |
) |
|
|
52,686 |
|
|
|
56,282 |
|
Other Expense (Income) |
|
|
986 |
|
|
|
148 |
|
|
1,816 |
|
|
|
(104 |
) |
|
|
2,642 |
|
(Loss) Income Before Income Taxes |
|
|
(18,315 |
) |
|
|
10,782 |
|
|
(13,538 |
) |
|
|
52,790 |
|
|
|
53,640 |
|
Income Tax (Benefit) Expense |
|
|
(3,235 |
) |
|
|
474 |
|
|
(1,457 |
) |
|
|
11,092 |
|
|
|
(7,787 |
) |
Net (Loss) Income |
|
$ |
(15,080 |
) |
|
$ |
10,308 |
|
$ |
(12,081 |
) |
|
$ |
41,698 |
|
|
$ |
61,427 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net (Loss) Income per Common Share—Basic |
|
$ |
(0.53 |
) |
|
$ |
0.35 |
|
$ |
(0.42 |
) |
|
$ |
1.44 |
|
|
$ |
2.13 |
|
Net (Loss) Income per Common Share—Diluted |
|
$ |
(0.53 |
) |
|
$ |
0.35 |
|
$ |
(0.42 |
) |
|
$ |
1.41 |
|
|
$ |
2.10 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Weighted Average Common Shares Outstanding: |
|
|
|
|
|
|
|
|
|
|
|||||||||
Basic |
|
|
28,691 |
|
|
|
29,095 |
|
|
28,860 |
|
|
|
29,041 |
|
|
|
28,830 |
|
Diluted |
|
|
28,691 |
|
|
|
29,451 |
|
|
28,860 |
|
|
|
29,525 |
|
|
|
29,247 |
|
|
||||||||||||||||
Condensed Consolidated Statements of Cash Flows |
||||||||||||||||
(in thousands) |
||||||||||||||||
|
|
Year Ended |
||||||||||||||
|
|
2022 |
|
|
|
2021 |
|
|
|
2020 |
||||||
Cash Flows from Operating Activities: |
|
|
|
|
|
|
|
|
||||||||
Net (Loss) Income |
|
$ |
(12,081 |
) |
|
|
$ |
41,698 |
|
|
|
$ |
61,427 |
|
||
Adjustments to Reconcile Net (Loss) Income: |
|
|
|
|
|
|
|
|
||||||||
Depreciation and Amortization |
|
|
18,410 |
|
|
|
|
18,833 |
|
|
|
|
17,645 |
|
||
Impairment of |
|
|
9,693 |
|
|
|
|
— |
|
|
|
|
— |
|
||
Deferred Income Taxes (Benefit) Provision |
|
|
(2,361 |
) |
|
|
|
276 |
|
|
|
|
(12,037 |
) |
||
Income on Vouchers Redeemed for Legal Settlements |
|
|
(1,300 |
) |
|
|
|
(1,676 |
) |
|
|
|
— |
|
||
Stock-Based Compensation Expense |
|
|
3,738 |
|
|
|
|
5,113 |
|
|
|
|
3,333 |
|
||
Provision for Inventory Obsolescence Reserves |
|
|
1,615 |
|
|
|
|
2,345 |
|
|
|
|
3,036 |
|
||
Antidumping Adjustments |
|
|
(1,036 |
) |
|
|
|
(6,279 |
) |
|
|
|
(2,208 |
) |
||
Impairment of Operating Lease Right-Of-Use |
|
|
— |
|
|
|
|
— |
|
|
|
|
935 |
|
||
Reclassification of Foreign Currency Translation to Earnings |
|
|
— |
|
|
|
|
— |
|
|
|
|
757 |
|
||
(Gain) Loss on Disposal of Fixed Assets |
|
|
(2 |
) |
|
|
|
44 |
|
|
|
|
(211 |
) |
||
Changes in Operating Assets and Liabilities: |
|
|
|
|
|
|
|
|
||||||||
Merchandise Inventories |
|
|
(81,833 |
) |
|
|
|
(15,104 |
) |
|
|
|
38,617 |
|
||
Accounts Payable |
|
|
(16,595 |
) |
|
|
|
(8,538 |
) |
|
|
|
9,910 |
|
||
Customer Deposits and Store Credits |
|
|
(23,296 |
) |
|
|
|
5,674 |
|
|
|
|
19,818 |
|
||
Tariff Recovery Receivable |
|
|
36 |
|
|
|
|
4,078 |
|
|
|
|
22,947 |
|
||
Prepaid Expenses and Other Current Assets |
|
|
(2,968 |
) |
|
|
|
700 |
|
|
|
|
(4,094 |
) |
||
Accrued Compensation |
|
|
(1,058 |
) |
|
|
|
(5,219 |
) |
|
|
|
3,605 |
|
||
Accrual for Legal Matters and Settlements |
|
|
303 |
|
|
|
|
7,773 |
|
|
|
|
2,507 |
|
||
Payments for Legal Matters and Settlements |
|
|
(8,148 |
) |
|
|
|
(101 |
) |
|
|
|
(18,080 |
) |
||
Deferred Rent Payments |
|
|
(157 |
) |
|
|
|
(2,315 |
) |
|
|
|
2,947 |
|
||
Deferred Payroll Taxes |
|
|
(2,585 |
) |
|
|
|
(2,542 |
) |
|
|
|
5,131 |
|
||
Other Assets and Liabilities |
|
|
2,916 |
|
|
|
|
(6,090 |
) |
|
|
|
1,061 |
|
||
|
|
|
(116,709 |
) |
|
|
|
38,670 |
|
|
|
|
157,046 |
|
||
Cash Flows from Investing Activities: |
|
|
|
|
|
|
|
|
||||||||
Purchases of Property and Equipment |
|
|
(22,048 |
) |
|
|
|
(19,443 |
) |
|
|
|
(15,828 |
) |
||
Other Investing Activities |
|
|
65 |
|
|
|
|
71 |
|
|
|
|
966 |
|
||
|
|
|
(21,983 |
) |
|
|
|
(19,372 |
) |
|
|
|
(14,862 |
) |
||
Cash Flows from Financing Activities: |
|
|
|
|
|
|
|
|
||||||||
Borrowings on Credit Agreement |
|
|
289,500 |
|
|
|
|
— |
|
|
|
|
45,000 |
|
||
Payments on Credit Agreement |
|
|
(217,500 |
) |
|
|
|
(101,000 |
) |
|
|
|
(26,000 |
) |
||
Common Stock Repurchased |
|
|
(7,994 |
) |
|
|
|
(2,360 |
) |
|
|
|
(663 |
) |
||
Other Financing Activities |
|
|
297 |
|
|
|
|
(690 |
) |
|
|
|
441 |
|
||
Net Cash Provided by (Used in) Financing Activities |
|
|
64,303 |
|
|
|
|
(104,050 |
) |
|
|
|
18,778 |
|
||
Effect of Exchange Rates on Cash and Cash Equivalents |
|
|
— |
|
|
|
|
— |
|
|
|
|
(14 |
) |
||
Net (Decrease) Increase in Cash and Cash Equivalents |
|
|
(74,389 |
) |
— |
|
|
(84,752 |
) |
— |
|
|
160,948 |
|
||
Cash and Cash Equivalents, Beginning of Year |
|
|
85,189 |
|
|
|
|
169,941 |
|
|
|
|
8,993 |
|
||
Cash and Cash Equivalents, End of Year |
|
$ |
10,800 |
|
|
|
$ |
85,189 |
|
|
|
$ |
169,941 |
|
||
|
|
|
|
|
|
|
|
|
||||||||
Supplemental Disclosure of Non-Cash Operating and Financing Activities: |
|
|
|
|
|
|
|
|
||||||||
Relief of Inventory for Vouchers Redeemed for Legal Settlements |
|
$ |
2,307 |
|
|
|
$ |
2,783 |
|
|
|
$ |
— |
|
||
Release of Deposit for Legal Settlement and Liability |
|
|
— |
|
|
|
|
— |
|
|
|
|
21,500 |
|
||
Tenant Improvement Allowance for Leases |
|
|
(1,155 |
) |
|
|
|
(1,230 |
) |
|
|
|
(726 |
) |
||
|
||||||||||||||||||||||||||||||
GAAP to Non-GAAP Reconciliation |
||||||||||||||||||||||||||||||
(in thousands, except percentages) |
||||||||||||||||||||||||||||||
Items impacting gross margin with comparisons to the prior-year periods include: |
||||||||||||||||||||||||||||||
|
|
Three Months Ended |
|
Year Ended |
||||||||||||||||||||||||||
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||||||||||||||||
|
|
$ |
|
% of
|
|
$ |
|
% of
|
|
$ |
|
% of
|
|
$ |
|
% of
|
||||||||||||||
|
|
(dollars in thousands) |
|
(dollars in thousands) |
|
|||||||||||||||||||||||||
Gross Profit/Margin, as reported (GAAP) |
|
$ |
94,751 |
|
|
|
35.9 |
% |
|
$ |
106,519 |
|
|
37.3 |
% |
|
$ |
401,163 |
|
|
36.1 |
% |
|
$ |
440,042 |
|
|
|
38.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Antidumping and Countervailing Adjustments1 |
|
|
(564 |
) |
|
|
(0.2 |
)% |
|
|
287 |
|
|
0.1 |
% |
|
|
413 |
|
|
— |
% |
|
|
(6,279 |
) |
|
|
(0.5 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Adjusted Gross Profit/Margin (non-GAAP measures) |
|
$ |
94,187 |
|
|
|
35.7 |
% |
|
$ |
106,806 |
|
|
37.4 |
% |
|
$ |
401,576 |
|
|
36.2 |
% |
|
$ |
433,763 |
|
|
|
37.6 |
% |
1 |
This amount represents net antidumping and countervailing (income)/expense associated with applicable prior-year shipments of engineered hardwood from |
Items impacting SG&A with comparisons to the prior-year periods include: |
||||||||||||||||||||||||||||||||
|
|
Three Months Ended
|
|
Year Ended
|
||||||||||||||||||||||||||||
|
|
2022 |
|
2021 |
|
2022 |
|
|
2021 |
|||||||||||||||||||||||
|
|
$ |
|
|
% of
|
|
$ |
|
% of
|
|
$ |
|
% of
|
|
|
$ |
|
|
% of
|
|||||||||||||
|
|
(dollars in thousands) |
|
(dollars in thousands) |
|
|||||||||||||||||||||||||||
SG&A, as reported (GAAP) |
|
$ |
112,080 |
|
|
|
42.5 |
% |
|
$ |
95,589 |
|
|
|
33.5 |
% |
|
$ |
412,885 |
|
|
|
37.2 |
% |
|
$ |
387,356 |
|
|
|
33.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(Recovery) Accrual for Legal Matters and Settlements2 |
|
|
— |
|
|
|
— |
% |
|
|
(475 |
) |
|
|
(0.2 |
)% |
|
|
(150 |
) |
|
|
— |
% |
|
|
6,800 |
|
|
|
0.6 |
% |
Legal and Professional Fees3 |
|
|
— |
|
|
|
— |
% |
|
|
31 |
|
|
|
— |
% |
|
|
— |
|
|
|
— |
% |
|
|
501 |
|
|
|
— |
% |
Goodwill Impairment Charge4 |
|
|
9,693 |
|
|
|
3.7 |
% |
|
|
— |
|
|
|
— |
% |
|
|
9,693 |
|
|
|
0.9 |
% |
|
|
— |
|
|
|
— |
% |
Sub-Total Items above |
|
|
9,693 |
|
|
|
3.7 |
% |
|
|
(444 |
) |
|
|
(0.2 |
)% |
|
|
9,543 |
|
|
|
0.9 |
% |
|
|
7,301 |
|
|
|
0.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Adjusted SG&A (a non-GAAP measure) |
|
$ |
102,387 |
|
|
|
38.8 |
% |
|
$ |
96,033 |
|
|
|
33.7 |
% |
|
$ |
403,342 |
|
|
|
36.3 |
% |
|
$ |
380,055 |
|
|
|
33.0 |
% |
| 2 |
The 2022 amount represents insurance recovery related to the Gold Litigation recorded in the third quarter of 2022. The 2021 amounts represent the charge to earnings for the Mason and Savidis matters in the first quarter of 2021 and |
|
| 3 | This amount 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. |
|
| 4 |
This amount represents an impairment charge resulting from the Company's evaluation of goodwill during the fourth quarter of 2022. This item is described more fully in Item 8, Note 3 to the consolidated financial statements filed in the |
|
||||||||||||||||||||||||||||||||
GAAP to Non-GAAP Reconciliation |
||||||||||||||||||||||||||||||||
(in thousands, except percentages) |
||||||||||||||||||||||||||||||||
Items impacting operating income and operating margin with comparisons to the prior-year periods include: |
||||||||||||||||||||||||||||||||
|
|
Three Months Ended |
|
Year Ended |
||||||||||||||||||||||||||||
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||||||||||||||||||
|
|
$ |
|
% of
|
|
$ |
|
% of
|
|
$ |
|
% of
|
|
$ |
|
% of
|
||||||||||||||||
|
|
(dollars in thousands) |
|
|
(dollars in thousands) |
|
||||||||||||||||||||||||||
Operating (Loss) Income, as reported (GAAP) |
|
$ |
(17,329 |
) |
|
|
(6.6 |
)% |
|
$ |
10,930 |
|
|
|
3.8 |
% |
|
$ |
(11,722 |
) |
|
|
(1.1 |
)% |
|
$ |
52,686 |
|
|
|
4.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gross Margin Adjustment Items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Antidumping and Countervailing Adjustments1 |
|
|
(564 |
) |
|
|
(0.2 |
)% |
|
|
287 |
|
|
|
0.1 |
% |
|
|
413 |
|
|
|
— |
% |
|
|
(6,279 |
) |
|
|
(0.5 |
)% |
Gross Margin Adjustment Items Subtotal |
|
|
(564 |
) |
|
|
(0.2 |
)% |
|
|
287 |
|
|
|
0.1 |
% |
|
|
413 |
|
|
|
— |
% |
|
|
(6,279 |
) |
|
|
(0.5 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
SG&A Adjustment Items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(Recovery) Accrual for Legal Matters and Settlements2 |
|
|
— |
|
|
|
— |
% |
|
|
(475 |
) |
|
|
(0.2 |
)% |
|
|
(150 |
) |
|
|
— |
% |
|
|
6,800 |
|
|
|
0.6 |
% |
Legal and Professional Fees3 |
|
|
— |
|
|
|
— |
% |
|
|
31 |
|
|
|
— |
% |
|
|
— |
|
|
|
— |
% |
|
|
501 |
|
|
|
— |
% |
Goodwill Impairment Charge4 |
|
|
9,693 |
|
|
|
3.7 |
% |
|
|
— |
|
|
|
— |
% |
|
|
9,693 |
|
|
|
0.9 |
% |
|
|
— |
|
|
|
— |
% |
SG&A Adjustment Items Subtotal |
|
|
9,693 |
|
|
|
3.7 |
% |
|
|
(444 |
) |
|
|
(0.2 |
)% |
|
|
9,543 |
|
|
|
0.9 |
% |
|
|
7,301 |
|
|
|
0.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Adjusted Operating (Loss) Income/ Margin (a non-GAAP measure) |
|
$ |
(8,200 |
) |
|
|
(3.1 |
)% |
|
$ |
10,773 |
|
|
|
3.8 |
% |
|
$ |
(1,766 |
) |
|
|
(0.2 |
)% |
|
$ |
53,708 |
|
|
|
4.7 |
% |
1,2,3,4 |
See the Gross Profit and SG&A sections above for more detailed explanations of these individual items. |
Items impacting other expense (income) with comparisons to the prior year periods include: |
||||||||||||||||||||||||||||||||
|
|
Three Months Ended
|
|
Year Ended
|
||||||||||||||||||||||||||||
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||||||||||||||||||
|
|
$ |
|
% of
|
|
$ |
|
% of
|
|
$ |
|
% of
|
|
$ |
|
% of
|
||||||||||||||||
|
|
(dollars in thousands) |
|
|
(dollars in thousands) |
|
||||||||||||||||||||||||||
Other Expense (Income), as reported (GAAP) |
|
$ |
986 |
|
|
|
0.4 |
% |
|
$ |
148 |
|
|
|
0.1 |
% |
|
$ |
1,816 |
|
|
|
0.2 |
% |
|
$ |
(104 |
) |
|
|
— |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest Impact Related to Antidumping and Countervailing Adjustments5 |
|
|
(147 |
) |
|
|
(0.1 |
)% |
|
|
44 |
|
|
|
— |
% |
|
|
(148 |
) |
|
|
— |
% |
|
|
(1,797 |
) |
|
|
(0.2 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted Other Expense/Adjusted Other Expense as a % of Sales (a non-GAAP measure) |
|
$ |
1,133 |
|
|
|
0.4 |
% |
|
$ |
104 |
|
|
|
— |
% |
|
$ |
1,964 |
|
|
|
0.2 |
% |
|
$ |
1,693 |
|
|
|
0.2 |
% |
5 |
This amount represents net interest (income)/expense impact of certain antidumping and countervailing adjustments related to applicable prior-year shipments of engineered hardwood from |
|
||||||||||||||||
GAAP to Non-GAAP Reconciliation |
||||||||||||||||
(in thousands, except per share data) |
||||||||||||||||
Items impacting earnings per diluted share with comparisons to the prior-year periods include: |
||||||||||||||||
|
|
Three Months Ended |
|
Year Ended |
||||||||||||
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
|
|
(in thousands) |
|
|
(in thousands) |
|
||||||||||
Net (Loss) Income, as reported (GAAP) |
|
$ |
(15,080 |
) |
|
$ |
10,308 |
|
|
$ |
(12,081 |
) |
|
$ |
41,698 |
|
Net (Loss) Income per Diluted Share (GAAP) |
|
$ |
(0.53 |
) |
|
$ |
0.35 |
|
|
$ |
(0.42 |
) |
|
$ |
1.41 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gross Margin Adjustment Items: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Antidumping and Countervailing Adjustments1 |
|
|
(564 |
) |
|
|
287 |
|
|
|
413 |
|
|
|
(6,279 |
) |
Gross Margin Adjustment Items Subtotal |
|
|
(564 |
) |
|
|
287 |
|
|
|
413 |
|
|
|
(6,279 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
SG&A Adjustment Items: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
(Recovery) Accrual for Legal Matters and Settlements2 |
|
|
— |
|
|
|
(475 |
) |
|
|
(150 |
) |
|
|
6,800 |
|
Legal and Professional Fees3 |
|
|
— |
|
|
|
31 |
|
|
|
— |
|
|
|
501 |
|
Goodwill Impairment Charge4 |
|
|
9,693 |
|
|
|
— |
|
|
|
9,693 |
|
|
|
— |
|
SG&A Adjustment Items Subtotal |
|
|
9,693 |
|
|
|
(444 |
) |
|
|
9,543 |
|
|
|
7,301 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other Expense (Income) Adjustment Items: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest Impact Related to Antidumping and Countervailing Adjustments5 |
|
|
(147 |
) |
|
|
44 |
|
|
|
(148 |
) |
|
|
(1,797 |
) |
Other Expense (Income) Adjustment Items Subtotal |
|
|
(147 |
) |
|
|
44 |
|
|
|
(148 |
) |
|
|
(1,797 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income Tax Adjustment6 |
|
|
(2,353 |
) |
|
|
30 |
|
|
|
(2,570 |
) |
|
|
204 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Adjusted (Loss) Earnings |
|
$ |
(8,451 |
) |
|
$ |
10,225 |
|
|
$ |
(4,843 |
) |
|
$ |
41,127 |
|
Adjusted (Loss) Earnings per Diluted Share (a non-GAAP measure) |
|
$ |
(0.29 |
) |
|
$ |
0.35 |
|
|
$ |
(0.17 |
) |
|
$ |
1.39 |
|
1,2,3,4,5 |
See the Gross Profit, SG&A and Other Expense (Income) sections above for more detailed explanations of these individual items. | |
6 |
Income tax adjustment is defined as the sum of gross margin, SG&A, and other expense (income) adjustment items multiplied by the Company’s federal incremental rate, which was |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230301005241/en/
LL Flooring Investor Relations
ir@llflooring.com
Tel: 804-420-9801
Source:
FAQ
What were the net sales for LL Flooring in Q4 2022?
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What is the operating margin for LL Flooring in Q4 2022?
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