LL Flooring Reports Fourth Quarter and Full Year 2023 Financial Results
"Fourth quarter business conditions remain difficult as we continue to experience the impact of weakness in existing home sales and the corresponding softness in the home improvement industry. We reported comparable store sales down 19.6% as we saw continued declines in traffic and lower average project sizes for our consumer and pro customers. Despite external headwinds, we are focused on our ability to deliver the high-touch service of an independent flooring retailer combined with the value, assortment, and convenience of a national brand,” said President and Chief Executive Officer
Tyson continued "Leading economic indicators suggest that home improvement spending will continue to be challenged through at least the first half of 2024, however, the long-term fundamentals of our business are strong due to aging housing stock, increased household formation and rising home values. To that end, we remain focused on executing on our brand transformation and on our strategic initiatives which we believe will drive revenue growth, increase brand awareness, spur product innovation and deliver a consistent customer experience. We are also gaining traction on several of our operating strategies, focusing on the customer experience, driving and improving NPS scores, innovating products including the execution of our carpet initiatives, and maintaining a strong focus on improving operational efficiencies and working capital management. All of which, gives us confidence in achieving long-term growth.”
Fourth Quarter Financial Highlights
-
Net sales decreased 19.7% to
$211.8 million compared to the same period last year, driven by a decrease in transaction count and average transaction size reflecting lower spend by consumers and Pros. - Total comparable store sales decreased 20.2% versus the same period last year.
- Gross margin increased 270 basis points to 38.6% and Adjusted gross margin1 increased 260 basis points to 38.3% compared to the same period last year, primarily driven by vendor cost outs and lower transportation costs, partially offset by headwinds from higher vinyl sourcing costs as we increased sourcing from domestic vendors.
-
SG&A as a percentage of net sales increased 430 basis points to 46.8% compared to the fourth quarter of last year and Adjusted SG&A1 as a percentage of net sales increased 800 basis points to 46.8% 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; Adjusted SG&A spending decreased
$3.1 million primarily due to restructuring activities and lower advertising spend. - Operating margin loss increased 170 basis points to 8.3% compared to the fourth quarter of last year. Adjusted operating margin loss1 increased 550 basis points to 8.6% compared to the fourth quarter of last year.
-
Loss per Diluted Share increased
$0.09 to$0.62 compared to the fourth quarter of last year. Adjusted Loss per Diluted Share1 increased$0.35 to$0.64 compared to the fourth quarter of last year. -
We’ve continued to evaluate our store portfolio, resulting in the closure of seven stores during the fourth quarter. We also opened one new store, bringing our total store portfolio to 437 stores as of
December 31, 2023 .
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 decreased 18.5% to
$904.7 million compared to last year, driven by a decrease in transaction count and average transaction size reflecting lower spend by consumers and Pros. - Total comparable store sales decreased 19.6% versus last year.
-
Gross margin decreased 40 basis points to 35.7% compared to 2022 and Adjusted gross margin1 increased 140 basis points to 37.5% compared to 2022. Gross margin decreased due to unfavorable antidumping duty rate changes and customs detentions on certain vinyl flooring products from
Asia . The increase in adjusted gross margin1 was primarily due to lower vendor and transportation costs. - SG&A as a percentage of net sales increased 740 basis points to 44.6% compared to last year and adjusted SG&A1 increased 820 basis points to 44.5% compared to last year. Both SG&A and Adjusted SG&A increased as a percentage of net sales primarily due to expense deleverage on lower net sales; Adjusted SG&A spend remained relatively flat compared to 2022, as the cost savings from our restructuring activities and lower spend on advertising were offset by higher occupancy costs associated with the addition of a third distribution center, rents of new stores and lease renewals at higher rental rates, non-recurring professional services and IT spend associated with the rollout of our CRM.
- Operating margin loss increased 780 basis points to 8.9% compared to last year. Adjusted operating margin loss1 increased 680 basis points to 7.0% compared to last year.
-
Loss per Diluted Share increased
$3.17 to$3.59 compared to last year. Adjusted Loss per Diluted Share1 increased$2.84 to$3.01 compared to last year. -
During 2023, the Company opened three new stores and closed eight, bringing total stores to 437 as of
December 31, 2023 .
1Pleaserefer 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 2023, the Company generated
2024 Business Outlook
The Company continues to navigate uncertainty in the macroeconomic environment due to low 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 2024, while we strongly believe that our strategic initiatives of our CRM and Pro initiatives will improve the customer experience and help drive traffic to stores, our visibility is limited as to when the macroeconomic environment will normalize.
- Adjusted gross margins1 are expected to maintain year-over-year, driven primarily by potential reductions in transportation costs. The Company will continue to monitor the competitive pricing environment to inform its pricing and promotion strategies.
- SG&A dollar spend and SG&A spend as a percentage of sales are expected to increase year-over-year, primarily due to lower net sales as we continue to invest in our strategic initiatives while navigating a dynamic macroeconomic environment.
-
Capital expenditures of approximately
$15 million in 2024, primarily related to our strategic initiatives such as the rollout of Carpet across our store portfolio, and maintenance capital investments.
1Pleaserefer to the “Non-GAAP and Other Information” section and the GAAP to non-GAAP reconciliation tables below for more information.
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.
Reconciliations of forward-looking non-GAAP measures are not provided because the company is unable to provide such reconciliations without unreasonable effort due to the uncertainty and inherent difficulty of predicting the occurrence and financial impact of certain items, including, but not limited to, the timing and significance of antidumping rate changes or vinyl charges.
(Tables Follow)
Consolidated Balance Sheets (in thousands) |
||||||||
|
|
|
|
|
|
|
||
|
|
2023 |
|
|
2022 |
|
||
Assets |
|
|
|
|
|
|
||
Current Assets: |
|
|
|
|
|
|
||
Cash and Cash Equivalents |
|
$ |
8,772 |
|
|
$ |
10,800 |
|
Merchandise Inventories, Net |
|
|
265,290 |
|
|
|
332,296 |
|
Prepaid Expenses |
|
|
5,658 |
|
|
|
9,054 |
|
Other Current Assets |
|
|
8,473 |
|
|
|
17,598 |
|
Total Current Assets |
|
|
288,193 |
|
|
|
369,748 |
|
Property and Equipment, Net |
|
|
100,490 |
|
|
|
101,758 |
|
Operating Lease Right-of-Use Assets |
|
|
141,210 |
|
|
|
123,172 |
|
Deferred Tax Assets, Net |
|
|
— |
|
|
|
13,697 |
|
Other Assets |
|
|
5,681 |
|
|
|
5,578 |
|
Total Assets |
|
$ |
535,574 |
|
|
$ |
613,953 |
|
|
|
|
|
|
|
|
||
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
||
Current Liabilities: |
|
|
|
|
|
|
||
Accounts Payable |
|
$ |
67,195 |
|
|
$ |
47,733 |
|
Customer Deposits and Store Credits |
|
|
39,468 |
|
|
|
43,767 |
|
Accrued Compensation |
|
|
6,915 |
|
|
|
9,070 |
|
Sales and Income Tax Liabilities |
|
|
2,103 |
|
|
|
3,574 |
|
Accrual for Legal Matters and Settlements |
|
|
15,344 |
|
|
|
22,159 |
|
Operating Lease Liabilities - Current |
|
|
31,815 |
|
|
|
34,509 |
|
Other Current Liabilities |
|
|
24,382 |
|
|
|
19,712 |
|
Total Current Liabilities |
|
|
187,222 |
|
|
|
180,524 |
|
Other Long-Term Liabilities |
|
|
8,391 |
|
|
|
6,162 |
|
Operating Lease Liabilities - Long-Term |
|
|
116,651 |
|
|
|
99,186 |
|
Credit Agreement |
|
|
66,000 |
|
|
|
72,000 |
|
Total Liabilities |
|
|
378,264 |
|
|
|
357,872 |
|
|
|
|
|
|
|
|
||
Commitments and Contingencies |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Stockholders’ Equity: |
|
|
|
|
|
|
||
Common Stock ( |
|
|
31 |
|
|
|
31 |
|
Treasury Stock, at cost (2,134 and 2,063 shares, respectively) |
|
|
(153,617 |
) |
|
|
(153,331 |
) |
|
|
|
236,848 |
|
|
|
231,839 |
|
Retained Earnings |
|
|
74,048 |
|
|
|
177,542 |
|
Total Stockholders’ Equity |
|
|
157,310 |
|
|
|
256,081 |
|
Total Liabilities and Stockholders’ Equity |
|
$ |
535,574 |
|
|
$ |
613,953 |
|
Consolidated Statements of Operations and Comprehensive (Loss) Income (in thousands, except per share amounts) |
||||||||||||||||||||
|
|
Three Months Ended
|
|
|
Year Ended |
|
||||||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
2021 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net Merchandise Sales |
|
$ |
183,059 |
|
|
$ |
226,883 |
|
|
$ |
779,326 |
|
|
$ |
957,927 |
|
|
$ |
993,943 |
|
Net Services Sales |
|
|
28,721 |
|
|
|
36,986 |
|
|
|
125,420 |
|
|
|
152,752 |
|
|
|
158,401 |
|
Total |
|
|
211,780 |
|
|
|
263,869 |
|
|
|
904,746 |
|
|
|
1,110,679 |
|
|
|
1,152,344 |
|
Cost of Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of Merchandise Sold |
|
|
103,919 |
|
|
|
139,733 |
|
|
|
477,495 |
|
|
|
589,719 |
|
|
|
588,166 |
|
Cost of Services Sold |
|
|
26,187 |
|
|
|
29,385 |
|
|
|
104,538 |
|
|
|
119,797 |
|
|
|
124,136 |
|
Total Cost of Sales |
|
|
130,106 |
|
|
|
169,118 |
|
|
|
582,033 |
|
|
|
709,516 |
|
|
|
712,302 |
|
Gross Profit |
|
|
81,674 |
|
|
|
94,751 |
|
|
|
322,713 |
|
|
|
401,163 |
|
|
|
440,042 |
|
Selling, General and Administrative Expenses |
|
|
99,205 |
|
|
|
112,080 |
|
|
|
403,499 |
|
|
|
412,885 |
|
|
|
387,356 |
|
Operating (Loss) Income |
|
|
(17,531 |
) |
|
|
(17,329 |
) |
|
|
(80,786 |
) |
|
|
(11,722 |
) |
|
|
52,686 |
|
Other Expense |
|
|
1,082 |
|
|
|
986 |
|
|
|
9,307 |
|
|
|
1,816 |
|
|
|
(104 |
) |
(Loss) Income Before Income Taxes |
|
|
(18,613 |
) |
|
|
(18,315 |
) |
|
|
(90,093 |
) |
|
|
(13,538 |
) |
|
|
52,790 |
|
Income Tax Expense (Benefit) |
|
|
(668 |
) |
|
|
(3,235 |
) |
|
|
13,401 |
|
|
|
(1,457 |
) |
|
|
11,092 |
|
Net (Loss) Income and Comprehensive (Loss) Income |
|
$ |
(17,945 |
) |
|
$ |
(15,080 |
) |
|
$ |
(103,494 |
) |
|
$ |
(12,081 |
) |
|
$ |
41,698 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net (Loss) Income per Common Share—Basic |
|
$ |
(0.62 |
) |
|
$ |
(0.53 |
) |
|
$ |
(3.59 |
) |
|
$ |
(0.42 |
) |
|
$ |
1.44 |
|
Net (Loss) Income per Common Share—Diluted |
|
$ |
(0.62 |
) |
|
$ |
(0.53 |
) |
|
$ |
(3.59 |
) |
|
$ |
(0.42 |
) |
|
$ |
1.41 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Weighted Average Common Shares Outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic |
|
|
28,845 |
|
|
|
28,691 |
|
|
|
28,806 |
|
|
|
28,860 |
|
|
|
29,041 |
|
Diluted |
|
|
28,845 |
|
|
|
28,691 |
|
|
|
28,806 |
|
|
|
28,860 |
|
|
|
29,525 |
|
Condensed Consolidated Statements of Cash Flows (in thousands) |
||||||||||||||
|
|
Year Ended |
|
|||||||||||
|
|
2023 |
|
|
2022 |
|
|
|
2021 |
|
||||
Cash Flows from Operating Activities: |
|
|
|
|
|
|
|
|
|
|
||||
Net (Loss) Income |
|
$ |
(103,494 |
) |
|
$ |
(12,081 |
) |
|
|
$ |
41,698 |
|
|
Adjustments to Reconcile Net (Loss) Income: |
|
|
|
|
|
|
|
|
|
|
||||
Depreciation and Amortization |
|
|
18,647 |
|
|
|
18,410 |
|
|
|
|
18,833 |
|
|
Impairment on Long-Lived Assets |
|
|
1,316 |
|
|
|
— |
|
|
|
|
— |
|
|
Impairment of |
|
|
— |
|
|
|
9,693 |
|
|
|
|
— |
|
|
Deferred Income Taxes Provision |
|
|
13,979 |
|
|
|
(2,361 |
) |
|
|
|
276 |
|
|
Income on Redeemed or Expired Vouchers for Legal Settlements |
|
|
(2,491 |
) |
|
|
(1,300 |
) |
|
|
|
(1,676 |
) |
|
Stock-Based Compensation Expense |
|
|
5,009 |
|
|
|
3,738 |
|
|
|
|
5,113 |
|
|
Provision for Inventory Obsolescence Reserves |
|
|
3,469 |
|
|
|
1,615 |
|
|
|
|
2,345 |
|
|
Antidumping Adjustments |
|
|
353 |
|
|
|
(1,036 |
) |
|
|
|
(6,279 |
) |
|
(Gain) Loss on Disposal of Fixed Assets |
|
|
27 |
|
|
|
(2 |
) |
|
|
|
44 |
|
|
Changes in Operating Assets and Liabilities: |
|
|
|
|
|
|
|
|
|
|
||||
Merchandise Inventories |
|
|
61,243 |
|
|
|
(81,833 |
) |
|
|
|
(15,104 |
) |
|
Accounts Payable |
|
|
17,254 |
|
|
|
(16,595 |
) |
|
|
|
(8,538 |
) |
|
Customer Deposits and Store Credits |
|
|
(4,299 |
) |
|
|
(23,296 |
) |
|
|
|
5,674 |
|
|
Tariff Recovery Receivable |
|
|
— |
|
|
|
36 |
|
|
|
|
4,078 |
|
|
Prepaid Expenses and Other Current Assets |
|
|
13,758 |
|
|
|
(2,968 |
) |
|
|
|
700 |
|
|
Accrued Compensation |
|
|
(2,156 |
) |
|
|
(1,058 |
) |
|
|
|
(5,219 |
) |
|
Accrual for Legal Matters and Settlements |
|
|
543 |
|
|
|
303 |
|
|
|
|
7,773 |
|
|
Payments for Legal Matters and Settlements |
|
|
(345 |
) |
|
|
(8,148 |
) |
|
|
|
(101 |
) |
|
Deferred Rent Payments |
|
|
(187 |
) |
|
|
(157 |
) |
|
|
|
(2,315 |
) |
|
Deferred Payroll Taxes |
|
|
— |
|
|
|
(2,585 |
) |
|
|
|
(2,542 |
) |
|
Other Assets and Liabilities |
|
|
(1,341 |
) |
|
|
2,916 |
|
|
|
|
(6,090 |
) |
|
Net Cash Provided by (Used in) Operating Activities |
|
|
21,285 |
|
|
|
(116,709 |
) |
|
|
|
38,670 |
|
|
Cash Flows from Investing Activities: |
|
|
|
|
|
|
|
|
|
|
||||
Purchases of Property and Equipment |
|
|
(17,029 |
) |
|
|
(22,048 |
) |
|
|
|
(19,443 |
) |
|
Other Investing Activities |
|
|
2 |
|
|
|
65 |
|
|
|
|
71 |
|
|
|
|
|
(17,027 |
) |
|
|
(21,983 |
) |
|
|
|
(19,372 |
) |
|
Cash Flows from Financing Activities: |
|
|
|
|
|
|
|
|
|
|
||||
Borrowings on Credit Agreement |
|
|
306,000 |
|
|
|
289,500 |
|
|
|
|
— |
|
|
Payments on Credit Agreement |
|
|
(312,000 |
) |
|
|
(217,500 |
) |
|
|
|
(101,000 |
) |
|
Common Stock Repurchased |
|
|
(286 |
) |
|
|
(7,994 |
) |
|
|
|
(2,360 |
) |
|
Other Financing Activities |
|
|
|
|
|
297 |
|
|
|
|
(690 |
) |
||
|
|
|
(6,286 |
) |
|
|
64,303 |
|
|
|
|
(104,050 |
) |
|
|
|
|
(2,028 |
) |
|
|
(74,389 |
) |
|
— |
|
|
(84,752 |
) |
Cash and Cash Equivalents, Beginning of Period |
|
|
10,800 |
|
|
|
85,189 |
|
|
|
|
169,941 |
|
|
Cash and Cash Equivalents, End of Period |
|
$ |
8,772 |
|
|
$ |
10,800 |
|
|
|
$ |
85,189 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Supplemental Disclosure of Non-Cash Operating and Financing Activities: |
|
|
|
|
|
|
|
|
|
|
||||
Relief of Inventory for Vouchers Redeemed for Legal Settlements |
|
$ |
2,294 |
|
|
$ |
2,307 |
|
|
|
$ |
2,783 |
|
|
Tenant Improvement Allowance for Leases |
|
|
(196 |
) |
|
|
(1,155 |
) |
|
|
|
(1,230 |
) |
|
|
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 |
|
||||||||||||||||||||||||||
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||||||||||||||||||
|
$ |
|
|
% of Sales |
|
|
$ |
|
|
% of Sales |
|
|
$ |
|
|
% of
|
|
|
$ |
|
|
% of
|
|
||||||||
|
(in thousands, except percentage data) |
|
|||||||||||||||||||||||||||||
Gross Profit/Margin, as reported (GAAP) |
$ |
81,674 |
|
|
|
38.6 |
% |
|
$ |
94,751 |
|
|
|
35.9 |
% |
|
$ |
322,713 |
|
|
|
35.7 |
% |
|
$ |
401,163 |
|
|
|
36.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Vinyl Charges1 |
|
(701 |
) |
|
|
(0.3 |
)% |
|
|
— |
|
|
|
— |
|
|
|
5,426 |
|
|
|
0.6 |
% |
|
|
— |
|
|
|
— |
% |
Antidumping and Countervailing Adjustments2 |
|
95 |
|
|
|
— |
|
|
|
(564 |
) |
|
|
(0.2 |
)% |
|
|
10,809 |
|
|
|
1.2 |
% |
|
|
413 |
|
|
|
0.0 |
% |
Adjustment Items Subtotal |
|
(606 |
) |
|
|
(0.3 |
)% |
|
|
(564 |
) |
|
|
(0.2 |
)% |
|
|
16,235 |
|
|
|
1.8 |
% |
|
|
413 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted Gross Profit/Margin (non-GAAP measures) |
$ |
81,068 |
|
|
|
38.3 |
% |
|
$ |
94,187 |
|
|
|
35.7 |
% |
|
$ |
338,948 |
|
|
|
37.5 |
% |
|
$ |
401,576 |
|
|
|
36.1 |
% |
1 |
This amount represents costs related to CBP detention on flooring products that contain PVC as a consequence of the UFLPA. | ||
2 |
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 |
|
||||||||||||||||||||||||||
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||||||||||||||||||
|
$ |
|
|
% of
|
|
|
$ |
|
|
% of
|
|
|
$ |
|
|
% of
|
|
|
$ |
|
|
% of
|
|
||||||||
|
(in thousands, except percentage data) |
|
|||||||||||||||||||||||||||||
SG&A, as reported (GAAP) |
$ |
99,205 |
|
|
|
46.8 |
% |
|
$ |
112,080 |
|
|
|
42.5 |
% |
|
$ |
403,499 |
|
|
|
44.6 |
% |
|
$ |
412,885 |
|
|
|
37.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Recovery from Legal Matters and Settlements1 |
|
— |
|
|
|
— |
% |
|
|
— |
|
|
|
— |
% |
|
|
— |
|
|
|
— |
% |
|
|
(150 |
) |
|
|
— |
% |
Legal and Professional Fees2 |
|
(36 |
) |
|
|
— |
% |
|
|
— |
|
|
|
— |
% |
|
|
886 |
|
|
|
0.1 |
% |
|
|
— |
|
|
|
— |
% |
Goodwill Impairment Charge3 |
|
— |
|
|
|
— |
% |
|
|
9,693 |
|
|
|
3.7 |
% |
|
|
— |
|
|
|
0.0 |
% |
|
|
9,693 |
|
|
|
0.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted SG&A (a non-GAAP measure) |
$ |
99,241 |
|
|
|
46.8 |
% |
|
$ |
102,387 |
|
|
|
38.8 |
% |
|
$ |
402,613 |
|
|
|
44.5 |
% |
|
$ |
403,342 |
|
|
|
36.3 |
% |
1. |
The 2022 amount represents insurance recovery related to the Gold Litigation recorded in the third quarter of 2022. This item is described more fully in Item 8, Note 10 to the consolidated financial statements filed in the |
||
2. |
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. | ||
3. |
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 |
|
||||||||||||||||||||||||||
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||||||||||||||||||
|
$ |
|
|
% of Sales |
|
|
$ |
|
|
% of Sales |
|
|
$ |
|
|
% of Sales |
|
|
$ |
|
|
% of Sales |
|
||||||||
|
(in thousands, except percentage data) |
|
|||||||||||||||||||||||||||||
Operating Loss, as reported (GAAP) |
$ |
(17,531 |
) |
|
|
(8.3 |
)% |
|
$ |
(17,329 |
) |
|
|
(6.6 |
)% |
|
$ |
(80,786 |
) |
|
|
(8.9 |
)% |
|
$ |
(11,722 |
) |
|
|
(1.1 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Gross Profit/Margin Adjustment Items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Vinyl Charges1 |
|
(701 |
) |
|
|
(0.3 |
)% |
|
|
— |
|
|
|
— |
% |
|
|
5,426 |
|
|
|
0.6 |
% |
|
|
— |
|
|
|
— |
% |
Antidumping and Countervailing Adjustments2 |
|
95 |
|
|
|
0.0 |
% |
|
|
(564 |
) |
|
|
(0.2 |
)% |
|
|
10,809 |
|
|
|
1.2 |
% |
|
|
413 |
|
|
|
— |
|
Gross Profit/Margin Adjustment Items Subtotal |
|
(606 |
) |
|
|
(0.3 |
)% |
|
|
(564 |
) |
|
|
(0.2 |
)% |
|
|
16,235 |
|
|
|
1.8 |
% |
|
|
413 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
SG&A Adjustment Items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Recovery from Legal Matters and Settlements3 |
|
— |
|
|
|
— |
% |
|
|
— |
|
|
|
— |
% |
|
|
— |
|
|
|
— |
% |
|
|
(150 |
) |
|
|
— |
% |
Legal and Professional Fees4 |
|
(36 |
) |
|
|
0.0 |
% |
|
|
— |
|
|
|
— |
% |
|
|
886 |
|
|
|
0.1 |
% |
|
|
— |
|
|
|
— |
% |
Goodwill Impairment Charge5 |
|
— |
|
|
|
— |
% |
|
|
9,693 |
|
|
|
3.7 |
% |
|
|
— |
|
|
|
0.0 |
% |
|
|
9,693 |
|
|
|
0.9 |
% |
SG&A Adjustment Items Subtotal |
|
(36 |
) |
|
|
0.0 |
% |
|
|
9,693 |
|
|
|
3.7 |
% |
|
|
886 |
|
|
|
0.1 |
% |
|
|
9,543 |
|
|
|
0.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted Operating Loss / Margin (a non-GAAP measure) |
$ |
(18,173 |
) |
|
|
(8.6 |
)% |
|
$ |
(8,200 |
) |
|
|
(3.1 |
)% |
|
$ |
(63,665 |
) |
|
|
(7.0 |
)% |
|
$ |
(1,766 |
) |
|
|
(0.2 |
)% |
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 expense (income) with comparisons to the prior year periods include:
|
|
Three Months Ended |
|
|
Year Ended |
|
||||||||||||||||||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||||||||||||||||||
|
|
$ |
|
|
% of
|
|
|
$ |
|
|
% of
|
|
|
$ |
|
|
% of
|
|
|
$ |
|
|
% of
|
|
||||||||
|
|
(in thousands, except percentage data) |
|
|||||||||||||||||||||||||||||
Other Expense, as reported (GAAP) |
|
$ |
1,082 |
|
|
|
0.5 |
% |
|
$ |
986 |
|
|
|
0.4 |
% |
|
$ |
9,307 |
|
|
|
1.0 |
% |
|
$ |
1,816 |
|
|
|
0.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest Impact Related to Antidumping and Countervailing Adjustments1 |
|
|
27 |
|
|
|
0.0 |
% |
|
|
(147 |
) |
|
|
0.0 |
% |
|
|
5,565 |
|
|
|
0.6 |
% |
|
|
(148 |
) |
|
|
— |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted Other Expense/Adjusted Other Expense as a % of Sales (a non-GAAP measure) |
|
$ |
1,055 |
|
|
|
0.5 |
% |
|
$ |
1,133 |
|
|
|
0.4 |
% |
|
$ |
3,742 |
|
|
|
0.4 |
% |
|
$ |
1,964 |
|
|
|
0.2 |
% |
1. |
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 |
|
||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
|
|
(in thousands, except per share data) |
|
|||||||||||||
Net Loss, as reported (GAAP) |
|
$ |
(17,945 |
) |
|
$ |
(15,080 |
) |
|
$ |
(103,494 |
) |
|
$ |
(12,081 |
) |
Net Loss per Diluted Share (GAAP) |
|
$ |
(0.62 |
) |
|
$ |
(0.53 |
) |
|
$ |
(3.59 |
) |
|
$ |
(0.42 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gross Profit/Margin Adjustment Items: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Vinyl Charges1 |
|
|
(701 |
) |
|
|
— |
|
|
|
5,426 |
|
|
|
— |
|
Antidumping and Countervailing Adjustments2 |
|
|
95 |
|
|
|
(564 |
) |
|
|
10,809 |
|
|
|
413 |
|
Gross Profit/Margin Adjustment Items Subtotal |
|
|
(606 |
) |
|
|
(564 |
) |
|
|
16,235 |
|
|
|
413 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
SG&A Adjustment Items: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Recovery from Legal Matters and Settlements3 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(150 |
) |
Legal and Professional Fees4 |
|
|
(36 |
) |
|
|
— |
|
|
|
886 |
|
|
|
— |
|
Goodwill Impairment Charge5 |
|
|
— |
|
|
|
9,693 |
|
|
|
— |
|
|
|
9,693 |
|
SG&A Adjustment Items Subtotal |
|
|
(36 |
) |
|
|
9,693 |
|
|
|
886 |
|
|
|
9,543 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other Expense (Income) Adjustment Items: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest Impact Related to Antidumping and Countervailing Adjustment6 |
|
|
27 |
|
|
|
(147 |
) |
|
|
5,565 |
|
|
|
(148 |
) |
Other Expense (Income) Adjustment Items Subtotal |
|
|
27 |
|
|
|
(147 |
) |
|
|
5,565 |
|
|
|
(148 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income Tax Adjustment7 |
|
|
158 |
|
|
|
(2,353 |
) |
|
|
(5,830 |
) |
|
|
(2,570 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Adjusted Loss |
|
$ |
(18,402 |
) |
|
$ |
(8,451 |
) |
|
$ |
(86,638 |
) |
|
$ |
(4,843 |
) |
Adjusted Loss per Diluted Share (a non-GAAP measure) |
|
$ |
(0.64 |
) |
|
$ |
(0.29 |
) |
|
$ |
(3.01 |
) |
|
$ |
(0.17 |
) |
1,2,3,4,5,6 |
See the Gross Profit, SG&A and Other Expense (Income) sections above for more detailed explanations of these individual items. | |
7 |
Income Tax Adjustment is defined as the sum of Gross Profit/Margin, SG&A, and Other Expense (Income) Adjustment Items multiplied by the Company’s federal incremental rate, which was 25.7% for the 2023 period and 26.2% for the 2022 period. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240301411085/en/
For further information contact:
LL Flooring Investor Relations
ICR
ir@llflooring.com
Tel: 804-420-9801
Source: