LUMBER LIQUIDATORS Reports Operating Results (10-Q)
Lumber Liquidat has a market cap of $670.5 million; its shares were traded at around $23.47 with a P/E ratio of 25.7 and P/S ratio of 1. Lumber Liquidat had an annual average earning growth of 18.2% over the past 5 years.
Highlight of Business Operations:Net sales for the first quarter of 2012 increased $28.4 million, or 17.8%, over the first quarter of 2011 as net sales in non-comparable stores increased $16.4 million and net sales in comparable stores increased $11.9 million. We generally consider a store comparable on the first day of the thirteenth full calendar month after opening. Net sales increased primarily due to the following factors:
Net sales in comparable stores increased 7.5% in the first quarter of 2012 compared to the same period in 2011, primarily due to an 8.0% increase in the number of customers invoiced, partially offset by a slight decrease in our average sale. We believe our efforts to expand our advertising reach and frequency resulted in greater recognition of our value proposition.
Operating income for the three months ended March 31, 2012 increased $4.0 million, or 42.6%, over the first quarter of 2011 as the $12.3 million increase in gross profit was partially offset by an $8.4 million increase in SG&A expenses. The increase in SG&A expenses was principally due to the following factors:
Our net sales fluctuate slightly as a result of seasonal factors, and we adjust merchandise inventories in anticipation of those factors, causing variations in our build of merchandise inventories. Generally, we experience higher than average net sales in the spring and fall, when more home remodeling activities are taking place, and lower than average net sales in the winter months and during the hottest summer months. These seasonal fluctuations, however, are minimized to some extent by our national presence, as markets experience different seasonal characteristics.
Operating Activities. Net cash provided by operating activities was $10.3 million and $11.1 million for the three months ended March 31, 2012 and 2011, respectively. Net cash provided by operating activities decreased primarily due to a larger build in merchandise inventories net of the change in accounts payable, partially offset by more profitable operations.
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