Lumber Liquidators 2007 Annual Report Download - page 21

Item 1A. Risk Factors.
Cautionary Note Regarding Forward-Looking Statements
This report includes statements of our expectations, intentions, plans and beliefs that constitute “forward-
looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934 and are intended to come within the safe harbor protection provided by those
sections. These statements, which involve risks and uncertainties, relate to matters such as sales growth,
comparable store net sales, impact of cannibalization, price changes, earnings performance, stock-based
compensation expense, margins, return on invested capital, strategic direction, the demand for our products and
store openings. We have used words such as “may,” “will,” “should,” “expects,” “intends,” “plans,”
“anticipates,” “believes,” “thinks,” “estimates,” “seeks,” “expects,” “predicts,” “could,” “projects,” “potential”
and other similar terms and phrases, including references to assumptions, in this report to identify forward-
looking statements. These forward-looking statements are made based on expectations and beliefs concerning
future events affecting us and are subject to uncertainties, risks and factors relating to our operations and business
environments, all of which are difficult to predict and many of which are beyond our control, that could cause our
actual results to differ materially from those matters expressed or implied by these forward-looking statements.
These risks and other factors include those listed in this Item 1A. “Risk Factors,” and elsewhere in this report.
When considering these forward-looking statements, you should keep in mind the cautionary statements in
this report and the documents incorporated by reference. New risks and uncertainties arise from time to time, and
we cannot predict those events or how they may affect us. There may also be other factors that we cannot
anticipate or that are not described in this report that could cause results to differ materially from our
expectations. Forward-looking statements speak only as of the date they are made and we assume no obligation
to update them after the date of this report as a result of new information, future events or subsequent
developments, except as required by the federal securities laws.
Risks Related to Our Business and Industry
The hardwood flooring industry depends on the economy, home remodeling activity, the homebuilding
industry and other important factors.
The hardwood flooring industry is highly dependent on the remodeling of existing homes and new home
construction. In turn, remodeling and new home construction depend on a number of factors which are beyond
our control, including interest rates, tax policy, employment levels, consumer confidence, credit availability, real
estate prices, demographic trends, weather conditions, natural disasters and general economic conditions. If:
• the national economy or any regional or local economy where we operate weakens;
• interest rates rise;
• credit becomes less available;
• regions where we operate experience unfavorable demographic trends;
• fuel costs or utility expenses increase; or
• home-price appreciation slows;
that could limit discretionary consumer spending, reduce spending on remodeling of existing homes and cause
purchases of new homes to decline. For example, although our net sales increased during 2006 and 2007,
Catalina Research estimates that sales of hardwood flooring declined 5.0% in comparing 2007 to 2006, following
a decline of 4.2% in comparing 2006 to 2005. Any one or a combination of these factors could result in
decreased demand for hard surface flooring, including in particular premium hardwood flooring, in remodeled
and new homes, which would harm our business and operating results.
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