Lumber Liquidators 2007 Annual Report Download - page 29

provides that Section 203 of the Delaware General Corporation Law, which relates to business combinations with
interested stockholders, applies to us. These provisions may delay, prevent or deter a merger, acquisition, tender
offer, proxy contest or other transaction that might otherwise result in our stockholders receiving a premium over
the market price for their common stock. In addition, these provisions may cause our common stock to trade at a
market price lower than it might absent such provisions.
Our common stock price may be volatile and you may lose all or part of your investment.
The market price of our common stock could fluctuate significantly. Those fluctuations could be based on
various factors in addition to those otherwise described in this report, including:
• our operating performance and the performance of our competitors;
• the public’s reaction to our press releases, our other public announcements and our filings with the
SEC;
• changes in earnings estimates or recommendations by research analysts who follow Lumber
Liquidators or other companies in our industry;
• variations in general economic conditions;
• actions of our current stockholders, including sales of common stock by our directors and executive
officers;
• the arrival or departure of key personnel; and
• other developments affecting us, our industry or our competitors.
In addition, in recent years, the stock market has experienced significant price and volume fluctuations.
These fluctuations may be unrelated to the operating performance of particular companies but may cause
declines in the market price of our common stock. The price of our common stock could fluctuate based upon
factors that have little or nothing to do with our company or its performance.
Future sales of our common stock, or the perception that such sales may occur, could cause our stock price to
fall.
Sales of substantial amounts of our common stock in the public market, or the perception that such sales
may occur, could harm the market price of our common stock and could materially impair our ability to raise
capital in the future through offerings of our common stock.
We, our executive officers and directors and TA Associates have agreed, subject to certain exceptions, not
to dispose of or hedge any common stock or securities convertible into or exchangeable for shares of common
stock until May 8, 2008, except, in our case, for the issuance of common stock upon exercise of options
outstanding under existing option plans. Goldman, Sachs & Co. and Merrill Lynch, Pierce, Fenner & Smith
Incorporated may, in their sole discretion, release any of these shares from these restrictions at any time without
notice. As of May 8, 2008, all of our shares of common stock outstanding may be sold in the public market by
existing stockholders, subject to applicable volume and other limitations imposed under federal securities laws.
By letter dated February 20, 2008, Kevin Sullivan provided notice to us that he considered the lock-up
agreement that he signed to be null and void. He has asserted that because his lock-up agreement is not identical
to the lock-up agreement signed by Tom Sullivan, which he has alleged was required by the Variable Plan
agreement, he is not bound by its terms. To date, however, none of the shares put into escrow by Tom in
connection with the Variable Plan have been transferred to Kevin.
We do not intend to pay dividends for the foreseeable future.
For the foreseeable future, we intend to retain any earnings to finance the development and expansion of our
business, and we do not anticipate paying any cash dividends on our common stock. Accordingly, investors must
be prepared to rely on sales of their common stock after price appreciation to earn an investment return, which
may never occur. Investors seeking cash dividends should not purchase our common stock. Any determination to
pay dividends in the future will be made at the discretion of our board of directors and will depend on our results
of operations, financial condition, contractual restrictions, restrictions imposed by applicable law and other
factors our board deems relevant.
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