Lumber Liquidators 2008 Annual Report Download - page 49

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Financing Activities. Net cash used in financing activities was less than $0.1 million during 2008 and was
primarily due to equity activity. Net cash provided by financing activities was $26.7 million during 2007,
primarily from the $36.2 million net proceeds from our IPO in November 2007, offset by scheduled monthly
principal payments under the term portion of our senior secured loan agreement prior to the IPO, and the pay off
of the $6.6 million balance that remained outstanding after the IPO. Net cash used in financing activities was
$0.8 million during 2006, which was primarily attributable to the activity under the senior secured loan
agreement.
Revolving Credit Agreement
A revolving credit agreement (the “Revolver”) providing for borrowings up to $25.0 million is available to
us through expiration on August 10, 2012. During 2008, we did not borrow against the Revolver and at
December 31, 2008, there were no outstanding commitments under letters of credit. At December 31, 2007, we
had outstanding letters of credit of $0.3 million and $24.7 million was available to borrow. The Revolver is
primarily available to fund inventory purchases, including the support of up to $5.0 million for letters of credit,
and for general operations. The Revolver is secured by our inventory, has no mandated payment provisions and
we pay a fee of 0.125% per annum, subject to adjustment based on certain financial performance criteria, on any
unused portion of the Revolver. Amounts outstanding under the Revolver would be subject to an interest rate of
LIBOR (reset on the 10th of the month) + 0.50%, subject to adjustment based on certain financial performance
criteria. The Revolver has certain defined covenants and restrictions, including the maintenance of certain
defined financial ratios. We are in compliance with these financial covenants at December 31, 2008.
Related Party Transactions
See the discussion of related party transactions in Note 5 and Note 10 to the consolidated financial
statements included in Item 8 of this report and within Related Party Transactions and Lease Arrangements in
Item 13 of this report.
Contractual Commitments and Contingencies
Our significant contractual obligations and commitments as of December 31, 2008 are summarized in the
following table:
Payments Due by Period
Total
Less Than
1 Year
1to3
Years
3to5
Years 5+ Years
(in thousands)
Contractual obligations
Operating lease obligations(1) ....................... $53,503 $9,582 $16,361 $10,820 $16,740
Supplier purchase commitments(2) ................... — — — — —
Total contractual obligations ......................... $53,503 $9,582 $16,361 $10,820 $16,740
(1) Included in this table is the base period or current renewal period for our operating leases. The operating
leases generally contain varying renewal provisions.
(2) We have one long-term purchase agreement with a merchant vendor that we entered into in July 2006 that
requires us to purchase approximately 27 million square feet of the vendor’s assorted products over a four-
year period. We are not currently receiving product under the agreement and the merchant vendor has filed a
demand for arbitration. See “Item. 3 Legal Proceedings.”
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