Lumber Liquidators 2008 Annual Report Download - page 63

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NOTE 3. PROPERTY AND EQUIPMENT
Property and equipment consisted of:
December 31,
2008 2007
Vehicles ......................................................... $ 8,984 $ 9,045
Finishing Equipment ............................................... 3,432 3,171
Office Equipment and Other ......................................... 6,986 5,029
Store Fixtures .................................................... 4,494 2,413
Leasehold Improvements ........................................... 3,997 1,736
27,893 21,394
Less: Accumulated Depreciation and Amortization ....................... 14,113 9,814
Property and Equipment, net ..................................... $13,780 $11,580
NOTE 4. REVOLVING CREDIT AGREEMENT
A revolving credit agreement (the “Revolver”) providing for borrowings up to $25,000 is available to the
Company through expiration on August 10, 2012. During 2008, the Company did not borrow against the
Revolver and at December 31, 2008, there were no outstanding commitments under letters of credit. At
December 31, 2007, the Company had outstanding letters of credit of $262 and $24,738 was available to borrow.
The Revolver is primarily available to fund inventory purchases, including the support of up to $5,000 for letters
of credit, and for general operations. The Revolver is secured by the Company’s inventory, has no mandated
payment provisions and the Company pays 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. The Company is in compliance with these financial
covenants at December 31, 2008.
Interest payments on capital leases totaled $4 in 2008, and interest payments on capital leases and previous
borrowing totaled $679 and $672 in 2007 and 2006, respectively.
NOTE 5. LEASES
The Company leases all store locations, the Corporate Headquarters and certain equipment. The store
location leases are operating leases and generally have five-year base periods with multiple five-year renewal
periods.
The Founder is also the sole owner of ANO LLC, DORA Real Estate Company, LLC and Wood on Wood
Road, Inc., and he has a 50% membership interest in BMT Holdings, LLC (collectively, “ANO and Related
Companies”). As of December 31, 2008, 2007 and 2006, the Company leased 26 of its locations from ANO and
Related Companies representing 17.3%, 22.4% and 28.6% of the total number of store leases in operation,
respectively. In addition, the Company leases the Corporate Headquarters from ANO LLC under an operating
lease with a base period through December 31, 2019.
Rental expense for 2008, 2007 and 2006 was $9,276, $6,853 and $5,213, respectively, with rental expense
attributable to ANO and Related Companies of $2,505, $2,529 and $2,261, respectively.
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