Lumber Liquidators 2009 Annual Report Download - page 16

takes these retailers longer than us to deliver their product to customers, and their prices tend to be higher than ours. We also
compete against companies that sell other types of floor coverings, such as carpet, vinyl sheet and tile, ceramic tile, natural
stone and others.
Seasonality and Quarterly Results
Our quarterly results of operations fluctuate depending on the timing of our advertising expenses and the timing of, and
income contributed by, new stores. Our net sales also fluctuate slightly as a result of seasonal factors. We experience slightly
higher net sales in spring and fall, when more home remodeling and home building activities are taking place, and slightly
lower net sales in holiday periods 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.
Our Employees
As of December 31, 2009, we had 934 employees, 96% of whom were full-time and none of whom were represented by
a union. Of these employees, 67% work in our stores, 18% work in corporate store support infrastructure or similar functions
(including our call center employees) and 15% work either on our finishing line or in our distribution center. We believe that
we have good relations with our employees.
Intellectual Property and Trademarks
We have a number of marks registered in the United States, including Lumber Liquidators®, Bellawood®,
1-800-HARDWOOD®, 1-800-FLOORING®, Dura-Wood®, Blutec®, Quickclic®, Virginia Mill Works Co. Hand Scraped
and Distressed Floors®, Morning Star Bamboo Flooring®, Dream Home Laminate Floors®, Builder’s Pride®, Schön
Engineered Floors®, Casa de Colour Collection®and other product line names. We have also registered certain marks in
jurisdictions outside the United States, including the European Union, Canada, Australia and Japan. We regard our
intellectual property as having significant value and these names are an important factor in the marketing of our brands.
Accordingly, we take steps intended to protect our intellectual property including, where necessary, the filing of lawsuits and
administrative actions to enforce our rights. We are not aware of any facts that could be expected to have a material adverse
effect on our intellectual property.
Government Regulation
We are subject to extensive and varied federal, state and local government regulation, including regulations relating to
employment, public health and safety, zoning and fire codes. We operate each of our stores, finishing facility and distribution
center in accordance with standards and procedures designed to comply with applicable codes and regulations.
Our operations and properties are also subject to federal, state and local laws and regulations relating to the use, storage,
handling, generation, transportation, treatment, emission, release, discharge and disposal of hazardous materials, substances
and wastes and relating to the investigation and cleanup of contaminated properties, including off-site disposal locations. We
do not incur significant costs complying with environmental laws and regulations. However, we could be subject to material
environmental costs, liabilities or claims in the future, especially in the event of changes in existing laws and regulations or
in their interpretation.
Our suppliers are subject to the laws and regulations of their home countries, including in particular laws regulating
forestry and the environment. We consult with our suppliers as appropriate to ensure that they are in compliance with their
applicable home country laws. We also support social and environmental responsibility among our supplier community and
our major suppliers agree to comply with a code of conduct regarding our expectations concerning environmental, labor and
health and safety matters. Among its guidelines, the code of conduct includes a provision that our suppliers must comply
with the laws, rules and regulations of the countries in which they operate.
Products that we import into the United States are subject to laws and regulations imposed in conjunction with such
importation, including those issued and/or enforced by U.S. Customs and Border Protection. In addition, certain of our
products are subject to laws and regulations relating to the importation, acquisition or sale of illegally harvested plants and
plant products and the emissions of hazardous materials. We work closely with our suppliers to ensure compliance with the
laws and regulations in these areas.
We believe that we currently conduct, and in the past have conducted, our activities and operations in substantial
compliance with applicable laws and regulations relating to the environment and protection of natural resources, and believe that
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