Lumber Liquidators 2009 Annual Report Download - page 3

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April 7, 2010
Dear Shareholders,
Our proven business model, unique value proposition and strong team performance allowed us to achieve
excellent results in 2009 even as consumer demand for larger ticket home improvement projects reached
historically low levels. Through our knowledgeable and service-oriented sales force, we were able to deliver value
to our customers in the form of price, selection, quality and availability. We believe that this value proposition,
which is fundamental to our business, resonated with consumers. Furthermore, in 2009, we invested in the
infrastructure supporting our value proposition, continued our store base expansion and strengthened our
commitment to product assortment and in-stock inventory levels. As a result, we are well positioned to meet
consumer demand for value across a broad range of retail price points. We believe we have passed through the
most difficult macroeconomic challenges facing the current residential wood flooring industry, and we look
forward to the opportunities of the coming year.
2009 Financial Highlights
In 2009, through our powerful store model and the coordinated efforts of our entire organization, we
continued to gain market share in the highly fragmented wood flooring market and realized notable financial
achievements. Specifically, we are proud of the following financial accomplishments for the full year:
• Net sales growth of 12.9% to $544.6 million;
• Increase in our calculation of the number of customers invoiced at our comparable stores of 12.4%;
• Gross margin expansion of 90 basis points to 35.7%;
• Operating margin expansion of 30 basis points to 8.0%; and
• Fully-diluted earnings per share of $0.97.
Positioned for Success in 2010 and Beyond
Throughout 2009, we took steps to further strengthen our foundation and position us for growth in 2010 and
beyond. We continued to invest in our marketing, infrastructure and store operations to support our store base
expansion and gain market share. Overall, we enhanced our value proposition, improved customer satisfaction
and strengthened our competitive position through the following:
•Store Expansion. We opened 36 new locations, entering 24 new markets and expanding our presence
in 12 existing markets. Our investment in store expansion allowed us to capture additional market share
even in the difficult macroeconomic environment that we encountered throughout the year. We
continued to be extremely pleased with the performance of our new stores as our low cost, flexible store
model enables us to quickly generate a strong return on capital when opening new locations. We ended
2009 with 186 stores operating in 45 states.
•Store Operations. As more store associates participated in our standardized training program, and we
expanded our regional management, we continued to develop and improve the knowledge and customer
service focus of our sales force.
•Merchandising. We enhanced our merchandising strategies, including product planning initiatives,
which improved coordination with our vendor-mills.