Lumber Liquidators 2010 Annual Report Download - page 25

Risks Relating to Our Common Stock
Tom Sullivan has the ability to exercise significant influence over us and his interests in our business may be different
than yours.
At December 31, 2010, Tom controlled approximately 13% of our outstanding common stock. Accordingly, he is able
to exercise significant influence over our business policies and affairs and all matters requiring a stockholders’ vote,
including the composition of our board of directors, the adoption of amendments to our certificate of incorporation and the
approval of mergers or sales of all or substantially all of our assets. This concentration of ownership could also delay, defer
or even prevent a change in control of our company and may make some transactions more difficult or impossible without
his support. Tom’s interests may conflict with yours, and he may seek to cause us to take courses of action that, in his
judgment, could enhance his investment in us, but which might involve risks to holders of our common stock or be harmful
to our business or other investors. In addition, the timing and volume of any transactions involving our common stock by
Tom may, among other things, cause fluctuations in the price of our common stock.
Our anti-takeover defense provisions may cause our common stock to trade at market prices lower than it might absent
such provisions.
Our certificate of incorporation and bylaws contain several provisions that may make it more difficult or expensive for a
third party to acquire control of us without the approval of our board of directors. These provisions include a staggered
board, the availability of “blank check” preferred stock, provisions restricting stockholders from calling a special meeting of
stockholders or requiring one to be called or from taking action by written consent and provisions that set forth advance
notice procedures for stockholders’ nominations of directors and proposals of topics for consideration at meetings of
stockholders. Our certificate of incorporation also 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, the stock market may experience 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.
Our quarterly operating results may fluctuate significantly and could fall below the expectations of research analysts and
investors due to various factors.
Our quarterly operating results may fluctuate significantly because of various factors, including:
• changes in comparable store net sales and customer visits, including as a result of declining consumer confidence
or the introduction of new products;
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