Lumber Liquidators 2011 Annual Report Download - page 17

of 1934 and are intended to come within the safe harbor protection provided by those sections. These statements, which
involve risks and uncertainties, relate to matters such as sales growth, comparable store net sales, impact of cannibalization,
price changes, earnings performance, stock-based compensation expense, margins, return on invested capital, strategic
direction, the demand for our products and store openings. We have used words such as “may,” “will,” “should,” “expects,”
“intends,” “plans,” “anticipates,” “believes,” “thinks,” “estimates,” “seeks,” “predicts,” “could,” “projects,” “potential” and
other similar terms and phrases, including references to assumptions, in this report to identify forward-looking statements.
These forward-looking statements are made based on expectations and beliefs concerning future events affecting us and are
subject to uncertainties, risks and factors relating to our operations and business environments, all of which are difficult to
predict and many of which are beyond our control, that could cause our actual results to differ materially from those matters
expressed or implied by these forward-looking statements. These risks and other factors include those listed in this Item 1A.
“Risk Factors,” and elsewhere in this report.
When considering these forward-looking statements, you should keep in mind the cautionary statements in this report
and the documents incorporated by reference. New risks and uncertainties arise from time to time, and we cannot predict
those events or how they may affect us. There may also be other factors that we cannot anticipate or that are not described in
this report that could cause results to differ materially from our expectations. Forward-looking statements speak only as of
the date they are made and we assume no obligation to update them after the date of this report as a result of new
information, future events or subsequent developments, except as required by the federal securities laws.
Risks Related to Economic Factors and Our Industry
Deterioration in economic conditions may adversely impact demand for our products, reduce access to credit and cause
our customers and others with which we do business to suffer financial hardship, all of which could adversely impact our
business, results of operations, financial condition and cash flows.
Our business, financial condition and results of operations have and may continue to be affected by various economic
factors. Deterioration in the current economic environment could lead to reduced consumer and business spending, including
by our customers. It may also cause customers to shift their spending to products we either do not sell or do not sell as
profitably. Further, reduced access to credit may adversely affect the ability of consumers to purchase our products. This
potential reduction in access to credit may include our ability to offer customers credit card financing through third-party
credit providers on terms similar to those offered previously, or at all. In addition, economic conditions, including decreased
access to credit, may result in financial difficulties leading to restructurings, bankruptcies, liquidations and other unfavorable
events for our customers, suppliers and other service providers. If such conditions deteriorate, our industry, business and
results of operations may be severely impacted.
The hardwood flooring industry depends on the economy, home remodeling activity, the homebuilding industry and other
important factors.
The hardwood flooring industry is highly dependent on the remodeling of existing homes and new home construction.
In turn, remodeling and new home construction depend on a number of factors which are beyond our control, including
interest rates, tax policy, employment levels, consumer confidence, credit availability, real estate prices, demographic trends,
weather conditions, natural disasters and general economic conditions. For example, discretionary consumer spending could
be limited, spending on remodeling of existing homes could be reduced and purchases of new homes could decline if:
• the national economy or any regional or local economy where we operate weakens;
• interest rates rise;
• credit becomes less available;
• regions where we operate experience unfavorable demographic trends;
• fuel costs or utility expenses increase; or
• home price depreciation continues.
Any one or a combination of these factors could result in decreased demand for hardwood flooring, in remodeled and
new homes, which would harm our business and operating results.
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