Lumber Liquidators 2011 Annual Report Download - page 4

•Expanding Our Footprint. In 2011, we opened a record 40 stores, including our first seven stores in Canada,
serving the greater Toronto area. As of year-end, we operated 256 stores across 46 states and Canada. We continue
to have a uniquely profitable new store model, with flexible lease terms and a low cost structure. In 2012, we
expect to open approximately 20 to 25 stores, which is a slower pace that will allow us to optimize total market
returns. We intend to leverage our enhanced site selection processes and integrated real estate strategy to balance
the mix of new stores, relocations, remodels and assortment expansion to maximize our return on investment.
Poised for Multi-Year Growth
The Company has invested significant capital in recent years to prepare for the next phase of our growth. With those
investments completed, we are now positioned for a significant return on that investment. As we move forward, we remain
committed to our value proposition of price, selection, quality, availability and people, and we will continue to invest in
protecting and nurturing that value proposition for the long-term. Lumber Liquidators continues to have exciting
opportunities to expand domestically and internationally through even stronger retail operations, broadened logistics and
continued direct sourcing. The momentum we built in the past year, particularly in the second half of 2011, has our team
focused on growth and committed to the continuous improvement of our operations.
Looking at our strategy going forward in 2012, our team is focused on five key strategic initiatives:
• Growing revenue;
• Continuing to improve our sourcing;
• Optimizing our supply chain;
• Driving traffic through advertising reach and frequency; and,
• Developing the best people to serve our customers.
In early 2012, with our team focused on these strategic initiatives, our Board of Directors authorized a $50 million share
repurchase program. While we intend to maintain a conservative balance sheet, we have completed the most significant
capital investments in our infrastructure and systems and we expect that our proven store model will generate substantial free
cash flow in the future. Our share repurchase program marks an important step in returning value to our shareholders and
demonstrates our confidence in the business.
We want to take the opportunity to thank Jeff Griffiths for his significant contributions to Lumber Liquidators over the
past five years while he served as Chief Executive Officer and a member of the Board of Directors. Jeff helped the Company
establish a solid infrastructure and instilled sound retail principles throughout our organization to support our operations as a
public company. He also helped develop the strong management team we have in place today. We appreciate his leadership
of Lumber Liquidators through a period of substantial growth and transformation.
We remain confident in the strength of our unique value proposition, our profitable store model and opportunities for
growth in net sales and operating margin. We believe our financial position is solid and our operations are aligned to the
meet the needs of a value conscious consumer and take share in a fragmented market. We have a strong team in place with a
focus on long-term growth to deliver value to our customers and shareholders. Overall, we are well positioned to compete
effectively in a highly fragmented market and are excited about our future opportunities.
We want to thank all of our associates in the U.S., Canada and Shanghai for their hard work and dedication, as well as
our customers, vendors and shareholders for their continued support. We look forward to continuing on this exciting path
together.
Tom Sullivan Robert M. Lynch
Founder and Chairman of the Board President and Chief Executive Officer