Lumber Liquidators 2013 Annual Report Download - page 45

leasehold improvements for the West Coast distribution facility. In 2011, net cash used in investing activities
included $4.7 million of cash paid to acquire certain assets in China.
Financing Activities. Net cash used by financing activities was $7.4 million in 2013 and $31.9 million
in 2012. We used cash of $34.8 million and $49.4 million in 2013 and 2012, respectively, to repurchase our
common stock, primarily under our stock repurchase program initiated in February 2012. Stock option
exercises provided $27.3 million, $17.5 million and $4.8 million in 2013, 2012 and 2011, respectively.
Revolving Credit Agreement
A revolving credit agreement (the ‘‘Revolver’’) providing for borrowings up to $50.0 million is available
to us through expiration on February 21, 2017. During 2013, 2012 and 2011, we did not borrow against the
Revolver. At December 31, 2013, the Revolver supported $2.3 million of letters of credit. At December 31,
2012, there were no outstanding commitments under letters of credit. The Revolver is primarily available to
fund inventory purchases, including the support of up to $10.0 million for letters of credit, and for general
operations. The Revolver is secured by our inventory, has no mandated payment provisions and we pay a fee
of 0.1% per annum, subject to adjustment based on certain financial performance criteria, on any unused
portion of the Revolver. Amounts outstanding under the Revolver would be subject to an interest rate of
LIBOR plus 1.125%, subject to adjustment based on certain financial performance criteria. The Revolver has
certain defined covenants and restrictions, including the maintenance of certain defined financial ratios. We
were in compliance with these financial covenants at December 31, 2013.
Related Party Transactions
See the discussion of related party transactions in Note 5 and Note 10 to the consolidated financial
statements included in Item 8 of this report and within Certain Relationships and Related Transactions, and
Director Independence in Item 13 of this report.
Contractual Commitments and Contingencies
Our significant contractual obligations and commitments as of December 31, 2013 are summarized in the
following table:
Payments Due by Period
Total
Less Than
1 Year
1to3
Years
3to5
Years 5+ Years
(in thousands)
Contractual obligations
Operating lease obligations
(1)
..... $111,497 $23,676 $39,478 $24,630 $23,713
Purchase obligations
(2)
......... 35,873 35,873 — — —
Total contractual obligations ..... $147,370 $59,549 $39,478 $24,630 $23,713
(1)
Included in this table is the base period or current renewal period for our operating leases. The operating
leases generally contain varying renewal provisions.
(2)
Purchase obligations represent capital expenditure commitments for the construction of the East Coast
distribution center.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements or other financing activities with special-purpose
entities.
Inflation
Inflationary factors such as increases in the cost of our product and overhead costs may adversely affect
our operating results. Although we do not believe that inflation has had a material impact on our financial
position or results of operations to date, a high rate of inflation in the future may have an adverse effect on
our ability to maintain current levels of gross profit and SG&A expenses as a percentage of net sales if the
selling prices of our products do not increase with these increased costs.
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