Lumber Liquidators 2013 Annual Report Download - page 62

Download and view the complete annual report

Please find page 62 of the 2013 Lumber Liquidators annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 80

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80

Lumber Liquidators Holdings, Inc.
Notes to Consolidated Financial Statements
(amounts in thousands, except share data and per share amounts)
NOTE 4. REVOLVING CREDIT AGREEMENT
A revolving credit agreement (the ‘‘Revolver’’) providing for borrowings up to $50,000 is available to
the Company through expiration on February 21, 2017. The Revolver is primarily available to fund inventory
purchases, including the support of up to $10,000 for letters of credit, and for general operations. As of
December 31, 2013, the Revolver supported $2,289 of letters of credit and there were no outstanding
borrowings against the Revolver. As of December 31, 2012, there were no outstanding commitments or
borrowings against the Revolver. The Revolver is secured by the Company’s inventory, has no mandated
payment provisions and 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. The Company was in compliance with these financial covenants at
December 31, 2013.
NOTE 5. LEASES
The Company has operating leases for its stores, Corporate Headquarters, Hampton Roads and West
Coast distribution centers, supplemental office facilities and certain equipment. The store location leases are
operating leases and generally have five-year base periods with one or more five-year renewal periods. The
Corporate Headquarters has an operating lease with a base term running through December 31, 2019. The
Hampton Roads distribution centers have operating leases with varied expiration dates ending by March 31,
2015. The West Coast distribution center has an operating lease with a base term running through October 31,
2024.
As of December 31, 2013, 2012 and 2011, the Company leased the Corporate Headquarters, which
includes a store location, and 29, 27 and 25 of its locations, representing 9.4%, 9.7% and 9.5% of the total
number of store leases in operation, respectively, from entities controlled by the Company’s founder and
current chairman of the Board of Directors (‘‘Controlled Companies’’).
Rental expense is as follows:
Year Ended December 31,
2013 2012 2011
Rental expense ............................ $21,874 $18,826 $16,575
Rental expense related to Controlled Companies ..... 2,895 2,725 2,718
The future minimum rental payments under non-cancellable operating leases, segregating Controlled
Companies leases from all other operating leases, were as follows at December 31, 2013:
Operating Leases
Controlled Companies
Store
Leases
Distribution
Centers & Other
Leases
Total
Operating
Leases
Store
Leases
Headquarters
Lease
2014 ...................... $1,684 $1,198 $17,886 $ 2,908 $ 23,676
2015 ...................... 1,396 1,234 16,500 2,320 21,450
2016 ...................... 938 1,271 13,866 1,953 18,028
2017 ...................... 629 1,309 10,534 1,898 14,370
2018 ...................... 526 1,348 6,450 1,936 10,260
Thereafter .................. 1,248 1,388 8,775 12,302 23,713
Total minimum lease payments .... $6,421 $7,748 $74,011 $23,317 $111,497
52