Lumber Liquidators 2014 Annual Report Download - page 24

We are involved in a number of legal proceedings and, while we cannot predict the outcomes of such
proceedings and other contingencies with certainty, some of these outcomes could adversely affect our
business, financial condition and results of operations.
We are, or may become, involved in legal proceedings, government and agency investigations, and
consumer, employment, tort and other litigation (see discussion of Legal Proceedings in Item 3 of this Report
and Note 10 to the consolidated financial statements included in Item 8 of this Report). We cannot predict
with certainty the outcomes of these legal proceedings. The outcome of some of these legal proceeding could
require us to take, or refrain from taking, actions which could negatively affect our operations or could require
us to pay substantial amounts of money adversely affecting our financial condition and results of operations.
Additionally, defending against lawsuits and legal proceedings may involve significant expense and diversion
of management’s attention and resources. Negative publicity surrounding such legal proceedings may also
harm our reputation and adversely impact our business and results.
Increasing our net sales and profitability depends substantially on our ability to open new stores and is
subject to many unpredictable factors.
As of December 31, 2014, we had 352 stores throughout the United States and Canada, 166 of which we
opened after January 1, 2010. We plan to open a significant number of new stores during each of the next
several years. This growth strategy and the investment associated with the development of each new store
may cause our operating results to fluctuate and be unpredictable or decrease our profits. Our future results
will depend on various factors, including the following:
• the successful selection of new markets and store locations;
• the implementation of and results generated by our new showroom format;
• our ability to negotiate leases on acceptable terms;
• management of store opening costs;
• the quality of our operations;
• consumer recognition of the quality of our products;
• our ability to meet customer demand;
• the continued popularity of hardwood flooring; and
• general economic conditions.
In addition, the following may impact the net sales and performance of our new stores compared to
prior years:
• as we open more stores, our rate of expansion relative to the size of our store base will decline;
• we may not be able to identify suitable store locations in markets into which we seek to expand and
may not be able to open as many stores as planned;
• consumers in new markets may be less familiar with our brands, and we may need to increase brand
awareness in those markets through additional investments in advertising;
• new stores may have higher construction, occupancy or operating costs, or may have lower average
store net sales, than stores opened in the past;
• we may experience difficulties, delays or failures in obtaining the necessary licenses, permits or
other approvals necessary to open and operate particular store locations;
• we may incur higher maintenance costs than in the past;
• newly opened stores may not succeed or may reach profitability more slowly than we expect, and
the ramp-up to profitability may become longer in the future as we enter more mid-sized and smaller
markets and add stores to larger markets where we already have a presence; and
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