Lumber Liquidators 2014 Annual Report Download - page 3

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April 10, 2015
Dear Shareholders,
Lumber Liquidators had one of its most important years in 2014 as we completed several strategic initiatives and
made significant progress on others. The hard work we put into our East Coast distribution center paid off, and as of
early 2015, that facility became fully operational. Our store expansion and showroom re-designs are already paying
dividends. We made a comprehensive assessment of our value proposition and implemented marketing changes that
have improved our customer metrics. We are so proud of our employees for their persistence and dedication during
the headwinds of 2014, and we are resolved to maintain that dedication amidst recent trials in 2015. To be sure, the
strategic investments we made in 2014 will be instrumental in navigating what has already been a demanding year.
We remain confident that we have a superior product, great customers, dedicated employees, a growing presence in
new markets, an improving infrastructure and a value proposition to customers that is unmatched in the marketplace.
The Lumber Liquidators team is more dedicated than ever to delivering improvements and reaffirming our
competitive advantage through a commitment to investing in our value proposition.
2014 Financial Highlights
In 2014, we focused on infrastructure investment, enhanced customer perception and store expansion, all of which
will help propel growth. Despite the headwinds of 2014, our team delivered a solid year:
Net sales growth of 4.7% to $1.05 billion;
34 new stores, bringing our total to 352 stores in 46 states and Canada; and
Fully diluted earnings per share of $2.31.
Commitment to our Multi-Year Strategic Initiatives
Our team remained committed to our multi-year initiatives throughout 2014, implementing our strategic initiatives
and enhancing our value proposition, including:
Optimized Supply Chain. Throughout 2014, Lumber Liquidators invested in infrastructure to strengthen
and optimize our sourcing and supply chain. We opened our first distribution facility on the West Coast and
completed our million square foot East Coast distribution center. These facilities will support our
continued expansion and speed to market, and we believe will result in improvements in both our margin
and inventory management.
Implemented New Marketing Initiatives. In 2014, Lumber Liquidators focused on improving consumer
metrics through a number of marketing initiatives aimed at broadening our customer base and perception.
Through a number of modifications to our promotional focus, advertising cadence and outstanding
advertised retail price points, we gained ground in the marketplace. Shortly after making these changes, we
saw improvements in our demand metrics and conversion of interest into invoiced sales.
Expanded Stores and Services. Lumber Liquidators remained dedicated to enhancing the customer
experience through the continued rollout of stores and showroom enhancements. We are two years into a
multi-year plan to remodel existing stores. At the end of 2014, approximately 29% of our 352 stores
featured our expanded showroom format. The new look and feel continues to yield dividends and
outperforms our historical model. Additionally, we expanded installation services provided by Lumber
Liquidators to 85 stores by the end of the year.