Lumber Liquidators 2015 Annual Report Download - page 52

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At December 31, 2015, the Company had approximately $67.2 million available to borrow under the
Revolving Credit Facility, $20.0 million in outstanding borrowings and supported $2.8 million and
$2.7 million of letters of credit at December 31, 2015 and 2014, respectively.
Related Party Transactions
See the discussion of related party transactions in Note 5 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, 2015 are summarized in the
following table:
Payments Due by Period
Total
Less Than
1 Year
1to3
Years
3to5
Years 5+ Years
Contractual obligations
Operating lease obligations
(1)
............. $131,904 $30,285 $48,729 $30,841 $22,049
Purchase obligations
(2)
.................. 436 436 — — —
Borrowings on revolving credit facility ....... 20,000 — — 20,000 —
Total contractual obligations ............ $152,340 $30,721 $48,729 $50,841 $22,049
(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.
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.
Other Matters
Legal Matters
We are involved in various lawsuits, claims, investigations, and proceedings. See the discussion of
commitments and contingencies in Note 10 to the consolidated financial statements included in Item 8 of this
report for a discussion of these matters.
Indoor Air Quality Testing Program Results
In early March 2015, we began voluntarily offering free indoor air quality screening to certain of our
flooring customers, predominately those who had purchased laminate flooring sourced from China, to address
customer questions about the air quality in their homes. Home air test kits were selected as a quick, effective
way to measure the total level of formaldehyde in indoor air from all sources, not just from the flooring.
We retained Building Health Check, LLC (‘‘BHC’’) to coordinate our indoor air quality testing program.
The customer receives the home test kit from BHC and controls the sampling process, with clear instructions
on how to conduct the sampling. The samples are then sent by the customer to EDLab at Pure Air Control
Services, Inc. (‘‘EDLab’’) where EDLab then forwards them to one of EDLab’s partner laboratories, which are
all accredited for formaldehyde analysis by the American Industrial Hygiene Association’s Laboratory
42