Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Feb. 25, 2016 | Jun. 30, 2015 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | Lumber Liquidators Holdings, Inc. | ||
Entity Central Index Key | 1,396,033 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 27,088,460 | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 542.6 | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Current Assets: | ||
Cash and Cash Equivalents | $ 26,703 | $ 20,287 |
Merchandise Inventories | 244,402 | 314,371 |
Prepaid Expenses | 5,931 | 5,575 |
Refundable Income Taxes | 19,596 | |
Deferred Tax Asset | 21,045 | 8,901 |
Other Current Assets | 5,111 | 8,143 |
Total Current Assets | 322,788 | 357,277 |
Property and Equipment, net | 121,997 | 124,867 |
Goodwill | 9,693 | 9,693 |
Other Assets | 1,724 | 1,625 |
Total Assets | 456,202 | 493,462 |
Current Liabilities: | ||
Accounts Payable | 55,247 | 80,303 |
Customer Deposits and Store Credits | 33,771 | 34,943 |
Accrued Compensation | 6,057 | 3,693 |
Sales and Income Tax Liabilities | 3,914 | 7,472 |
Other Current Liabilities | 28,755 | 17,836 |
Total Current Liabilities | 127,744 | 144,247 |
Other Long-Term Liabilities | 20,252 | 6,603 |
Deferred Tax Liability | 10,638 | 10,558 |
Revolving Credit Facility | 20,000 | |
Total Liabilities | 178,634 | 161,408 |
Stockholders' Equity: | ||
Common Stock ($0.001 par value; 35,000,000 shares authorized; 27,088,460 and 27,069,307 shares outstanding, respectively) | 30 | 30 |
Treasury Stock, at cost (2,824,814 and 2,816,780 shares, respectively) | (138,987) | (138,692) |
Additional Capital | 180,590 | 177,479 |
Retained Earnings | 237,600 | 294,033 |
Accumulated Other Comprehensive Loss | (1,665) | (796) |
Total Stockholders' Equity | 277,568 | 332,054 |
Total Liabilities and Stockholders' Equity | $ 456,202 | $ 493,462 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 |
Statement Of Financial Position [Abstract] | ||
Common Stock, par value | $ 0.001 | $ 0.001 |
Common Stock, shares authorized | 35,000,000 | 35,000,000 |
Common Stock, shares outstanding | 27,088,460 | 27,069,307 |
Treasury Stock, shares | 2,824,814 | 2,816,780 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Statement [Abstract] | |||
Net Sales | $ 978,776 | $ 1,047,419 | $ 1,000,240 |
Cost of Sales | 699,918 | 629,252 | 589,257 |
Gross Profit | 278,858 | 418,167 | 410,983 |
Selling, General and Administrative Expenses | 362,051 | 314,094 | 284,960 |
Operating (Loss) Income | (83,193) | 104,073 | 126,023 |
Other Expense (Income) | 234 | 490 | (442) |
(Loss) Income Before Income Taxes | (83,427) | 103,583 | 126,465 |
Income Tax (Benefit) Expense | (26,994) | 40,212 | 49,070 |
Net (Loss) Income | $ (56,433) | $ 63,371 | $ 77,395 |
Net (Loss) Income per Common Share Basic | $ (2.08) | $ 2.32 | $ 2.82 |
Net (Loss) Income per Common Share Diluted | $ (2.08) | $ 2.31 | $ 2.77 |
Weighted Average Common Shares Outstanding: | |||
Basic | 27,082,299 | 27,264,882 | 27,484,790 |
Diluted | 27,082,299 | 27,485,852 | 27,914,322 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statement of Comprehensive Income [Abstract] | |||
Net (Loss) Income | $ (56,433) | $ 63,371 | $ 77,395 |
Foreign Currency Translation Adjustments | (869) | (234) | (635) |
Total Other Comprehensive (Loss) Income | (869) | (234) | (635) |
Comprehensive (Loss) Income | $ (57,302) | $ 63,137 | $ 76,760 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Common Stock [Member] | Treasury Stock [Member] | Additional Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Total |
Beginning Balance at Dec. 31, 2012 | $ 29 | $ (50,552) | $ 131,724 | $ 153,267 | $ 73 | $ 234,541 |
Beginning Balance (in shares) at Dec. 31, 2012 | 27,214,144 | 1,719,706 | ||||
Stock-Based Compensation Expense | 5,471 | $ 5,471 | ||||
Exercise of Stock Options (in shares) | 718,665 | 718,665 | ||||
Exercise of Stock Options | $ 1 | 10,254 | $ 10,255 | |||
Excess Tax Benefits on Stock Option Exercises | 17,132 | 17,132 | ||||
Release of Restricted Shares (in shares) | 38,362 | |||||
Common Stock Repurchased (in shares) | 413,601 | |||||
Common Stock Repurchased (in shares) | (413,601) | |||||
Common Stock Repurchased | $ (34,830) | (34,830) | ||||
Translation Adjustment | (635) | (635) | ||||
Net (Loss) Income | 77,395 | 77,395 | ||||
Ending Balance at Dec. 31, 2013 | $ 30 | $ (85,382) | 164,581 | 230,662 | (562) | 309,329 |
Ending Balance (in shares) at Dec. 31, 2013 | 27,557,570 | 2,133,307 | ||||
Stock-Based Compensation Expense | 5,744 | $ 5,744 | ||||
Exercise of Stock Options (in shares) | 149,707 | 149,707 | ||||
Exercise of Stock Options | 3,150 | $ 3,150 | ||||
Excess Tax Benefits on Stock Option Exercises | 4,004 | 4,004 | ||||
Release of Restricted Shares (in shares) | 45,503 | |||||
Common Stock Repurchased (in shares) | 683,473 | |||||
Common Stock Repurchased (in shares) | (683,473) | |||||
Common Stock Repurchased | $ (53,310) | (53,310) | ||||
Translation Adjustment | (234) | (234) | ||||
Net (Loss) Income | 63,371 | 63,371 | ||||
Ending Balance at Dec. 31, 2014 | $ 30 | $ (138,692) | 177,479 | 294,033 | (796) | 332,054 |
Ending Balance (in shares) at Dec. 31, 2014 | 27,069,307 | 2,816,780 | ||||
Stock-Based Compensation Expense | 4,080 | 4,080 | ||||
Excess Tax Benefits on Stock Option Exercises | (969) | (969) | ||||
Release of Restricted Shares (in shares) | 19,153 | |||||
Common Stock Repurchased (in shares) | 8,034 | |||||
Common Stock Repurchased | $ (295) | (295) | ||||
Translation Adjustment | (869) | (869) | ||||
Net (Loss) Income | (56,433) | (56,433) | ||||
Ending Balance at Dec. 31, 2015 | $ 30 | $ (138,987) | $ 180,590 | $ 237,600 | $ (1,665) | $ 277,568 |
Ending Balance (in shares) at Dec. 31, 2015 | 27,088,460 | 2,824,814 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash Flows from Operating Activities: | |||
Net (Loss) Income | $ (56,433) | $ 63,371 | $ 77,395 |
Adjustments to Reconcile Net (Loss) Income to Net Cash Provided by Operating Activities: | |||
Depreciation and Amortization | 17,392 | 14,714 | 11,666 |
Deferred Income Taxes | (12,064) | (152) | (846) |
Stock-Based Compensation Expense | 3,941 | 5,593 | 5,974 |
Impairment Charges related to Property and Equipment | 4,392 | ||
Inventory Lower of Cost or Market Adjustments | 26,162 | ||
Deconsolidation of Variable Interest Entity | 1,457 | ||
Changes in Operating Assets and Liabilities: | |||
Merchandise Inventories | 42,773 | (62,140) | (45,834) |
Accounts Payable | (21,450) | 21,478 | (15) |
Customer Deposits and Store Credits | (1,075) | 12,623 | (3,354) |
Prepaid Expenses and Other Current Assets | (18,385) | (1,836) | (257) |
Other Assets and Liabilities | 22,494 | 3,436 | 8,271 |
Net Cash Provided by Operating Activities | 9,204 | 57,087 | 53,000 |
Cash Flows from Investing Activities: | |||
Purchases of Property and Equipment | (22,478) | (71,138) | (28,585) |
Net Cash Used in Investing Activities | (22,478) | (71,138) | (28,585) |
Cash Flows from Financing Activities: | |||
Payments for Stock Repurchases | (295) | (53,310) | (34,830) |
Proceeds from the Exercise of Stock Options | 3,150 | 10,255 | |
Excess Tax Benefit from Stock-Based Compensation | 4,004 | 17,132 | |
Borrowings on Revolving Credit Facility | 39,000 | 53,000 | |
Payments on Revolving Credit Facility | (19,000) | (53,000) | |
Net Cash Provided by (Used in) Financing Activities | 19,705 | (46,156) | (7,443) |
Effect of Exchange Rates on Cash and Cash Equivalents | (15) | (140) | (505) |
Net Increase (Decrease) in Cash and Cash Equivalents | 6,416 | (60,347) | 16,467 |
Cash and Cash Equivalents, Beginning of Year | 20,287 | 80,634 | 64,167 |
Cash and Cash Equivalents, End of Year | $ 26,703 | $ 20,287 | $ 80,634 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 1. Summary of Significant Accounting Policies Nature of Business Lumber Liquidators Holdings, Inc. and its direct and indirect subsidiaries (collectively and, where applicable, individually, the “Company”) engage in business as a multi-channel specialty retailer of hardwood flooring, and hardwood flooring enhancements and accessories, operating as a single operating segment. The Company offers an extensive assortment of exotic and domestic hardwood species, engineered hardwood, laminate and resilient vinyl flooring direct to the consumer. The Company also features the renewable flooring products, bamboo and cork, and provides a wide selection of flooring enhancements and accessories, including moldings, noise-reducing underlay, adhesives and flooring tools. The Company also provides in-home delivery and installation services to certain of its customers. The Company sells primarily to homeowners or to contractors on behalf of homeowners through a network of 366 store locations in primary or secondary metropolitan areas in 46 states and eight store locations in Canada at December 31, 2015. In addition to the store locations, the Company’s products may be ordered, and customer questions/concerns addressed, through both its call center in Toano, Virginia, and its website, www.lumberliquidators.com. The Company finishes the majority of the Bellawood products on its finishing lines in Toano, Virginia, which along with the call center, corporate offices, and a distribution center, represent the “Corporate Headquarters.” Organization and Basis of Financial Statement Presentation The consolidated financial statements of Lumber Liquidators Holdings, Inc., a Delaware corporation, include the accounts of its wholly owned subsidiaries. All significant intercompany transactions have been eliminated in consolidation. In 2014, the Company entered into an arrangement to begin to vertically integrate its domestic hardwood supply to feed its finishing lines. During the quarter ended June 30, 2015, the Company decided to discontinue certain of these vertical integration initiatives, which were previously consolidated as a variable interest entity, and terminated its prior arrangement. As a result, the Company has recorded a charge of $1,457 in cost of sales in its consolidated statements of income upon deconsolidation of the variable interest entity. The charge was measured as the difference between the fair value of the assets received upon termination and the carrying value of the related net assets. In order to conform to current year presentation, the Company has reclassified the deferred tax asset on the accompanying December 31, 2014 consolidated balance sheet to a separate line item from other current assets. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Cash and Cash Equivalents The Company had cash equivalents of $ 8,551 and $12,700 at December 31, 2015 and 2014, respectively. The Company considers all highly liquid investments with a maturity date of three months or less when purchased to be cash equivalents, of which there was nil at December 31, 2015 and 2014, respectively. The Company accepts a range of debit and credit cards, and these transactions are generally transmitted to a bank for reimbursement within 24 hours. The payments due from the banks for these debit and credit card transactions are generally received, or settled, within 24 to 48 hours of the transmission date. The Company considers all debit and credit card transactions that settle in less than seven days to be cash and cash equivalents. Amounts due from the banks for these transactions classified as cash and cash equivalents totaled $ 8,551 and $12,700 at December 31, 2015 and 2014, respectively. Credit Programs Credit is offered to the Company’s customers through a proprietary credit card, underwritten by a third party financial institution and generally at no recourse to the Company. A credit line is offered to the Company’s professional customers through the Lumber Liquidators Commercial Credit Program. This commercial credit program is underwritten by a third party financial institution, generally with no recourse to the Company. As part of the credit program, the Company’s customers may tender their Lumber Liquidators credit card to receive installation services provided by the Company’s third party installation provider, who is responsible for all credits and program fees for the related transactions. The Company has agreed to indemnify the financial institution against any losses related to these credits or fees. There are no maximum potential future payments under the guarantee. The Company is able to seek recovery from the installation provider of any amounts paid on its behalf. The Company believes that the risk of significant loss from the guarantee of these obligations is remote. Fair Value of Financial Instruments The carrying amounts of financial instruments such as cash and cash equivalents, accounts payable and other liabilities approximate fair value because of the short-term nature of these items and the carrying amount of obligations under our revolving credit facility approximate fair value due to the variable rate of interest . Of these financial instruments, the cash equivalents are classified as Level 1 as defined in the Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) 820 fair value hierarchy. Certain non-financial assets, including property and equipment, have been written down and measured in the consolidated financial statements at fair value. Fair value was based on expected future cash flows using Level 3 inputs under ASC 820. Merchandise Inventories The Company values merchandise inventories at the lower of cost or market value. Merchandise cost is determined using the average cost method. All of the hardwood flooring purchased from vendors is either prefinished or unfinished, and in immediate saleable form. The Company adds the finish to, and boxes, various species of unfinished product, to produce certain proprietary products, primarily Bellawood, at its finishing facility. These finishing and boxing costs are included in the average unit cost of related merchandise inventory. The Company maintains an inventory reserve for loss or obsolescence based on historical results and current sales trends. This reserve was $ 26,882 and $3,242 at December 31, 2015 and 2014, respectively. On May 7, 2015, the Company suspended the sale of laminate products sourced from China after certain allegations were made regarding these products. This inventory has been held in stores and distribution centers as the Company has continued to evaluate and assess alternatives for the disposition of these products and the potential implications these alternatives could have on the net realizable value of the laminate flooring inventory sourced from China. During the quarter ended June 30, 2015, the Company recorded a charge of approximately $339 related to its laminate flooring sourced from China, primarily for flooring with less than job-lot quantities on hand as the Company did not intend to purchase additional quantities of such product. During the quarter ended December 31, 2015, in connection with changes in the executive management team and based on the most recent evaluation of the alternatives for disposal, which considered strategic and operational considerations including potential distractions these products could have on the Company’s employees and business, the Company determined that it would not sell the current inventory of laminate flooring sourced from China in its stores . As a result of this decision, the Company recorded a charge to reduce the remaining carrying value of this laminate flooring and related moldings to its net realizable value of zero. The Company recorded total charges related to laminate flooring sourced from China of $22,499 in cost of sales for the year ended December 31, 2015 in the accompanying consolidated statements of operations. The Company is considering its options for disposal of this product. Costs related to shipping and disposal will be recognized as incurred. During the quarter ended June 30, 2015, the Company appointed its founder as acting chief executive officer. In connection with this and other management changes, the Company determined that it would refocus on its core business and it would not pursue an expansion into the tile flooring business in the near term. In 2014, the Company had begun to sell tile flooring and related accessories in three stores as a potential growth opportunity. As a result, in the second quarter of 2015, the Company recorded a lower of cost or market adjustment of $3,663 for certain tile flooring and related accessories, which is recorded in cost of sales for the year ended December 31, 2015 in the accompanying consolidated statements of operations. Impairment of Long-Lived Assets The Company evaluates potential impairment losses on long-lived assets used in operations when events and circumstances indicate that the assets may be impaired, and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amounts of those assets. If impairment exists and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amount of those assets, an impairment loss is recorded based on the difference between the carrying value and fair value of the assets. In the third quarter of 2015, the Company finalized the termination of its agreement relating to certain vertical integration initiatives which changed the Company’s expectations of future cash flows from related long-lived assets. As a result, the Company tested certain long-lived assets for impairment. The Company recorded a $3,043 impairment charge within selling, general and administrative (“SG&A”) expenses for the three months ended September 30, 3015 in its accompanying consolidated statements of income. The impairment charge was measured under an income approach utilizing forecasted discounted cash flows. Fair value was based on expected future cash flows using Level 3 inputs under ASC 820. The most significant unobservable input used in the fair value analysis relates to the estimated sales price of the long-lived assets. In the second quarter of 2015, the Company concluded that its decision not to pursue an expansion into the tile flooring business in the near term was a triggering event requiring assessment of recoverability for certain of its long-lived assets. As a result, the Company tested the long-lived assets for impairment related to its store locations selling a significant assortment of tile flooring. In the second quarter of 2015, the Company recorded a $1,350 impairment charge, which is recorded within SG&A expenses for the year ended December 31, 3015 in the accompanying consolidated statements of income. The impairment charge was measured under an income approach utilizing forecasted discounted cash flows. Fair value was based on expected future cash flows using Level 3 inputs under ASC 820. The most significant unobservable input used in the fair value analysis relates to the estimated sales price of the long-lived assets. No impairment charges were recognized in 2014 or 2013. Goodwill and Other Indefinite-Lived Intangibles Goodwill represents the costs in excess of the fair value of net assets acquired associated with acquisitions by the Company. Other assets include $800 for an indefinite-lived intangible asset for the phone number 1-800-HARDWOOD and related internet domain names. The Company evaluates these assets for impairment on an annual basis, or whenever events or changes in circumstance indicate that the asset carrying value exceeds its fair value . Based on the analysis performed, the Company has concluded that no impairment in the value of these assets has occurred. Self - Insurance The Company is self-insured for certain employee health benefit claims and for certain workers’ compensation claims. The Company estimates a liability for aggregate losses below stop-loss coverage limits based on estimates of the ultimate costs to be incurred to settle known claims and claims incurred but not reported as of the balance sheet date. The estimated liability is not discounted and is based on a number of assumptions and factors including historical and industry trends and economic conditions. This liability could be affected if future occurrences and claims differ from these assumptions and historical trends. As of December 31, 2015 and 2014, an accrual of $1,976 and $1,585 related to estimated claims was included in other current liabilities, respectively. Recognition of Net Sales The Company recognizes net sales for products purchased at the time the customer takes possession of the merchandise . Service revenue, primarily installation revenue and freight charges for in-home delivery, is included in net sales and recognized when the service has been rendered. The Company reports sales exclusive of sales taxes collected from customers and remitted to governmental taxing authorities, and net of an allowance for anticipated sales returns based on historical and current sales trends and experience. The sales returns allowance and related changes were not significant for 2015, 2014 or 2013. In total, we offer more than 400 different flooring product stock-keeping units; however, no single flooring product represented more than 2% of our sales mix. By major product category, our sales mix was as follows: 2015 2014 2013 Solid and Engineered Hardwood $ 378,501 $ 406,887 $ 413,709 Laminate 153,722 199,775 195,382 Bamboo, Cork, Vinyl Plank and Other 221,776 212,735 193,960 Moldings and Accessories 184,144 195,539 180,713 Non-Merchandise Services 40,633 32,483 16,476 Total $ 978,776 $ 1,047,419 $ 1,000,240 The Company generally requires customers to pay a deposit, equal to approximately half of the retail sales value, when purchasing merchandise inventories not regularly carried in a given store location, or not currently in stock. These deposits are included in customer deposits and store credits until the customer takes possession of the merchandise. Cost of Sales Cost of sales includes the cost of the product sold, cost of installation services, transportation costs from vendor to the Company’s distribution centers or store locations, any applicable finishing costs related to production of the Company’s proprietary brands, transportation costs from distribution centers to store locations, transportation costs for the delivery of products from store locations to customers, certain costs of quality control procedures, inventory adjustments including shrinkage, and costs to produce samples, reduced by vendor allowances. In early March 2015, the Company began voluntarily offering free indoor air quality screening to certain of its flooring customers, predominately those who had purchased laminate flooring sourced from China, to address customer questions about the air quality in their homes. During the year ended December 31, 2015, over approximately 48,000 testing kits were sent to Lumber Liquidators customers through the program. In total, approximately 30,500 testing kits have been returned. Of those returned, over 90% indicated indoor air concentrations of formaldehyde within the guidelines set by the World Health Organization (“WHO”) as protective against sensory irritation and long-term health effects. The Company has been and continues to directly contact the customers whose test results indicate an indoor formaldehyde level in excess of the WHO guideline for additional investigation and next steps. These “Phase 2” steps primarily consist of independent third-party laboratory testing of flooring samples from these customers. If the results of this testing indicates that the flooring is contributing to formaldehyde levels in a customer’s home at elevated rates, the Company will work with the customer, at the Company’s discretion, to replace the customer’s floor or compensate the customer for the cost of the floor as part of “Phase 3”. Throughout 2015, the Company facilitated customers with elevated Phase 1 testing results to complete Phase 2. To date, the Company did not record a reserve for Phase 3 based on the results it has received to date from the testing of customer flooring samples. The Company believes the test results and number of tests obtained to date provided a reasonable basis to support its assertion that a material reserve related to the replacement of customer floors was not warranted. The Company will, however, continue to evaluate the results of each phase of the indoor air quality testing program. Should its results differ from current trends, the Company could record a material charge in future periods. The Company incurred $9,445 of direct costs primarily related to purchases of testing kits and professional fees for the year ended December 31, 2015. At December 31, 2015, the Company had a reserve of $ 809 for estimated future costs to evaluate whether the laminate flooring purchased from the Company was the primary driver of the air quality testing results being above WHO standards. The reserve was based on actual experience to date, estimated using information through the filing date of the financial statements and was included in other current liabilities. Should the Company’s actual experience related to results of its indoor air quality testing program and subsequent follow-up with customers differ from these estimates, may be recorded in the future. A rollforward of the reserve for the Company’s air quality testing program was as follows: Balance at December 31, 2014 $ — Provision 10,873 Reversal (1,428) Payments (8,636) Balance at December 31, 2015 $ 809 Additionally, for the year ended December 31, 2015, the Company incurred customer satisfaction costs of $1,200 , , primarily related to projects using certain laminate or engineered hardwood products that were incomplete as of the date sales of such laminate and engineered hardwood products were suspended during the second quarter of 2015. These costs were incurred to ensure customers could complete their projects in a satisfactory manner. Refer to Note 10, Commitments and Contingencies, for a discussion of these products. The Company offers a range of limited warranties from the durability of the finish on its prefinished products to its services provided. These limited warranties range from one to 100 years. Warranty reserves are based primarily on claims experience, sales history and other considerations, including payments made to satisfy customers for claims not directly related to the warranty on the Company’s products. Warranty costs are recorded in cost of sales. This reserve was $ 1,688 and $ 1,568 at December 31, 2015 and 2014, respectively. The Company is able to seek recovery from its vendors and installation providers for certain amounts paid. Vendor allowances primarily consist of volume rebates that are earned as a result of attaining certain purchase levels and reimbursement for the cost of producing samples. Vendor allowances are accrued as earned, with those allowances received as a result of attaining certain purchase levels accrued over the incentive period based on estimates of purchases. Volume rebates earned are initially recorded as a reduction in merchandise inventories and a subsequent reduction in cost of sales when the related product is sold. Reimbursement received for the cost of producing samples is recorded as an offset against cost of sales. Advertising Costs Advertising costs charged to selling, general and administrative (“SG&A”) expenses, net of vendor allowances, were $ 77,455 , $82,604 and $75,506 in 2015, 2014 and 2013, respectively. The Company uses various types of media to brand its name and advertise its products. Media production costs are generally expensed as incurred, except for direct mail, which is expensed when the finished piece enters the postal system. Media placement costs are generally expensed in the month the advertising occurs, except for contracted endorsements and sports agreements, which are generally expensed ratably over the contract period. Amounts paid in advance are included in prepaid expenses and totaled $ 1,495 and $1,549 at December 31, 2015 and 2014, respectively. Store Opening Costs Costs to open new store locations are charged to SG&A expenses as incurred, net of any vendor support. Other Vendor Consideration Consideration from non-merchandise vendors, including royalties and rebates, are generally recorded as an offset to SG&A expenses when earned. Depreciation and Amortization Property and equipment is carried at cost and depreciated on the straight-line method over the estimated useful lives. The estimated useful lives for leasehold improvements are the shorter of the estimated useful lives or the remainder of the lease terms. For leases with optional renewal periods, the Company uses the original lease term, excluding optional renewal periods, to determine the appropriate estimated useful lives. Capitalized software costs are capitalized from the time that technological feasibility is established until the software is ready for use. The estimated useful lives are generally as follows: Years Buildings and Building Improvements 15 to 40 Property and Equipment 5 to 25 Computer Software and Hardware 3 to 10 Leasehold Improvements 1 to 15 Operating Leases The Company has operating leases for its stores, Corporate Headquarters, certain of its distribution facilities, supplemental office facilities and certain equipment. The lease agreements for certain stores and distribution facilities contain rent escalation clauses, rent holidays and tenant improvement allowances. For scheduled rent escalation clauses during the lease terms or for rental payments commencing at a date other than the date of initial occupancy, the Company records minimum rental expenses in SG&A expenses on a straight-line basis over the terms of the leases. The difference between the rental expense and rent paid is recorded as deferred rent on the consolidated balance sheets. For tenant improvement allowances, the Company records deferred rent on the consolidated balance sheets and amortizes the deferred rent over the terms of the leases as reductions to rental expense. Stock-Based Compensation The Company records compensation expense associated with stock options and other forms of equity compensation in accordance with FASB ASC 718. The Company may issue incentive awards in the form of stock options, restricted shares and other equity awards to employees, non-employee directors and other service providers. The Company recognizes expense for its stock-based compensation based on the fair value of the awards that are granted. Compensation expense is recognized only for those awards expected to vest, with forfeitures estimated at the date of grant based on historical experience and future expectations. Measured compensation cost is recognized ratably over the requisite service period of the entire related stock-based compensation award. Foreign Currency Translation The Company’s Canadian operations use the Canadian dollar as the functional currency. Assets and liabilities are translated at exchange rates in effect at the balance sheet date. Revenues and expenses are translated at the average monthly exchange rates during the year. Resulting translation adjustments are recorded as a component of accumulated other comprehensive income on the consolidated balance sheets. Income Taxes Income taxes are accounted for in accordance with FASB ASC 740 (“ASC 740”). Income taxes are provided for under the asset and liability method and consider differences between the tax and financial accounting bases. The tax effects of these differences are reflected on the consolidated balance sheets as deferred income taxes and measured using the effective tax rate expected to be in effect when the differences reverse. ASC 740 also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some portion of the deferred tax asset will not be realized. In evaluating the need for a valuation allowance, the Company takes into account various factors, including the nature, frequency and severity of current and cumulative losses, expected level of future taxable income, the duration of statutory carryforward periods and tax planning alternatives. In future periods, any valuation allowance will be re-evaluated in accordance with ASC 740, and a change, if required, will be recorded through income tax expense in the period such determination is made. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the relevant taxing authorities, based on the technical merits of its position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The Company classifies interest and penalties related to income tax matters as a component of income tax expense. Net Income per Common Share Basic net income per common share is determined by dividing net income by the weighted average number of common shares outstanding during the year. Diluted net income per common share is determined by dividing net income by the weighted average number of common shares outstanding during the year, plus the dilutive effect of common stock equivalents, including stock options and restricted shares. Common stock and common stock equivalents included in the computation represent shares issuable upon assumed exercise of outstanding stock options and release of restricted shares, except when the effect of their inclusion would be antidilutive. Recent Accounting Pronouncements In February 2016, the FASB issued Accounting Standards Update No. 2016-02 (“ASU 2016-02”), which creates ASC Topic 842, Leases , and supersedes the lease accounting requirements in Topic 840, Leases. In summary, Topic 842 requires organizations that lease assets—referred to as “lessees”—to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. The amendments in ASU 2016-02 are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Therefore, the amendments in ASU 2016-02 will become effective for the Company at the beginning of its 2019 fiscal year. The Company is currently assessing the impact of implementing the new guidance on its consolidated financial statements. When implemented, the standard is expected to have a material impact as its operating leases will be recognized on the consolidated balance sheet. In November 2015, the FASB issued Accounting Standards Update No. 201 5 -17 (“ASU 2015-17”), which amends ASC Topic 740, Balance Sheet Classification of Deferred Taxes. In summary, the core principle of Topic 740 is that an entity classify both current and noncurrent deferred income tax assets and liabilities in the noncurrent section of the statement of financial position. The current requirement that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount is not affected by this amendment. The amendments in ASU 2015-17 are effective for annual reporting periods beginning after December 15, 2017 and interim periods beginning after December 31, 20 1 8. Early application is permitted for all entities as of the beginning of an interim or annual reporting period. The Company is currently assessing the impact of implementing the new guidance on its consolidated financial statements and has not yet selected a method of adoption. In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (“ASU 2014-09”), which creates ASC Topic 606, Revenue from Contracts with Customers, and supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, including most industry-specific revenue recognition guidance throughout the Industry Topics of the Codification. In addition, ASU 2014-09 supersedes the cost guidance in Subtopic 605-35, Revenue Recognition—Construction-Type and Production-Type Contracts, and creates new Subtopic 340-40, Other Assets and Deferred Costs—Contracts with Customers. In summary, the core principle of Topic 606 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendments in ASU 2014-09 are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period, and early application is not permitted. Therefore, the amendments in ASU 2014-09 will become effective for the Company at the beginning of its 2017 fiscal year. The Company is currently assessing the impact of implementing the new guidance on its consolidated financial statements and has not yet selected a method of adoption . |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2015 | |
Property and Equipment [Abstract] | |
Property and Equipment | Note 2. Property and Equipment Property and equipment consisted of: December 31, 2015 2014 Land $ 4,937 $ 4,937 Building 44,234 - Property and Equipment 59,015 51,409 Computer Software and Hardware 44,026 40,071 Leasehold Improvement 35,495 30,715 Assets under Construction 1,623 51,097 189,330 178,229 Less: Accumulated Depreciation and Amortization 67,333 53,362 Property and Equipment, net $ 121,997 $ 124,867 As of December 31, 2015 and 2014, the Company had capitalized $ 34,024 and $31,230 of computer software costs, respectively. Amortization expense related to these assets was $ 3,501 , $3,212 and $2,659 for 2015, 2014 and 2013, respectively. |
Other Current Liabilities
Other Current Liabilities | 12 Months Ended |
Dec. 31, 2015 | |
Other Current Liabilities [Abstract] | |
Other Current Liabilities | Note 3. Other Current Liabilities Other current liabilities consisted of: December 31, 2015 2014 Accrued Legal and Settlement Expense $ 14,011 $ 2,087 Other 14,744 15,749 Other Current Liabilities, net $ 28,755 $ 17,836 |
Revolving Credit Agreement
Revolving Credit Agreement | 12 Months Ended |
Dec. 31, 2015 | |
Revolving Credit Agreement [Abstract] | |
Revolving Credit Agreement | Note 4. Revolving Credit Agreement On April 24, 2015, the Company, exclusive of the non-domestic subsidiaries, entered into a Second Amended and Restated Credit Agreement (as amended on May 21, 2015 and November 20, 2015, the “Credit Agreement”) with Bank of America, N.A. as administrative agent, collateral agent and lender (the “Bank”). The Credit Agreement amended and restated the Amended and Restated Credit Agreement that was entered into between Lumber Liquidators, Inc. and the Bank on February 21, 2012 and amended on March 27, 2015. Under the Credit Agreement, the Bank agreed to provide the Company with an asset-based revolving credit facility (the “Revolving Credit Facility”) under which the Company may obtain loans and letters of credit from the Bank up to a maximum aggregate outstanding principal amount of the lesser of $100,000 or a calculated borrowing base. Letters of credit are subject to a sublimit of $20,000 (subject to the borrowing base). The Credit Agreement expires on April 24, 2020 , is guaranteed by the Company and certain of its domestic subsidiaries and is secured primarily by the Company’s inventory, including certain in-transit inventory, and credit card receivables. The Revolving Credit Facility has no mandated payment provisions and a fee of 0.15% per annum on any unused portion, paid quarterly in arrears. Loans outstanding under the Revolving Credit Facility can bear interest based on the Base Rate or the LIBOR Rate, each as defined in the Credit Agreement. Interest on Base Rate loans is charged at varying per annum rates computed by applying a margin ranging from 0.125% to 0.375% (dependent on the Company’s average daily excess borrowing availability during the most recently completed fiscal quarter) over the applicable base interest rate (defined as the greatest of the prime rate, a specified federal funds rate plus 0.50% , or the one-month LIBOR Rate plus 1.00% ). Interest on LIBOR Rate loans and fees for standby letters of credit are charged at varying per annum rates computed by applying a margin ranging from 1.125% to 1.375% (dependent on the Company’s average daily excess borrowing availability during the most recently completed fiscal quarter) over the applicable LIBOR rate for one, two, three or six month interest periods as selected by the Company. At December 31, 2015, the applicable interest rate for outstanding borrowings was 1.4375% . For the year ended December 31, 2015, the Company paid cash for interest in the amount of $ 237 . The Credit Agreement contains a fixed charge coverage ratio covenant that becomes effective in the event that the Company’s excess borrowing availability under the Revolving Credit Facility at any time during the term of the Revolving Credit Facility falls below the greater of $10,000 or 10% of the borrowing base. At December 31, 2015, the Company had $67,200 available to borrow under the Revolving Credit Facility and $20,000 in outstanding borrowings and supported approximately $2,800 and $2,700 of letters of credit at December 31, 2015 and 2014, respectively. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2015 | |
Leases [Abstract] | |
Leases | Note 5. Leases The Company has operating leases for its stores, Corporate Headquarters and West Coast distribution center , 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 West Coast distribution center has an operating lease with a base term running through October 31, 2024 . As of December 31, 2015, 2014 and 2013, the Company leased the Corporate Headquarters, which includes a store location and 30 , 30 and 29 of its locations, representing 8.3% , 8.8% and 9.4% of the total number of store leases in operation, respectively, from entities controlled by the Company’s founder , who also serves as a member of the Board of Directors (“Controlled Companies”). During 2015, the Company also leased a warehouse , from one of the Controlled Companies. Rental expense is as follows: Year Ended December 31, 2015 2014 2013 Rental expense $ 28,825 $ 27,995 $ 21,874 Rental expense related to Controlled Companies 3,070 2,837 2,895 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, 2015: Operating Leases Controlled Companies Store Leases Headquarters Lease Store Leases Distribution Centers & Other Leases Total Operating Leases 2016 $ 2,066 $ 1,271 $ 24,537 $ 2,411 $ 30,285 2017 1,611 1,309 21,214 2,435 26,569 2018 1,490 1,348 16,928 2,394 22,160 2019 1,121 1,388 13,046 2,305 17,860 2020 836 - 9,785 2,361 12,982 Thereafter 1,390 - 12,206 8,452 22,048 Total minimum lease payments $ 8,514 $ 5,316 $ 97,716 $ 20,358 $ 131,904 |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2015 | |
Stockholders' Equity [Abstract] | |
Stockholders' Equity | Note 6. Stockholders’ Equity Net Income per Common Share The following table sets forth the computation of basic and diluted net income per common share: Year Ended December 31, 2015 2014 2013 Net (Loss) Income $ (56,433) $ 63,371 $ 77,395 $ Weighted Average Common Shares Outstanding—Basic 27,082,299 27,264,882 27,484,790 Effect of Dilutive Securities: Common Stock Equivalents — 220,970 429,532 Weighted Average Common Shares Outstanding—Diluted 27,082,299 27,485,852 27,914,322 Net (Loss) Income per Common Share—Basic $ (2.08) $ 2.32 $ 2.82 $ Net (Loss) Income per Common Share—Diluted $ (2.08) $ 2.31 $ 2.77 $ The following have been excluded from the computation of Weighted Average Common Shares Outstanding—Diluted because the effect would be antidilutive: As of December 31, 2015 2014 2013 Stock Options 650,759 184,252 103,329 Restricted Shares 225,027 16,999 176 Stock Repurchase Program In 2012, the Company’s Board of Directors (“Board”) authorized the repurchase of up to $100,000 of the Company’s common stock from time to time on the open market or in privately negotiated transactions. In January 2014, the Company’s Board authorized the repurchase of up to an additional $50,000 of the Company’s common stock, bringing the total authorization to $150,000 and at December 31, 2015, the Company had $14,728 remaining under this authorization. The Company has not purchased any stock through privately negotiated transactions. Purchases under this program were as follows: Year Ended December 31, 2015 2014 2013 Shares Repurchased - 671,200 403,630 Average Price per Share $ - $ 77.68 $ 84.40 Total Aggregate Costs $ - $ 52,138 $ 34,066 |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2015 | |
Stock-Based Compensation [Abstract] | |
Stock-Based Compensation | Note 7. Stock-Based Compensation S tock-based compensation expense included in SG&A expenses consisted of: Year Ended December 31, 2015 (1) 2014 2013 Stock Options, Restricted Shares and Stock Appreciation Rights $ 3,941 $ 5,593 $ 5,974 ___________________ 1 Includes the impact of actual forfeitures in the period due to the resignation of certain senior executives. Overview On May 6, 2011, the Company’s stockholders approved the Lumber Liquidators Holdings, Inc. 2011 Equity Compensation Plan (the “2011 Plan”), which succeeded the Lumber Liquidators Holdings, Inc. 2007 Equity Compensation Plan. The 2011 Plan is an equity incentive plan for employees, non-employee directors and other service providers from which the Company may grant stock options, restricted shares, stock appreciation rights (“SARs”) and other equity awards. The total number of shares of common stock authorized for issuance under the 2011 Plan is 5.3 million. As of December 31, 2015, 1. 0 million shares of common stock were available for future grants. Stock options granted under the 2011 Plan expire no later than ten years from the date of grant and the exercise price shall not be less than the fair market value of the shares on the date of grant. Vesting periods are assigned to stock options and restricted shares on a grant by grant basis at the discretion of the Board. The Company issues new shares of common stock upon exercise of stock options and vesting of restricted shares. The Company also maintains the Lumber Liquidators Holdings, Inc. Outside Directors Deferral Plan under which each of the Company’s non-employee directors has the opportunity to elect annually to defer certain fees until departure from the Board. A non-employee director may elect to defer up to 100% of his or her fees and have such fees invested in deferred stock units. Deferred stock units must be settled in common stock upon the director’s departure from the Board. There were 95,553 and 63,279 deferred stock units outstanding at December 31, 2015 and 2014, respectively. Stock Options The following table summarizes activity related to stock options: Shares Weighted Average Exercise Price Remaining Average Contractual Term (Years) Aggregate Intrinsic Value Balance, December 31, 2012 1,311,377 $ 17.79 6.5 $ 45,954 Granted 214,966 62.52 Exercised (718,665) 14.35 Forfeited (58,188) 29.04 Balance, December 31, 2013 749,490 $ 33.04 7.3 $ 52,358 Granted 79,126 100.05 Exercised (149,707) 21.04 Forfeited (26,101) 60.71 Balance, December 31, 2014 652,808 $ 42.81 6.9 $ 18,113 Granted 410,164 25.34 Exercised - 0.00 Forfeited (370,196) 44.71 Balance, December 31, 2015 692,776 $ 31.45 7.7 $ 1,283 Exercisable at December 31, 2015 221,561 $ 29.28 $ 540 Vested and expected to vest December 31, 2015 692,776 $ 31.45 $ 1,283 The aggregate intrinsic value is the difference between the exercise price and the closing price of the Company’s common stock on December 31. The intrinsic value of the stock options exercised during 2015, 2014 and 2013 was nil , $10,278 and $49,137 , respectively. As of December 31, 201 5 , total unrecognized compensation cost related to unvested options was approximately $4,570 , net of estimated forfeitures, which is expected to be recognized over a weighted average period of approximately 3.0 years. The fair value of each stock option award is estimated by management on the date of the grant using the Black-Scholes-Merton option pricing model. The weighted average fair value of options granted during 2015, 2014 and 2013 was $11.87 , $43.21 and $ 29.66 , respectively. The following are the ranges of assumptions for the periods noted: Year Ended December 31, 2015 2014 2013 Expected dividend rate 0 % 0 % 0 % Expected stock price volatility 50 % 45 % 45 % Risk-free interest rate 1.7 % 1.8 % 1.3 - 2.0 % Expected term of options 5.5 years 5.5 years 6.0 - 7.5 years The expected stock price volatility is based on the historical volatility of the Company’s stock price and in 2013, also included the historical volatilities of companies included in a peer group that was selected by management whose shares or options are publicly available. The volatilities are estimated for a period of time equal to the expected term of the related option. The risk-free interest rate is based on the implied yield of U.S. Treasury zero-coupon issues with an equivalent remaining term. The expected term of the options represents the estimated period of time until exercise and is determined by considering the contractual terms, vesting schedule and expectations of future employee behavior. Restricted Shares The following table summarizes activity related to restricted shares: Shares Weighted Average Grant Date Fair Value Nonvested, December 31, 2012 152,405 $ 15.19 Granted 80,814 66.11 Released (38,362) 75.73 Forfeited (16,522) 37.51 Nonvested, December 31, 2013 178,335 $ 22.82 Granted 38,260 89.46 Released (45,503) 95.02 Forfeited (14,003) 54.90 Nonvested, December 31, 2014 157,089 $ 15.00 Granted 386,517 18.30 Released (27,187) 41.57 Forfeited (54,748) 45.93 Nonvested, December 31, 2015 461,671 $ 12.95 The fair value of restricted shares released during 2015, 2014 and 2013 was $941 , $4,371 and $3,060 , respectively. As of December 31, 2015, total unrecognized compensation cost related to unvested restricted shares was approximately $5,141 , net of estimated forfeitures, which is expected to be recognized over a weighted average period of approximately 2. 4 years. Stock Appreciation Rights The following table summarizes activity related to SARs: Shares Weighted Average Exercise Price Remaining Average Contractual Term (Years) Aggregate Intrinsic Value Balance, December 31, 2012 9,301 $ 17.79 6.5 $ 261 Granted 7,533 62.52 Forfeited (678) 29.04 Balance, December 31, 2013 16,156 $ 33.04 7.3 $ 938 Granted 1,941 100.05 Forfeited (1,870) 60.71 Balance, December 31, 2014 16,227 $ 42.81 6.9 $ 389 Granted - 0.00 Forfeited (170) 93.68 Balance, December 31, 2015 16,057 $ 47.58 6.8 $ - Exercisable at December 31, 2015 10,420 $ 41.59 6.6 $ - The fair value method, estimated by management using the Black-Scholes-Merton option pricing model, is used to recognize compensation cost associated with SARs. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes [Abstract] | |
Income Taxes | Note 8. Income Taxes The components of income before income taxes were as follows: Year Ended December 31, 2015 2014 2013 United States $ (80,136) $ 105,447 $ 128,482 Foreign (3,291) (1,864) (2,017) Total Income before Income Taxes $ (83,427) $ 103,583 $ 126,465 The provision for income taxes consisted of the following: Year Ended December 31, 2015 2014 2013 Current Federal $ (14,088) $ 34,615 $ 43,159 State (975) 5,614 6,637 Foreign 133 135 120 Total Current (14,930) 40,364 49,916 Deferred Federal (9,276) (22) (745) State (2,788) (130) (101) Foreign - - - Total Deferred (12,064) (152) (846) Total Provision for Income Taxes $ (26,994) $ 40,212 $ 49,070 The reconciliation of significant differences between income tax expense applying the federal statutory rate and the actual income tax expense at the effective rate are as follows: Year Ended December 31, 2015 2014 2013 Income Tax Expense at Federal Statutory Rate $ (29,200) 35.0 % $ 36,254 35.0 % $ 44,263 35.0 % (Decreases) Increases: State Income Taxes, Net of Federal Income Tax Benefit (2,401) 2.9 % 3,711 3.6 % 4,146 3.3 % Valuation Allowance 210 (0.2) % 458 0.4 % 498 0.4 % Foreign Operations 1,075 (1.3) % 329 0.3 % 328 0.2 % Non-deductible penalty 3,887 (4.7) % - - % - - % Other (565) 0.7 % (540) (0.5) % (165) (0.1) % Total $ (26,994) 32.4 % $ 40,212 38.8 % $ 49,070 38.8 % The tax effects of temporary differences that result in significant portions of the deferred tax accounts are as follows: December 31, 2015 2014 Deferred Tax Liabilities: Prepaid Expenses and Other $ (1) $ (77) Depreciation and Amortization (20,367) (16,900) Total Gross Deferred Tax Liabilities (20,368) (16,977) Deferred Tax Assets: Stock-Based Compensation Expense 3,794 3,785 Reserves and Accruals 9,825 4,296 Employee Benefits 1,034 15 Inventory Reserves 10,699 1,606 Inventory Capitalization 4,457 5,582 Foreign Net Operating Losses 2,433 2,223 Other 966 37 Total Gross Deferred Tax Assets 33,208 17,544 Less Valuation Allowance (2,433) (2,223) Total Net Deferred Tax Assets 30,775 15,321 Net Deferred Tax Asset (Liability) $ 10,407 $ (1,656) In both 2015 and 2014, the Canadian operations were in a cumulative loss position. As such, the Company has recorded a full valuation allowance on the net deferred tax assets in Canada. For the year ended December 31, 2015, the valuation allowance increased by $ 836 primarily as a result of an increase in the Canadian net operating loss that was partially offset by a currency exchange loss of $626 . In future periods, the allowance could be reduced if sufficient evidence exists indicating that it is more likely than not that a portion or all of these deferred tax assets will be realized. As of December 31, 2015 and 2014, the Company had foreign net operating loss carryforwards of $11,797 and $8,577 , respectively, which begin to expire in 2030 . These net operating losses may be carried forward up to 20 years to offset future taxable income. The Company made income tax payments of $ 7,855 , $33,281 and $30,154 in 2015, 2014 and 2013, respectively. The reconciliation of unrecognized tax benefits was as follows: Year Ended December 31, 2015 2014 Balance at beginning of year $ 1,232 $ 915 (Decrease) increase based on tax position related to the current year (180) 430 Increases in tax positions for prior years - 161 Decreases in tax positions for prior years (434) - Settlements (11) - Lapse of statute (211) (274) Balance at end of year $ 396 $ 1,232 As of December 31, 2015, the Company had $0.4 million of gross unrecognized tax benefits, $0.3 million of which, if recognized, would affect the effective tax rate. It is reasonably possible that the amount of the unrecognized tax benefit with respect to certain of the uncertain tax positions will increase or decrease during the next 12 months; however, the Company does not expect the change to have a significant effect on its results of operations, financial position or cash flows. As of December 31, 2014, the Company had $ 1.2 million of gross unrecognized tax benefits, $0. 8 million of which, if recognized, would affect the effective tax rate. The Company files income tax returns with the U.S. federal government and various state and foreign jurisdictions. In the normal course of business, the Company is subject to examination by taxing authorities. The Internal Revenue Service has completed audits of the Company’s federal income tax returns for years through 2009. |
Profit-sharing Plan
Profit-sharing Plan | 12 Months Ended |
Dec. 31, 2015 | |
Profit-sharing Plan [Abstract] | |
Profit-sharing Plan | Note 9. Profit-sharing Plan The Company maintains a profit-sharing plan, qualified under Section 401(k) of the Internal Revenue Code, for all eligible employees. Employees are eligible to participate following the completion of three months of service and attainment of age 21 . In 2013, the Company amended the plan to a safe harbor plan , and began matching 100% of the fir st 3% of employee contributions and 50% of the nex t 2% of employee contributions. Additionally, e mployees are now immediately 100% vested in the Company ’s matching contributions . Prior to 2013, the Company matched 50% of employee contributions up to 6% of eligible compensation. The Company’s matching contributions, included in SG&A expenses, totaled $2,019 , $1,937 and $1,590 in 2015, 2014 and 2013, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note 10. Commitments and Contingencies Government Investigations Lacey Act Related Matters On September 26, 2013, sealed search warrants were executed at the Company’s corporate offices in Toano and Richmond, Virginia by the Department of Homeland Security’s Immigration and Customs Enforcement and the U.S. Fish and Wildlife Service. The search warrants requested information, primarily documentation, related to the importation of certain of the Company’s wood flooring products in accordance with the Lacey Act. Since then, the Company cooperated with the federal authorities, including the Department of Justice (“DOJ”), in their investigation. On October 7, 2015, Lumber Liquidators, Inc. (“LLI”) reached a settlement with the DOJ in connection with this investigation. Under the terms of a Plea Agreement with the DOJ (the “Plea Agreement”) executed on October 7, 2015, LLI agreed to plead guilty to one felony count for entry of goods by means of false statements and four misdemeanor due care counts under the Lacey Act. These violations do not require LLI to have acted with a deliberate or willful intent to violate the law, and LLI did not stipulate that it acted with such deliberate or willful intent. As part of the settlement, LLI agreed to pay a combined total of $10,000 in fines, community service payments and forfeited proceeds. The payments include a $7,800 fine, community service contributions of $880 and $350 to the National Fish and Wildlife Foundation and the Rhinoceros and Tiger Conservation fund, respectively, and a $969 forfeiture payment. The Company had previously recorded this amount in SG&A expenses in the first quarter of 2015. At December 31, 2015, $6,200 was included in current liabilities and $3,800 was included in other long-term liabilities on the accompanying consolidated balance sheet. The Company paid $6,200 of the settlement amount in the first quarter of 2016, and the Company expects to pay $2,000 in the first quarter of 2017 and $1,800 in the first quarter of 2018. LLI also agreed in the Plea Agreement to implement an environmental compliance plan (the “Compliance Plan”) for a probation period of five years. If LLI fails to implement the Compliance Plan within three months of sentencing, the government may require the Company to cease the importation of hardwood flooring from China until the DOJ determines that the Compliance Plan has been satisfactorily implemented. During the first four years, LLI has agreed to engage an outside consulting firm to conduct audits of compliance with the Compliance Plan and certain requirements of the Lacey Act. The Company has agreed to guarantee all payments and performance due from LLI, including but not limited to payments for fines, community service, forfeited proceeds and special assessments and the performance of LLI’s obligations under and compliance with the Compliance Plan and related audits. In addition, as part of its internal compliance review procedures in the second quarter of 2015, the Company determined that there were Lacey Act compliance concerns related to a limited amount of its engineered hardwood flooring. As a result, the Company suspended sales of approximately $4,069 of this product pending further investigation, and brought this matter to the attention of the DOJ. During the investigation, the Company determined that there were no compliance concerns with respect to approximately $914 of the suspended engineered hardwood flooring. In connection with the Plea Agreement with the DOJ, the Company also reached a settlement with the DOJ related to the remaining $3,155 of suspended engineered hardwood flooring. Pursuant to a Complaint for Forfeiture In Rem and a Stipulation for Settlement and Joint Motion for Entry of Consent Order of Forfeiture (the “Consent”) , the DOJ agreed to accept a $3,155 payment in lieu of a civil forfeiture of this product. The Company previously recorded this amount in SG&A expenses in the second quarter of 2015. The Company paid this amount in October 2015 pending entry of the Consent and, pursuant to a motion granted, is now permitted to sell the suspended engineered hardwood flooring and retain any proceeds of the sale. The Consent was entered by the court on January 7, 2016, and final judgment was entered on January 8, 2016. The Plea Agreement was approved by the United States District Court for the Eastern District of Virginia on October 22, 2015. A sentencing hearing was held on February 1, 2016 and the court entered a final judgment on February 3, 2016. The terms of the final judgment are consistent with the Plea Agreement. Securities Laws In March 2015, the Company received a grand jury subpoena issued in connection with a criminal investigation being conducted by the U.S. Attorney’s Office for the Eastern District of Virginia (the “U.S. Attorney”). In addition, on May 19, 2015 and July 13, 2015, the Company received subpoenas from the New York Regional Office of the SEC in connection with an inquiry by the SEC staff. Based on the subpoenas, the Company believes the focus of both the U.S. Attorney investigation and SEC investigation primarily relate to compliance with disclosure, financial reporting and trading requirements under the securities laws since 2011. The Company is fully cooperating with the U.S. Attorney’s subpoena, the SEC’s subpoenas and the related investigations by the U.S. Attorney and SEC staff. Given that the investigation by the U.S. Attorney and SEC staff are still ongoing, the Company cannot estimate the reasonably possible loss or range of loss that may result from this matter. California Air Resources Board The Company believes that the California Air Resources Board (“CARB”) is regularly looking at the entire industry to ensure compliance with its emissions standards. While conducting routine inspections of the Company’s products, CARB has performed “deconstructive” testing on its products as well as, the Company believes, products from others in the industry. In CARB’s preliminary findings, some of the samples of the Company’s finished product that CARB deconstructed and tested exceeded the CARB limits for raw composite wood cores. This could occur for numerous reasons, including one or more of the variability factors associated with this type of testing. In May 2015, CARB notified the Company that additional samples of finished products were obtained in 2014, some of which, based on deconstructive testing, exceeded the CARB limits for raw composite wood cores. CARB has further informed the Company that it has performed additional deconstructive testing on certain finished products it obtained in March 2015, with certain of the samples of the Company’s products exceeding the CARB limits for raw composite wood cores. The Company has been fully cooperative with CARB as CARB continues to work on this matter by, among other things, providing CARB with requested information related to the products CARB tested and removing laminate flooring sourced from China from its stores in California. Based on discussion s with CARB, the Company’s best estimate of the probable loss that may result from this matter is approximately $1,500 , which the Company recorded in other current liabilities and selling, general and administrative expenses in the fourth quarter of 2015. The Company believes that there is at least a reasonable possibility that a loss greater than the amount accrued may be incurred, but the Company is unable to estimate the amount at this time. Securities Litigation Matter On or about November 26, 2013, Gregg Kiken ("Kiken") filed a securities class action lawsuit (the "Kiken Lawsuit"), which was subsequently amended, in the United States District Court for the Eastern District of Virginia against the Company, its founder, former Chief Executive Officer and President, former Chief Financial Officer and former Chief Merchandising Officer (collectively, the "Kiken Defendants"). On or about September 17, 2014, the City of Hallandale Beach Police Officers' and Firefighters' Personnel Retirement Trust ("Hallandale") filed a securities class action lawsuit (the "Hallandale Lawsuit") in the United States District Court for the Eastern District of Virginia against the Company, its former Chief Executive Officer and President and its former Chief Financial Officer (collectively, the "Hallandale Defendants," and with the Kiken Defendants, the "Defendants"). On March 23, 2015, the court consolidated the Kiken Lawsuit with the Hallandale Lawsuit, appointed lead plaintiffs and lead counsel for the consolidated action, and captioned the consolidated action as In re Lumber Liquidators Holdings, Inc. Securities Litigation . The lead plaintiffs filed a consolidated amended complaint on April 22, 2015. The consolidated amended complaint alleges that the Defendants made material false and/or misleading statements that caused losses to investors. In particular, the lead plaintiffs allege that the Defendants made material misstatements or omissions related to their compliance with the l Lacey Act, the chemical content of certain of their wood products, and their supply chain and inventory position. The lead plaintiffs do not quantify any alleged damages in their consolidated amended complaint but, in addition to attorneys' fees and costs, they seek to recover damages on behalf of themselves and other persons who purchased or otherwise acquired the Company’s stock during the putative class period at allegedly inflated prices and purportedly suffered financial harm as a result. The Defendants moved to dismiss the consolidated amended complaint but, on December 21, 2015, the court denied this motion. The Company disputes these claims and intends to defend the matter vigorously. Given the uncertainty of litigation, the current status of the case, and the legal standards that must be met for, among other things, class certification and success on the merits, the Company cannot estimate the reasonably possible loss or range of loss that may result from this action. NW Bamboo Matter On February 27, 2014, NW Bamboo Trim, Inc. (“NWBT”) filed suit in the Circuit Court of the City of Richmond, Virginia against the Company and a supplier of bamboo trim products (the “Supplier”). In its complaint, NWBT alleges that (i) the Company breached a contract with NWBT by not purchasing certain products from NWBT, (ii) the Company tortiously interfered with NWBT’s relationship with the Supplier, and (iii) the Company and the Supplier conspired to harm NWBT’s business. The Company filed a motion seeking to dismiss the claims, which was granted as it pertained to the breach of contract claim. The case the n proceeded on the two remaining causes of action. On October 12, 2015, as part of its required discovery disclosures, NWBT identified a valuation of its business of approximately $2,800 as the basis for its compensatory damages claim . Subsequently, the Company filed a motion for summary judgment seeking dismissal of NWBT’s case. On December 21, 2015, the Court granted the Company’s motion for summary judgment and dismissed the two remaining causes of action in NWBT’s complaint. On January 20, 2016, NWBT filed a notice of appeal in connection with the trial court’s dismissal of NWBT’s case. In light of the trial court’s ruling and the Company’s views regarding the merits of NWBT’s appeal, the likelihood of a material loss in connection with this matter is now remote. TCPA Matter On or about March 4, 2014, Richard Wade Architects, P.C. (“RWA”) filed a lawsuit in the United States District Court for the Northern District of Illinois (the “RWA Lawsuit”), which was subsequently amended, alleging that the Company violated the Telephone Consumer Protection Act (“TCPA”), the Illinois Consumer Fraud Act and the common law by sending an unsolicited facsimile advertisement to RWA and a proposed class. RWA sought recourse on its own behalf as well as other similarly situated parties who are members of the proposed class that received unsolicited facsimile advertisements from the Company. The TCPA provides for recovery of actual damages or five hundred dollars for each violation, whichever is greater. If it is determined that a defendant acted willfully or knowingly in violating the TCPA, the amount of the award may be increased by up to three times the amount provided above. Although the Company believed it had valid defenses to the claims asserted, it entered into a settlement of the claims in the RWA Lawsuit. On September 3, 2015, the Court entered an order granting final approval to the settlement and certifying a settlement class. Under the settlement agreement, the Company paid a total of $300 including the plaintiffs’ attorneys’ fees, class notice and administration costs, a sum to RWA and cash payments to members of the settlement class who file valid claims. The settlement amount was accrued in 2014 and was paid into an escrow fund on August 18, 2015. The settlement payment was released to class counsel on October 16, 2015 after the final approval order became a final and non-appealable order. Settlement payments to class members who submitted claims have now been issued by the claims administrator, with a final accounting of the settlement fund to be filed with the court by March 4, 2016. Prop 65 Matter On or about July 23, 2014, Global Community Monitor and Sunshine Park LLC (together, the “Prop 65 Plaintiffs”) filed a lawsuit, which was subsequently amended, in the Superior Court of the State of California, County of Alameda, against the Company. In the amended complaint, the Prop 65 Plaintiffs allege that the Company violated California’s Safe Drinking Water and Toxic Enforcement Act of 1986, Health and Safety Code section 25249.5, et seq. (“Proposition 65”). In particular, the Prop 65 Plaintiffs allege that the Company failed to warn consumers in California that certain of the Company’s products (collectively, the “Products”) emit formaldehyde in excess of the applicable safe harbor limits. The Prop 65 Plaintiffs did not quantify any alleged damages in their amended complaint but, in addition to attorneys’ fees and costs, the Prop 65 Plaintiffs seek (i) equitable relief involving the reformulation of the Products, additional warnings related to the Products, the issuance of notices to certain of the purchasers of the Products (the “Customers”) and the waiver of restocking fees for Customers who return the Products and (ii) civil penalties in the amount of two thousand five hundred dollars per day for each violation of Proposition 65. The Company disputes the claims of the Prop 65 Plaintiffs and intends to defend the matter vigorously. The Company’s best estimate of the probable loss that may result from this action is approximately $900 , which was accrued in the fourth quarter of 2015. The Company believes that there is at least a reasonable possibility that a may differ from the amount accrued , but it is unable to estimate the amount at this time. Gold Matter On or about December 8, 2014, Dana Gold (“Gold”) filed a purported class action lawsuit in the United States District Court for the Northern District of California alleging that the Morning Star bamboo flooring (the “Bamboo Product”) that the Company sells is defective. On February 13, 2015, Gold filed an amended complaint that added three additional plaintiffs (collectively with Gold, “Gold Plaintiffs”). The Company moved to dismiss the amended complaint. After holding a hearing and taking the motion under submission, the court dismissed most of Gold Plaintiffs’ claims but allowed certain omission-based claims to proceed. Gold Plaintiffs filed a Second Amended Complaint on December 16, 2015, and then a Third Amended Complaint on January 20, 2016. In the Third Amended Complaint, Gold Plaintiffs allege that the Company has engaged in unfair business practices and unfair competition by falsely representing the quality and characteristics of the Bamboo Product and by concealing the Bamboo Product’s defective nature. Gold Plaintiffs seek the certification of a class of individuals in the United States who purchased the Bamboo Product, as well as 7 state subclasses of individuals who are residents of California, New York, Illinois, West Virginia, Minnesota, Pennsylvania, and Florida, respectively, and purchased the Bamboo Product for personal, family, or household use. Gold Plaintiffs did not quantify any alleged damages in their complaint but, in addition to attorneys’ fees and costs, Gold Plaintiffs seek (i) a declaration that the Company’s actions violate the law and that the Company is financially responsible for notifying all purported class members, (ii) injunctive relief requiring the Company to replace and/or repair all of the Bamboo Product installed in structures owned by the purported class members, and (iii) a declaration that the Company must disgorge, for the benefit of the purported classes, all or part of its profits received from the sale of the allegedly defective Bamboo Product and/or to make full restitution to Gold Plaintiffs and the purported class members. The Company filed its answer to the Third Amended Complaint on February 3, 2016, and discovery in the matter is now proceeding. The Company disputes the Gold Plaintiffs’ claims and intends to defend the matter vigorously. Given the uncertainty of litigation, the preliminary stage of the case, and the legal standards that must be met for, among other things, class certification and success on the merits, the Company cannot estimate the reasonably possible loss or range of loss that may result from this action. Litigation Relating to Products Liability Beginning on or about March 3, 2015, numerous purported class action cases were filed in various U.S. federal district courts and state courts involving claims of excessive formaldehyde emissions from the Company’s flooring products (collectively, the “Products Liability Cases”). The plaintiffs in these various actions sought recovery under a variety of theories, which although not identical are generally similar, including negligence, breach of warranty, state consumer protection act violations, state unfair competition act violations, state deceptive trade practices act violations, false advertising, fraudulent concealment, negligent misrepresentation, failure to warn, unjust enrichment and similar claims. The purported classes consisted either or both of all U.S. consumers or state consumers that purchased the subject products in certain time periods. The plaintiffs also sought various forms of declaratory and injunctive relief and various damages, including restitution, actual, compensatory, consequential, and, in certain cases, punitive damages, and interest, costs, and attorneys’ fees incurred by the plaintiffs and other purported class members in connection with the alleged claims, and orders certifying the actions as class actions. Plaintiffs had not quantified damages sought from the Company in these class actions. On June 12, 2015, United States Judicial Panel on Multi District Litigation (the “MDL Panel”) issued an order transferring and consolidating 10 of the related federal class actions to the United States District Court for the Eastern District of Virginia (the “Virginia Court”). In a series of subsequent conditional transfer orders, the MDL Panel has transferred the other cases to the Virginia Court. The Company continues to seek to have any newly filed cases transferred and consolidated in the Virginia Court and ultimately, the Company expects all federal class actions involving formaldehyde allegations, including any newly filed cases, to be transferred and consolidated in the Virginia Court. The consolidated case in the Virginia Court is captioned In re: Lumber Liquidators Chinese-Manufactured Flooring Products Marketing, Sales, Practices and Products Liability Litigation . Pursuant to court order, plaintiffs filed a Representative Class Action Complaint in the Virginia Court on September 11, 2015. The complaint challenged the Company’s labeling of its flooring products and asserted claims under California, New York, Illinois, Florida and Texas law for fraudulent concealment, violation of consumer protection statutes, negligent misrepresentation and declaratory relief, as well as a claim for breach of implied warranty under California law. Thereafter, on September 18, 2015, plaintiffs filed the First Amended Representative Class Action Complaint (“FARC”) in which they added implied warranty claims under New York, Illinois, Florida and Texas law, as well as a federal warranty claim. The Company filed a motion to dismiss and answered the FARC. The Virginia Court granted the motion as to claims for negligent misrepresentation filed on behalf of certain plaintiffs, deferred as to class action allegations, and otherwise denied the motion. The Company also filed a motion to strike nationwide class allegations and a motion to strike all claims of personal injury made in class action complaints, on which the Virginia court has not yet ruled. Discovery is now proceeding in this matter. In addition, on or about April 1, 2015, Sarah Steele (“Steele”) filed a purported class action lawsuit in the Ontario, Canada Superior Court of Justice against the Company. In the complaint, Steele’s allegations include (i) strict liability, (ii) breach of implied warranty of fitness for a particular purpose, (iii) breach of implied warranty of merchantability, (iv) fraud by concealment, (v) civil negligence, (vi) negligent misrepresentation, and (vii) breach of implied covenant of good faith and fair dealing. Steele did not quantify any alleged damages in her complaint but, in addition to attorneys’ fees and costs, Steele seeks (i) compensatory damages, (ii) punitive, exemplary and aggravated damages, and (iii) statutory remedies related to the Company’s breach of various laws including the Sales of Goods Act, the Consumer Protection Act, the Competition Act, the Consumer Packaging and Labe l ling Act and the Canada Consumer Product Safety Act. The Company disputes the plaintiff s ’ claims and intends to defend these matters vigorously. Given the uncertainty of litigation, the preliminary stage of these cases and the legal standards that must be met for, among other things, class certification and success on the merits, the Company cannot estimate the reasonably possible loss or range of loss that may result from these actions. In connection with the Products Liability Cases, on April 22, 2015, five of the Company’s general and umbrella liability insurers brought an action in the United States District Court for the Eastern District of Virginia, (the “Virginia Action”). Through the Virginia Action, these insurers sought a declaratory judgment that they were not obligated to defend or indemnify the Company in connection with the lawsuits asserted against the Company arising out of its sale of laminate flooring sourced from China. One insurer also asserted a claim seeking reformation of one policy to include a “total pollution exclusion” endorsement, contending that it was omitted from that policy as the result of a mutual mistake. On April 27, 2015, the Company filed a similar but more comprehensive action against nine of its general, umbrella and excess insurers (including the five Plaintiffs in the Virginia Action) in the Circuit Court for Dane County, Wisconsin (where four of the insurers are domiciled) (the “Wisconsin Action”). In the Wisconsin Action, the Company asserted breach of contract claims against its general liability insurers, alleging that these insurers had wrongfully failed to defend the Company in connection with the Chinese-manufactured laminate flooring claims. The Company also asserted breach of contract and bad faith claims against two of its general liability insurers, arising out of the manner in which those insurers computed retrospective premiums under their policies in connection with the Chinese-manufactured laminate flooring lawsuits. Finally, the Company sought declaratory relief from the court as to its rights and the insurers’ responsibilities under their policies. The Company moved to dismiss the Virginia Action, contending that the federal court should abstain from deciding the case in favor of the more comprehensive state-court Wisconsin Action. Thereafter, the four insurers who were not plaintiffs in the Virginia Action have filed motions to intervene as plaintiffs in the Virginia Action, in an effort to make the Virginia Action “as comprehensive” as the Wisconsin Action. The Company has opposed the motions to intervene. By order dated September 4, 2015, the court largely denied the Company’s motion to dismiss, allowing the Virginia Action to proceed. While the court dismissed the reformation claim without prejudice, as pled with insufficient specificity, the court granted leave to amend, and an amended complaint was filed on September 15, 2015. On October 2, 2015, the Company stipulated to entry of judgment on the reformation claim, and moved to dismiss the remaining claims in favor of proceeding in Wisconsin. The defendant-insurers in the Wisconsin Action have filed motions to dismiss or stay the Wisconsin Action in favor of the Virginia Action. The defendants in the Wisconsin Action have also moved for protective orders seeking to forestall their obligation to respond to discovery requests that the Company promulgated in the Wisconsin Action. On February 1, 2016, the Wisconsin court stayed the Wisconsin Action in favor of the proceedings in Virginia. On February 5, 2016, the Company moved for reconsideration and that motion remains pending. On February 9, 2016, the Virginia court denied its motion to dismiss. The Virginia court also granted the remaining insurers’ motion to intervene, but stayed proceedings on their excess and umbrella insurance policies pending resolution of the primary insurers’ claims. Litigation Relating to Abrasion Claims On May 20, 2015, a purported class action titled Abad v. Lumber Liquidators, Inc. was filed in the United States District Court for the Central District of California and two amended complaints were subsequently filed. In the Second Amended Complaint (“SAC”), the plaintiffs (collectively, the “Abrasion Plaintiffs”) seek to certify a national class composed of “All Persons in the United States who purchased Defendant’s Dream Home brand laminate flooring products from Defendant for personal use in their homes,” or, in the alternative, 32 statewide classes from California, North Carolina, Texas, New Jersey, Florida, Nevada, Connecticut, Iowa, Minnesota, Nebraska, Georgia, Maryland, Massachusetts, New York, West Virginia, Kansas, Kentucky, Mississippi, Pennsylvania, South Carolina, Tennessee, Virginia, Washington, Maine, Michigan, Missouri, Ohio, Oklahoma, Wisconsin, Indiana, Illinois and Louisiana. The SAC alleges violations of each of these states’ consumer protections statutes and the federal Magnuson-Moss Warranty Act, as well as breach of implied warranty and fraudulent concealment. The Abrasion Plaintiffs did not quantify any alleged damages in the SAC but, in addition to attorneys’ fees and costs, seek an order certifying the action as a class action, an order adopting the Abrasion Plaintiffs’ class definitions and finding that the Abrasion Plaintiffs are their proper representatives, an order appointing their counsel as class counsel, injunctive relief prohibiting the Company from continuing to advertise and/or sell laminate flooring products with false abrasion class ratings, restitution of all monies it received from the Abrasion Plaintiffs and class members, damages (actual, compensatory, and consequential) and punitive damages. The Company filed a motion to dismiss the SAC and the Abrasion Plaintiffs filed a motion for leave to file a corrected SAC. The Company’s motion was subsequently granted in part and denied in part. The court also denied the Abrasion Plaintiffs’ motion for leave to file a corrected SAC. The Abrasion Plaintiffs have until March 1, 2016, to file a Third Amended Complaint. The Company disputes the Abrasion Plaintiffs’ claims and intends to defend these matters vigorously. Given the uncertainty of litigation, the preliminary stage of these cases, the legal standards that must be met for, among other things, class certification and success on the merits, the Company cannot estimate the reasonably possible loss or range of loss that may result from these actions. Morris Matter On or about August 18, 2015, Kevin Morris (“Morris”) filed a purported class action lawsuit in the Circuit Court of the Twentieth Judicial Circuit in St. Clair County, Illinois alleging that the Casa de Colour Collection by Dura-Wood flooring (the “Morris Product”), a brand of solid wood flooring sold by the Company, is defective due to warping, cupping and buckling. Morris alleges that the Company has engaged in unfair business practices and unfair competition by falsely representing the quality and characteristics of the Morris Product and by concealing the Morris Product’s defective nature. In particular, Morris’s allegations include (i) common law fraud, (ii) breach of implied warranty, (iii) breach of express warranty, (iv) breach of contract, (v) breach of duty of good faith and fair dealing, (vi) violation of the Illinois Consumer Fraud and Deceptive Business Practices Act (the “ICFA”) and (vii) violation of the Uniform Deceptive Trade Practices Act (the “UDTPA”). Morris did not quantify any alleged damages in his complaint but, in addition to attorneys’ fees and costs, Morris seeks (i) certification of the purposed class, (ii) injunctive relief requiring the Company to replace and/or repair all Morris Products installed in structures owned by the purported class, (iii) an award of compensatory, consequential and statutory damages, pre-judgment interest and post-judgment interest, (iv) a declaration that the Company must disgorge, for the benefit of the purported class, all or part of the Company’s profits received from the sale of the Morris Product and/or to make full restitution to Morris and the purported class, (v) a judgment for actual damages for injuries suffered by Morris and the purported class as a result of the Company’s violation of the ICFA and (vi) a judgment awarding Morris and the purported class reasonable attorneys’ fees and costs in accordance with the UDTPA. On September 25, 2015, the Company removed the action to the United States District Court for the Southern District of Illinois. Subsequently, the Company filed a motion to dismiss. Morris failed to respond to the motion and, as a result, the lawsuit was dismissed without prejudice on November 10, 2015. Ross Matter On or about February 23, 2016, Joseph Ross and Linda Ross (collectively, “Ross”) filed a purported class action lawsuit in the Second Judicial District Court, State of Nevada, County of Washoe. Ross seeks the certification of a class of individuals in the State of Nevada who purchased certain hardwood flooring products produced in China (the “Ross Products”). Ross alleges that the Ross Products are defective due to the Ross Products being contaminated with certain wood-boring insects. In particular, Ross’s allegations include (i) breach of warranty, (ii) negligence, (iii) strict liability, (iv) negligent misrepresentation, (v) willful misconduct, and (vi) unjust enrichment. In the complaint, Ross seeks (i) general and special damages according to proof in excess of $50,000 , (ii) attorneys’ fees and costs according to proof, (iii) prejudgment and post-judgment interest on all sums awarded, according to proof at the maximum legal rate, (iv) costs of the lawsuit incurred, (v) restitution as authorized by law, (vi) punitive damages as authorized by law, and (vii) specific performance under our express warranties. The Company disputes Ross’s claims and intends to defend the matter vigorously. Given the uncertainty of litigation, the preliminary stage of the case, and the legal standards that must be met for, among other things, class certification and success on the merits, the Company cannot estimate the reasonably possible loss or range of loss that may result from this action. Derivative Litigation Matters Consolidated Cases On or about March 11, 2015, R. Andre Klein (“Klein”) filed a shareholder derivative suit in the United States District Court for the Eastern District of Virginia against the Company’s directors at that time, as well as its Senior Vice President, Supply Chain, former Chief Merchandising Officer and former Chief Financial Officer (collectively, the “Klein Defendants”). On or about |
Condensed Quarterly Financial I
Condensed Quarterly Financial Information (unaudited) | 12 Months Ended |
Dec. 31, 2015 | |
Condensed Quarterly Financial Information [Abstract] | |
Condensed Quarterly Financial Information (unaudited) | Note 11. Condensed Quarterly Financial Information (unaudited) The following tables present the Company’s unaudited quarterly results for 2015 and 2014. Quarter Ended March 31, 2015 June 30, 2015 September 30, 2015 December 31, 2015 Net Sales $ 259,961 $ 247,944 $ 236,064 $ 234,807 Gross Profit 91,612 62,284 70,996 53,966 Selling, General and Administrative Expenses 97,680 90,551 88,333 85,487 Operating (Loss) Income (6,068) (28,267) (17,337) (31,521) Net (Loss) Income (1,2,3) $ (7,780) $ (20,347) $ (8,479) $ (19,827) Net income per Common Share - Basic $ (0.29) $ (0.75) $ (0.31) $ (0.73) Net income per Common Share - Diluted $ (0.29) $ (0.75) $ (0.31) $ (0.73) Number of Stores Opened in Quarter 4 7 7 4 Comparable store net sales (Decrease) Increase (1.8) % (10.0) % (14.6) % (17.2) % 1 Includes pretax lower of cost or market inventory adjustments recorded for Chinese laminate and tile inventory of $4,002 in the Second Quarter and $22,160 in the Fourth Quarter. See “Note 1. Summary of Significant Accounting Policies” above. 2 Includes pretax charges for legal matters of $10,000 in the First Quarter, $8,077 in the Second Quarter, and $2,400 in the Fourth Quarter. See “Note 10. Commitments and Contingencies” above. 3 Includes pretax impairment charges related to long-lived assets of $1,350 in the Second Quarter and $3,043 in the Third Quarter. See “Note 1. Summary of Significant Accounting Policies” above. Quarter Ended March 31, 2014 June 30, 2014 September 30, 2014 December 31, 2014 Net Sales $ 246,291 $ 263,085 $ 266,067 $ 271,976 Gross Profit 101,287 106,238 104,158 106,484 Selling, General and Administrative Expenses 78,866 79,066 78,377 77,805 Operating (Loss) Income 22,421 27,172 25,781 28,679 Net (Loss) Income $ 13,694 $ 16,607 $ 15,725 $ 17,345 Net income per Common Share - Basic $ 0.50 $ 0.61 $ 0.58 $ 0.64 Net income per Common Share - Diluted $ 0.49 $ 0.60 $ 0.58 $ 0.64 Number of Stores Opened in Quarter 13 13 5 3 Comparable store net sales (Decrease) Increase (0.6) % (7.1) % (4.9) % (4.2) % |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 12. Subsequent Events In February 2016, the Company paid settlement amounts totaling $6,200 , as described in Note 10, under Lacey Act Related Matters. Due to a planned build in inventory, the Company borrowed an additional $10,000 under its Revolving Credit Facility, as described in Note 4. As of February 29, 2016, the Company has $30,000 in outstanding borrowings under the Revolving Credit Facility. |
Schedule II - Analysis of Valua
Schedule II - Analysis of Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2015 | |
Schedule II - Analysis of Valuation and Qualifying Accounts [Abstract] | |
Schedule II - Analysis of Valuation and Qualifying Accounts | Lumber Liquidators Holdings, Inc. Schedule II – Analysis of Valuation and Qualifying Accounts For the Years Ended December 31, 2015, 2014 and 2013 (in thousands) Balance Beginning of Year Additions Charged to Cost and Expenses Deductions (1) Other Balance End of Year For the Year Ended December 31, 2013 Reserve deducted from assets to which it applies Inventory reserve for loss or obsolescence $ 1,035 $ 1,465 $ (1,225) $ - $ 1,275 Income tax valuation allowance $ 1,267 $ 498 $ - $ - $ 1,765 For the Year Ended December 31, 2014 Reserve deducted from assets to which it applies Inventory reserve for loss or obsolescence $ 1,275 $ 3,198 (2) $ (1,231) $ - $ 3,242 Income tax valuation allowance $ 1,765 $ 458 $ - $ - $ 2,223 For the Year Ended December 31, 2015 Reserve deducted from assets to which it applies Inventory reserve for loss or obsolescence $ 3,242 $ 28,897 (3) $ (5,257) $ - $ 26,882 Income tax valuation allowance $ 2,223 $ 210 $ - $ - $ 2,433 1 Deductions are for the purposes for which the reserve was created. 2 Addition of $1,200 for reserves related to the Company's Bellawood transition. 3 Includes $22,499 for laminate flooring sourced from China and $3,663 related to the tile exit. |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Significant Accounting Policies [Abstract] | |
Nature of Business | Nature of Business Lumber Liquidators Holdings, Inc. and its direct and indirect subsidiaries (collectively and, where applicable, individually, the “Company”) engage in business as a multi-channel specialty retailer of hardwood flooring, and hardwood flooring enhancements and accessories, operating as a single operating segment. The Company offers an extensive assortment of exotic and domestic hardwood species, engineered hardwood, laminate and resilient vinyl flooring direct to the consumer. The Company also features the renewable flooring products, bamboo and cork, and provides a wide selection of flooring enhancements and accessories, including moldings, noise-reducing underlay, adhesives and flooring tools. The Company also provides in-home delivery and installation services to certain of its customers. The Company sells primarily to homeowners or to contractors on behalf of homeowners through a network of 366 store locations in primary or secondary metropolitan areas in 46 states and eight store locations in Canada at December 31, 2015. In addition to the store locations, the Company’s products may be ordered, and customer questions/concerns addressed, through both its call center in Toano, Virginia, and its website, www.lumberliquidators.com. The Company finishes the majority of the Bellawood products on its finishing lines in Toano, Virginia, which along with the call center, corporate offices, and a distribution center, represent the “Corporate Headquarters.” |
Organization and Basis of Financial Statement Presentation | Organization and Basis of Financial Statement Presentation The consolidated financial statements of Lumber Liquidators Holdings, Inc., a Delaware corporation, include the accounts of its wholly owned subsidiaries. All significant intercompany transactions have been eliminated in consolidation. In 2014, the Company entered into an arrangement to begin to vertically integrate its domestic hardwood supply to feed its finishing lines. During the quarter ended June 30, 2015, the Company decided to discontinue certain of these vertical integration initiatives, which were previously consolidated as a variable interest entity, and terminated its prior arrangement. As a result, the Company has recorded a charge of $1,457 in cost of sales in its consolidated statements of income upon deconsolidation of the variable interest entity. The charge was measured as the difference between the fair value of the assets received upon termination and the carrying value of the related net assets. In order to conform to current year presentation, the Company has reclassified the deferred tax asset on the accompanying December 31, 2014 consolidated balance sheet to a separate line item from other current assets. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company had cash equivalents of $ 8,551 and $12,700 at December 31, 2015 and 2014, respectively. The Company considers all highly liquid investments with a maturity date of three months or less when purchased to be cash equivalents, of which there was nil at December 31, 2015 and 2014, respectively. The Company accepts a range of debit and credit cards, and these transactions are generally transmitted to a bank for reimbursement within 24 hours. The payments due from the banks for these debit and credit card transactions are generally received, or settled, within 24 to 48 hours of the transmission date. The Company considers all debit and credit card transactions that settle in less than seven days to be cash and cash equivalents. Amounts due from the banks for these transactions classified as cash and cash equivalents totaled $ 8,551 and $12,700 at December 31, 2015 and 2014, respectively. |
Credit Programs | Credit Programs Credit is offered to the Company’s customers through a proprietary credit card, underwritten by a third party financial institution and generally at no recourse to the Company. A credit line is offered to the Company’s professional customers through the Lumber Liquidators Commercial Credit Program. This commercial credit program is underwritten by a third party financial institution, generally with no recourse to the Company. As part of the credit program, the Company’s customers may tender their Lumber Liquidators credit card to receive installation services provided by the Company’s third party installation provider, who is responsible for all credits and program fees for the related transactions. The Company has agreed to indemnify the financial institution against any losses related to these credits or fees. There are no maximum potential future payments under the guarantee. The Company is able to seek recovery from the installation provider of any amounts paid on its behalf. The Company believes that the risk of significant loss from the guarantee of these obligations is remote. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of financial instruments such as cash and cash equivalents, accounts payable and other liabilities approximate fair value because of the short-term nature of these items and the carrying amount of obligations under our revolving credit facility approximate fair value due to the variable rate of interest . Of these financial instruments, the cash equivalents are classified as Level 1 as defined in the Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) 820 fair value hierarchy. Certain non-financial assets, including property and equipment, have been written down and measured in the consolidated financial statements at fair value. Fair value was based on expected future cash flows using Level 3 inputs under ASC 820. |
Merchandise Inventories | Merchandise Inventories The Company values merchandise inventories at the lower of cost or market value. Merchandise cost is determined using the average cost method. All of the hardwood flooring purchased from vendors is either prefinished or unfinished, and in immediate saleable form. The Company adds the finish to, and boxes, various species of unfinished product, to produce certain proprietary products, primarily Bellawood, at its finishing facility. These finishing and boxing costs are included in the average unit cost of related merchandise inventory. The Company maintains an inventory reserve for loss or obsolescence based on historical results and current sales trends. This reserve was $ 26,882 and $3,242 at December 31, 2015 and 2014, respectively. On May 7, 2015, the Company suspended the sale of laminate products sourced from China after certain allegations were made regarding these products. This inventory has been held in stores and distribution centers as the Company has continued to evaluate and assess alternatives for the disposition of these products and the potential implications these alternatives could have on the net realizable value of the laminate flooring inventory sourced from China. During the quarter ended June 30, 2015, the Company recorded a charge of approximately $339 related to its laminate flooring sourced from China, primarily for flooring with less than job-lot quantities on hand as the Company did not intend to purchase additional quantities of such product. During the quarter ended December 31, 2015, in connection with changes in the executive management team and based on the most recent evaluation of the alternatives for disposal, which considered strategic and operational considerations including potential distractions these products could have on the Company’s employees and business, the Company determined that it would not sell the current inventory of laminate flooring sourced from China in its stores . As a result of this decision, the Company recorded a charge to reduce the remaining carrying value of this laminate flooring and related moldings to its net realizable value of zero. The Company recorded total charges related to laminate flooring sourced from China of $22,499 in cost of sales for the year ended December 31, 2015 in the accompanying consolidated statements of operations. The Company is considering its options for disposal of this product. Costs related to shipping and disposal will be recognized as incurred. During the quarter ended June 30, 2015, the Company appointed its founder as acting chief executive officer. In connection with this and other management changes, the Company determined that it would refocus on its core business and it would not pursue an expansion into the tile flooring business in the near term. In 2014, the Company had begun to sell tile flooring and related accessories in three stores as a potential growth opportunity. As a result, in the second quarter of 2015, the Company recorded a lower of cost or market adjustment of $3,663 for certain tile flooring and related accessories, which is recorded in cost of sales for the year ended December 31, 2015 in the accompanying consolidated statements of operations. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company evaluates potential impairment losses on long-lived assets used in operations when events and circumstances indicate that the assets may be impaired, and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amounts of those assets. If impairment exists and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amount of those assets, an impairment loss is recorded based on the difference between the carrying value and fair value of the assets. In the third quarter of 2015, the Company finalized the termination of its agreement relating to certain vertical integration initiatives which changed the Company’s expectations of future cash flows from related long-lived assets. As a result, the Company tested certain long-lived assets for impairment. The Company recorded a $3,043 impairment charge within selling, general and administrative (“SG&A”) expenses for the three months ended September 30, 3015 in its accompanying consolidated statements of income. The impairment charge was measured under an income approach utilizing forecasted discounted cash flows. Fair value was based on expected future cash flows using Level 3 inputs under ASC 820. The most significant unobservable input used in the fair value analysis relates to the estimated sales price of the long-lived assets. In the second quarter of 2015, the Company concluded that its decision not to pursue an expansion into the tile flooring business in the near term was a triggering event requiring assessment of recoverability for certain of its long-lived assets. As a result, the Company tested the long-lived assets for impairment related to its store locations selling a significant assortment of tile flooring. In the second quarter of 2015, the Company recorded a $1,350 impairment charge, which is recorded within SG&A expenses for the year ended December 31, 3015 in the accompanying consolidated statements of income. The impairment charge was measured under an income approach utilizing forecasted discounted cash flows. Fair value was based on expected future cash flows using Level 3 inputs under ASC 820. The most significant unobservable input used in the fair value analysis relates to the estimated sales price of the long-lived assets. No impairment charges were recognized in 2014 or 2013. |
Goodwill and Other Indefinite-Lived Intangibles | Goodwill and Other Indefinite-Lived Intangibles Goodwill represents the costs in excess of the fair value of net assets acquired associated with acquisitions by the Company. Other assets include $800 for an indefinite-lived intangible asset for the phone number 1-800-HARDWOOD and related internet domain names. The Company evaluates these assets for impairment on an annual basis, or whenever events or changes in circumstance indicate that the asset carrying value exceeds its fair value . Based on the analysis performed, the Company has concluded that no impairment in the value of these assets has occurred. |
Self Insurance | Self - Insurance The Company is self-insured for certain employee health benefit claims and for certain workers’ compensation claims. The Company estimates a liability for aggregate losses below stop-loss coverage limits based on estimates of the ultimate costs to be incurred to settle known claims and claims incurred but not reported as of the balance sheet date. The estimated liability is not discounted and is based on a number of assumptions and factors including historical and industry trends and economic conditions. This liability could be affected if future occurrences and claims differ from these assumptions and historical trends. As of December 31, 2015 and 2014, an accrual of $1,976 and $1,585 related to estimated claims was included in other current liabilities, respectively. |
Recognition of Net Sales | Recognition of Net Sales The Company recognizes net sales for products purchased at the time the customer takes possession of the merchandise . Service revenue, primarily installation revenue and freight charges for in-home delivery, is included in net sales and recognized when the service has been rendered. The Company reports sales exclusive of sales taxes collected from customers and remitted to governmental taxing authorities, and net of an allowance for anticipated sales returns based on historical and current sales trends and experience. The sales returns allowance and related changes were not significant for 2015, 2014 or 2013. In total, we offer more than 400 different flooring product stock-keeping units; however, no single flooring product represented more than 2% of our sales mix. By major product category, our sales mix was as follows: 2015 2014 2013 Solid and Engineered Hardwood $ 378,501 $ 406,887 $ 413,709 Laminate 153,722 199,775 195,382 Bamboo, Cork, Vinyl Plank and Other 221,776 212,735 193,960 Moldings and Accessories 184,144 195,539 180,713 Non-Merchandise Services 40,633 32,483 16,476 Total $ 978,776 $ 1,047,419 $ 1,000,240 The Company generally requires customers to pay a deposit, equal to approximately half of the retail sales value, when purchasing merchandise inventories not regularly carried in a given store location, or not currently in stock. These deposits are included in customer deposits and store credits until the customer takes possession of the merchandise. |
Cost of Sales | Cost of Sales Cost of sales includes the cost of the product sold, cost of installation services, transportation costs from vendor to the Company’s distribution centers or store locations, any applicable finishing costs related to production of the Company’s proprietary brands, transportation costs from distribution centers to store locations, transportation costs for the delivery of products from store locations to customers, certain costs of quality control procedures, inventory adjustments including shrinkage, and costs to produce samples, reduced by vendor allowances. In early March 2015, the Company began voluntarily offering free indoor air quality screening to certain of its flooring customers, predominately those who had purchased laminate flooring sourced from China, to address customer questions about the air quality in their homes. During the year ended December 31, 2015, over approximately 48,000 testing kits were sent to Lumber Liquidators customers through the program. In total, approximately 30,500 testing kits have been returned. Of those returned, over 90% indicated indoor air concentrations of formaldehyde within the guidelines set by the World Health Organization (“WHO”) as protective against sensory irritation and long-term health effects. The Company has been and continues to directly contact the customers whose test results indicate an indoor formaldehyde level in excess of the WHO guideline for additional investigation and next steps. These “Phase 2” steps primarily consist of independent third-party laboratory testing of flooring samples from these customers. If the results of this testing indicates that the flooring is contributing to formaldehyde levels in a customer’s home at elevated rates, the Company will work with the customer, at the Company’s discretion, to replace the customer’s floor or compensate the customer for the cost of the floor as part of “Phase 3”. Throughout 2015, the Company facilitated customers with elevated Phase 1 testing results to complete Phase 2. To date, the Company did not record a reserve for Phase 3 based on the results it has received to date from the testing of customer flooring samples. The Company believes the test results and number of tests obtained to date provided a reasonable basis to support its assertion that a material reserve related to the replacement of customer floors was not warranted. The Company will, however, continue to evaluate the results of each phase of the indoor air quality testing program. Should its results differ from current trends, the Company could record a material charge in future periods. The Company incurred $9,445 of direct costs primarily related to purchases of testing kits and professional fees for the year ended December 31, 2015. At December 31, 2015, the Company had a reserve of $ 809 for estimated future costs to evaluate whether the laminate flooring purchased from the Company was the primary driver of the air quality testing results being above WHO standards. The reserve was based on actual experience to date, estimated using information through the filing date of the financial statements and was included in other current liabilities. Should the Company’s actual experience related to results of its indoor air quality testing program and subsequent follow-up with customers differ from these estimates, may be recorded in the future. A rollforward of the reserve for the Company’s air quality testing program was as follows: Balance at December 31, 2014 $ — Provision 10,873 Reversal (1,428) Payments (8,636) Balance at December 31, 2015 $ 809 Additionally, for the year ended December 31, 2015, the Company incurred customer satisfaction costs of $1,200 , , primarily related to projects using certain laminate or engineered hardwood products that were incomplete as of the date sales of such laminate and engineered hardwood products were suspended during the second quarter of 2015. These costs were incurred to ensure customers could complete their projects in a satisfactory manner. Refer to Note 10, Commitments and Contingencies, for a discussion of these products. The Company offers a range of limited warranties from the durability of the finish on its prefinished products to its services provided. These limited warranties range from one to 100 years. Warranty reserves are based primarily on claims experience, sales history and other considerations, including payments made to satisfy customers for claims not directly related to the warranty on the Company’s products. Warranty costs are recorded in cost of sales. This reserve was $ 1,688 and $ 1,568 at December 31, 2015 and 2014, respectively. The Company is able to seek recovery from its vendors and installation providers for certain amounts paid. Vendor allowances primarily consist of volume rebates that are earned as a result of attaining certain purchase levels and reimbursement for the cost of producing samples. Vendor allowances are accrued as earned, with those allowances received as a result of attaining certain purchase levels accrued over the incentive period based on estimates of purchases. Volume rebates earned are initially recorded as a reduction in merchandise inventories and a subsequent reduction in cost of sales when the related product is sold. Reimbursement received for the cost of producing samples is recorded as an offset against cost of sales. |
Advertising Costs | Advertising Costs Advertising costs charged to selling, general and administrative (“SG&A”) expenses, net of vendor allowances, were $ 77,455 , $82,604 and $75,506 in 2015, 2014 and 2013, respectively. The Company uses various types of media to brand its name and advertise its products. Media production costs are generally expensed as incurred, except for direct mail, which is expensed when the finished piece enters the postal system. Media placement costs are generally expensed in the month the advertising occurs, except for contracted endorsements and sports agreements, which are generally expensed ratably over the contract period. Amounts paid in advance are included in prepaid expenses and totaled $ 1,495 and $1,549 at December 31, 2015 and 2014, respectively. |
Store Opening Costs | Store Opening Costs Costs to open new store locations are charged to SG&A expenses as incurred, net of any vendor support. |
Other Vendor Consideration | Other Vendor Consideration Consideration from non-merchandise vendors, including royalties and rebates, are generally recorded as an offset to SG&A expenses when earned. |
Depreciation and Amortization | Depreciation and Amortization Property and equipment is carried at cost and depreciated on the straight-line method over the estimated useful lives. The estimated useful lives for leasehold improvements are the shorter of the estimated useful lives or the remainder of the lease terms. For leases with optional renewal periods, the Company uses the original lease term, excluding optional renewal periods, to determine the appropriate estimated useful lives. Capitalized software costs are capitalized from the time that technological feasibility is established until the software is ready for use. The estimated useful lives are generally as follows: Years Buildings and Building Improvements 15 to 40 Property and Equipment 5 to 25 Computer Software and Hardware 3 to 10 Leasehold Improvements 1 to 15 |
Operating Leases | Operating Leases The Company has operating leases for its stores, Corporate Headquarters, certain of its distribution facilities, supplemental office facilities and certain equipment. The lease agreements for certain stores and distribution facilities contain rent escalation clauses, rent holidays and tenant improvement allowances. For scheduled rent escalation clauses during the lease terms or for rental payments commencing at a date other than the date of initial occupancy, the Company records minimum rental expenses in SG&A expenses on a straight-line basis over the terms of the leases. The difference between the rental expense and rent paid is recorded as deferred rent on the consolidated balance sheets. For tenant improvement allowances, the Company records deferred rent on the consolidated balance sheets and amortizes the deferred rent over the terms of the leases as reductions to rental expense. |
Stock-Based Compensation | Stock-Based Compensation The Company records compensation expense associated with stock options and other forms of equity compensation in accordance with FASB ASC 718. The Company may issue incentive awards in the form of stock options, restricted shares and other equity awards to employees, non-employee directors and other service providers. The Company recognizes expense for its stock-based compensation based on the fair value of the awards that are granted. Compensation expense is recognized only for those awards expected to vest, with forfeitures estimated at the date of grant based on historical experience and future expectations. Measured compensation cost is recognized ratably over the requisite service period of the entire related stock-based compensation award. |
Foreign Currency Translation | Foreign Currency Translation The Company’s Canadian operations use the Canadian dollar as the functional currency. Assets and liabilities are translated at exchange rates in effect at the balance sheet date. Revenues and expenses are translated at the average monthly exchange rates during the year. Resulting translation adjustments are recorded as a component of accumulated other comprehensive income on the consolidated balance sheets. |
Income Taxes | Income Taxes Income taxes are accounted for in accordance with FASB ASC 740 (“ASC 740”). Income taxes are provided for under the asset and liability method and consider differences between the tax and financial accounting bases. The tax effects of these differences are reflected on the consolidated balance sheets as deferred income taxes and measured using the effective tax rate expected to be in effect when the differences reverse. ASC 740 also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some portion of the deferred tax asset will not be realized. In evaluating the need for a valuation allowance, the Company takes into account various factors, including the nature, frequency and severity of current and cumulative losses, expected level of future taxable income, the duration of statutory carryforward periods and tax planning alternatives. In future periods, any valuation allowance will be re-evaluated in accordance with ASC 740, and a change, if required, will be recorded through income tax expense in the period such determination is made. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the relevant taxing authorities, based on the technical merits of its position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The Company classifies interest and penalties related to income tax matters as a component of income tax expense. |
Net Income per Common Share | Net Income per Common Share Basic net income per common share is determined by dividing net income by the weighted average number of common shares outstanding during the year. Diluted net income per common share is determined by dividing net income by the weighted average number of common shares outstanding during the year, plus the dilutive effect of common stock equivalents, including stock options and restricted shares. Common stock and common stock equivalents included in the computation represent shares issuable upon assumed exercise of outstanding stock options and release of restricted shares, except when the effect of their inclusion would be antidilutive. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the FASB issued Accounting Standards Update No. 2016-02 (“ASU 2016-02”), which creates ASC Topic 842, Leases , and supersedes the lease accounting requirements in Topic 840, Leases. In summary, Topic 842 requires organizations that lease assets—referred to as “lessees”—to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. The amendments in ASU 2016-02 are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Therefore, the amendments in ASU 2016-02 will become effective for the Company at the beginning of its 2019 fiscal year. The Company is currently assessing the impact of implementing the new guidance on its consolidated financial statements. When implemented, the standard is expected to have a material impact as its operating leases will be recognized on the consolidated balance sheet. In November 2015, the FASB issued Accounting Standards Update No. 201 5 -17 (“ASU 2015-17”), which amends ASC Topic 740, Balance Sheet Classification of Deferred Taxes. In summary, the core principle of Topic 740 is that an entity classify both current and noncurrent deferred income tax assets and liabilities in the noncurrent section of the statement of financial position. The current requirement that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount is not affected by this amendment. The amendments in ASU 2015-17 are effective for annual reporting periods beginning after December 15, 2017 and interim periods beginning after December 31, 20 1 8. Early application is permitted for all entities as of the beginning of an interim or annual reporting period. The Company is currently assessing the impact of implementing the new guidance on its consolidated financial statements and has not yet selected a method of adoption. In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (“ASU 2014-09”), which creates ASC Topic 606, Revenue from Contracts with Customers, and supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, including most industry-specific revenue recognition guidance throughout the Industry Topics of the Codification. In addition, ASU 2014-09 supersedes the cost guidance in Subtopic 605-35, Revenue Recognition—Construction-Type and Production-Type Contracts, and creates new Subtopic 340-40, Other Assets and Deferred Costs—Contracts with Customers. In summary, the core principle of Topic 606 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendments in ASU 2014-09 are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period, and early application is not permitted. Therefore, the amendments in ASU 2014-09 will become effective for the Company at the beginning of its 2017 fiscal year. The Company is currently assessing the impact of implementing the new guidance on its consolidated financial statements and has not yet selected a method of adoption |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Significant Accounting Policies [Abstract] | |
Sales Mix by Major Product | In total, we offer more than 400 different flooring product stock-keeping units; however, no single flooring product represented more than 2% of our sales mix. By major product category, our sales mix was as follows: 2015 2014 2013 Solid and Engineered Hardwood $ 378,501 $ 406,887 $ 413,709 Laminate 153,722 199,775 195,382 Bamboo, Cork, Vinyl Plank and Other 221,776 212,735 193,960 Moldings and Accessories 184,144 195,539 180,713 Non-Merchandise Services 40,633 32,483 16,476 Total $ 978,776 $ 1,047,419 $ 1,000,240 |
Rollforward of the Reserve for Air Quality Testing Program | A rollforward of the reserve for the Company’s air quality testing program was as follows: Balance at December 31, 2014 $ — Provision 10,873 Reversal (1,428) Payments (8,636) Balance at December 31, 2015 $ 809 |
Estimated Useful Lives of Property Plant and Equipment | The estimated useful lives are generally as follows: Years Buildings and Building Improvements 15 to 40 Property and Equipment 5 to 25 Computer Software and Hardware 3 to 10 Leasehold Improvements 1 to 15 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of: December 31, 2015 2014 Land $ 4,937 $ 4,937 Building 44,234 - Property and Equipment 59,015 51,409 Computer Software and Hardware 44,026 40,071 Leasehold Improvement 35,495 30,715 Assets under Construction 1,623 51,097 189,330 178,229 Less: Accumulated Depreciation and Amortization 67,333 53,362 Property and Equipment, net $ 121,997 $ 124,867 |
Other Current Liabilities (Tabl
Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Other Current Liabilities [Abstract] | |
Other Current Liabilities | Other current liabilities consisted of: December 31, 2015 2014 Accrued Legal and Settlement Expense $ 14,011 $ 2,087 Other 14,744 15,749 Other Current Liabilities, net $ 28,755 $ 17,836 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Leases [Abstract] | |
Rental Expense | Rental expense is as follows: Year Ended December 31, 2015 2014 2013 Rental expense $ 28,825 $ 27,995 $ 21,874 Rental expense related to Controlled Companies 3,070 2,837 2,895 |
Future Minimum Rental Payments under Non-Cancellable Operating Leases | 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, 2015: Operating Leases Controlled Companies Store Leases Headquarters Lease Store Leases Distribution Centers & Other Leases Total Operating Leases 2016 $ 2,066 $ 1,271 $ 24,537 $ 2,411 $ 30,285 2017 1,611 1,309 21,214 2,435 26,569 2018 1,490 1,348 16,928 2,394 22,160 2019 1,121 1,388 13,046 2,305 17,860 2020 836 - 9,785 2,361 12,982 Thereafter 1,390 - 12,206 8,452 22,048 Total minimum lease payments $ 8,514 $ 5,316 $ 97,716 $ 20,358 $ 131,904 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Stockholders' Equity [Abstract] | |
Computation of Basic and Diluted Net Income Per Common Share | The following table sets forth the computation of basic and diluted net income per common share: Year Ended December 31, 2015 2014 2013 Net (Loss) Income $ (56,433) $ 63,371 $ 77,395 $ Weighted Average Common Shares Outstanding—Basic 27,082,299 27,264,882 27,484,790 Effect of Dilutive Securities: Common Stock Equivalents — 220,970 429,532 Weighted Average Common Shares Outstanding—Diluted 27,082,299 27,485,852 27,914,322 Net (Loss) Income per Common Share—Basic $ (2.08) $ 2.32 $ 2.82 $ Net (Loss) Income per Common Share—Diluted $ (2.08) $ 2.31 $ 2.77 $ |
Anti-Dilutive Securities Excluded from Computation of Weighted Average Common Shares Outstanding Diluted | The following have been excluded from the computation of Weighted Average Common Shares Outstanding—Diluted because the effect would be antidilutive: As of December 31, 2015 2014 2013 Stock Options 650,759 184,252 103,329 Restricted Shares 225,027 16,999 176 |
Purchases Under Stock Repurchase Program | Purchases under this program were as follows: Year Ended December 31, 2015 2014 2013 Shares Repurchased - 671,200 403,630 Average Price per Share $ - $ 77.68 $ 84.40 Total Aggregate Costs $ - $ 52,138 $ 34,066 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Stock-Based Compensation [Abstract] | |
Stock-Based Compensation Expense | S tock-based compensation expense included in SG&A expenses consisted of: Year Ended December 31, 2015 (1) 2014 2013 Stock Options, Restricted Shares and Stock Appreciation Rights $ 3,941 $ 5,593 $ 5,974 ___________________ 1 Includes the impact of actual forfeitures in the period due to the resignation of certain senior executives. |
Summary of Activity Related to Stock Options | The following table summarizes activity related to stock options: Shares Weighted Average Exercise Price Remaining Average Contractual Term (Years) Aggregate Intrinsic Value Balance, December 31, 2012 1,311,377 $ 17.79 6.5 $ 45,954 Granted 214,966 62.52 Exercised (718,665) 14.35 Forfeited (58,188) 29.04 Balance, December 31, 2013 749,490 $ 33.04 7.3 $ 52,358 Granted 79,126 100.05 Exercised (149,707) 21.04 Forfeited (26,101) 60.71 Balance, December 31, 2014 652,808 $ 42.81 6.9 $ 18,113 Granted 410,164 25.34 Exercised - 0.00 Forfeited (370,196) 44.71 Balance, December 31, 2015 692,776 $ 31.45 7.7 $ 1,283 Exercisable at December 31, 2015 221,561 $ 29.28 $ 540 Vested and expected to vest December 31, 2015 692,776 $ 31.45 $ 1,283 |
Ranges of Assumptions | The following are the ranges of assumptions for the periods noted: Year Ended December 31, 2015 2014 2013 Expected dividend rate 0 % 0 % 0 % Expected stock price volatility 50 % 45 % 45 % Risk-free interest rate 1.7 % 1.8 % 1.3 - 2.0 % Expected term of options 5.5 years 5.5 years 6.0 - 7.5 years |
Summary of Activity Related to Restricted Stock Awards | The following table summarizes activity related to restricted shares: Shares Weighted Average Grant Date Fair Value Nonvested, December 31, 2012 152,405 $ 15.19 Granted 80,814 66.11 Released (38,362) 75.73 Forfeited (16,522) 37.51 Nonvested, December 31, 2013 178,335 $ 22.82 Granted 38,260 89.46 Released (45,503) 95.02 Forfeited (14,003) 54.90 Nonvested, December 31, 2014 157,089 $ 15.00 Granted 386,517 18.30 Released (27,187) 41.57 Forfeited (54,748) 45.93 Nonvested, December 31, 2015 461,671 $ 12.95 |
Summary of Activities Related to Stock Appreciation Rights | The following table summarizes activity related to SARs: Shares Weighted Average Exercise Price Remaining Average Contractual Term (Years) Aggregate Intrinsic Value Balance, December 31, 2012 9,301 $ 17.79 6.5 $ 261 Granted 7,533 62.52 Forfeited (678) 29.04 Balance, December 31, 2013 16,156 $ 33.04 7.3 $ 938 Granted 1,941 100.05 Forfeited (1,870) 60.71 Balance, December 31, 2014 16,227 $ 42.81 6.9 $ 389 Granted - 0.00 Forfeited (170) 93.68 Balance, December 31, 2015 16,057 $ 47.58 6.8 $ - Exercisable at December 31, 2015 10,420 $ 41.59 6.6 $ - |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes [Abstract] | |
Components of Income Before Income Taxes | The components of income before income taxes were as follows: Year Ended December 31, 2015 2014 2013 United States $ (80,136) $ 105,447 $ 128,482 Foreign (3,291) (1,864) (2,017) Total Income before Income Taxes $ (83,427) $ 103,583 $ 126,465 |
Provision for Income Taxes | The provision for income taxes consisted of the following: Year Ended December 31, 2015 2014 2013 Current Federal $ (14,088) $ 34,615 $ 43,159 State (975) 5,614 6,637 Foreign 133 135 120 Total Current (14,930) 40,364 49,916 Deferred Federal (9,276) (22) (745) State (2,788) (130) (101) Foreign - - - Total Deferred (12,064) (152) (846) Total Provision for Income Taxes $ (26,994) $ 40,212 $ 49,070 |
Reconciliation of Significant Differences Between Income Tax Expenses Applying Federal Statutory Rate to Actual Income Tax Expense at Effective Rate | Year Ended December 31, 2015 2014 2013 Current Federal $ (14,088) $ 34,615 $ 43,159 State (975) 5,614 6,637 Foreign 133 135 120 Total Current (14,930) 40,364 49,916 Deferred Federal (9,276) (22) (745) State (2,788) (130) (101) Foreign - - - Total Deferred (12,064) (152) (846) Total Provision for Income Taxes $ (26,994) $ 40,212 $ 49,070 The reconciliation of significant differences between income tax expense applying the federal statutory rate and the actual income tax expense at the effective rate are as follows: Year Ended December 31, 2015 2014 2013 Income Tax Expense at Federal Statutory Rate $ (29,200) 35.0 % $ 36,254 35.0 % $ 44,263 35.0 % (Decreases) Increases: State Income Taxes, Net of Federal Income Tax Benefit (2,401) 2.9 % 3,711 3.6 % 4,146 3.3 % Valuation Allowance 210 (0.2) % 458 0.4 % 498 0.4 % Foreign Operations 1,075 (1.3) % 329 0.3 % 328 0.2 % Non-deductible penalty 3,887 (4.7) % - - % - - % Other (565) 0.7 % (540) (0.5) % (165) (0.1) % Total $ (26,994) 32.4 % $ 40,212 38.8 % $ 49,070 38.8 % |
Tax Effects of Temporary Differences Result in Significant Portions of Deferred Tax Accounts | The tax effects of temporary differences that result in significant portions of the deferred tax accounts are as follows: December 31, 2015 2014 Deferred Tax Liabilities: Prepaid Expenses and Other $ (1) $ (77) Depreciation and Amortization (20,367) (16,900) Total Gross Deferred Tax Liabilities (20,368) (16,977) Deferred Tax Assets: Stock-Based Compensation Expense 3,794 3,785 Reserves and Accruals 9,825 4,296 Employee Benefits 1,034 15 Inventory Reserves 10,699 1,606 Inventory Capitalization 4,457 5,582 Foreign Net Operating Losses 2,433 2,223 Other 966 37 Total Gross Deferred Tax Assets 33,208 17,544 Less Valuation Allowance (2,433) (2,223) Total Net Deferred Tax Assets 30,775 15,321 Net Deferred Tax Asset (Liability) $ 10,407 $ (1,656) |
Reconciliation of Unrecognized Tax Benefits | The reconciliation of unrecognized tax benefits was as follows: Year Ended December 31, 2015 2014 Balance at beginning of year $ 1,232 $ 915 (Decrease) increase based on tax position related to the current year (180) 430 Increases in tax positions for prior years - 161 Decreases in tax positions for prior years (434) - Settlements (11) - Lapse of statute (211) (274) Balance at end of year $ 396 $ 1,232 |
Condensed Quarterly Financial29
Condensed Quarterly Financial Information (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Condensed Quarterly Financial Information [Abstract] | |
Unaudited Quarterly Results | The following tables present the Company’s unaudited quarterly results for 2015 and 2014. Quarter Ended March 31, 2015 June 30, 2015 September 30, 2015 December 31, 2015 Net Sales $ 259,961 $ 247,944 $ 236,064 $ 234,807 Gross Profit 91,612 62,284 70,996 53,966 Selling, General and Administrative Expenses 97,680 90,551 88,333 85,487 Operating (Loss) Income (6,068) (28,267) (17,337) (31,521) Net (Loss) Income (1,2,3) $ (7,780) $ (20,347) $ (8,479) $ (19,827) Net income per Common Share - Basic $ (0.29) $ (0.75) $ (0.31) $ (0.73) Net income per Common Share - Diluted $ (0.29) $ (0.75) $ (0.31) $ (0.73) Number of Stores Opened in Quarter 4 7 7 4 Comparable store net sales (Decrease) Increase (1.8) % (10.0) % (14.6) % (17.2) % 1 Includes pretax lower of cost or market inventory adjustments recorded for Chinese laminate and tile inventory of $4,002 in the Second Quarter and $22,160 in the Fourth Quarter. See “Note 1. Summary of Significant Accounting Policies” above. 2 Includes pretax charges for legal matters of $10,000 in the First Quarter, $8,077 in the Second Quarter, and $2,400 in the Fourth Quarter. See “Note 10. Commitments and Contingencies” above. 3 Includes pretax impairment charges related to long-lived assets of $1,350 in the Second Quarter and $3,043 in the Third Quarter. See “Note 1. Summary of Significant Accounting Policies” above. Quarter Ended March 31, 2014 June 30, 2014 September 30, 2014 December 31, 2014 Net Sales $ 246,291 $ 263,085 $ 266,067 $ 271,976 Gross Profit 101,287 106,238 104,158 106,484 Selling, General and Administrative Expenses 78,866 79,066 78,377 77,805 Operating (Loss) Income 22,421 27,172 25,781 28,679 Net (Loss) Income $ 13,694 $ 16,607 $ 15,725 $ 17,345 Net income per Common Share - Basic $ 0.50 $ 0.61 $ 0.58 $ 0.64 Net income per Common Share - Diluted $ 0.49 $ 0.60 $ 0.58 $ 0.64 Number of Stores Opened in Quarter 13 13 5 3 Comparable store net sales (Decrease) Increase (0.6) % (7.1) % (4.9) % (4.2) % |
Summary of Significant Accoun30
Summary of Significant Accounting Policies (Narrative) (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2015USD ($)statestoreterritoryitem | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2015USD ($)statestoreterritoryitem | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Organization And Business Operations [Line Items] | |||||||
Number of states in which stores operates | state | 46 | 46 | |||||
Number of domestic stores | store | 366 | 366 | |||||
Number of canadian stores | territory | 8 | 8 | |||||
Deconsolidation of variable interest entity | $ 1,457 | $ 1,457 | |||||
Cash Equivalents, at Carrying Value | $ 8,551 | 8,551 | $ 12,700 | ||||
Due from Banks | 8,551 | 8,551 | 12,700 | ||||
Inventory Valuation Reserves | 26,882 | 26,882 | 3,242 | ||||
Asset impairment charge | $ 3,043 | ||||||
Inventory lower of cost or market adjustment | 26,162 | ||||||
Long-lived asset impairment charge | $ 3,043 | 1,350 | 0 | $ 0 | |||
Indefinite-lived intangible assets (excluding goodwill) | $ 800 | $ 800 | |||||
Minimum number of products offered | item | 400 | 400 | |||||
Testing kits sent to customers | item | 48,000 | ||||||
Testing kits returned by customers | item | 30,500 | 30,500 | |||||
Percentage of returned indoor air quality screening test kits within guidelines set by the World Health Organization | 90.00% | 90.00% | |||||
Description of air quality testing kits | In early March 2015, the Company began voluntarily offering free indoor air quality screening to certain of its flooring customers, predominately those who had purchased laminate flooring sourced from China, to address customer questions about the air quality in their homes. During the year ended December 31, 2015, over approximately 48,000 testing kits were sent to Lumber Liquidators customers through the program. In total, approximately 30,500 testing kits have been returned. Of those returned, over 90% indicated indoor air concentrations of formaldehyde within the guidelines set by the World Health Organization ("WHO") as protective against sensory irritation and long-term health effects. | ||||||
Costs incurred for air quality testing | $ 9,445 | ||||||
Warranty and customer satisfaction reserve | $ 809 | 809 | |||||
Customer satisfaction costs | 1,200 | ||||||
Current self insurance reserve | 1,976 | $ 1,976 | 1,585 | ||||
Minimum years of product warranty. | 1 year | ||||||
Maximum years of product warranty | 100 years | ||||||
Product warranty reserve | 1,688 | $ 1,688 | |||||
Advertising expense | 77,455 | 82,604 | $ 75,506 | ||||
Prepaid advertising | 1,495 | $ 1,495 | $ 1,549 | ||||
Sales Revenue, Net [Member] | |||||||
Organization And Business Operations [Line Items] | |||||||
Concentration risk, percentage | 2.00% | ||||||
Laminate [Member] | |||||||
Organization And Business Operations [Line Items] | |||||||
Asset impairment charge | 339 | $ 22,499 | |||||
Inventory lower of cost or market adjustment | 22,160 | $ 4,002 | |||||
Tile Flooring and Related Accessories [Member] | |||||||
Organization And Business Operations [Line Items] | |||||||
Inventory lower of cost or market adjustment | $ 3,663 | ||||||
Short-term Investments [Member] | |||||||
Organization And Business Operations [Line Items] | |||||||
Cash Equivalents, at Carrying Value | $ 0 | $ 0 |
Summary of Significant Accoun31
Summary of Significant Accounting Policies (Sales Mix by Major Product) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Product Information [Line Items] | |||
Net sales | $ 978,776 | $ 1,047,419 | $ 1,000,240 |
Solid and Engineered Hardwood [Member] | |||
Product Information [Line Items] | |||
Net sales | 378,501 | 406,887 | 413,709 |
Laminate [Member] | |||
Product Information [Line Items] | |||
Net sales | 153,722 | 199,775 | 195,382 |
Bamboo, Cork, Vinyl Plank and Other [Member] | |||
Product Information [Line Items] | |||
Net sales | 221,776 | 212,735 | 193,960 |
Moldings and Accessories [Member] | |||
Product Information [Line Items] | |||
Net sales | 184,144 | 195,539 | 180,713 |
Non-Merchandise Services [Member] | |||
Product Information [Line Items] | |||
Net sales | $ 40,633 | $ 32,483 | $ 16,476 |
Summary of Significant Accoun32
Summary of Significant Accounting Policies (Rollforward of the Reserve for Air Quality Testing Program) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Summary of Significant Accounting Policies [Abstract] | |
Air quality testing program accrual, Beginning balance | |
Provision | $ 10,873 |
Reversal | (1,428) |
Payments | (8,636) |
Air quality testing program accrual, Ending balance | $ 809 |
Summary of Significant Accoun33
Summary of Significant Accounting Policies (Estimated Useful Lives) (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Property and Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 5 years |
Property and Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 25 years |
Building and Building Improvements [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 15 years |
Building and Building Improvements [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 40 years |
Computer Software and Hardware [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 3 years |
Computer Software and Hardware [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 10 years |
Leasehold Improvement [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 1 year |
Leasehold Improvement [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 15 years |
Property and Equipment (Narrati
Property and Equipment (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Property and Equipment [Abstract] | |||
Capitalized Computer Software, Gross | $ 34,024 | $ 31,230 | |
Capitalized Computer Software, Amortization | $ 3,501 | $ 3,212 | $ 2,659 |
Property and Equipment (Schedul
Property and Equipment (Schedule of Property and Equipment) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Gross | $ 189,330 | $ 178,229 |
Less: Accumulated Depreciation and Amortization | 67,333 | 53,362 |
Property and Equipment, net | 121,997 | 124,867 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Gross | 4,937 | 4,937 |
Building [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Gross | 44,234 | |
Property and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Gross | 59,015 | 51,409 |
Computer Software and Hardware [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Gross | 44,026 | 40,071 |
Leasehold Improvement [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Gross | 35,495 | 30,715 |
Asset under Construction [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Gross | $ 1,623 | $ 51,097 |
Other Current Liabilities (Othe
Other Current Liabilities (Other Current Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Other Current Liabilities [Abstract] | ||
Accrued Legal and Settlement Expense | $ 14,011 | $ 2,087 |
Other | 14,744 | 15,749 |
Other Current Liabilities, net | $ 28,755 | $ 17,836 |
Revolving Credit Agreement (Nar
Revolving Credit Agreement (Narrative) (Details) - USD ($) | 10 Months Ended | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Line of Credit Facility [Line Items] | |||
Long-term Line of Credit, Noncurrent | $ 20,000,000 | ||
Interest Rate for Outstanding Borrowings | 1.4375% | ||
Interest Paid | $ 237,000 | ||
Revolving Credit Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 100,000,000 | ||
Line of Credit Facility, Expiration Date | Apr. 24, 2020 | ||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.15% | ||
Long-term Line of Credit, Noncurrent | $ 20,000,000 | ||
Line of Credit Facility, Remaining Borrowing Capacity | $ 67,200,000 | ||
Revolving Credit Facility [Member] | Federal Funds Effective Swap Rate [Member] | |||
Line of Credit Facility [Line Items] | |||
Basis Spread on Variable Rate | 0.50% | ||
Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||
Line of Credit Facility [Line Items] | |||
Basis Spread on Variable Rate | 1.00% | ||
Letter of Credit [Member] | |||
Line of Credit Facility [Line Items] | |||
Long-term Line of Credit, Noncurrent | $ 2,800,000 | $ 2,700,000 | |
Minimum [Member] | Revolving Credit Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 20,000,000 | ||
Line of Credit Facility, Remaining Borrowing Capacity | $ 10,000,000 | ||
Minimum [Member] | Revolving Credit Facility [Member] | Base Rate [Member] | |||
Line of Credit Facility [Line Items] | |||
Basis Spread on Variable Rate | 0.125% | ||
Minimum [Member] | Letter of Credit [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||
Line of Credit Facility [Line Items] | |||
Basis Spread on Variable Rate | 1.125% | ||
Maximum [Member] | Revolving Credit Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 10.00% | ||
Maximum [Member] | Revolving Credit Facility [Member] | Base Rate [Member] | |||
Line of Credit Facility [Line Items] | |||
Basis Spread on Variable Rate | 0.375% | ||
Maximum [Member] | Letter of Credit [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||
Line of Credit Facility [Line Items] | |||
Basis Spread on Variable Rate | 1.375% |
Leases (Narrative) (Details)
Leases (Narrative) (Details) - store | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Operating Leased Assets [Line Items] | |||
Operating Leases Term | 5 years | ||
Corporate Headquarters [Member] | |||
Operating Leased Assets [Line Items] | |||
Lease Expiration Date | Dec. 31, 2019 | ||
West Coast Distribution Centers [Member] | |||
Operating Leased Assets [Line Items] | |||
Lease Expiration Date | Oct. 31, 2024 | ||
Controlled Companies [Member] | |||
Operating Leased Assets [Line Items] | |||
Related Party Leased Stores | 30 | 30 | 29 |
Percentage Aggregate Number Store Lease in Operation | 8.30% | 8.80% | 9.40% |
Minimum [Member] | |||
Operating Leased Assets [Line Items] | |||
Operating Lease Renewal Options | 1 year | ||
Maximum [Member] | |||
Operating Leased Assets [Line Items] | |||
Operating Lease Renewal Options | 5 years |
Leases (Rental Expense) (Detail
Leases (Rental Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Operating Leased Assets [Line Items] | |||
Rental expense | $ 28,825 | $ 27,995 | $ 21,874 |
Controlled Companies [Member] | |||
Operating Leased Assets [Line Items] | |||
Rental expense | $ 3,070 | $ 2,837 | $ 2,895 |
Leases (Future Minimum Rental P
Leases (Future Minimum Rental Payments under Non-Cancellable Operating Leases) (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Operating Leased Assets [Line Items] | |
2,016 | $ 30,285 |
2,017 | 26,569 |
2,018 | 22,160 |
2,019 | 17,860 |
2,020 | 12,982 |
Thereafter | 22,048 |
Total minimum lease payments | 131,904 |
Store Leases[Member] | |
Operating Leased Assets [Line Items] | |
2,016 | 24,537 |
2,017 | 21,214 |
2,018 | 16,928 |
2,019 | 13,046 |
2,020 | 9,785 |
Thereafter | 12,206 |
Total minimum lease payments | 97,716 |
Store Leases[Member] | Controlled Companies [Member] | |
Operating Leased Assets [Line Items] | |
2,016 | 2,066 |
2,017 | 1,611 |
2,018 | 1,490 |
2,019 | 1,121 |
2,020 | 836 |
Thereafter | 1,390 |
Total minimum lease payments | 8,514 |
Distribution Centers & Other Leases [Member] | |
Operating Leased Assets [Line Items] | |
2,016 | 2,411 |
2,017 | 2,435 |
2,018 | 2,394 |
2,019 | 2,305 |
2,020 | 2,361 |
Thereafter | 8,452 |
Total minimum lease payments | 20,358 |
Headquarters Leases [Member] | Controlled Companies [Member] | |
Operating Leased Assets [Line Items] | |
2,016 | 1,271 |
2,017 | 1,309 |
2,018 | 1,348 |
2,019 | 1,388 |
Total minimum lease payments | $ 5,316 |
Stockholders' Equity (Narrative
Stockholders' Equity (Narrative) (Details) - Stock Repurchase Program [Member] - USD ($) $ in Thousands | Dec. 31, 2015 | Jan. 31, 2014 | Dec. 31, 2012 |
Stock Repurchase Programs [Line Items] | |||
Stock Repurchase Program, Authorized Amount | $ 150,000 | $ 50,000 | $ 100,000 |
Common Stock Repurchased, Remaining Authorized Amount | $ 14,728 |
Stockholders' Equity (Computati
Stockholders' Equity (Computation of Basic and Diluted Net Income Per Common Share) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Stockholders' Equity [Abstract] | |||||||||||
Net (Loss) Income | $ (19,827) | $ (8,479) | $ (20,347) | $ (7,780) | $ 17,345 | $ 15,725 | $ 16,607 | $ 13,694 | $ (56,433) | $ 63,371 | $ 77,395 |
Weighted Average Common Shares Outstanding Basic | 27,082,299 | 27,264,882 | 27,484,790 | ||||||||
Effect of Dilutive Securities: | |||||||||||
Common Stock Equivalents | 220,970 | 429,532 | |||||||||
Weighted Average Common Shares Outstanding Diluted | 27,082,299 | 27,485,852 | 27,914,322 | ||||||||
Net (Loss) Income per Common Share Basic | $ (0.73) | $ (0.31) | $ (0.75) | $ (0.29) | $ 0.64 | $ 0.58 | $ 0.61 | $ 0.50 | $ (2.08) | $ 2.32 | $ 2.82 |
Net (Loss) Income per Common Share Diluted | $ (0.73) | $ (0.31) | $ (0.75) | $ (0.29) | $ 0.64 | $ 0.58 | $ 0.60 | $ 0.49 | $ (2.08) | $ 2.31 | $ 2.77 |
Stockholders' Equity (Anti-Dilu
Stockholders' Equity (Anti-Dilutive Securities Excluded from Computation of Weighted Average Common Shares Outstanding-Diluted) (Details) - shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Stock Option [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from computation of earning per share | 650,759 | 184,252 | 103,329 |
Restricted Shares [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from computation of earning per share | 225,027 | 16,999 | 176 |
Stockholders' Equity (Purchases
Stockholders' Equity (Purchases Under Stock Repurchase Program) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Equity, Class of Treasury Stock [Line Items] | |||
Total Aggregate Costs | $ 295 | $ 53,310 | $ 34,830 |
Stock Repurchase Program [Member] | |||
Equity, Class of Treasury Stock [Line Items] | |||
Shares Repurchased | 671,200 | 403,630 | |
Average Price per Share | $ 77.68 | $ 84.40 | |
Total Aggregate Costs | $ 52,138 | $ 34,066 |
Stock Based Compensation (Narra
Stock Based Compensation (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Stock options exercised intrinsic value | $ 0 | $ 10,278 | $ 49,137 |
Unrecognized compensation cost related to unvested option | $ 4,570 | ||
Weighted average period of recognition | 3 years | ||
Weighted average fair value of option granted | $ 11.87 | $ 43.21 | $ 29.66 |
Two Thousand And Eleven Plan [Member] | |||
Common stock shares authorized for issuance | 5,300,000 | ||
Common stock available for future grant | 1,000,000 | ||
Two Thousand And Eleven Plan [Member] | Maximum [Member] | |||
Share based compensation stock options expiration period | 10 years | ||
Non Employee Director [Member] | |||
Deferred stock units outstanding | 95,553 | 63,279 | |
Non Employee Director [Member] | Maximum [Member] | |||
Deferred percentage of director fees invested in deferred stock units | 100.00% | ||
Restricted Shares [Member] | |||
Weighted average period of recognition | 2 years | ||
Fair value of restricted stock awards released | $ 941 | $ 4,371 | $ 3,060 |
Unrecognized compensation cost related to unvested restricted stock awards | $ 5,141 |
Stock-Based Compensation (Stock
Stock-Based Compensation (Stock-Based Compensation Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Stock-Based Compensation [Abstract] | |||
Stock Options, Restricted Shares and Stock Appreciation Rights | $ 3,941 | $ 5,593 | $ 5,974 |
Stock-Based Compensation (Summa
Stock-Based Compensation (Summary of Activity Related to Stock Options) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Shares | ||||
Beginning Balance | 652,808 | 749,490 | 1,311,377 | |
Granted | 410,164 | 79,126 | 214,966 | |
Exercised | (149,707) | (718,665) | ||
Forfeited | (370,196) | (26,101) | (58,188) | |
Ending Balance | 692,776 | 652,808 | 749,490 | 1,311,377 |
Ending Balance, Exercisable | 221,561 | |||
Ending Balance, Vested and expected to vest | 692,776 | |||
Weighted Average Exercise Price | ||||
Beginning Balance | $ 42.81 | $ 33.04 | $ 17.79 | |
Granted | 25.34 | 100.05 | 62.52 | |
Exercised | 0 | 21.04 | 14.35 | |
Forfeited | 44.71 | 60.71 | 29.04 | |
Ending Balance | 31.45 | $ 42.81 | $ 33.04 | $ 17.79 |
Ending Balance, Exercisable | 29.28 | |||
Ending Balance, Vested and expected to vest | $ 31.45 | |||
Remaining Average Contractual Term (Years) for outstanding shares | ||||
Remaining Average Contractual Term (Years) for outstanding shares | 7 years 8 months 12 days | 6 years 10 months 24 days | 7 years 3 months 18 days | 6 years 6 months |
Aggregate Intrinsic Value | ||||
Aggregate Intrinsic Value | $ 1,283 | $ 18,113 | $ 52,358 | $ 45,954 |
Aggregate Intrinsic Value, Exercisable | 540 | |||
Aggregate Intrinsic Value, Vested and expected to vest | $ 1,283 |
Stock-Based Compensation (Range
Stock-Based Compensation (Range of Assumptions) (Details) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Schedule Of Stock Options [Line Items] | |||
Expected dividend rate | 0.00% | 0.00% | 0.00% |
Expected stock price volatility | 50.00% | 45.00% | 45.00% |
Risk-free interest rate | 1.70% | 1.80% | |
Risk-free interest rate, minimum | 1.80% | 1.30% | |
Risk-free interest rate, maximum | 2.00% | ||
Expected term of options | 5 years 6 months | ||
Minimum [Member] | |||
Schedule Of Stock Options [Line Items] | |||
Expected term of options | 6 years | ||
Maximum [Member] | |||
Schedule Of Stock Options [Line Items] | |||
Expected term of options | 5 years 6 months | 7 years 6 months |
Stock-Based Compensation (Sum49
Stock-Based Compensation (Summary of Activity Related to Restricted Stock Awards) (Details) - Restricted Shares [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Shares | |||
Beginning Balance | 157,089 | 178,335 | 152,405 |
Granted | 386,517 | 38,260 | 80,814 |
Released | (27,187) | (45,503) | (38,362) |
Forfeited | (54,748) | (14,003) | (16,522) |
Ending Balance | 461,671 | 157,089 | 178,335 |
Weighted Average Grant Date Fair Value | |||
Beginning Balance | $ 15 | $ 22.82 | $ 15.19 |
Granted | 18.30 | 89.46 | 66.11 |
Released | 41.57 | 95.02 | 75.73 |
Forfeited | 45.93 | 54.90 | 37.51 |
Ending Balance | $ 12.95 | $ 15 | $ 22.82 |
Stock-Based Compensation (Sum50
Stock-Based Compensation (Summary of Activities Related to Stock Appreciation Rights) (Details) - Stock Appreciation Rights (SARs) [Member] - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Shares | ||||
Beginning Balance | 16,227 | 16,156 | 9,301 | |
Granted | 1,941 | 7,533 | ||
Forfeited | (170) | (1,870) | (678) | |
Ending Balance | 16,057 | 16,227 | 16,156 | 9,301 |
Ending Balance, Exercisable | 10,420 | |||
Weighted Average Exercise Price | ||||
Beginning Balance | $ 42.81 | $ 33.04 | $ 17.79 | |
Granted | 0 | 100.05 | 62.52 | |
Forfeited | 93.68 | 60.71 | 29.04 | |
Ending Balance | 47.58 | $ 42.81 | $ 33.04 | $ 17.79 |
Ending Balance, Exercisable | $ 41.59 | |||
Remaining average contractual term | ||||
Remaining average contractual term | 6 years 9 months 18 days | 6 years 10 months 24 days | 7 years 3 months 18 days | 6 years 6 months |
Remaining average contractual term, Exercisable | 6 years 7 months 6 days | |||
Aggregate Intrinsic Value | ||||
Aggregate intrinsic value | $ 389 | $ 938 | $ 261 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Taxes [Line Items] | |||
Income tax paid | $ 7,855 | $ 33,281 | $ 30,154 |
Operating loss carryforwards, valuation allowance increased | 210 | 458 | 498 |
Unrecognized tax benefits | 396 | 1,232 | $ 915 |
Unrecognized tax benefits that would impact effective tax rate | 300 | 800 | |
CANADA | |||
Income Taxes [Line Items] | |||
Operating loss carryforwards, valuation allowance increased | 836 | ||
Currency exchange loss | (626) | ||
Net operating losses carryforwards | $ 11,797 | $ 8,577 | |
Operating loss carryforwards, expiration year | 2,030 | ||
Operating loss carryforwards, offset period | 20 years |
Income Taxes (Components of Inc
Income Taxes (Components of Income Before Income Taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Taxes [Abstract] | |||
United States | $ (80,136) | $ 105,447 | $ 128,482 |
Foreign | (3,291) | (1,864) | (2,017) |
(Loss) Income Before Income Taxes | $ (83,427) | $ 103,583 | $ 126,465 |
Income Taxes (Provision for Inc
Income Taxes (Provision for Income Taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Current | |||
Federal | $ (14,088) | $ 34,615 | $ 43,159 |
State | (975) | 5,614 | 6,637 |
Foreign | 133 | 135 | 120 |
Total Current | (14,930) | 40,364 | 49,916 |
Deferred | |||
Federal | (9,276) | (22) | (745) |
State | $ (2,788) | $ (130) | $ (101) |
Foreign | |||
Total Deferred | $ (12,064) | $ (152) | $ (846) |
Total | $ (26,994) | $ 40,212 | $ 49,070 |
Income Taxes (Effective Income
Income Taxes (Effective Income Tax Reconciliation) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Taxes [Abstract] | |||
Income Tax Expense at Federal Statutory Rate | $ (29,200) | $ 36,254 | $ 44,263 |
State Income Taxes, Net of Federal Income Tax Benefit | (2,401) | 3,711 | 4,146 |
Valuation Allowance | 210 | 458 | 498 |
Foreign Operations | 1,075 | 329 | 328 |
Non-deductible penalty | 3,887 | ||
Other | (565) | (540) | (165) |
Total | $ (26,994) | $ 40,212 | $ 49,070 |
Income Tax Expense at Federal Statutory Rate | 35.00% | 35.00% | 35.00% |
State Income Taxes, Net of Federal Income Tax Benefit | 2.90% | 3.60% | 3.30% |
Valuation Allowance | (0.20%) | 0.40% | 0.40% |
Foreign Operations | (1.30%) | 0.30% | 0.20% |
Non-deductible penalty | (4.70%) | ||
Other | 0.70% | (0.50%) | (0.10%) |
Total | 32.40% | 38.80% | 38.80% |
Income Taxes (Tax Effects of Te
Income Taxes (Tax Effects of Temporary Differences Result in Significant Portions of Deferred Tax Accounts) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred Tax Liabilities: | ||
Prepaid Expenses and Other | $ (1) | $ (77) |
Depreciation and Amortization | (20,367) | (16,900) |
Total Gross Deferred Tax Liabilities | (20,368) | (16,977) |
Deferred Tax Assets: | ||
Stock-Based Compensation Expense | 3,794 | 3,785 |
Reserves | 9,825 | 4,296 |
Employee Benefits | 1,034 | 15 |
Inventory Obsolescence Reserve | 10,699 | 1,606 |
Inventory Capitalization | 4,457 | 5,582 |
Foreign Net Operating Losses | 2,433 | 2,223 |
Other | 966 | 37 |
Total Gross Deferred Tax Assets | 33,208 | 17,544 |
Less Valuation Allowance | (2,433) | (2,223) |
Total Net Deferred Tax Assets | 30,775 | 15,321 |
Net Deferred Tax Asset (Liability) | $ 10,407 | $ (1,656) |
Income Taxes (Reconciliation of
Income Taxes (Reconciliation of Unrecognized Tax Benefits) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income Taxes [Abstract] | ||
Balance | $ 1,232 | $ 915 |
(Decrease) increase based on tax position related to the current year | $ (180) | 430 |
Increases for tax positions of prior years | $ 161 | |
Decreases in tax positions for prior years | $ (434) | |
Settlements | (11) | |
Lapse of statute | (211) | $ (274) |
Balance | $ 396 | $ 1,232 |
Profit Sharing Plan (Narrative)
Profit Sharing Plan (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | 36 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2015 | |
Profit-sharing Plan [Abstract] | |||||
Employer matching contribution percentage | 50.00% | 100.00% | |||
Employer matching contribution Additional percentage | 50.00% | ||||
Eligible service age for profit-sharing plan | 21 years | ||||
Eligible service period for profit-sharing plan | 3 months | ||||
Employer contribution percentage | 6.00% | 3.00% | |||
Employer contribution Additional percentage | 2.00% | ||||
Company matching contribution to benefit plans | $ 2,019 | $ 1,937 | $ 1,590 | ||
Company matching contribution additional percentage | 100.00% |
Commitments and Contingencies (
Commitments and Contingencies (Narrative) (Details) - USD ($) $ in Thousands | Feb. 23, 2016 | Oct. 07, 2015 | Feb. 29, 2016 | Jan. 31, 2016 | Oct. 31, 2015 | Jul. 31, 2015 | Nov. 30, 2012 | Dec. 31, 2011 | Mar. 31, 2016 | Dec. 31, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Nov. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Mar. 31, 2018 | Mar. 31, 2017 | Oct. 12, 2015 |
Loss Contingencies [Line Items] | ||||||||||||||||||||
Litigation Settlement, Amount | $ 2,400 | $ 8,077 | $ 10,000 | |||||||||||||||||
Third Annual Review [Member] | Subsequent Event [Member] | ||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||
Loss Contingency Modified Purchase Price Of Antidumping Duty Rate | 13.34% | |||||||||||||||||||
Loss Contingency Modified Purchase Price Of Countervailing Duties Rate | 1.43% | |||||||||||||||||||
Antidumping Duties [Member] | ||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||
Loss Contingency, Damages Sought, Value | $ 5,300 | |||||||||||||||||||
Loss Contingency Multilayered Handwood Products Purchase Percentage | 6.00% | 10.00% | ||||||||||||||||||
Loss Contingency Purchase Price Of Antidumping Duty Rate | 3.30% | |||||||||||||||||||
Loss Contingency Purchase Price Of Countervailing Duties Rate | 1.50% | |||||||||||||||||||
Loss Contingency, Range of Possible Loss, Minimum | 0 | $ 0 | ||||||||||||||||||
Loss Contingency, Range of Possible Loss, Maximum | $ 5,300 | 5,300 | ||||||||||||||||||
Antidumping Duties [Member] | First Annual Review [Member] | ||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||
Loss Contingency, Estimate of Possible Loss | 833 | |||||||||||||||||||
Loss Contingency Modified Purchase Price Of Antidumping Duty Rate | 5.92% | |||||||||||||||||||
Loss Contingency Modified Purchase Price Of Countervailing Duties Rate | 0.83% | |||||||||||||||||||
Antidumping Duties [Member] | Second Annual Review [Member] | ||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||
Loss Contingency, Estimate of Possible Loss | 4,089 | |||||||||||||||||||
Loss Contingency Modified Purchase Price Of Antidumping Duty Rate | 13.74% | 18.27% | ||||||||||||||||||
Loss Contingency Modified Purchase Price Of Countervailing Duties Rate | 0.99% | 0.97% | ||||||||||||||||||
Lacey Act Related Matters [Member] | ||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||
Litigation Settlement, Amount | $ 10,000 | |||||||||||||||||||
Environmental Compliance Plan, Probation Period | 5 years | |||||||||||||||||||
Environmental Compliance Plan, Outside Audit Period | 4 years | |||||||||||||||||||
Engineered Hardwood Inventory | 914 | |||||||||||||||||||
Lacey Act Related Matters [Member] | Scenario, Plan [Member] | ||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||
Settlement Liability, Noncurrent | $ 1,800 | $ 2,000 | ||||||||||||||||||
Settlement payment | $ 6,200 | |||||||||||||||||||
Lacey Act Related Matters [Member] | Subsequent Event [Member] | ||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||
Settlement payment | $ 6,200 | |||||||||||||||||||
Lacey Act Related Matters [Member] | Other Current Liabilities [Member] | ||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||
Settlement Liability, Current | $ 6,200 | 6,200 | ||||||||||||||||||
Lacey Act Related Matters [Member] | Other Noncurrent Liabilities [Member] | ||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||
Settlement Liability, Noncurrent | 3,800 | 3,800 | ||||||||||||||||||
Telephone Consumer Protection Act Law Suit [Member] | ||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||
Settlement payment | $ 300 | |||||||||||||||||||
Prop 65 Matter [Member] | ||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||
Loss Contingency, Estimate of Possible Loss | 900 | 900 | ||||||||||||||||||
Department Of Justice [Member] | ||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||
Litigation Settlement, Amount | 3,155 | |||||||||||||||||||
Loss Contingency, Estimate of Possible Loss | 4,069 | |||||||||||||||||||
California Air Resources Board [Member] | ||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||
Loss Contingency, Estimate of Possible Loss | $ 1,500 | $ 1,500 | ||||||||||||||||||
NW Bamboo Matter [Member] | ||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||
Plaintiff company valuation | $ 2,800 | |||||||||||||||||||
Ross Matter [Member] | Subsequent Event [Member] | ||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||
Loss Contingency, Damages Sought, Value | $ 50,000 | |||||||||||||||||||
Fine [Member] | Lacey Act Related Matters [Member] | ||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||
Litigation Settlement, Amount | 7,800 | |||||||||||||||||||
National Fish and Wildlife Foundation [Member] | Lacey Act Related Matters [Member] | ||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||
Litigation Settlement, Amount | 880 | |||||||||||||||||||
Rhinoceros and Tiger Conservation [Member] | Lacey Act Related Matters [Member] | ||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||
Litigation Settlement, Amount | 350 | |||||||||||||||||||
Forfeiture [Member] | Lacey Act Related Matters [Member] | ||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||
Litigation Settlement, Amount | $ 969 | |||||||||||||||||||
Forfeiture [Member] | Department Of Justice [Member] | ||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||
Engineered Hardwood Inventory | $ 3,155 |
Condensed Quarterly Financial59
Condensed Quarterly Financial Information (unaudited) (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015USD ($)store$ / shares | Sep. 30, 2015USD ($)store$ / shares | Jun. 30, 2015USD ($)store$ / shares | Mar. 31, 2015USD ($)store$ / shares | Dec. 31, 2014USD ($)store$ / shares | Sep. 30, 2014USD ($)store$ / shares | Jun. 30, 2014USD ($)store$ / shares | Mar. 31, 2014USD ($)store$ / shares | Dec. 31, 2015USD ($)$ / shares | Dec. 31, 2014USD ($)$ / shares | Dec. 31, 2013USD ($)$ / shares | |
Net Sales | $ 234,807 | $ 236,064 | $ 247,944 | $ 259,961 | $ 271,976 | $ 266,067 | $ 263,085 | $ 246,291 | $ 978,776 | $ 1,047,419 | $ 1,000,240 |
Gross Profit | 53,966 | 70,996 | 62,284 | 91,612 | 106,484 | 104,158 | 106,238 | 101,287 | 278,858 | 418,167 | 410,983 |
Selling, General and Administrative Expenses | 85,487 | 88,333 | 90,551 | 97,680 | 77,805 | 78,377 | 79,066 | 78,866 | 362,051 | 314,094 | 284,960 |
Operating Income | (31,521) | (17,337) | (28,267) | (6,068) | 28,679 | 25,781 | 27,172 | 22,421 | (83,193) | 104,073 | 126,023 |
Net Income | $ (19,827) | $ (8,479) | $ (20,347) | $ (7,780) | $ 17,345 | $ 15,725 | $ 16,607 | $ 13,694 | $ (56,433) | $ 63,371 | $ 77,395 |
Net Income per Common Share - Basic | $ / shares | $ (0.73) | $ (0.31) | $ (0.75) | $ (0.29) | $ 0.64 | $ 0.58 | $ 0.61 | $ 0.50 | $ (2.08) | $ 2.32 | $ 2.82 |
Net (Loss) Income per Common Share -- Diluted | $ / shares | $ (0.73) | $ (0.31) | $ (0.75) | $ (0.29) | $ 0.64 | $ 0.58 | $ 0.60 | $ 0.49 | $ (2.08) | $ 2.31 | $ 2.77 |
Number of Stores Opened in Quarter | store | 4 | 7 | 7 | 4 | 3 | 5 | 13 | 13 | |||
Comparable Store Net Sales Decrease | (17.20%) | (14.60%) | (10.00%) | (1.80%) | (4.20%) | (4.90%) | (7.10%) | (0.60%) | |||
Inventory Lower of Cost or Market Adjustments | $ 26,162 | ||||||||||
Litigation Settlement Amount | $ 2,400 | $ 8,077 | $ 10,000 | ||||||||
Impairment of Long-Lived Assets | $ 3,043 | 1,350 | $ 0 | $ 0 | |||||||
Laminate [Member] | |||||||||||
Inventory Lower of Cost or Market Adjustments | $ 22,160 | $ 4,002 | |||||||||
Tile Flooring and Related Accessories [Member] | |||||||||||
Inventory Lower of Cost or Market Adjustments | $ 3,663 |
Subsequent Events (Narrative) (
Subsequent Events (Narrative) (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Feb. 29, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Subsequent Event [Line Items] | |||
Additional borrowing on Revolving Credit Facility | $ 39,000 | $ 53,000 | |
Revolving Credit Facility | 20,000 | ||
Subsequent Event [Member] | Lacey Act Related Matters [Member] | |||
Subsequent Event [Line Items] | |||
Settlement payment | $ 6,200 | ||
Revolving Credit Facility [Member] | |||
Subsequent Event [Line Items] | |||
Revolving Credit Facility | $ 20,000 | ||
Revolving Credit Facility [Member] | Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Additional borrowing on Revolving Credit Facility | 10,000 | ||
Revolving Credit Facility | $ 30,000 |
Schedule II - Analysis of Val61
Schedule II - Analysis of Valuation and Qualifying Accounts (Valuation of Qualifying Accounts) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Inventory Reserve for Loss or Obsolescence [Member] | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance Beginning of Year | $ 3,242 | $ 1,275 | $ 1,035 |
Additions Charged to Cost and Expenses | 28,897 | 3,198 | 1,465 |
Deductions | $ (5,257) | $ (1,231) | $ (1,225) |
Other | |||
Balance End of Year | $ 26,882 | $ 3,242 | $ 1,275 |
Income Tax Valuation Allowance [Member] | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance Beginning of Year | 2,223 | 1,765 | 1,267 |
Additions Charged to Cost and Expenses | $ 210 | $ 458 | $ 498 |
Deductions | |||
Other | |||
Balance End of Year | $ 2,433 | $ 2,223 | $ 1,765 |
Bellawood [Member] | Inventory Reserve for Loss or Obsolescence [Member] | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Valuation Allowances and Reserves, Reserves of Businesses Acquired | $ 1,200 | ||
Tile [Member] | Inventory Reserve for Loss or Obsolescence [Member] | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Additions Charged to Cost and Expenses | 3,663 | ||
Laminate Flooring [Member] | Inventory Reserve for Loss or Obsolescence [Member] | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Additions Charged to Cost and Expenses | $ 22,499 |