Document and Entity Information
| Document and Entity Information - shares | 3 Months Ended | |
| Mar. 31, 2017 | Apr. 27, 2017 | |
| Document And Entity Information [Abstract] | ||
| Document Type | 10-Q | |
| Amendment Flag | false | |
| Document Period End Date | Mar. 31, 2017 | |
| Document Fiscal Year Focus | 2,017 | |
| Document Fiscal Period Focus | Q1 | |
| Entity Registrant Name | Lumber Liquidators Holdings, Inc. | |
| Entity Central Index Key | 1,396,033 | |
| Current Fiscal Year End Date | --12-31 | |
| Entity Filer Category | Accelerated Filer | |
| Entity Common Stock, Shares Outstanding | 28,384,125 | |
| Entity Current Reporting Status | Yes | |
| Entity Voluntary Filers | No | |
| Entity Well-known Seasoned Issuer | No |
Condensed Consolidated Balance
| Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
| Current Assets: | ||
| Cash and Cash Equivalents | $ 10,971 | $ 10,271 |
| Merchandise Inventories | 301,332 | 301,892 |
| Prepaid Expenses | 6,316 | 5,367 |
| Refundable Income Taxes | 31,171 | 31,429 |
| Other Current Assets | 3,900 | 5,346 |
| Total Current Assets | 353,690 | 354,305 |
| Property and Equipment, net | 112,091 | 115,004 |
| Goodwill | 9,693 | 9,693 |
| Other Assets | 3,522 | 3,542 |
| Total Assets | 478,996 | 482,544 |
| Current Liabilities: | ||
| Accounts Payable | 87,381 | 120,647 |
| Customer Deposits and Store Credits | 42,127 | 32,639 |
| Accrued Compensation | 6,945 | 9,193 |
| Sales and Income Tax Liabilities | 5,196 | 4,249 |
| Other Current Liabilities | 36,236 | 19,984 |
| Total Current Liabilities | 177,885 | 186,712 |
| Other Long-Term Liabilities | 18,982 | 21,142 |
| Deferred Tax Liability | 3,995 | 3,798 |
| Revolving Credit Facility | 72,000 | 40,000 |
| Total Liabilities | 272,862 | 251,652 |
| Stockholders' Equity: | ||
| Common Stock ($0.001 par value; 35,000,000 shares authorized; 31,258,368 and 31,102,436 shares issued and 28,384,125 and 28,248,606 shares outstanding, respectively) | 31 | 31 |
| Treasury Stock, at cost (2,874,243 and 2,853,830 shares, respectively) | (139,791) | (139,420) |
| Additional Capital | 204,653 | 202,700 |
| Retained Earnings | 142,665 | 169,037 |
| Accumulated Other Comprehensive Loss | (1,424) | (1,456) |
| Total Stockholders' Equity | 206,134 | 230,892 |
| Total Liabilities and Stockholders' Equity | $ 478,996 | $ 482,544 |
Condensed Consolidated Balance3
| Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2017 | Dec. 31, 2016 |
| 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 issued | 31,258,368 | 31,102,436 |
| Common Stock, shares outstanding | 28,384,125 | 28,248,606 |
| Treasury Stock, shares | 2,874,243 | 2,853,830 |
Condensed Consolidated Statemen
| Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
| Mar. 31, 2017 | Mar. 31, 2016 | |
| Income Statement [Abstract] | ||
| Net Sales | $ 248,389 | $ 233,513 |
| Cost of Sales | 161,590 | 157,404 |
| Gross Profit | 86,799 | 76,109 |
| Selling, General and Administrative Expenses | 112,214 | 117,236 |
| Operating Loss | (25,415) | (41,127) |
| Other Expense | 512 | 151 |
| Loss Before Income Taxes | (25,927) | (41,278) |
| Income Tax Expense (Benefit) | 445 | (8,876) |
| Net Loss | $ (26,372) | $ (32,402) |
| Net Loss per Common Share-Basic | $ (0.93) | $ (1.20) |
| Net Loss per Common Share-Diluted | $ (0.93) | $ (1.20) |
| Weighted Average Common Shares Outstanding: | ||
| Basic | 28,291,658 | 27,090,575 |
| Diluted | 28,291,658 | 27,090,575 |
Condensed Consolidated Stateme5
| Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | |
| Mar. 31, 2017 | Mar. 31, 2016 | |
| Statement of Comprehensive Income [Abstract] | ||
| Net Loss | $ (26,372) | $ (32,402) |
| Foreign Currency Translation Adjustments | 32 | 317 |
| Total Other Comprehensive Income | 32 | 317 |
| Comprehensive Loss | $ (26,340) | $ (32,085) |
Condensed Consolidated Stateme6
| Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
| Mar. 31, 2017 | Mar. 31, 2016 | |
| Cash Flows from Operating Activities: | ||
| Net Loss | $ (26,372) | $ (32,402) |
| Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities: | ||
| Depreciation and Amortization | 4,335 | 4,524 |
| Stock-Based Compensation Expense | 1,259 | 1,671 |
| Stock-Based Portion of Provision for Securities Class Action | 16,020 | |
| Changes in Operating Assets and Liabilities: | ||
| Merchandise Inventories | (298) | 3,578 |
| Accounts Payable | (32,032) | (2,925) |
| Customer Deposits and Store Credits | 9,587 | 23 |
| Prepaid Expenses and Other Current Assets | 733 | (34,115) |
| Other Assets and Liabilities | 13,029 | 35,427 |
| Net Cash Used in Operating Activities | (29,759) | (8,199) |
| Cash Flows from Investing Activities: | ||
| Purchases of Property and Equipment | (2,502) | (2,409) |
| Net Cash Used in Investing Activities | (2,502) | (2,409) |
| Cash Flows from Financing Activities: | ||
| Proceeds from the Exercise of Stock Options | 815 | |
| Payments on Capital Lease Obligations | (114) | |
| Borrowings on Revolving Credit Facility | 35,000 | 10,000 |
| Payments on Revolving Credit Facility | (3,000) | (5,000) |
| Other Financing Activities | (371) | (80) |
| Net Cash Provided by Financing Activities | 32,330 | 4,920 |
| Effect of Exchange Rates on Cash and Cash Equivalents | 631 | 958 |
| Net Increase (Decrease) in Cash and Cash Equivalents | 700 | (4,730) |
| Cash and Cash Equivalents, Beginning of Period | 10,271 | 26,703 |
| Cash and Cash Equivalents, End of Period | $ 10,971 | $ 21,973 |
Basis of Presentation
| Basis of Presentation | 3 Months Ended |
| Mar. 31, 2017 | |
| Basis of Presentation [Abstract] | |
| Basis of Presentation | Note 1. Basis of Presentation 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 business segment. The Company offers an extensive assortment of domestic and exotic hardwood species, engineered hardwood, laminate , resilient vinyl, engineered vinyl plank and wood-look ceramic tile flooring direct to the consumer. The Company also features the renewable flooring products, bamboo , engineered bamboo and cork, and provides a wide selection of flooring enhancements and accessories, including moldings, noise-reducing underlay ment , adhesives and flooring tools. These products are primarily sold under the Company’s private label brands, including the premium Bellawood brand. The Company also provides in-home delivery and installation services . The Company sells primarily to homeowners or to contractors on behalf of homeowners through a network of 385 store locations in primary or secondary metropolitan areas. The Company’s stores span ned 46 states in the United States (“U.S.”) and include d eight stores in Canada at March 31, 2017 . 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 and corporate offices, represent the “Corporate Headquarters.” The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q for interim financial reporting pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) . In the opinion of management, all adjustments (consisting of normal and recurring adjustments except those otherwise described herein) considered necessary for a fair presentation have been included in the accompanying condensed consolidated financial statements. However, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. Therefore, the interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s annual report filed on Form 10-K for the year ended December 31, 201 6 . The condensed consolidated financial statements of the Company include the accounts of its wholly owned subsidiaries. All intercompany transactions have been eliminated in consolidation. The Company adopted Accounting Standards Update No. 2015-17 (“ASU 2015-17”) during the first quarter of 2017 and reclassified approximately $6,090 of current deferred tax assets to long-term deferred tax liabilities on the prior year balance sheet which now reflects a net deferred tax liability of $3,798 , from the $9,888 previously disclosed . Results of operations for the three months ended March 31, 2017 are not necessarily indicative of the results to be expected for the full year. |
Summary of Significant Accounti
| Summary of Significant Accounting Policies | 3 Months Ended |
| Mar. 31, 2017 | |
| Summary of Significant Accounting Policies [Abstract] | |
| Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies Fair Value of Financial Instruments The carrying amounts of financial instruments such as cash and cash equivalents, accounts payable and other liabilities approximates fair value because of the short-term nature of these items. The carrying amount of obligations under the revolving credit facility approximates fair value due to the variable rate of interest. The fair values of these financial instruments are classified as Level 1 as defined in the Financial Accounting Standards Board (“FASB”) ASC 820 fair value hierarchy. Merchandise Inventories The Company values merchandise inventories at the lower of cost or market value. The Company periodically reviews the carrying value of items in inventory and records a lower of cost or market adjustment when there is evidence that the utility of inventory will be less than its cost. In determining market value, the Company makes judgments and estimates as to the market value of its products, based on factors such as historical results and current sales trends. Although the Company believes its products are appropriately valued as of the balance sheet date, there can be no assurance that future events or changes in key assumptions would not significantly impact their value. 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 charges were not significant for the three month periods ended March 31, 2017 and 2016. 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, warranty and customer satisfaction costs, 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 who purchased laminate flooring sourced from China to address customer questions about the air quality in their homes. During the second quarter of 2016, the Company agreed with the Office of Compliance and Field Operations of the Consumer Product Safety Commission (“CPSC”) to continue its indoor air quality testing program for customers who purchased laminate flooring sourced from China during the period from February 22, 2012 to February 27, 2015. The form of the testing program agreed to with the CPSC is substantially similar to the program the Company has operated since March 2015. In connection with the continuation of the testing program, the Company recorded a charge to cost of sales of approximately $3,000 in the second quarter of 2016 that represented our best estimate of the costs to continue the program. No additional accruals were considered necessary during the first quarter of 2017. Estimating the reserve for costs associated with the Company’s indoor air quality program for certain of its customers who purchased laminate flooring sourced from China requires management to estimate (1) the number of future requests for indoor air quality testing, (2) the results of that testing and (3) the average cost to fulfill each request, all of which are subject to variables that are inherently uncertain. The Company projects its best estimate of both the expected number of requests to be received and the percentage of requests that will ultimately progress through various phases of its testing program using a range of assumptions derived from the Company’s limited indoor air quality test program history and the identification of factors influencing the amount of requests, including the declining trend in received requests due to the passage of time since customer purchase of the material and/or recent media events. Actual liabilities could be higher or lower than those projected due to uncertainty in projecting the number of future requests for tests, the potential for a media event driving an increase in test kit requests, future average costs per test and other factors, which could materially affect the Company’s financial condition, results of operations or cash flows. If the level of requests received or average cost per request differs materially from expectations, it could result in additional increases to the reserve and reduced earnings and cash flows in future periods. At March 31, 2017, the Company’s best estimate of its future indoor air quality testing program reserve is approximately $1,350 . A rollforward of the reserve for the Company’s air quality testing program was as follows: 2017 2016 Balance at January 1 $ 1,500 $ 809 Provision - 2,895 Reversal - - Payments (150) (2,925) Balance at March 31 $ 1,350 $ 779 Recent Accounting Pronouncements In November 2015, the FASB issued 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 classifies both current and noncurrent deferred income tax assets and liabilities in the noncurrent section of the statement of financial position. The amendments in ASU 2015-17 became effective for annual reporting periods beginning after December 15, 2016, and interim periods within those fiscal years. The Company adopted this new guidance during the first quarter of 2017 on a retrospective basis, and accordingly reclassified approximately $6,090 of current deferred tax assets to long-term deferred tax liabilities, such that the December 31, 2016 balance sheet reflects a noncurrent deferred tax liability of $3,798 and a current deferred tax asset of zero . The adoption of th is guidance had no impact on the Company’s results of operations or cash flows. In March 2016, the FASB issued Accounting Standards Update No. 2016-09, which amends ASC Topic 718, Compensation – Stock Compensation, which simplifies the accounting for employee share-based payments. The new standard requires the immediate recognition of all excess tax benefits and deficiencies in the income statement (rather than equity), which was adopted in the first quarter of 2017 on a prospective basis. The standard also requires classification of excess tax benefits as an operating activity as opposed to a financing activity in the statements of cash flows. The Company applied this amendment of the standard on a retrospective basis starting in the first quarter of 2017. In the first quarter of 2016, there were no excess tax benefits recognized. The standard also clarifies that all cash payments made to taxing authorities on the employees' behalf for shares withheld should be presented as financing activities on the statements of cash flows, which is consistent with the Company’s current practice. Finally, the standard provides for a policy election to either estimate the number of awards that are expected to vest or account for forfeitures as they occur. The Company will continue to include the impact of estimated forfeitures when determining share-based compensation expense. 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. In August 2015, FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which deferred the effective date of ASU 2014-09 to reporting periods beginning after December 15, 2017. Early adoption is permitted for reporting periods beginning after December 15, 2016. The Company will adopt this ASU on January 1, 2018. Companies may use either a full retrospective or a modified retrospective approach to adopt this ASU. The Company established a cross-functional team in 2016 to review its current accounting policies and practices, assess the effect of the standard on its revenue contracts and identify potential differences. In addition, the Company is in the process of evaluating changes to its business processes and controls to support recognition and disclosure under the new standard. While the Company is continuing to assess all potential impacts of the standard, it currently believes the most significant impacts will relate to its assessment of (i) determining when its merchandise and installation sales order arrangements meet the definition of a contract when both arrangements are offered to its customers, (ii) determining the transaction price as impacted by sales returns and promotional activities, including financing arrangements it offers to its customers; (iii) sales commission costs it pays to its employees; and (iv) the potential impact on gross versus net presentation and classification relative to the performance of its installation sales. However, the Company cannot currently estimate the impact of this change upon adoption of this standard. The Company is also continuing to review the impact of this standard on potential disclosure changes in its financial statements as well as which transition approach will be applied. 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 operating leases will be recognized on the Company’s consolidated balance sheet. |
Stockholders' Equity
| Stockholders' Equity | 3 Months Ended |
| Mar. 31, 2017 | |
| Stockholders' Equity [Abstract] | |
| Stockholders' Equity | Note 3. Stockholders’ Equity Net Loss per Common Share The following table sets forth the computation of basic and diluted net loss per common share: Three Months Ended March 31, 2017 2016 Net Loss $ (26,372) $ (32,402) Weighted Average Common Shares Outstanding—Basic 28,291,658 27,090,575 Effect of Dilutive Securities: Common Stock Equivalents — — Weighted Average Common Shares Outstanding—Diluted 28,291,658 27,090,575 Net Loss per Common Share—Basic $ (0.93) $ (1.20) Net Loss per Common Share—Diluted $ (0.93) $ (1.20) The following have been excluded from the computation of Weighted Average Common Shares Outstanding—Diluted because the effect would be anti-dilutive: Three Months Ended March 31, 2017 2016 Stock Options 769,456 795,480 Restricted Shares 469,076 449,869 Stock Repurchase Program The Company’s board of directors has authorized the repurchase of up to $150,000 of the Company’s common stock. At March 31, 2017 , the Company had $14,728 remaining under this authorization. The Company did not repurchase any shares of its common stock under this program during the three months ended March 31, 201 7 and 2016 , respectively. |
Stock-Based Compensation
| Stock-Based Compensation | 3 Months Ended |
| Mar. 31, 2017 | |
| Stock-Based Compensation [Abstract] | |
| Stock-Based Compensation | Note 4. Stock-Based Compensation The following table summarizes share activity related to stock options and restricted stock awards (“RSAs”): Stock Options Restricted Stock Awards Options Outstanding/Nonvested RSAs, December 31, 2016 835,614 586,187 Granted 61,350 159,401 Options Exercised/RSAs Released (50,548) (104,194) Forfeited (40,150) (36,707) Options Outstanding/Nonvested RSAs, March 31, 2017 806,266 604,687 |
Related Party Transactions
| Related Party Transactions | 3 Months Ended |
| Mar. 31, 2017 | |
| Related Party Transactions [Abstract] | |
| Related Party Transactions | Note 5. Related Party Transactions The Company leases stores, a warehouse, and the corporate headquarters, which includes a store location, from entities controlled by the Company’s founder, who was a stockholder and a member of the Company’s board of directors until December 31, 2016. Effective December 31, 2016, upon the departure of the Company’s founder from the board of directors, these transactions no longer meet the criteria of related party transactions. Rental expense related to these leases was $ 851 for the three months ended March 31, 2016. |
Income Taxes
| Income Taxes | 3 Months Ended |
| Mar. 31, 2017 | |
| Income Taxes [Abstract] | |
| Income Taxes | Note 6 . Income Taxes The effective tax rate of (1.7)% for the three months ended March 31, 2017 is less than the statutory rate of 35% due to the Company’s valuation allowance recorded against its net deferred tax asset. Changes in the valuation allowance as well as the small t ax expense incurred in certain state and foreign jurisdictions with taxable income in the period are recorded as tax expense and substantially reduce the Company’s effective tax rate. The valuation allowance is recorded in deferred tax liability on the condensed consolidated balance sheet . The effective tax rate of 21.5% for the three months ended March 31, 2016 was driven principally by the recognition of a valuation allowance against certain of the Company’s deferred tax assets coupled with a limitation on the recognition of tax benefits on an interim basis in which the quarterly tax benefit exceeds the estimated tax benefit for the full year. 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 is conducting audits of the Company’s income tax returns for the years 2013 through 2015. |
Commitments and Contingencies
| Commitments and Contingencies | 3 Months Ended |
| Mar. 31, 2017 | |
| Commitments and Contingencies [Abstract] | |
| Commitments and Contingencies | Note 7 . Commitments and Contingencies Governmental Investigations In M ar c h 2015, the Company r eceived a g r and ju r y subpoena i s sued in conn e ction with a c ri m inal inv e stigation being conducted by the U . S. Attorney’s Office for the E astern District of Virginia (the “ U .S. Attorney”). In a ddition, on May 19, 20 1 5, J u ly 13, 20 1 5 and March 11, 2016, the Company r e ceived s u bp o e n as fr o m the N e w Y o r k Regional O f f ice of the S E C in connection wi t h an in q u iry by the SEC Staff. Based on t h e s u bp o e n as, the Company b e lieves the focus of both the U . S. Attorney investigation a n d S E C investigation primarily relate to compliance with disclosur e , fin a nci a l r e p o r tin g an d t r a d in g r e q ui r e m e n t s un d e r the federal securiti e s laws since 2011. The Company is fully cooper a ting with the inv e s tigations by the U. S . A ttorn e y and S EC Staff and continues to produce documents responsive to the subpoenas and pursuant to other requests received from the U.S. Attorney’s Office. Given that the investigation by the U.S. Attorney and S E C Staff are still ongoing, the Company cannot estimate the reasonably p o ssi b le lo s s o r r a n g e o f loss t h a t may r e s u lt from this matter. Litigation Relating to Chinese Laminates Formaldehyde-Related Cases Begi n n ing o n or ab o u t March 3, 20 1 5, n u merous p u r p orted class a c tion ca s e s were filed in various U.S. fe d e ral d istrict courts and state c o urts involving cl a ims of excessive f o r m aldehy d e emissi o n s from the Company’s flooring pro d ucts (collectively, t h e “Products L iabil i ty C a ses”). The plaintiffs in these vari o u s acti o ns sou g ht reco v e ry u n der a variety of theorie s , which alt h ou g h not id e n tic a l a r e general l y s imila r , i n cluding negligence, b r each of wa r ranty, state consumer p r ot e ction act violations, state un f air competition a c t viol a tions, st a te deceptive t r ade pra c tices a c t viola t ions, f alse a d ve r ti s i n g, fr a udulent con c ealment, neglige n t misrepresentation, failure to wa r n , unjust en r ichment a n d similar claims. The purpo r ted classes c o nsisted either or both of all U.S. c o ns u m ers or state con s umers t h at p u rc h a s e d t h e s u bject pro d ucts in certain time p e rio d s. T h e p lai n tiffs al s o sou g ht vari o us forms of d e clar a tory and injun c tive relief and v a rious damages, in c luding restit u tion, actual, compensatory, consequenti a l, a n d , in certain cases, punitive damages, a n d int e rest, c o sts, and attorney s ’ f e es incurr e d by the plai n tiffs and oth e r purported cl a ss members in conne c tion w ith the alleged cl a ims, and orders c ertifying the a c ti o ns as class actions. Plai n tiffs did not q u a n tify damag e s sought f r om the Company in these class actions. On June 12, 2015, the U n it e d States Judicial P a nel on Multi D i s tr i ct L itigation (the “ M DL Pane l ” ) issued an order transferring a n d c o ns o li d ati n g ten o f the r e lated f e deral c lass actions to the United St a tes Dist r ict Cou r t f o r the E astern D istrict of Vi r g i nia (the “Virginia Court ” ). In a series of s ubsequent c o nditional transfer order s , the M DL Panel has transferred the other cases to t h e Vir g inia C ourt. The Company c o ntin u es to seek to have any new l y filed cases transferred and con s olidated in the Virginia Court and, u l timatel y , it expects all federal class actio n s i n vol v i n g f o r m al d ehyde allegations, includi n g any newly filed cases, to be tr a n s f er r ed and consolid a ted in the Vi rg inia Court. T h e consolidated ca s e in the Virginia Court is caption e d In re: L u m b er Liquidato r s C h ines e -Manufac t u red F loor i ng Products Marketing, Sales, Pract i ces and Products L iability Litigatio n (the “MDL”) . Pursuant to a co u r t order, plaintiffs f il e d a Repr e s e n ta t ive Class Action Complaint in the Virginia Court on September 11, 2015. T h e complaint ch a llenged the Company’s labeling o f its fl o o ring prod u cts and as s e rted claims u nder 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 fo r breach of implied warr a n ty un d er Calif o r nia law. T h ereafter, o n September 18, 201 5 , plai n t iffs filed the First A m ended Representative C la s s Action C o mplaint (“FARC”) in which they added impli e d war r anty claims under N e w Yo r k , Illinois, Flo r ida and Texas l a w, as well as a fede r al w a rr a nty cl a im. The Company fil e d a motion to dismiss and ans w ered the FARC. Th e Virginia Court granted the motion a s to claims for negl i g ent misrepresentation filed o n behalf of cer t ain plainti f fs, de f er r ed as to c lass act i on allegation s , and ot h e rwise d e n ied t h e m o t i on. The Company al s o filed a m o tion to strike nationwide cl a s s allegations, on which the V ir g inia Court has not yet r u le d . The Company also filed a motion to strike all personal injury claims made in class action complaints. Plaintiffs subsequently agreed and the Virginia Court has ordered that no Chinese formaldehyde class action pending in this lawsuit will seek damages for personal injury on a class-wide basis. The order does not affect any claims for personal injury brought solely on an individual basis. The Company’s motion for summary judgment on plaintiffs’ First Amended Representative Complaint in the MDL was granted in part and denied in part, and its motion to exclude expert reports and testimony by plaintiffs’ experts related to deconstructive testing was denied. In a d dition, on or about April 1, 2015, S a rah St e ele (“Steel e ”) filed a purport e d c lass action la w s uit in the Ontario, Can a da Sup e rior Court of Justi c e against the Company. I n the compl a int, Ste e le ’ s a lleg a tions include ( i ) st r ict liability, (ii) b r each of impli e d warranty of fitn e s s for a parti c ular purpose, (ii i ) breach of implied warranty of m e rchantability, ( i v) fraud by con c ealment, ( v ) civil negligence, (vi) ne g ligent misrepr e s e n tation, a n d (vii) breach of implied cove n a n t o f go o d faith and fa i r dealin g . Steele did n o t q u antify any alle g ed damages in her complaint but, in addition to attorneys’ f ees a n d c o sts, Steele see ks (i) comp e n satory damages, (ii) punitive, e x e m plary and a g gr a v at e d d a mages, and (iii) statutory remedies related to the Company’s brea c h of various laws in c ludi n g the Sales of Goods Act, the Consum e r Protection Act, the Competition A c t, the Co n su m er Packa g ing and L a b elli n g Act and the Canada Con s umer Prod u ct Safety Act. Abrasion-Related Cases On M ay 20, 2015, a pur p ort e d class ac t ion titl e d A b ad v . L u m b er L i q u i d at o rs, I n c . w as fil e d in the United Sta t es District Court f o r t h e Ce n tral Distri c t o f Ca l if o rnia and two a m e n ded compl a ints were s u bsequ e ntly filed. In the Se c o nd Amend e d Complaint (“SA C ”), the plaintiffs ( collectively, the “Abad Abrasion Plaintif f s”) sought to ce r tify a nat i onal c lass composed of “ A ll Pe r sons in the U n it e d States w h o purchased Defenda n t ’s Dream Home bra n d laminate fl o o rin g p r o du c t s (the “Dream Home Product”) f r o m De f e n d a n t f o r person a l use in their homes , ” o r , i n the alte r n a t ive, 32 state w ide classes f r om C a lifornia, North Ca r o lina, T e xas, New Jers e y , Florida, Nevada, C onnecticut, I o wa, Minn e sot a , N eb r as k a, G e o r g ia, Ma r y l a n d , Massac hu setts, N ew Y o r k , W est V ir g ini a , Kansas, Kentucky, Mississip p i, Pe n n s y l v a n ia, S o u th Car o li n a, Te nn essee, Vir g i n ia, W a shi ng to n , Mai n e, M i chi g a n , Miss o u r i, Ohio, O k lahoma, Wiscon s in, India n a, Illinois a n d L o uisiana. The products that are the subject of these complaints are part of the same products at issue in the MDL. The S AC alleges vio l ations of e a ch of t h ese sta t es’ consumer protections statu t es and the f e de r al M agnuson-Moss War r anty A c t, as w ell as b r each of implied w ar r anty and f raudul e nt con c ealment. T h e Abad Abr a s ion Plaintiffs did not quantify a n y al l eg e d damages in the SAC but, in a d dition to a ttorneys’ fees and costs, sought a n o r d e r c erti f ying the a c tion a s a cl a ss action, an o r de r ado p tin g th e Abad A b rasi o n P l ai n tiff s ’ class defi n itions and findi n g that the Abad A b r asion Plaintiffs are their p r oper rep r esent a tiv e s , an ord e r appointing th e ir c o un s e l as c lass counsel, injunctive r elief pro h ibiting the Company f r o m c o ntinu i ng to advertise and/or sell laminate flooring products with false a b rasion class r a tings, r e s titution of a ll monies it re c eiv e d from the Abad A b rasion Plai n tiffs and class memb e rs, damages (actual, compensatory, and cons e q uential) and punitive damag e s . The Abad Abrasion Plaintiffs filed a Third Amended Complaint and the Company moved to dismiss the Third Amended Complaint. The court decided that it would decide the motion only as to the California plaintiffs (hereinafter referred to as the Abad Abrasion Plaintiffs) and ordered that all the non-California plaintiffs (collectively, the “Non-California Abrasion Plaintiffs”) be dropped from the action with leave to re-file. Many of the Non-California Abrasion Plaintiffs re-filed separate complaints in the Central District of California within the required 60-day period, which were then transferred to the district court located in the place of residence of each Non-California Abrasion Plaintiff. These complaints included similar causes of action and sought similar relief as those of the Abad Abrasion Plaintiffs. On October 3, 2016, the M DL Pane l issued an order transferring a n d c o ns o li d ati n g sixteen o f the f e deral abrasion c lass actions to the Virginia Court. In subsequent conditional transfer orders, the MDL Panel transferred other cases to the Virginia Court. The Company will seek to have any additional related cases transferred and con s olidated in the Virginia Court. T h e consolidated ca s e in the Virginia Court is caption e d In re: L u m b er Liquidato r s C h ines e -Manufac t u red Laminate Flooring Durability Marketing and Sales Pract i ces Litigatio n (the “Abrasion MDL”) . The Virginia Court issued an initial pretrial order instructing all parties to undertake certain discovery and planning tasks and scheduled certain preliminary conferences. Pursuant to a court order, on February 27, 2017, the plaintiffs filed a Representative Class Action Complaint in the Virginia Court. The complaint challenged the durability of the Dream Home Product and asserted claims under Alabama, California, Nevada, New York and Virginia law for breach of warranty, fraudulent concealment, violation of the Magnuson-Moss Warranty Act, and violation of consumer protection statutes. The Company filed a motion to dismiss the representative complaint and a motion to strike irrelevant and prejudicial allegations from the representative complaint. Both motions are currently pending. Estimated Liability Associated with Formaldehyde and Abrasion MDL’s In April 2017, the Company initiated settlement discussions to jointly settle the MDL and the Abrasion MDL. As a result of this and other developments, the Company has recognized an estimated liability of approximately $18,000 in its results of operations (within selling, general and administrative expenses ) for the three months ended March 31, 2017, with a corresponding current liability on the accompanying condensed consolidated balance sheet as the Company determined a loss was both probable and reasonably estimable. This is an estimate and significant uncertainty remains regarding whether a reasonable settlement can be reached, and the timing, amount and form of any ultimate loss. The Company believes that such a settlement may be funded by a combination of cash, shares of common stock, and coupons. The ultimate resolution of the MDL and the Abrasion MDL matters, including the form of any settlement or any loss in the absence of a settlement, could have a material impact on the Company’s results of operations, financial condition, and may have a material adverse impact on the Company’s liquidity. The Company will monitor new information or developments in these contingencies in future reporting periods and adjust its accruals, as necessary, in accordance with ASC 450-20-25. The Company is currently unable to reasonably estimate the amount or range of possible loss in excess of the amounts accrued. If the Company is unable to reach a reasonable settlement, the Company will defend the matter vigorously and believes there are meritorious defenses and legal standards that must be met for, among other things, class certification and success on the merits. The Company does not have insurance coverage with respect to the MDL and Steele matters, and may have limited insurance coverage relative to the Abrasion MDL. In addition to the MDL, the Steele matters, and the Abrasion MDL, there are a number of individual claims and lawsuits alleging (i) damages due to excessive formaldehyde emissions and (ii) damages similar to those in the Abrasion MDL. While the Company believes that a loss associated with these additional matters and the Steele matter is reasonably possible, the Company is unable to reasonably estimate the amount or range of possible loss. Gold Matter On or about December 8, 2014, D a na Gold ( “ G o ld ” ) fil e d a purpo r ted class a ction l awsuit in the United S tates Dist r ict Court f o r the N o rt h e r n Distri c t o f Cali fo r n ia alle g ing that the M o r n ing Star b amboo flo o ring (the “Bamb o o Pro d uct”) that the Company sells is defecti v e. On February 1 3 , 2 01 5 , Gold filed an amen d ed c o mplaint that added three additional plaintiffs ( c olle c tiv e ly with Gold, “ G old P laintiffs” ) . The Company m o ved to dismiss t h e amen d ed complaint. The co ur t dis m i s sed most of G o ld Plaintiff s ’ c l aims but allowed c ertain omission -b ased claims to proce e d. Gold P l aintiffs filed a S e cond Amended Complaint on D ece m be r 1 6 , 2 0 15 , a n d the n a T hi rd A m ended Co m p laint on Jan u ary 2 0 , 2 0 16. In t h e T h ird Ame n ded Com p lai n t, Gold Plaintiffs allege th a t the Company has enga g e d in u n fair b u siness practi c es and u n fair c o mpetition b y falsely re p r esenting t h e q u ality a n d characteristics of t h e Bamboo Prod u c t and by conce a ling the B a mboo Prod u c t ’s def e ctive nature. Gold Pla i ntiffs seek the c ertification of a class of i n divid u als in t h e United States who p u rc h a sed t h e Bam b oo Pr o duct, as well as seven s t ate s u bclasses o f in d ivid u als who are r e s idents of C a lifornia, New York, Illinoi s , West V irgini a , M inne s ota, Penn s ylvania, a n d Fl o r i d a, res p ecti v el y , and p u rchased t h e Bam b o o Pr o duc t f o r perso n a l, famil y , or hou s e h old u s e . G o ld P l ai n tiffs did not q u a n tify any alleged dam a g es in t h e ir c o mplaint b u t, in additi o n to attorneys’ fees and costs, Gold Plaintiffs seek (i) a declaration that the Company’s actions violate the law and that it is financially responsible for notifying all purported class memb e rs, (ii) in j u nctive relief requir i ng the Company to re p lace a n d / o r r e pair all of the Bamboo Product insta l led in structures owned by the pu r ported class members, and ( iii) a de c laration that the Company m u st disg o r g e , f o r the benef i t of the p u rported clas s e s , all or part of the p r o f its r e cei v ed f r om t h e s a le of the alle g edly defe c tive Bamboo Product and/or to make full restitution to Gold Plai n tiffs and the purported class members. Fact disco v ery in the matter is now complete. The Gold Plaintiffs filed a motion for class certification seeking to certify state-wide classes for purchases of the Bamboo Product in California, Florida, Illinois, Minnesota, Pennsylvania, and West Virginia. The Company filed an opposition to class certification and a motion to exclude the opinions of the Gold Plaintiffs’ experts. These motions are currently pending. In addition, there are a number of other claims and lawsuits alleging damages similar to those in the Gold matter. The Company dispu tes these and the Gold Plainti f fs’ cla i ms and intends to de f end such m a tters vigorously. Given the unc e rtainty of l itigat io n, the p r eliminary stage of the case, and the legal standards th a t must be m e t f o r, among other things, c lass certific a tion an d success on the merit s , the Company is unable to estimate the amount of loss, or range of possible loss, at this time that may result from this action. Antidumping and Countervailing D u ties Investigation In O ctober 2010, a conglomerat i on of domestic manufactur e rs of multilayered wood flooring filed a p e tition se e k ing the imposition of a n tidumping ( “ AD”) and c o untervailing duti e s (“C V D ”) with the U n ited States D ep a rtment of Comm e rce (“DOC ” ) and the United St a tes Intern a tional Tr a d e Commis s i o n (“I T C”) a g a inst imports of multilayered wood flooring from China. T h is ruling applies to companies importing multilayered wood flooring from Chinese suppliers subject to the AD and CVD orders . The Company’s multilayered wood flooring imports from China ac c ounted for app r oximately 7% , 6% and 1 0 % o f its fl o o ri n g purchases in 2016, 2015 and 20 1 4, respectively. The Company’s consistent view through the course of this matter has been, and remains, that its imports are neither dumped nor subsidized. As part of its p r o c esses in these procee d ing s , the DOC con d u c ts a n nual r eviews of the CVD and AD r ates. In such cases, the DOC will issue pr e liminary rat e s th a t are not binding and are subject to comment by inter e s t ed p a rties. Aft e r c o nsideration of the comm e n ts rece i ved, the D O C will issue f inal r a tes for the applicable pe r iod, which may lag by a year or more. As rates are adju s t e d through the administrative r e vi e ws, the Company adjusts its payments p r o spectively based on the fi n al rate. The Company will begin to pay the finalized rates on each applicable future purchase when recognized by U.S. Customs and Border Protection. T h e DOC made its initial d e ter m inatio n s regar d ing CVD and AD rates o n A p ril 6, 2 0 11 and May 26, 2 011, res p ecti v el y . O n De c ember 8, 2011, orders were issued setting final A D and CVD r a tes at a maximum of 3 . 3% and 1.5% , respectively. These r ates bec a me ef f e c tive in the form of additional du ty d e p o sits, w h ich the Company has paid, and applied r e troactively to the D OC initial determinati o ns. Follo w ing the is s u ance of the orde r s issued on December 8, 2011, a number of app e als we r e f iled by sev e ral parties, in c luding the Company, with the Court of In t ernation a l T r ade ( “CI T ”) c h a llenging, among other things, ce r tain aspects that may impact the validi t y of the AD and CVD ord e rs and the a p plicable rates. The appeal of the CVD o r d e r was dis m issed in June 2 0 15. On Ja n u ary 2 3 , 2 015, the CIT i s sued a d e cisi o n rejecting the challen g e of the AD r a te f o r all but o n e Chi n ese ex p o rter. T h is decision was finalized on J u ly 6, 2 015, and appealed to the C ourt o f Appeals f o r the Fe d e ral Circuit (“CAFC”) o n July 3 1 , 2 0 15. On February 15, 2017, the CAFC vacated the CIT’s prior decision with instructions to the DOC to recalculate its AD rate. The schedule for the DOC’s recalculation has not yet been set. The Company is unable to determine the impact of the CAFC’s decision to vacate the initial determination of AD rates; however, the DOC’s recalculation could materially impact the Company’s previously recorded loss related to annual reviews of AD rates discussed below. In the first DOC annual review in this matter, AD rates for the period from May 26, 2011 through No v ember 30, 2 012 and CVD rates from April 6, 2011 thr o u gh December 31, 2 0 11 were modified to a maximum of 5.92% and a maximum of 0.83% , respectively, which resulted in an additional payment obligation for the Company, based on best estimates and shipments during the applicable window, of $833 . We recorded this as a long-term liability on our accompanying consolidated balance sheet and in cost of sales in our second quarter 2015 financial statements. T h e s e r a tes have been appe a led to the CIT by several parties, including the Company. While the appeal is still pending, the CIT has issued a remand to the DOC requesting reconsideration of certain AD rate calculations. Pursuant to the second annual review, in early July 2015, the DOC finalized the AD rate for the period from December 1, 2012 through November 30, 2013 at a maximum of 13.74% and the CVD rate for the period from January 1, 2012 through December 31, 2012 at a maximum of 0.99% . The Company believes the best estimate of the probable loss was $4,089 for shipments during the applicable time periods, which was recorded as a long-term liability on its accompanying consolidated balance sheet and included in cost of sales in its second quarter 2015 financial statements. Beginning in July 2015, the Company began paying these rates on each applicable purchase. The rates relating to this second annual review have been appealed to the CIT and that appeal is pending. The third annual review of the AD and CVD rates was initiated in February 2015. The third AD review covered shipments from December 1, 2013 through November 30, 2014. The third CVD review covered shipments from January 1, 2013 through December 31, 2013. In May 2016, the DOC issued the final CVD rate in the third review, which was a maximum of 1.38% . On July 13, 2016, the DOC set the final AD rate at a maximum of 17.37% . The Company has appealed the AD rates to the CIT, and the appeal is currently pending. The Company believes its best estimate of the probable loss associated with AD and CVD is approximately $5,500 for shipments during the applicable time periods. During the quarter ended June 30, 2016, the Company recorded this amount in other long-term liabilities in its balance sheet and as a charge to earnings in cost of sales on its statement of operations. The total amount recorded in other long-term liabilities through the third annual review in the accompanying balance sheet s was $10,400 at March 31, 2017 and at December 31, 2016. In February 2016, the DOC initiated the fourth annual review of AD and CVD rates, which follows a similar schedule as the preceding review. The AD review covers shipments from December 1, 2014 through November 30, 2015. The CVD review covers shipments from January 1, 2014 through December 31, 2014. In December 2016 and January 2017, the DOC issued non-binding preliminary results in the fourth annual review for AD rates and CVD rates, respectively. The preliminary AD rate was a maximum of 4.92% and the CVD preliminary rate was a maximum of 1.68% . The final AD and CVD results in the fourth annual review are currently expected to be issued in May 2017. The Company paid AD and CVD rates in excess of preliminary amounts for shipments during the periods impacted by the fourth annual review. The Company has not recorded a gain contingency as a result of this preliminary review. If the final rate is determined to be above the rates paid, the Company may incur additional expense or may receive a return of funds if the final rate is set below these rates. The DOC initiated the fifth annual review of AD and CVD rates in February 2017, which is expected to follow the same schedule as preceding reviews. The AD review covers shipments from December 1, 2015 through November 30, 2016. The CVD review covers shipments from January 1, 2015 through December 31, 2015. The 5 -year Sunset Review of the antidumping and countervailing duty orders on multilayered wood flooring (the “Sunset Review”) began in November 2016 at the ITC to determine whether to terminate the orders. The Company filed a notice of appearance and documentation required at this phase of the proceeding and intends to participate fully in the Sunset Review. The Sunset Review is expected to be completed in late 2017 or early 2018. Oth e r Matters The Company is a l s o , from time to tim e , subject to claims and d isp u t es ari s ing in the normal c o urse o f bu s iness. In the opi n ion of manag e ment, while the outcome of any such cl a ims a n d disputes cannot be predicted with c ertainty, its ultimate liability in conne c tion w ith th e s e matters is not expec t ed to h a ve a mate r ial a d ve r s e e f fect on the results of oper a tions, financial po s i ti o n or cash f lo w s . |
Summary of Significant Accoun14
| Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
| Mar. 31, 2017 | |
| Summary of Significant Accounting Policies [Abstract] | |
| 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 approximates fair value because of the short-term nature of these items. The carrying amount of obligations under the revolving credit facility approximates fair value due to the variable rate of interest. The fair values of these financial instruments are classified as Level 1 as defined in the Financial Accounting Standards Board (“FASB”) ASC 820 fair value hierarchy. |
| Merchandise Inventories | Merchandise Inventories The Company values merchandise inventories at the lower of cost or market value. The Company periodically reviews the carrying value of items in inventory and records a lower of cost or market adjustment when there is evidence that the utility of inventory will be less than its cost. In determining market value, the Company makes judgments and estimates as to the market value of its products, based on factors such as historical results and current sales trends. Although the Company believes its products are appropriately valued as of the balance sheet date, there can be no assurance that future events or changes in key assumptions would not significantly impact their value. |
| 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 charges were not significant for the three month periods ended March 31, 2017 and 2016. |
| 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, warranty and customer satisfaction costs, 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 who purchased laminate flooring sourced from China to address customer questions about the air quality in their homes. During the second quarter of 2016, the Company agreed with the Office of Compliance and Field Operations of the Consumer Product Safety Commission (“CPSC”) to continue its indoor air quality testing program for customers who purchased laminate flooring sourced from China during the period from February 22, 2012 to February 27, 2015. The form of the testing program agreed to with the CPSC is substantially similar to the program the Company has operated since March 2015. In connection with the continuation of the testing program, the Company recorded a charge to cost of sales of approximately $3,000 in the second quarter of 2016 that represented our best estimate of the costs to continue the program. No additional accruals were considered necessary during the first quarter of 2017. Estimating the reserve for costs associated with the Company’s indoor air quality program for certain of its customers who purchased laminate flooring sourced from China requires management to estimate (1) the number of future requests for indoor air quality testing, (2) the results of that testing and (3) the average cost to fulfill each request, all of which are subject to variables that are inherently uncertain. The Company projects its best estimate of both the expected number of requests to be received and the percentage of requests that will ultimately progress through various phases of its testing program using a range of assumptions derived from the Company’s limited indoor air quality test program history and the identification of factors influencing the amount of requests, including the declining trend in received requests due to the passage of time since customer purchase of the material and/or recent media events. Actual liabilities could be higher or lower than those projected due to uncertainty in projecting the number of future requests for tests, the potential for a media event driving an increase in test kit requests, future average costs per test and other factors, which could materially affect the Company’s financial condition, results of operations or cash flows. If the level of requests received or average cost per request differs materially from expectations, it could result in additional increases to the reserve and reduced earnings and cash flows in future periods. At March 31, 2017, the Company’s best estimate of its future indoor air quality testing program reserve is approximately $1,350 . A rollforward of the reserve for the Company’s air quality testing program was as follows: 2017 2016 Balance at January 1 $ 1,500 $ 809 Provision - 2,895 Reversal - - Payments (150) (2,925) Balance at March 31 $ 1,350 $ 779 |
| Recent Accounting Pronouncements | Recent Accounting Pronouncements In November 2015, the FASB issued 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 classifies both current and noncurrent deferred income tax assets and liabilities in the noncurrent section of the statement of financial position. The amendments in ASU 2015-17 became effective for annual reporting periods beginning after December 15, 2016, and interim periods within those fiscal years. The Company adopted this new guidance during the first quarter of 2017 on a retrospective basis, and accordingly reclassified approximately $6,090 of current deferred tax assets to long-term deferred tax liabilities, such that the December 31, 2016 balance sheet reflects a noncurrent deferred tax liability of $3,798 and a current deferred tax asset of zero . The adoption of th is guidance had no impact on the Company’s results of operations or cash flows. In March 2016, the FASB issued Accounting Standards Update No. 2016-09, which amends ASC Topic 718, Compensation – Stock Compensation, which simplifies the accounting for employee share-based payments. The new standard requires the immediate recognition of all excess tax benefits and deficiencies in the income statement (rather than equity), which was adopted in the first quarter of 2017 on a prospective basis. The standard also requires classification of excess tax benefits as an operating activity as opposed to a financing activity in the statements of cash flows. The Company applied this amendment of the standard on a retrospective basis starting in the first quarter of 2017. In the first quarter of 2016, there were no excess tax benefits recognized. The standard also clarifies that all cash payments made to taxing authorities on the employees' behalf for shares withheld should be presented as financing activities on the statements of cash flows, which is consistent with the Company’s current practice. Finally, the standard provides for a policy election to either estimate the number of awards that are expected to vest or account for forfeitures as they occur. The Company will continue to include the impact of estimated forfeitures when determining share-based compensation expense. 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. In August 2015, FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which deferred the effective date of ASU 2014-09 to reporting periods beginning after December 15, 2017. Early adoption is permitted for reporting periods beginning after December 15, 2016. The Company will adopt this ASU on January 1, 2018. Companies may use either a full retrospective or a modified retrospective approach to adopt this ASU. The Company established a cross-functional team in 2016 to review its current accounting policies and practices, assess the effect of the standard on its revenue contracts and identify potential differences. In addition, the Company is in the process of evaluating changes to its business processes and controls to support recognition and disclosure under the new standard. While the Company is continuing to assess all potential impacts of the standard, it currently believes the most significant impacts will relate to its assessment of (i) determining when its merchandise and installation sales order arrangements meet the definition of a contract when both arrangements are offered to its customers, (ii) determining the transaction price as impacted by sales returns and promotional activities, including financing arrangements it offers to its customers; (iii) sales commission costs it pays to its employees; and (iv) the potential impact on gross versus net presentation and classification relative to the performance of its installation sales. However, the Company cannot currently estimate the impact of this change upon adoption of this standard. The Company is also continuing to review the impact of this standard on potential disclosure changes in its financial statements as well as which transition approach will be applied. 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 operating leases will be recognized on the Company’s consolidated balance sheet. |
Summary of Significant Accoun15
| Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
| Mar. 31, 2017 | |
| Summary of Significant Accounting Policies [Abstract] | |
| 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: 2017 2016 Balance at January 1 $ 1,500 $ 809 Provision - 2,895 Reversal - - Payments (150) (2,925) Balance at March 31 $ 1,350 $ 779 |
Stockholders' Equity (Tables)
| Stockholders' Equity (Tables) | 3 Months Ended |
| Mar. 31, 2017 | |
| Stockholders' Equity [Abstract] | |
| Computation of Basic and Diluted Net Income (Loss) Per Common Share | The following table sets forth the computation of basic and diluted net loss per common share: Three Months Ended March 31, 2017 2016 Net Loss $ (26,372) $ (32,402) Weighted Average Common Shares Outstanding—Basic 28,291,658 27,090,575 Effect of Dilutive Securities: Common Stock Equivalents — — Weighted Average Common Shares Outstanding—Diluted 28,291,658 27,090,575 Net Loss per Common Share—Basic $ (0.93) $ (1.20) Net Loss per Common Share—Diluted $ (0.93) $ (1.20) |
| 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 anti-dilutive: Three Months Ended March 31, 2017 2016 Stock Options 769,456 795,480 Restricted Shares 469,076 449,869 |
Stock-Based Compensation (Table
| Stock-Based Compensation (Tables) | 3 Months Ended |
| Mar. 31, 2017 | |
| Stock-Based Compensation [Abstract] | |
| Summary of Activity Related to Stock Options and Restricted Stock Awards | The following table summarizes share activity related to stock options and restricted stock awards (“RSAs”): Stock Options Restricted Stock Awards Options Outstanding/Nonvested RSAs, December 31, 2016 835,614 586,187 Granted 61,350 159,401 Options Exercised/RSAs Released (50,548) (104,194) Forfeited (40,150) (36,707) Options Outstanding/Nonvested RSAs, March 31, 2017 806,266 604,687 |
Basis of Presentation (Narrativ
| Basis of Presentation (Narrative) (Detail) $ in Thousands | Mar. 31, 2017USD ($)statestore | Dec. 31, 2016USD ($) |
| Basis of Presentation [Abstract] | ||
| Number of States in which Stores Operates | state | 46 | |
| Number of Domestic Stores | store | 385 | |
| Number of Canadian Stores | store | 8 | |
| Current deferred tax asset | $ 6,090 | |
| Deferred Tax Assets, Gross, Current | 0 | |
| Deferred tax liability | $ 3,798 | $ 9,888 |
Summary of Significant Accoun19
| Summary of Significant Accounting Policies (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
| Mar. 31, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
| Organization And Business Operations [Line Items] | |||
| Indoor air quality testing program reserve | $ 1,350 | ||
| Excess tax benefits from share based compensation | 0 | ||
| Current deferred tax asset | $ 6,090 | ||
| Long term deferred tax liability | $ 3,995 | 3,798 | |
| Deferred tax asset | $ 0 | ||
| Laminate [Member] | |||
| Organization And Business Operations [Line Items] | |||
| Asset impairment charge | $ 3,000 | ||
Summary of Significant Accoun20
| Summary of Significant Accounting Policies (Rollforward of the Reserve for Air Quality Testing Program) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
| Mar. 31, 2017 | Mar. 31, 2016 | |
| Summary of Significant Accounting Policies [Abstract] | ||
| Air quality testing program accrual, Beginning balance | $ 1,500 | $ 809 |
| Provision | 2,895 | |
| Reversal | ||
| Payments | (150) | (2,925) |
| Air quality testing program accrual, Ending balance | $ 1,350 | $ 779 |
Stockholders' Equity (Narrative
| Stockholders' Equity (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
| Mar. 31, 2017 | Mar. 31, 2016 | |
| Stockholders' Equity [Abstract] | ||
| Stock Repurchase Program, Authorized Amount | $ 150,000 | |
| Common Stock Repurchased, Remaining Authorized Amount | $ 14,728 | |
| Treasury Stock, Shares, Acquired | 0 | 0 |
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 | |
| Mar. 31, 2017 | Mar. 31, 2016 | |
| Stockholders' Equity [Abstract] | ||
| Net Loss | $ (26,372) | $ (32,402) |
| Weighted Average Common Shares Outstanding-Basic | 28,291,658 | 27,090,575 |
| Effect of Dilutive Securities: | ||
| Common Stock Equivalents | ||
| Weighted Average Common Shares Outstanding-Diluted | 28,291,658 | 27,090,575 |
| Net Loss per Common Share-Basic | $ (0.93) | $ (1.20) |
| Net Loss per Common Share-Diluted | $ (0.93) | $ (1.20) |
Stockholders' Equity (Anti-Dilu
| Stockholders' Equity (Anti-Dilutive Securities Excluded from Computation of Weighted Average Common Shares Outstanding-Diluted) (Details) - shares | 3 Months Ended | |
| Mar. 31, 2017 | Mar. 31, 2016 | |
| Stock Option [Member] | ||
| Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
| Anti-dilutive securities excluded from computation of earning per share | 769,456 | 795,480 |
| Restricted Shares [Member] | ||
| Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
| Anti-dilutive securities excluded from computation of earning per share | 469,076 | 449,869 |
Stock-Based Compensation (Summa
| Stock-Based Compensation (Summarizes Share Activity Related to Stock Options and Restricted Stock Awards) (Details) | 3 Months Ended |
| Mar. 31, 2017shares | |
| Stock Option [Member] | |
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
| Beginning Balance | 835,614 |
| Granted | 61,350 |
| Options Exercised/RSAs Released | (50,548) |
| Forfeited | (40,150) |
| Ending Balance | 806,266 |
| Restricted Shares [Member] | |
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
| Beginning Balance | 586,187 |
| Granted | 159,401 |
| Options Exercised/RSAs Released | (104,194) |
| Forfeited | (36,707) |
| Ending Balance | 604,687 |
Related Party Transactions (Nar
| Related Party Transactions (Narrative) (Details) $ in Thousands | 3 Months Ended |
| Mar. 31, 2016USD ($) | |
| Controlled Companies | |
| Related Party Transaction [Line Items] | |
| Rental expense | $ 851 |
Income Taxes (Narrative) (Detai
| Income Taxes (Narrative) (Details) | 3 Months Ended | |
| Mar. 31, 2017 | Mar. 31, 2016 | |
| Income Taxes [Abstract] | ||
| Effective tax rate | (1.70%) | 21.50% |
| Statutory rate | 35.00% | |
Commitments and Contingencies (
| Commitments and Contingencies (Narrative) (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 5 Months Ended | 9 Months Ended | 12 Months Ended | 18 Months Ended | |||||||||
| Jan. 31, 2017 | Dec. 31, 2016 | Jul. 31, 2016 | May 31, 2016 | Jul. 31, 2015 | Dec. 31, 2011 | Mar. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2011 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Nov. 30, 2012 | Jun. 30, 2016 | Jun. 30, 2015 | |
| Antidumping Duties [Member] | |||||||||||||||
| Loss Contingencies [Line Items] | |||||||||||||||
| Environmental Compliance Plan, Outside Audit Period | 5 years | ||||||||||||||
| Loss Contingency Multilayered Hardwood Products Purchase Percentage | 7.00% | 6.00% | 10.00% | ||||||||||||
| Loss Contingency Purchase Price Of Antidumping Duty Rate | 3.30% | ||||||||||||||
| Loss Contingency Purchase Price Of Countervailing Duties Rate | 1.50% | ||||||||||||||
| 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% | ||||||||||||||
| Loss Contingency Modified Purchase Price Of Countervailing Duties Rate | 0.99% | ||||||||||||||
| Antidumping Duties [Member] | Third Annual Review [Member] | |||||||||||||||
| Loss Contingencies [Line Items] | |||||||||||||||
| Loss Contingency, Estimate of Possible Loss | $ 5,500 | ||||||||||||||
| Loss Contingency Modified Purchase Price Of Antidumping Duty Rate | 17.37% | ||||||||||||||
| Loss Contingency Modified Purchase Price Of Countervailing Duties Rate | 1.38% | ||||||||||||||
| Antidumping Duties [Member] | Third Annual Review [Member] | Other Noncurrent Liabilities [Member] | |||||||||||||||
| Loss Contingencies [Line Items] | |||||||||||||||
| Loss Contingency, Estimate of Possible Loss | $ 10,400 | $ 10,400 | $ 10,400 | $ 10,400 | |||||||||||
| Antidumping Duties [Member] | Fourth Annual Review [Member] | |||||||||||||||
| Loss Contingencies [Line Items] | |||||||||||||||
| Loss Contingency Modified Purchase Price Of Antidumping Duty Rate | 4.92% | ||||||||||||||
| Loss Contingency Modified Purchase Price Of Countervailing Duties Rate | 1.68% | ||||||||||||||
| Litigation Relating to Abrasion Claims [Member] | |||||||||||||||
| Loss Contingencies [Line Items] | |||||||||||||||
| Loss Contingency, Loss in Period | 18,000 | ||||||||||||||
| Litigation Relating to Abrasion Claims [Member] | Other Current Liabilities [Member] | |||||||||||||||
| Loss Contingencies [Line Items] | |||||||||||||||
| Settlement Liability, Current | $ 18,000 | $ 18,000 | |||||||||||||