Lumber Liquidators Q2 net sales increased $25.4 million
Staff Writer |
Lumber Liquidators announced financial results for the second quarter and six months ended June 30, 2017.
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Net sales for the second quarter of 2017 increased $25.4 million, or 10.7%, to $263.5 million from $238.1 million in the second quarter of 2016.
Net sales in comparable stores increased $21 million, or 8.8%, driven by a 5.3% increase in the number of customers invoiced and a 3.5% increase in the average sale. Merchandise sales in comparable stores grew 6.1% in the quarter.
Net sales in non-comparable stores increased $4.4 million. The company did not open any stores during the second quarter of 2017, so total store count remained at 385 as of June 30, 2017.
Gross profit increased 38.1% in the second quarter of 2017 to $97.5 million from $70.6 million in the comparable period in 2016. Gross margin increased to 37% in the second quarter of 2017 from 29.7% in the second quarter of 2016.
During the quarter ended June 30, 2017, gross margin was favorably impacted by a combined total of $3.8 million due to revisions to anti-dumping rates ($2.8 million) and a reduction of $1 million in the reserve for the company's Air Quality Testing Program.
The three months ended June 30, 2016 were negatively impacted by $5.5 million in estimated anti-dumping charges and $3.3 million for the company's Air Quality Testing Program.
Excluding these costs from both years, which are summarized in the table below, the 220 basis points improvement from 2016 was due to increases in the sales mix of manufactured products such as vinyl and ancillary products, both of which have higher gross margins, and lower transportation costs.
These benefits were offset by higher installation sales that have slightly lower gross margins.
SG&A expenses increased 2.7% in the second quarter of 2017 to $92.3 million from $89.9 million in the comparable period in 2016, including legal and professional fees as well as settlement expenses in connection with the company's defense of various legal and regulatory matters.
These legal and professional fees were down in the three months ended June 30, 2017 as compared to the comparable period in the prior year and will continue to fluctuate in line with case activity until the outstanding legal matters are resolved.
Excluding these items from both periods, SG&A increased $7.5 million in the three months ended June 30, 2017 as compared to the year-ago period, primarily driven by a $3.9 million increase in payroll due to greater store level staffing, the development of the company's Installations and Pro Sales teams, and investments in corporate capabilities, a $1 million increase in advertising, and a $2 million increase in other operating expenses.
Net income for the three months ended June 30, 2017 was $4.5 million, resulting in income of $0.16 per diluted share, compared to a net loss of $12.2 million, resulting in a loss of $0.45 per diluted share, during the prior-year period.
At June 30, 2017, the company had approximately $83 million in immediate liquidity, comprised of cash and cash equivalents and availability under its revolving credit facility, but not including its income tax refund of $29 million that was received in July 2017.
The company had $57 million outstanding on its revolving credit facility at June 30, 2017. ■