Lumber Liquidators announced financial results for the fourth quarter and full year ended December 31, 2016.
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Net sales in the fourth quarter of 2016 were $244.9 million, an increase of 4.3% from the fourth quarter of 2015.
This includes a comparable store net sales increase of 2.8%, which reflected a 3.0% increase in average sale slightly offset by a 0.2% decrease in customers invoiced. Non-comparable store net sales increased $3.6 million over the comparable prior year period.
The company opened three new stores during the fourth quarter of 2016.
Gross margin was 32.9% in the fourth quarter of 2016, compared with 23.0% in the prior year period.
The increase in gross margin was primarily attributable to the prior year reduction in the carrying value of the company's inventory of laminate flooring sourced from China, related moldings and other inventory adjustments of approximately $21.7 million as well as shifts in the mix of products sold to items such as vinyl, which generally have lower retail price points, but higher gross margins.
Selling, general and administrative (SG&A) expenses in the fourth quarter of 2016 were $89.7 million compared to $85.5 million in the prior year quarter.
The increase was attributable to a $5.6 million increase in payroll-related costs in our store staffing, professional and installation sales teams, and corporate capabilities as well as an approximate $1.5 million increase in advertising spend.
These items were offset by the net impact of the change in the costs highlighted in the attached supplemental schedule. As a percentage of net sales, SG&A increased slightly to 36.6% from 36.4% during the prior year period.
Net loss for the fourth quarter of 2016 was $5.5 million, or a loss of $0.20 per diluted share, as compared to a net loss of $19.8 million, or $0.73 per diluted share, during the prior year period.
At December 31, 2016, the company had $101.0 million in liquidity, comprised of $10.3 million of cash and $90.7 million of availability under its revolving credit facility.
The company had $40.0 million outstanding on its revolving credit facility at December 31, 2016.
This compares to $93.9 million in liquidity at December 31, 2015, which was comprised of $26.7 million in cash and $67.2 million of availability under the revolving credit facility. The company had $20.0 million outstanding on its revolving credit facility at December 31, 2015.
Full year results
Net sales decreased 1.9% to $960.6 million in 2016 from $978.8 million in 2015.
Comparable store net sales decreased $45.0 million, or 4.6%, and net sales in non-comparable stores added $26.8 million versus the prior year. The company opened nine new stores in 2016, and as of December 31, 2016, operated 383 stores in the United States and Canada.
Gross profit increased 9.0% to $303.9 million from $278.9 million in 2015. SG&A expenses increased as a percentage of net sales to 41.4% in 2016, compared to 37.0% in 2015.
Net loss was $68.6 million, or $2.51 per diluted share in 2016 compared to a net loss of $56.4 million, or $2.08 per diluted share, in the prior year. ■