Retail IPO: Lumber Liquidators

Nov. 5.07 | About: Lumber Liquidators (LL)

Lumber Liquidators (NYSE:LL) is going public this week. The Virginia based company is the largest specialty retailer of hardwood flooring in the U.S.

All quotations are from the company's most recent S-1 filing with links provided.

LUMBER LIQUIDATORS, INC. (LL)
Business Overview (from prospectus)

Lumber Liquidators is the largest specialty retailer of hardwood flooring in the United States, based on industry sources and our experience. We believe we have achieved a reputation for offering great value, superior service and a broad selection of high-quality hardwood flooring products. We offer an extensive selection of premium hardwood flooring products under multiple proprietary brands at everyday low prices designed to appeal to a diverse customer base. We believe that our vertically integrated business model enables us to offer a broad assortment of high-quality products to our customers at a lower cost than our competitors. As of September 30, 2007, we sold our products through 111 Lumber Liquidators stores in 42 states, a call center, our website and a catalog. We believe that our brands, value proposition and integrated multi-channel approach are important competitive advantages.

Offering: 11.5 million shares at $12.00 - $14.00 per share. Net proceeds of approximately $43.4 million will be used to repay debt.

Lead Underwriters: Goldman Sachs, Merrill Lynch

Financial Highlights:

Net sales increased approximately $52.6 million, or 21%, to $299.8 million for the nine months ended September 30, 2007 from $247.2 million for the nine months ended September 30, 2006... Gross profit increased approximately $16.1 million, or 19%, to $99.4 million for the nine months ended September 30, 2007 from $83.3 million in first nine months of 2006, principally due to increases in net sales partially offset by a net higher cost from suppliers for the merchandise sold and an increase in transportation costs... Operating income for the nine months ended September 30, 2007 decreased $4.8 million, or 26%, to $13.9 million, as a $20.9 million increase in SG&A expenses was partially offset by a $16.1 million increase in gross profit... Net income decreased approximately $3.0 million to $8.3 million for the nine months ended September 30, 2007 from $11.3 million for the nine months ended September 30, 2006 and declined as a percentage of net sales to 2.8% for the nine months ended September 30, 2007 from 4.6% for the nine months ended September 30, 2006.

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