LL Flooring — Investor Presentation (December 2022)
27 slides from LL Flooring's investor presentation, Dec 13, 2022
Slide 1: LL Flooring Investor Presentation
1 LL Flooring Investor Presentation December 13, 2022
Slide 2: Forward-looking statements
2 The following information includes statements of the Company's expectations, intentions, plans and beliefs that constitute "forward - looking statements" within the meanings of the Private Securities Litigation Reform Act of 1995 .. These statements, which may be identified by words such as "may,"
Slide 3: Non-GAAP Financial Measures
3 Non - GAAP Financial Measures To supplement the financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), the Company uses the following non - GAAP financial measures: (i) Adjusted Operating Income, and (ii) Adjusted Operating Margin. These non - GAAP fin
Slide 4: LL Flooring: Well-Positioned for Long-Term Growth
4 LL Flooring: Well - Positioned for Long - Term Growth 2 Driving Transformation to Achieve Sustainable, Unique Competitive Positioning 1 4 Compelling Growth Strategies Position LL Flooring to Increase Market Share Strong Balance Sheet and Liquidity 3 Our Vision: Become customers’ first choice in ha
Slide 5: Vision: Become the first choice in hard-surface flooring
5 Vision: Become the first choice in hard - surface flooring by providing the best experience, from start to finish • Focusing the entire organization on a shared vision, purpose and values • Defining our ideal customer who values quality trend - right flooring, seeks our expertise and appreciates g
Slide 6: About LL Flooring
6 About LL Flooring From inspiration to installation, we deliver the floors customers love Innovative, Direct Sourcing Model ❑ Trend - Right Assortment ❑ Exclusive, Private - Label Brands ❑ Diversified Global Supplier Base ❑ Quality Flooring at a Good Value Multi - Channel End - to - End Service ❑ S
Slide 7: National Store Footprint in All Major Markets
7 National Store Footprint in All Major Markets 442 stores 2 DC’s 1 HQ Source: Company filings as of December 13 , 2022 7 3 7 43 10 7 33 13 3 2 16 10 3 5 6 12 9 3 13 7 8 4 1 18 1 2 1 3 22 15 3 9 21 10 2 9 31 3 1 11 8 5 0 18 4 15 5 1
Slide 8: Large, Fast-Growing Addressable Market with Fragmented Retail Distribution
8 Large, Fast - Growing Addressable Market with Fragmented Retail Distribution *Management estimates based on Catalina Research Report on Floor Covering Industry, Annual Market Report 2021; includes hardwood, laminate, tile and vinyl ** Management estimates based on Catalina Research Report of Floor
Slide 9: Well Positioned with Differentiated Customer Value Proposition
9 Well Positioned with Differentiated Customer Value Proposition The high - touch service of an independent combined with the value and convenience of a national brand Accessible Expertise Trend - Right, In - Stock Assortment Guided Journey from Inspiration to Installation All at a Compelling Value
Slide 10: Compelling Growth Strategies
10 Compelling Growth Strategies
Slide 11: 2022 Investment Year to Drive Long-Term Growth
11 2022 Investment Year to Drive Long - Term Growth 2019 – 2021 Transformation Merchandising & Sourcing E - commerce Rebrand Pricing/Promotion Strategy 2022 Investments New Stores Pro Sales Brand Awareness Customer Experience Product Innovation Developing people & culture to enable growth Foundation
Slide 12: Compelling Growth Strategies
12 Compelling Growth Strategies Open New Stores Grow Sales to Pro Customers Build New Brand Awareness Improve Customer Experience Innovate New Products Develop People & Culture
Slide 13: Open New Stores
13 2020 2021 2022 Store Count Substantial opportunity to open new stores in growing markets to more conveniently serve customers • Improving Pro and consumer convenience by expanding store footprint and placing inventory closer to customers • Data - driven pipeline of high - potential locations • Gr
Slide 14: Grow Sales to Pro Customers
14 Grow Pro by delivering quality floors at a good value, providing dedicated expert service and being easy to do business with • Build awareness for dedicated Pro everyday low pricing and web experience • Continue to invest in Pro relationship programs – local, regional and national • Deliver perso
Slide 15: Build Awareness of LL Flooring Brand
15 • Pros and consumers view LL Flooring more favorably than prior brand on all key measurements • Attracting customers who value: • Q uality • A broad selection of wood and wood - look flooring • Store associate expertise • A complete end - to - end solution/installation services • All at a great v
Slide 16: Improve the Customer Experience
16 Improve the Customer Experience Deliver quality and exper tise through a best - in - class customer e xperience Call Center Digital In Store Installation Services
Slide 17: Innovate New Products
17 Leveraging our large global network of sourcing partners and talented merchant team to launch high - quality, beautiful innovative on - trend floors • Strong team of merchandising professionals focused on delivering high - quality beautiful on - trend collections • Extensive assortment of hard -
Slide 18: Develop People and Culture
18 Our commitment to building a diverse customer - obsessed workforce delivers an exceptional customer experience Customer Obsessed We actively engage with our internal and external customers to understand their needs, and passionately seek to offer the best service Embrace Diversity We foster an en
Slide 19: Financials
NG : KK LL Flooring Financials
Slide 20: Profit improvement initiatives drive higher adjusted operating margin
20 Profit improvement initiatives drive higher adjusted operating margin Higher FY 2021 Profitability and Net Sales vs. FY 2019* *Most recent fiscal year results versus pre - COVID 19 fiscal year **A non - GAAP measure. Please refer to the Appendix as well as our Form 10 - K filings for a reconcilia
Slide 21: 2022 adjusted operating margin impacted by demand, costs and investment
21 Lower consumer sales, higher product costs and wage inflation, and increased investments in long - term growth unfavorably impacting adjusted operating margin in 2022 5.3% 4.7% Challenging Consumer Demand in 2022 Coupled with Higher Supply Chain Costs & Investment Year Spend 1.9% *A non - GAAP me
Slide 22: Strong Balance Sheet & Liquidity
22 FY 21 22-Sep Cash & Cash Equivalents Availability Strong Balance Sheet & Liquidity; Well Positioned with Replenished Inventory B alance sheet and liquidity remain strong even after rebuilding inventory in 2022 FY 21 22-Sep Rebuilt Inventory $227 $134 $254 $366 Liquidity Remains Strong
Slide 23: Capital Allocation Priorities
23 Capital Allocation Priorities Continually review capital allocation priorities to maximize long - term shareholder value Invest in our Business • Inventory replenished • Disciplined investment in growth strategies* • Run the business Return Capital via Share Repurchase $ 4 $43 Million Authorizati
Slide 24: GAAP to Non-GAAP Adjustments
24 GAAP to Non - GAAP Adjustments
Slide 25: GAAP to Non-GAAP Adjustments
25 GAAP to Non - GAAP Adjustments 1 A mounts may not sum due to rounding. 2 Represents classification adjustments related to HTS duty categorization in prior periods during the year ended December 31, 201 9. 3 Represents net antidumping and countervailing (income)/expense associated with applicable
Slide 26: GAAP to Non-GAAP Adjustments
26 GAAP to Non - GAAP Adjustments 1 Amounts may not sum due to rounding 2 Represents antidumping expense/(income) associated with applicable prior - year shipments of engineered hardwood from China. 3 The 2022 amount represents insurance recovery related to the Gold Litigation recorded in the third
Slide 27: ~ DESIGN |EIE
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LL Flooring Holdings — Investor Presentation (December 2022) on 6ix