Lumber Liquidators Q3 Net Income Plummets

Toano, VA, Nov. 3, 2010 -- Lumber Liquidators reported that third quarter net income decreased 44.8% to $4.3 million, or $0.15 per share from $7.8 million, or $0.28 per share, a year ago.

However, net sales increased $6.7 million, or 4.7%, to $147.2 million from $140.5 million even as comparable store net sales decreased 5.7%.

The company blamed the implementation of new SAP business systems software for reducing company productivity during the phase in as employees had to get used to the new systems.

It said problems included less effective conversion of customer demand into invoiced sales, less efficient product allocation and distribution, and the general need for additional resources to operate the business.

Lumber Liquidators said that net sales in the third quarter prior to the system implementation increased 18.5% over the same 2009 period, and comparable store net sales increased 7.3%.

For the first nine months, net income was $20.3 million, or $0.72 per share compared to $19.8 million, or $0.72 per share a year ago.

The company said that fourth quarter sales through October have increased about 14.5% over last year.