10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

or

☐     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission File Number: 001-33767

LL Flooring Holdings, Inc.

(Exact name of registrant as specified in its charter)

Delaware	27-1310817
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
4901 Bakers Mill Lane Richmond, Virginia	23230
(Address of Principal Executive Offices)	(Zip Code)

(800) 366-4204

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:	Trading Symbol:	Name of exchange on which registered:
Common Stock, par value $0.001 per share	LL	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 of 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  ☒  Yes  ☐  No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  ☒  Yes  ☐  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

☐  Large accelerated filer ☒  Accelerated filer ☐  Non-accelerated filer ☐  Smaller reporting company ☐  Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  ☐  Yes   ☒  No

As of October 28, 2022, there are 29,301,879 shares of the registrant’s common stock, par value of $0.001 per share, outstanding.

LL FLOORING HOLDINGS, INC.

Quarterly Report on Form 10-Q

For the quarter ended September 30, 2022

TABLE OF CONTENTS

		Page
	PART I – FINANCIAL INFORMATION	2
Item 1.	Condensed Consolidated Financial Statements and Supplementary Data	2
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4.	Controls and Procedures	27
	PART II – OTHER INFORMATION	27
Item 1.	Legal Proceedings	27
Item 1A.	Risk Factors	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 3.	Defaults Upon Senior Securities	28
Item 4.	Mine Safety Disclosures	28
Item 5.	Other Information	28
Item 6.	Exhibits	28
	Signatures	30

1

PART I
FINANCIAL INFORMATION

Item 1. Financial Statements.

LL Flooring Holdings, Inc.
Condensed Consolidated Balance Sheets
(Unaudited, in thousands)

	September 30,		December 31,
	2022		2021
Assets
Current Assets:
Cash and Cash Equivalents	$	6,051	$	85,189
Merchandise Inventories		365,622		254,385
Prepaid Expenses		11,200		9,160
Other Current Assets		16,673		11,094
Total Current Assets		399,546		359,828
Property and Equipment, net		100,555		96,926
Operating Lease Right-of-Use Assets		124,531		119,510
Goodwill		9,693		9,693
Net Deferred Tax Assets		11,285		11,336
Other Assets		6,209		8,599
Total Assets	$	651,819	$	605,892
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts Payable	$	62,103	$	63,464
Customer Deposits and Store Credits		48,877		67,063
Accrued Compensation		7,592		10,128
Sales and Income Tax Liabilities		3,887		4,297
Accrual for Legal Matters and Settlements		22,881		33,611
Operating Lease Liabilities - Current		34,293		33,060
Other Current Liabilities		25,073		20,717
Total Current Liabilities		204,706		232,340
Other Long-Term Liabilities		6,965		4,268
Operating Lease Liabilities - Long-Term		100,861		97,163
Credit Agreement		69,000		—
Total Liabilities		381,532		333,771
Commitments and Contingencies
Stockholders’ Equity:
Common Stock ($0.001 par value; 35,000 shares authorized; 30,743 and 30,536 shares issued and 28,686 and 29,113 shares outstanding, respectively)		31		31
Treasury Stock, at cost (2,057 and 1,423 shares, respectively)		(153,284)		(145,337)
Additional Capital		230,918		227,804
Retained Earnings		192,622		189,623
Total Stockholders’ Equity		270,287		272,121
Total Liabilities and Stockholders’ Equity	$	651,819	$	605,892

See accompanying notes to condensed consolidated financial statements

2

LL Flooring Holdings, Inc.
Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income
(Unaudited, in thousands, except per share amounts)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Net Sales
Net Merchandise Sales	$	229,204	$	240,802	$	731,044	$	750,388
Net Services Sales		39,617		41,427		115,766		116,675
Total Net Sales		268,821		282,229		846,810		867,063
Cost of Sales
Cost of Merchandise Sold		142,041		144,307		449,987		442,914
Cost of Services Sold		31,198		32,721		90,412		90,626
Total Cost of Sales		173,239		177,028		540,399		533,540
Gross Profit		95,582		105,201		306,411		333,523
Selling, General and Administrative Expenses		99,692		93,165		300,804		291,767
Operating (Loss) Income		(4,110)		12,036		5,607		41,756
Other Expense (Income)		646		18		830		(252)
(Loss) Income Before Income Taxes		(4,756)		12,018		4,777		42,008
Income Tax (Benefit) Expense		(982)		3,239		1,778		10,618
Net (Loss) Income and Comprehensive (Loss) Income	$	(3,774)	$	8,779	$	2,999	$	31,390
Net (Loss) Income per Common Share—Basic	$	(0.13)	$	0.30	$	0.10	$	1.08
Net (Loss) Income per Common Share—Diluted	$	(0.13)	$	0.30	$	0.10	$	1.06
Weighted Average Common Shares Outstanding:
Basic		28,668		29,082		28,859		28,984
Diluted		28,668		29,455		29,010		29,494

See accompanying notes to condensed consolidated financial statements

3

LL Flooring Holdings, Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(Unaudited, in thousands)

											Total
	Common Stock			Treasury Stock			Additional		Retained		Stockholders'
	Shares	Value		Shares	Value		Capital		Earnings		Equity
June 30, 2021	29,063	$	30	1,392	$	(144,788)	$	225,287	$	170,536	$	251,065
Stock-Based Compensation Expense	—		—	—		—		1,349		—		1,349
Release of Restricted Shares	26		—	—		—		—		—		—
Common Stock Repurchased	—		—	15		(290)		—		—		(290)
Net Income	—		—	—		—		—		8,779		8,779
September 30, 2021	29,089	$	30	1,407	$	(145,078)	$	226,636	$	179,315	$	260,903
June 30, 2022	28,680	$	31	2,053	$	(153,244)	$	230,086	$	196,396	$	273,269
Stock-Based Compensation Expense	—		—	—		—		832		—		832
Release of Restricted Shares	6		—	—		—		—		—		—
Common Stock Repurchased	—		—	4		(40)		—		—		(40)
Net Loss	—		—	—		—		—		(3,774)		(3,774)
September 30, 2022	28,686	$	31	2,057	$	(153,284)	$	230,918	$	192,622	$	270,287

											Total
	Common Stock			Treasury Stock			Additional		Retained		Stockholders'
	Shares	Value		Shares	Value		Capital		Earnings		Equity
December 31, 2020	28,911	$	30	1,318	$	(142,977)	$	222,628	$	147,925	$	227,606
Stock-Based Compensation Expense	—		—	—		—		3,945		—		3,945
Exercise of Stock Options	6		—	—		—		63		—		63
Release of Restricted Shares	172		—	—		—		—		—		—
Common Stock Repurchased	—		—	89		(2,101)		—		—		(2,101)
Net Income	—		—	—		—		—		31,390		31,390
September 30, 2021	29,089	$	30	1,407	$	(145,078)	$	226,636	$	179,315	$	260,903
December 31, 2021	29,113	$	31	1,423	$	(145,337)	$	227,804	$	189,623	$	272,121
Stock-Based Compensation Expense	—		—	—		—		2,818		—		2,818
Exercise of Stock Options	21		—	—		—		296		—		296
Release of Restricted Shares	123		—	—		—		—		—		—
Common Stock Repurchased	(571)		—	634		(7,947)		—		—		(7,947)
Net Income	—		—	—		—		—		2,999		2,999
September 30, 2022	28,686	$	31	2,057	$	(153,284)	$	230,918	$	192,622	$	270,287

See accompanying notes to condensed consolidated financial statements

4

LL Flooring Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)

	Nine Months Ended September 30,
	2022		2021
Cash Flows from Operating Activities:
Net Income	$	2,999	$	31,390
Adjustments to Reconcile Net Income:
Depreciation and Amortization		13,723		13,985
Deferred Income Taxes Provision		51		28
Income on Vouchers Redeemed for Legal Settlements		(1,051)		(1,183)
Stock-Based Compensation Expense		2,818		3,945
Provision for Inventory Obsolescence Reserves		742		1,784
Gain on Disposal of Fixed Assets		—		31
Changes in Operating Assets and Liabilities:
Merchandise Inventories		(113,828)		15,683
Accounts Payable		(1,619)		(17,277)
Customer Deposits and Store Credits		(18,186)		8,832
Accrued Compensation		(2,536)		(6,144)
Prepaid Expenses and Other Current Assets		(4,861)		(792)
Accrual for Legal Matters and Settlements		293		7,733
Payments for Legal Matters and Settlements		(8,123)		(101)
Other Assets and Liabilities		5,814		(7,634)
Net Cash (Used in) Provided by Operating Activities		(123,764)		50,280
Cash Flows from Investing Activities:
Purchases of Property and Equipment		(16,787)		(12,276)
Proceeds from Disposal of Fixed Assets		64		58
Net Cash Used in Investing Activities		(16,723)		(12,218)
Cash Flows from Financing Activities:
Borrowings on Credit Agreement		201,000		—
Payments on Credit Agreement		(132,000)		(101,000)
Proceeds from the Exercise of Stock Options		296		64
Common Stock Repurchased		(7,947)		(2,101)
Other Financing Activities		—		(755)
Net Cash Provided by (Used in) Financing Activities		61,349		(103,792)
Net Decrease in Cash and Cash Equivalents		(79,138)		(65,730)
Cash and Cash Equivalents, Beginning of Year		85,189		169,941
Cash and Cash Equivalents, End of Year	$	6,051	$	104,211
Supplemental disclosure of non-cash operating and financing activities:
Relief of Inventory for Vouchers Redeemed for Legal Settlements	$	1,849	$	1,944
Tenant Improvement Allowance for Leases		(1,148)		(1,053)

See accompanying notes to condensed consolidated financial statements

5

LL Flooring Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited, amounts in thousands, except per share amounts)

Note 1.       Basis of Presentation

LL Flooring Holdings, Inc., formerly Lumber Liquidators Holdings, Inc., and its direct and indirect subsidiaries (collectively and, where applicable, individually, “LL Flooring” or the “Company”) engage in business as a multi-channel specialty retailer of hard-surface flooring, and hard-surface flooring enhancements and accessories, operating as a single operating segment. The Company offers an extensive assortment of hard-surface flooring including waterproof hybrid resilient, waterproof vinyl plank, solid and engineered hardwood, laminate, bamboo, tile, and cork, with a wide range of flooring enhancements and accessories to complement. The Company also provides in-home delivery and installation services to its customers. The Company primarily sells to consumers or to Pros on behalf of consumers through a network of store locations in metropolitan areas. At September 30, 2022, the Company’s 439 stores spanned 47 states in the United States (“U.S.”). In addition to the store locations, the Company’s products may be ordered, and customer questions/concerns addressed, through both its customer contact center in Richmond, Virginia, and its digital platform, LLFlooring.com.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q for interim financial reporting pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, all adjustments (consisting of normal and recurring adjustments except those otherwise described herein) considered necessary for a fair presentation have been included in the accompanying condensed consolidated financial statements. However, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements. Therefore, the interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s annual report filed on Form 10-K for the year ended December 31, 2021.

The condensed consolidated financial statements of the Company include the accounts of its wholly owned subsidiaries. All intercompany transactions have been eliminated in consolidation.

Note 2.       Summary of Significant Accounting Policies

Fair Value of Financial Instruments

The carrying amounts of financial instruments such as cash and cash equivalents, accounts payable and other liabilities approximates fair value because of the short-term nature of these items. The carrying value of the revolving credit facility approximates fair value due to the variable rate of interest.

Merchandise Inventories

The Company values merchandise inventories at the lower of cost or net realizable value. The method by which amounts are removed from inventory is weighted average cost. All of the hardwood flooring purchased from vendors is either prefinished or unfinished, and in immediate saleable form. The Company relies on a select group of international and domestic suppliers to provide imported flooring products that meet the Company’s specifications. Both international and domestic inventory is subject to increased cost as a result of inflation. The Company is subject to risks associated with obtaining products from abroad, including disruptions or delays in production, shipments, supply chain, delivery or processing, including due to the COVID-19 pandemic.

Included in merchandise inventories are tariff-related costs, including Section 301 tariffs on certain products imported from China in recent years. The Company has deployed pricing, promotion, and alternative country sourcing strategies to mitigate tariff-related costs and improve gross margin. The Company continues to monitor the market to inform its pricing and promotional strategies.

6

Recognition of Net Sales

The Company generates revenues primarily by retailing merchandise in the form of hard-surface flooring and accessories. Additionally, the Company expands its revenues by offering services to deliver and/or install this merchandise for its customers; it considers these services to be separate performance obligations. The separate performance obligations are detailed on the customer’s invoice(s) and the customer often purchases flooring merchandise without purchasing installation or delivery services. Merchandise and services sales occur through the Company’s network of 439 stores across the U.S., a customer contact center, and its digital platform, LLFlooring.com. The Company’s agreements with its customers are of short duration (less than a year) and as such the Company has elected not to disclose revenue for partially satisfied contracts that will be completed in the days following the end of a period as permitted by GAAP. The Company reports its revenues exclusive of sales taxes collected from customers and remitted to governmental taxing authorities, consistent with past practice.

Revenue is based on consideration specified in a contract with a customer and excludes any sales incentives from vendors and amounts collected on behalf of third parties. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product to a customer or performing services for a customer. Revenues from installation and freight services are recognized when the delivery is made or the installation is complete, which approximates the recognition of revenue over time due to the short duration of service provided. The price of the Company’s merchandise and services is specified in the respective contract and detailed on the invoice agreed to with the customer including any discounts. The Company generally requires customers to pay a deposit, equal to approximately half of the retail sales value, when ordering merchandise not regularly carried in a given location or not currently in stock. In addition, the Company generally does not extend credit to its customers with payment due in full at the time the customer takes possession of merchandise or when the service is provided. Customer payments and deposits received in advance of the customer taking possession of the merchandise or receiving the services are recorded as deferred revenues in the accompanying condensed consolidated balance sheet caption “Customer Deposits and Store Credits.”

The following table shows the activity in this account for the periods noted:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Customer Deposits and Store Credits, Beginning Balance	$	(58,427)	$	(67,731)	$	(67,063)	$	(61,389)
New Deposits		(276,235)		(304,604)		(884,551)		(935,576)
Recognition of Revenue		268,821		282,229		846,810		867,063
Sales Tax included in Customer Deposits		15,980		16,936		51,152		52,708
Other		984		2,949		4,775		6,973
Customer Deposits and Store Credits, Ending Balance	$	(48,877)	$	(70,221)	$	(48,877)	$	(70,221)

Subject to limitations under the Company’s policy, return of unopened merchandise is accepted for 90 days, subject to the discretion of the store manager. The amount of revenue recognized for flooring merchandise is adjusted for expected returns, which are estimated based on the Company’s historical data, current sales levels, and forecasted economic trends. The Company uses the expected value method to estimate returns because it has a large number of contracts with similar characteristics. The Company reduces revenue by the amount of expected returns and records it within “Other Current Liabilities” on the condensed consolidated balance sheet. In addition, the Company recognizes a related asset for the right to recover returned merchandise and records it in the “Other Current Assets” caption of the accompanying condensed consolidated balance sheet. This amount was $1.3 million at September 30, 2022. The Company recognizes sales commissions as incurred since the amortization period is less than one year.

7

In total, the Company offers hundreds of different flooring products; however, no single flooring product represented a significant portion of its sales mix. By major product category, the Company’s sales mix was as follows:

	Three Months Ended September 30,								Nine Months Ended September 30,
	2022				2021				2022				2021
Manufactured Products1	$	128,213	48	%	$	129,543	46	%	$	405,654	48	%	$	401,373	46	%
Solid and Engineered Hardwood		62,838	23	%		69,090	24	%		203,785	24	%		220,887	26	%
Installation and Delivery Services		39,617	15	%		41,427	15	%		115,766	14	%		116,675	13	%
Moldings and Accessories and Other		38,153	14	%		42,169	15	%		121,605	14	%		128,128	15	%
Total	$	268,821	100	%	$	282,229	100	%	$	846,810	100	%	$	867,063	100	%

¹     Includes engineered vinyl plank, laminate, vinyl and tile.

Cost of Sales

Cost of sales includes the cost of products sold, including tariffs, the cost of installation services, and transportation costs from vendors to the Company’s distribution centers or store locations. It also includes transportation costs from distribution centers to store locations, transportation costs for the delivery of products from store locations to customers, certain costs of quality control procedures, warranty and customer satisfaction costs, inventory adjustments including obsolescence and shrinkage, and costs to produce and ship samples, which are net of vendor allowances.

The Company offers a range of limited warranties for the durability of the finish on its prefinished products to its services provided. These limited warranties range from one to 100 years, with lifetime warranties for certain of the Company’s products. Warranty reserves are based primarily on claims experience, sales history and other considerations, including payments made to satisfy customers for claims not directly related to the warranty on the Company’s products. Warranty costs are recorded in cost of sales. The related reserve of $1.0 million at September 30, 2022, was recorded in “Other Current Liabilities” on the accompanying condensed consolidated balance sheet. The Company seeks recovery from its vendors and third-party independent contractors of installation services for certain amounts paid.

Vendor allowances mostly consist of volume rebates and are accrued as earned, with those allowances received as a result of attaining certain purchase levels accrued over the incentive period based on estimates of purchases. Volume rebates earned are initially recorded as a reduction in merchandise inventories and a subsequent reduction in cost of sales when the related product is sold. Reimbursement received for the cost of producing samples is recorded as an offset against cost of sales.

Note 3.       Stockholders’ Equity

Net (Loss) Income per Common Share

The following table sets forth the computation of basic and diluted net (loss) income per common share:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Net (Loss) Income	$	(3,774)	$	8,779	$	2,999	$	31,390
Weighted Average Common Shares Outstanding—Basic		28,668		29,082		28,859		28,984
Effect of Dilutive Securities:
Common Stock Equivalents		—		373		151		510
Weighted Average Common Shares Outstanding—Diluted		28,668		29,455		29,010		29,494
Net (Loss) Income per Common Share—Basic	$	(0.13)	$	0.30	$	0.10	$	1.08
Net (Loss) Income per Common Share—Diluted	$	(0.13)	$	0.30	$	0.10	$	1.06

8

The following shares have been excluded from the computation of Weighted Average Common Shares Outstanding—Diluted because the effect would be anti-dilutive:

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2022	2021	2022	2021
Stock Options	633	222	448	167
Restricted Shares	503	280	365	100

Stock Repurchase Program

During the nine months ended September 30, 2022, the Company’s board of directors raised its authorization for the repurchase of up to $50.0 million of the Company’s common stock, and the Company resumed its share repurchase program. The Company made cash payments of $7.0 million to repurchase 571,332 shares under the share repurchase authorization during the nine months ended September 30, 2022. There remains $43.0 million outstanding under the share repurchase authorization.

Outside of the share repurchase program, during the nine months ended September 30, 2022, the Company repurchased $0.9 million, or 63,261 shares, of its common stock through the net settlement of shares issued as a result of the vesting of restricted shares.

Note 4.       Stock-based Compensation

The following table summarizes share activity related to employee stock options and restricted stock awards (“RSAs”):

		Restricted Stock
	Stock Options	Awards
Options Outstanding/Nonvested RSAs, December 31, 2021	625	631
Granted	175	400
Options Exercised/RSAs Released	(21)	(168)
Forfeited	(60)	(100)
Options Outstanding/Nonvested RSAs, September 30, 2022	719	763

The Company granted a target of 94,621 performance-based RSAs with a grant date fair value of $1.5 million during the nine months ended September 30, 2022 and a target of 47,768 performance-based RSAs with a grant date fair value of $1.1 million during the nine months ended September 30, 2021. The performance-based RSAs in both years were awarded to certain members of senior management in connection with the achievement of specific key financial metrics that will be measured over separate respective three-year periods and which will vest at the end of each respective three-year period if the respective performance conditions are met. In addition, the number of 2020 performance-based awards that will ultimately vest is also contingent upon the results of a relative total shareholder return multiple by the end of year three, the 2022 fiscal year. The Company assesses the probability of achieving these metrics on a quarterly basis. For these awards, the Company recognizes the fair value expense ratably over the performance and vesting period. These awards are included above in RSAs Granted.

Under the Company’s equity incentive plan, the Company’s non-employee directors are compensated with an annual RSA grant. The amount of outstanding nonvested RSAs granted to non-employee directors was 43,139 and 18,306 shares at September 30, 2022 and December 31, 2021, respectively. The Company also maintains the Outside Directors Deferral Plan under which each of the Company’s non-employee directors has the opportunity to elect annually to defer certain fees (which are payable in cash or in shares of Common Stock with a vesting period of at least one year) until departure from the board. A non-employee director may elect to defer up to 100% of his or her fees and have such fees invested in deferred stock units. Deferred stock units must be settled in common stock upon the director’s

9

departure from the board. There were 234,401 and 177,448 deferred stock units outstanding at September 30, 2022 and December 31, 2021, respectively.

Note 5.      Credit Agreement

The Company has a credit agreement (the “Credit Agreement”) with Bank of America, N.A. and Wells Fargo Bank, N.A. (the “Lenders”). On April 30, 2021, the Company entered into a Second Amendment to the Credit Agreement (the “Second Amendment”) with the Lenders. The execution of the Second Amendment, among other things, terminated the FILO Term Loans and converted those commitments to the Revolving Credit Facility. The total size of the Credit Agreement remained at $200 million, and the Company has an option to increase the Revolving Credit Facility to a maximum total amount of $250 million. The maturity date of the Credit Agreement was extended to April 30, 2026.

The Revolving Credit Facility is secured by security interests in the Collateral (as defined in the Credit Agreement), which includes substantially all assets of the Company including, among other things, the Company’s inventory and credit card receivables, and the Company’s East Coast distribution center located in Sandston, Virginia. Under the terms of the Credit Agreement, the Company has the ability to release the East Coast distribution center from the Collateral under certain conditions.

The Second Amendment decreased the margin for LIBOR Rate Loans (as defined in the Second Amendment) to a range of 1.25% to 1.75% over the applicable LIBOR Rate with respect to revolving loans (as defined in the Second Amendment) depending on the Company’s average daily excess borrowing availability, a decrease of 1.25% from rates prior to the Second Amendment. As previously stated, the FILO Term Loans were terminated by this Second Amendment. The amendment decreased the LIBOR Rate Floor from 1.00% to 0.25%. The Second Amendment also decreased the unused commitment fee of 0.50% per annum to 0.25% per annum on the average daily unused amount of the Revolving Credit Facility during the most recently completed calendar quarter. The weighted average interest rate applicable to the Company’s Revolving Credit Facility for the nine months ended September 30, 2022 was 4.6%.

The Credit Agreement contains a fixed charge coverage ratio covenant that becomes effective only when specified availability under the Revolving Credit Facility falls below the greater of $17.5 million or 10% of the Revolving Loan Cap (as defined in the Credit Agreement).

Except as set forth in the Second Amendment, all other terms and conditions of the Credit Agreement remain in place.

As of September 30, 2022, there was $69.0 million outstanding under the Revolving Credit Facility. The Company had $3.2 million in letters of credit which reduces its availability. As of September 30, 2022, there was $127.8 million of availability under the Revolving Credit Facility.

Note 6.       Taxes

The Company calculates its quarterly tax provision pursuant to the guidelines in Accounting Standards Codification ("ASC") 740-270 "Income Taxes." Generally, ASC 740-270 requires companies to estimate the annual effective tax rate for current year ordinary income. The estimated annual effective tax rate represents the best estimate of the tax provision in relation to the best estimate of pre-tax ordinary income or loss. The estimated annual effective tax rate is then applied to year-to-date ordinary income or loss to calculate the year-to-date interim tax provision and is adjusted for discrete items that occur within the period.

For the three months ended September 30, 2022, the Company recognized income tax benefit of $1.0 million, which represented an effective tax rate of 20.6%. For the three months ended September 30, 2021, the Company recognized income tax expense of $3.2 million, which represented an effective tax rate of 27.0%. The lower effective tax rate in the current period primarily reflects the greater impact of permanent items on the pretax ordinary loss.

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For the nine months ended September 30, 2022, the Company recognized income tax expense of $1.8 million, which represented an effective tax rate of 37.2%. For the nine months ended September 30, 2021, the Company recognized income tax expense of $10.6 million, which represented an effective tax rate of 25.3%. The higher effective tax rate in the current period primarily reflects the greater impact of permanent items on the lower pretax ordinary income.

The Company has a valuation allowance recorded against certain of its net deferred tax assets of $2.4 million as of September 30, 2022, and December 31, 2021, because the jurisdiction and nature of the assets makes realization of these deferred tax assets uncertain. The Company intends to maintain this valuation allowance on its deferred tax assets until there is sufficient evidence to support the realizability of those deferred tax assets.

In February 2022, the Company received sales tax and use tax assessments from the Commonwealth of Virginia covering part of 2014 through 2017. The Company believes there are some factual errors, is disputing this assessment, and will defend itself vigorously in this matter. Given the uncertainty of the final resolution, the Company cannot reasonably estimate the loss or range of loss, if any, that may result from this action and therefore no specific accrual has been made related to this. Any losses could, potentially, have a material adverse effect, individually or collectively, on the Company’s results of operations, financial condition and liquidity.

Note 7.       Commitments and Contingencies

The following chart shows the activity related to the Balance Sheet “Accrual for Legal Matters and Settlements.” The matters themselves are described in greater detail in the paragraphs that follow the chart.

Litigation Matter Description		December 31, 2021 Accrual for Legal Matters and Settlements - Current		Accruals		Settlement Payments		Vouchers Redeemed		September 30, 2022 Accrual for Legal Matters and Settlements - Current
MDL	$	10,656	$	—	$	—	$	(1,231)	$	9,425	1
Gold		14,885		—		—		(1,670)		13,215	1
Mason		7,000		129		(7,129)		—		—
Other Matters		1,070		164		(993)		—		241
	$	33,611	$	293	$	(8,122)	$	(2,901)	$	22,881
Litigation Matter Description		December 31, 2020 Accrual for Legal Matters and Settlements - Current		Accruals		Settlement Payments		Vouchers Redeemed		September 30, 2021 Accrual for Legal Matters and Settlements - Current
MDL	$	14,000	$	—	$	—	$	(2,781)	$	11,219
Gold		16,000		—		—		(346)		15,654
Mason		—		7,000		—		—		7,000
Other Matters		398		733		(101)		—		1,030
	$	30,398	$	7,733	$	(101)	$	(3,127)	$	34,903

1 The remaining accrual will be fulfilled by redeeming vouchers as discussed below.

Employment Cases

Mason Lawsuit

In August 2017, Ashleigh Mason, Dan Morse, Ryan Carroll and Osagie Ehigie filed a purported collective and class action lawsuit in the United States District Court for the Eastern District of New York on behalf of all current and

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former store managers, store managers in training, and similarly situated current and former employees (collectively, the “Mason Putative Class Employees”) alleging that the Company violated the Fair Labor Standards Act (“FLSA”) and New York Labor Law (“NYLL”) by classifying the Mason Putative Class Employees as exempt (the “Mason matter”). The alleged violations include failure to pay for overtime work.

In April 2021, the Company entered into a Memorandum of Understanding (“Mason MOU”) with counsel for the lead plaintiffs in the Mason matter. Under the terms of the Mason MOU, the Company agreed to pay up to $7.0 million to settle the claims asserted in the Mason matter.

In the first quarter of 2022, the court gave final approval to the settlement. As a result of the final approval, the Company paid $7.0 million, plus an additional $0.1 million in taxes, in the second quarter of 2022 to a court appointed administrator who handles distribution to the plaintiffs. Any checks issued to the Collective Members and the New York Non Opt-Ins which are not cashed by March 1, 2023, will revert to the Company.

Savidis Lawsuit

In April 2020, LL Flooring was served with a lawsuit filed by Tanya Savidis, on behalf of herself and all others similarly situated (collectively, the “Savidis Plaintiffs”). Ms. Savidis filed a purported class action lawsuit in the Superior Court of California, County of Alameda on March 6, 2020, on behalf of all current and former LL Flooring employees employed as non-exempt employees. The complaint alleges violation of the California Labor Code including, among other items, failure to pay minimum wages and overtime wages, failure to provide meal periods, failure to permit rest breaks, failure to reimburse business expenses, failure to provide accurate wage statements, failure to pay all wages due upon separation within the required time, and engaging in unfair business practices (the “Savidis matter”).

In December 2020, the Company began contacting individuals who constitute the Savidis Plaintiffs and offered individual settlements in satisfaction of their claims. In April 2021, the Company entered into a Memorandum of Understanding (“Savidis MOU”) with counsel for the lead plaintiffs in the Savidis matter. Under the terms of the Savidis MOU, the Company agreed to pay $0.9 million reduced by a credit of $0.1 million for amounts already paid to the individuals who accepted the Company’s prior settlement offer. In January 2022, the Court provided final approval of the settlement. In April 2022, the Company paid $0.8 million to a court appointed administrator who handles the distribution to the class members who did not opt out of participating in the settlement. Settlement checks were mailed to class members in May 2022, and the Company expects the Court to dismiss the matter during the fourth quarter of 2022.

Antidumping and Countervailing Duties Investigation

The Company is subject to antidumping (“AD”) and countervailing duties (“CVD”) for certain imports of multilayered wood flooring from China. The Company’s multilayered wood flooring imports from China accounted for approximately 3% of its flooring purchases in 2021.

At the time of import, the Company makes deposits at the then prevailing rate. This rate is subsequently reviewed to establish the final rate. When rates are declared final by the United States Department of Commerce (“DOC”), the Company accrues a receivable or payable depending on where that final rate compares to the deposits it has made. The Company and/or the domestic manufacturers can appeal the final rate for any period. Because of the length of time for finalization of rates as well as appeals, any subsequent adjustment of AD and CVD rates typically flows through a period different from those in which the inventory was originally purchased and/or sold.

Results by period for the Company are shown below. The “Total AD/CVD Receivable/Liability Balance as of September 30, 2022” represents the amount the Company would receive or pay (net of any collections or payments) as the result of subsequent adjustment to rates whether due to finalization by the DOC or because of action of a court based on appeals by various parties. It does not include any initial amounts paid for AD or CVD in the current period at the in-effect rate at that time.

The Company recorded net interest expense related to antidumping of $0.05 million for the nine months ended September 30, 2022 compared to net interest income of $1.8 million for the nine months ended September 30, 2021. The

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amounts for both years are included in “Other Expense” on the condensed consolidated statements of income. The estimated associated interest payable and receivable for each period is not included in the table below but is included in the same financial statement line item on the Company’s condensed consolidated balance sheet as the associated liability and receivable balance for each period.

Antidumping
Review Period1	Period Covered	Rates at which Company Deposited	Final Rates		Other Current Assets		Other Assets		Other Current Liabilities		Other Long-Term Liabilities
1	May 2011 - Nov 2012	6.78% / 3.3%	0%2	$	1,526	$	-	$	-	$	-
2	Dec 2012 - Nov 2013	3.30%	3.92%3		-		-		(205)		-
3	Dec 2013 - Nov 2014	3.3% / 5.92%	0%4		1,821		-		-		-
6	Dec 2016 - Nov 2017	17.37% / 0.00%	42.57% / 0.0%5		503		-		-		(1,464)
7	Dec 2017 - Nov 2018	0.00%	0%6		-		-		-		-
8	Dec 2018 - Nov 2019	0.00%	0%7		-		-		-		-
9	Dec 2019 - Nov 2020	0.00%	39.27%8		-		-		-		(1,137)
Total AD Receivable/Liability Balance as of September 30, 2022				$	3,850	$	-	$	(205)	$	(2,601)
Countervailing
Review Period	Period Covered	Rates at which Company Deposited	Final Rates		Other Current Assets		Other Assets		Other Current Liabilities		Other Long-Term Liabilities
1 & 2	April 2011 - Dec 2012	1.50%	0.83% / 0.99%	$	-	$	243	$	-	$	-
3	Jan 2013 - Dec 2013	1.50%	1.38%		-		37		-		-
4	Jan 2014 - Dec 2014	1.50% / 0.83%	1.06%		-		16		-		-
5	Jan 2015 - Dec 2015	0.83% / 0.99%	0.11% / 0.85%9		73		-		-		-
6	Jan 2016 - Dec 2016	0.99% / 1.38%	3.10% / 2.96%10		-		-		(38)		-
7	Jan 2017 - Dec 2017	1.38% / 1.06%	20.75%11		-		-		-		(1,651)
8	Jan 2018 - Dec 2018	1.06%	6.13%12		-		-		-		(287)
9	Jan 2019 - Dec 2019	0.00% / 0.85% / 2.96%	3.36% / 9.85%13		-		-		-		(81)
Total CVD Receivable/Liability Balance as of September 30, 2022				$	73	$	296	$	(38)	$	(2,019)

1 The fourth and fifth annual antidumping review periods have been settled and are no longer included on the chart above.

2 In the first quarter of 2022, pursuant to the Court of International Trade (“CIT”) order on appeal the DOC recalculated the final rates for the first annual review period at 0.0%. As a result, the Company recorded an additional $0.2 million receivable with a corresponding reduction of cost of sales during the first quarter of 2022.

3 In the second quarter of 2020, on appeal the DOC offered to reduce the rate for the second annual review period to 3.92% from 13.74%. The reduced rate was accepted by the CIT in the fourth quarter of 2020, and the Company reversed $3.9 million of its $4.1 million liability, with a corresponding reduction of cost of sales.

4 In the third quarter of 2020, on appeal the DOC offered to reduce the rate for the third annual review period to 0.0% from 17.37%. The reduced rate was accepted by the CIT in the first quarter of 2021, and the Company reversed the entire $4.7 million liability, with a corresponding reduction of cost of sales, and recorded a $1.8 million receivable and favorable adjustment to cost of sales for deposits made at previous preliminary rates.

5 In the third quarter of 2019, the DOC issued the final rates for the sixth annual review period at 42.57% and 0% depending on the vendor. As a result, the Company recorded a liability of $0.8 million with a corresponding reduction of cost of sales during the year ended December 31, 2019. The Company received payments during 2019 for its vendor with a final rate of 0.0% and the remaining balance of $0.5 million as of June 30, 2021 was included in other current assets on the condensed consolidated balance sheet. The vendors with a final rate of 42.57% are under appeal and the balance of $1.5 million as of September 30, 2022 was included in other long-term liabilities on the condensed consolidated balance sheet.

6 In the fourth quarter of 2021, the DOC issued a final rate of 0.0% for the seventh annual review period. The final rate is currently under appeal.

7 In the fourth quarter of 2021, the DOC issued a final rate of 0.0% for the eighth annual review period. The final rate is currently under appeal.

8 In the second quarter of 2022, the DOC issued the final rate for the ninth annual review period at 39.27%. As a result, the Company recorded a $1.1 million liability with a corresponding increase in cost of sales during the second quarter of 2022. The final rate is currently under appeal.

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9 In the second quarter of 2018, the DOC issued the final rates for the fifth annual review period at 0.11% and 0.85% depending on the vendor. As a result, in the second quarter of 2018, the Company recorded a receivable of $0.1 million for deposits made at previous preliminary rates, with a corresponding reduction of cost of sales.

10 In the third quarter of 2019, the DOC issued the final rates for the sixth annual review period at 3.1% and 2.96% depending on the vendor. As a result, the Company recorded a liability of $0.4 million with a corresponding reduction of cost of sales during the year ended December 31, 2019. As of September 30, 2022, the remaining liability balance was $38.3 thousand.

11 In the fourth quarter of 2020, the DOC issued the final rate 20.75% for the seventh annual review period. As a result, the Company recorded a liability of $1.7 million with a corresponding increase to cost of sales during the year ended December 31, 2020. The final rate is currently under appeal.

12 In October 2021, the DOC issued the final rate of 6.13% for the eighth annual review period. As a result, in October 2021 the Company recorded a $0.3 million liability with a corresponding increase in cost of sales. The final rate is currently under appeal.

13 In the second quarter of 2022, the DOC issued the final rates for the ninth annual review period at 3.36% and 9.85% depending on the vendor. As a result, the Company recorded a liability of $0.1 million with a corresponding increase in cost of sales in the second quarter of 2022. The final rate is currently under appeal.

Litigation Relating to Bamboo Flooring

In 2019, the Company finalized a settlement agreement to resolve claims related to Morning Star bamboo flooring (the “Gold Litigation”). Under the terms of the settlement agreement, the Company contributed $14.0 million in cash (the “Gold Cash Payment”) and provided $16.0 million in store-credit vouchers, for an aggregate settlement of up to $30.0 million. Cash and vouchers, which generally have a three-year life, were distributed by the administrator in 2021. The Company will monitor and evaluate the redemption of vouchers on a quarterly basis. The Company’s current expectation is that recipients bargained for this compensation as part of the settlement and therefore will redeem their voucher for product as intended.

As of September 30, 2022, the remaining accrual related to these matters was $13.2 million for vouchers. As $1.7 million of vouchers were redeemed during the first nine months of 2022, the Company relieved the accrual for legal matters and settlements for the full amount, relieved inventory at its cost, and the remaining amount -- the gross margin for the items sold of $0.6 million was recorded as a reduction in “Selling, General and Administrative Expenses” (“SG&A”) on the condensed consolidated statement of operations. The Company included those amounts in “Gold” in the chart above.

Litigation Related to Formaldehyde-Abrasion MDLs

In 2018, the Company entered into a settlement agreement to resolve claims related to Chinese-manufactured laminate products (the “Formaldehyde-Abrasion MDL”). Under the terms of the settlement agreement, the Company funded $22.0 million in cash and provided $14.0 million in store-credit vouchers for an aggregate settlement amount of $36.0 million to settle claims. Cash and vouchers, which generally have a three-year life, were distributed by the administrator in the fourth quarter of 2020. The Company will monitor and evaluate the redemption of vouchers on a quarterly basis. The Company’s current expectation is that recipients bargained for this compensation as part of the settlement and therefore will redeem their voucher for product as intended.

As of September 30, 2022, the remaining accrual related to these matters was $9.4 million for vouchers. As $1.2 million of vouchers were redeemed during the first nine months of 2022, the Company relieved the accrual for legal matters and settlements for the full amount, relieved inventory at its cost, and the remaining amount -- the gross margin for the items sold of $0.5 million was recorded as a reduction in “Selling, General and Administrative Expenses” (“SG&A”) on the condensed consolidated statement of operations. The Company included those amounts in “MDL” in the chart above.

Section 301 Tariffs

Since September 2018, pursuant to Section 301 of the Trade Act of 1974, the United States Trade Representative (“USTR”) has imposed tariffs on certain goods imported from China over four tranches (“Lists”).

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Products imported by the Company fall within Lists 3 and 4a for which tariffs range from 10% to 25%. On September 10, 2020 several importers of vinyl flooring filed a lawsuit with the Court of International Trade (“CIT”) challenging the Section 301 tariffs under Lists 3 and 4a. The Company has also filed a companion case at the CIT challenging the legitimacy of the USTR’s actions. On April 1, 2022 the CIT remanded the matter back to the USTR to explain its process for considering objections to the 301 tariffs and to reply to the CIT by June 30, 2022. Based on a USTR request, this deadline was extended to August 1, 2022. On August 1, 2022 the USTR filed its remand comments as well as a request to supplement the record. On September 14, 2022, the Company filed their response to the USTR’s August 1, 2022 remand determination pursuant to the CIT April 1, 2022 order. The USTR has until October 28, 2022 to address the Company’s response. The ruling will rest with the CIT upon review of the USTR’s remand. The Company is unable to predict the timing or outcome of the ruling by the USTR and/or CIT. If these appeals are successful, the Company should qualify for refunds on these Section 301 tariffs.

Other Matters

The Company is also, from time to time, subject to claims and disputes arising in the normal course of business. In the opinion of management, while the outcome of any such claims and disputes cannot be predicted with certainty, its ultimate liability in connection with these matters is not expected to have a material adverse effect on the Company’s results of operations, financial position or liquidity.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Cautionary Note Regarding Forward-Looking Statements

This report 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,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “thinks,” “estimates,” “seeks,” “predicts,” “could,” “projects,” “potential” and other similar terms and phrases, are based on the beliefs of the Company’s management, as well as assumptions made by, and information currently available to, the Company’s management as of the date of such statements. These statements are subject to risks and uncertainties, all of which are difficult to predict and many of which are beyond the Company’s control. These risks include, without limitation, the impact on us of any of the following:

● reduced consumer spending due to inflation, higher interest rates, and consumer sentiment;

● our advertising and overall marketing strategy, including anticipating consumer trends;

● a sustained period of inflation impacting product costs;

● transportation availability and costs;

● inability to execute on our key initiatives or such key initiatives do not yield desired results;

● our, and our suppliers’, compliance with complex and evolving rules, regulations, and laws at the federal, state, and local level;

● potential disruptions to supply chain related to forced labor and other trade regulations;

● inability to hire and/or retain employees;

● obtaining products from abroad, including the effects of the COVID-19 pandemic and tariffs, delays in shipping, as well as the effects of antidumping and countervailing duties;

● inability to staff stores due to the COVID-19 pandemic and the overall pressures in the labor market;

● the outcomes of legal proceedings, and the related impact on liquidity;

● the impact of the war in Ukraine on transportation costs and the Company’s European suppliers;

● reputational harm;

● disruptions due to cybersecurity threats, including any impacts from a network security incident;

● inability to open new stores, find suitable locations for new stores, and fund capital expenditures;

● managing growth;

● damage to our assets;

● disruption to our ability to distribute our products, including due to severe weather;

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● operating an office in China;

● managing third-party installers and product delivery companies;

● renewing store, warehouse, or other corporate leases;

● having sufficient suppliers;

● product liability claims, marketing substantiation claims, wage and hour claims, employment classification claims and other labor and employment claims;

● maintaining optimal inventory for consumer demand;

● availability of suitable hardwood, including due to disruptions from the impacts of severe weather;

● sufficient insurance coverage, including cybersecurity insurance;

● access to and costs of capital;

● the handling of confidential customer information, including the impacts from the California Consumer Privacy Act and other applicable data privacy laws and regulations;

● management information systems disruptions;

● alternative e-commerce offerings;

● competition;

● impact of changes in accounting and regulatory guidance, including implementation guidelines and interpretations related to Environmental, Social, and Governance (“ESG”) matters;

● internal controls;

● stock price volatility; and

● anti-takeover provisions.

Information regarding risks and uncertainties is contained in the Company’s reports filed with the SEC, including the Item 1A, “Risk Factors,” section of this quarterly report and the Form 10-K for the year ended December 31, 2021.

This management discussion should be read in conjunction with the financial statements and notes included in Part I, Item 1. “Financial Statements” of this quarterly report and the audited financial statements and notes and management discussion included in the Company’s annual report filed on Form 10-K for the year ended December 31, 2021.

Overview

LL Flooring is one of the leading specialty retailers of hard-surface flooring in the U.S. with 439 stores as of September 30, 2022. Our Company seeks to offer the best customer experience online and in stores, with more than 500 varieties of hard-surface floors featuring a range of quality styles and on-trend designs. Our online tools also help empower customers to find the right solution for the space they’ve envisioned. Our extensive selection includes waterproof hybrid resilient, waterproof vinyl plank, solid and engineered hardwood, laminate, bamboo, tile, and cork, with a wide range of flooring enhancements and accessories to complement. Our stores are staffed with flooring experts who provide advice, Pro partnership services and installation options for all of our products, the majority of which is in stock and ready for delivery. Our vision is to be customers’ first choice in hard-surface flooring by providing the best experience, from start to finish. We offer a wide selection of high-quality, locally stocked products and the accessible flooring expertise and service of a local store, with the scale, omni-channel convenience and value of a national chain. We plan to leverage this advantage to differentiate ourselves in the highly fragmented flooring market.

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 Gross Profit; (ii) Adjusted Gross Margin; (iii) Adjusted SG&A; (iv) Adjusted SG&A as a Percentage of Net Sales; (v) Adjusted Operating (Loss) Income; (vi) Adjusted Operating (Loss) Margin; (vii) Adjusted Other Expense (Income); (viii) Adjusted Other Expense (Income) as a Percentage of Net Sales; (ix) Adjusted (Loss) Earnings; and (x) Adjusted (Loss) Earnings per Diluted Share. These non-GAAP financial measures should be viewed in addition to, and not in lieu of, financial measures calculated in accordance with GAAP. These supplemental measures may vary from, and may not be comparable to, similarly titled measures by other companies.

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The non-GAAP financial measures are presented because management uses these non-GAAP financial measures to evaluate our operating performance and, in certain cases, to determine incentive compensation. Therefore, we believe that the presentation of non-GAAP financial measures provides useful supplementary information to, and facilitates additional analysis by, investors. The presented non-GAAP financial measures exclude items that management does not believe reflect our core operating performance, which include store closures, regulatory and legal settlements and associated legal and operating costs, and changes in antidumping and countervailing duties, as such items are outside of our control due to their inherent unusual, non-operating, unpredictable, non-recurring, or non-cash nature.

Third Quarter Financial Highlights

● Net sales of $268.8 million decreased $13.4 million, or 4.8%, from the third quarter of 2021, primarily due to continued lower consumer spending versus last year, which more than offset just under double-digit growth in sales to Pro customers.

● Comparable store sales decreased 7.3% from the third quarter of 2021. The year-over-year decrease in comparable store sales primarily reflected the same drivers as the change in net sales.

● Gross margin and adjusted gross margin (a non-GAAP measure) of 35.6% decreased 170 basis points as a percentage of sales compared to the same period last year, primarily reflecting significantly higher material and transportation costs (collectively up more than 800 basis points) that the Company was able to partially mitigate through pricing, promotion and alternative country/vendor sourcing strategies.

● SG&A expense as a percentage of net sales of 37.1% increased 410 basis points compared to the third quarter of last year. Adjusted SG&A expense (a non-GAAP measure) as a percentage of net sales of 37.1% increased 400 basis points compared to the third quarter of last year, primarily driven by investments to support the Company’s long-term growth, continued investment in customer facing and distribution center personnel, and deleverage on lower net sales.

● Operating margin of (1.5%) decreased 580 basis points compared to the third quarter of last year. Adjusted operating margin (a non-GAAP measure) of (1.6%) decreased 570 basis points compared to the third quarter of last year, primarily reflecting increased SG&A as a percentage of net sales and lower gross margin.

● Loss per diluted share of $0.13 decreased $0.43 compared to the third quarter of last year. Adjusted loss per diluted share (a non-GAAP measure) of $0.14 decreased $0.42 compared to the third quarter of last year.

● During the third quarter, the Company opened two new stores, bringing total store count to 439 as of September 30, 2022.

Other Items

Liquidity and Credit Agreement

As of September 30, 2022, we had liquidity of $133.9 million, consisting of excess availability under our Credit Agreement of $127.8 million, and cash and cash equivalents of $6.1 million. This represents a decrease in liquidity of $93.3 million from December 31, 2021, reflecting the Company’s goal to rebuild inventories in 2022 following COVID-19 related supply chain constraints. During the first nine months of the year, the Company rebuilt its inventory by more than $111.2 million.

In February 2022, the Company’s board of directors raised its authorization for the repurchase of up to $50.0 million of the Company’s common stock from the previous $14.0 million authorized. In April 2022, the Company resumed its share repurchase program. The Company has repurchased $7.0 million under that program, underscoring its confidence in its long-term net sales and profitability growth.

We believe that cash flows from operations, together with cash on hand, and the availability under our Credit Agreement will be sufficient to meet our obligations, fund our settlements, operations, anticipated capital expenditures, and potential share repurchases for the next 12 months. We prepare our forecasted cash flow and liquidity estimates based on assumptions that we believe to be reasonable but are also inherently uncertain. Actual future cash flows could differ from these estimates.

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Impact of Macroeconomic Environment

We continue to navigate uncertainty in the macroeconomic environment related to inflation, higher interest rates, lower existing home sales, a shift in COVID-19 spend from home remodeling to travel and entertainment, and economic and employment uncertainty. We anticipate material and transportation costs to remain inflated, exacerbated by the war in Ukraine, throughout 2022. We are also monitoring the impact of inflation on consumer purchasing trends as it could affect our prices, demand for our products, our sales and our profit margins.

Section 301 Tariffs

The Company’s financial statements have been impacted by Section 301 tariffs on certain products imported from China in recent years. The tariffs flow through the income statement as the product is sold. The Company has deployed strategies to mitigate tariffs and improve gross margin, primarily through adjusting its pricing and promotion strategies and alternative country sourcing. During the third quarter of 2022, the Company reduced the percentage of merchandise receipts subject to Section 301 tariffs to 16% from 22% during the third quarter of 2021.

As discussed in Item 1, Note 7 to the condensed consolidated financial statements, the Company is unable to predict the timing or outcome of the ruling by the USTR and/or CIT. If these appeals are successful, the Company should qualify for refunds on these Section 301 tariffs.

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Results of Operations

We believe the selected sales data, the percentage relationship between net sales and major categories in the condensed consolidated statements of operations and the percentage change in the dollar amounts of each of the items presented below are important in evaluating the performance of our business operations.

							% Improvement
	% of Net Sales						(Decline) in
	Three Months Ended September 30,						Dollar Amounts
	2022			2021			2022 VS 2021
Net Sales
Net Merchandise Sales		85.3	%		85.3	%		(4.8)	%
Net Services Sales		14.7	%		14.7	%		(4.4)	%
Total Net Sales		100.0	%		100.0	%		(4.8)	%
Gross Profit		35.6	%		37.3	%		(9.1)	%
Selling, General, and Administrative Expenses		37.1	%		33.0	%		7.0	%
Operating (Loss) Income		(1.5)	%		4.3	%		(134.1)	%
Other Expense		0.2	%		0.0	%		3,488.9	%
(Loss) Income Before Income Taxes		(1.8)	%		4.3	%		(139.6)	%
Income Tax (Benefit) Expense		(0.4)	%		1.2	%		(130.3)	%
Net (Loss) Income		(1.4)	%		3.1	%		(143.0)	%
							% Improvement
	% of Net Sales						(Decline) in
	Nine Months Ended September 30,						Dollar Amounts
	2022			2021			2022 VS 2021
Net Sales
Net Merchandise Sales		86.3	%		86.5	%		(2.6)	%
Net Services Sales		13.7	%		13.5	%		(0.8)	%
Total Net Sales		100.0	%		100.0	%		(2.3)	%
Gross Profit		36.2	%		38.5	%		(8.1)	%
Selling, General, and Administrative Expenses		35.5	%		33.7	%		3.1	%
Operating Income		0.7	%		4.8	%		(86.6)	%
Other Expense (Income)		0.1	%		(0.0)	%		(429.4)	%
Income Before Income Taxes		0.6	%		4.8	%		(88.6)	%
Income Tax Expense		0.2	%		1.2	%		(83.3)	%
Net Income		0.4	%		3.6	%		(90.4)	%

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2022			2021			2022			2021
SELECTED SALES DATA
Average Sale1	$	1,850		$	1,625		$	1,799		$	1,530
Comparable Stores (Decrease) Increase2		(7.3)	%		(4.5)	%		(4.6)	%		9.8	%
Transaction Count Decrease3		(21.1)	%		(23.5)	%		(19.4)	%		(9.4)	%
Average Retail Price per Unit Sold Increase4		13.4	%		6.8	%		12.7	%		7.9	%
Number of Stores Open, end of period		439			422			439			422
Number of Stores Opened in Period, net		2			6			15			12
Number of Stores Relocated in Period5		—			—			1			—

1 Average sale is defined as the average invoiced sales order, measured quarterly, excluding returns as well as transactions under $100 (which are generally sample orders or add-on/accessories to existing orders).

19

2 A store is generally considered comparable on the first day of the thirteenth full calendar month after opening.

3 Transaction count is calculated by applying the average sale to total net sales at comparable stores.

4 Average retail price per unit (square feet for flooring and other units of measures for moldings and accessories) sold is calculated on a total company basis and excludes non-merchandise revenue.

5 A relocated store remains a comparable store as long as it is relocated within the primary trade area.

Net Sales

Third quarter 2022 net sales of $268.8 million decreased $13.4 million, or 4.8%, versus the third quarter of 2021. Net merchandise sales and net service sales decreased 4.8% and 4.4%, respectively, over the same period in 2021.

Average ticket increased 13.8%, primarily reflecting higher merchandise average ticket. The higher merchandise average ticket was driven primarily by pricing and promotion strategies as well as favorable product mix, reflecting the launch of our new Duravana performance flooring brand.

Comparable store sales for the third quarter of 2022 decreased 7.3% from the third quarter of 2021. Comparable store sales for the nine months ended September 30, 2022 decreased 4.6% from the same period in 2021. The decline in comparable store sales was due primarily to continued lower consumer spending versus last year, which more than offset just under double-digit growth in sales to Pro customers. The year-over-year decrease in consumer sales reflected continued pressures on consumer discretionary spending from inflation, higher interest rates, lower existing home sales, a shift in COVID-19 spend from home remodeling to travel and entertainment, and economic and employment uncertainty.

During the third quarter of 2022, the Company opened two new stores bringing the total store count to 439 as of September 30, 2022.

Net sales for the nine months ended September 30, 2022 decreased 2.3% from the nine months ended September 30, 2021. Net merchandise sales and net service sales decreased 2.6% and 0.8%, respectively, over the same period in 2021.

Gross Profit

Gross profit decreased 9.1% in the third quarter of 2022 to $95.6 million from $105.2 million in the comparable period in 2021, and gross margin decreased 170 basis points to 35.6% in the third quarter of 2022 from 37.3% in the third quarter of 2021. Adjusted gross margin (a non-GAAP measure) of 35.6% decreased 170 basis points compared to the same period last year, primarily reflecting significantly higher material and transportation costs (collectively up more than 800 basis points) that the Company was able to partially mitigate through pricing, promotion and alternative country/vendor sourcing strategies.

Gross profit decreased 8.1% in the first nine months of 2022 to $306.4 million from $333.5 million in the comparable period in 2021 and gross margin decreased 230 basis points to 36.2% in the first nine months of 2022 from 38.5% in the first nine months of 2021. For the first nine months of 2022, the Company reported an unfavorable $1.0 million impact from antidumping duty rate changes, compared to income of $6.6 million in the prior-year period. Excluding these items as shown on the table that follows, adjusted gross margin (a non-GAAP measure) of 36.3% decreased 140 basis points compared to the same period last year, primarily reflecting significantly higher transportation and material costs (collectively up more than 1,100 basis points) that the Company was able to partially mitigate by pricing, promotion and alternative country/vendor sourcing strategies.

20

We believe that the following items set forth in the table below can distort the visibility of our ongoing performance and that the evaluation of our financial performance can be enhanced by use of supplemental presentation of our results that exclude the impact of these items.

	Three Months Ended								Nine Months Ended
	September 30,								September 30,
	2022				2021				2022				2021
	$		% of Sales		$		% of Sales		$		% of Sales		$		% of Sales
	(dollars in thousands)								(dollars in thousands)
Gross Profit/Margin, as reported (GAAP)	$	95,582	35.6	%	$	105,201	37.3	%	$	306,411	36.2	%	$	333,523	38.5	%
Antidumping Adjustments1		—	—	%		—	—	%		977	0.1	%		(6,566)	(0.8)	%
Adjusted Gross Profit/Margin (non-GAAP measures)	$	95,582	35.6	%	$	105,201	37.3	%	$	307,388	36.3	%	$	326,957	37.7	%

1 Represents antidumping expense associated with applicable prior-year shipments of engineered hardwood from China.

Selling, General and Administrative Expenses

SG&A expense for the third quarter of 2022 increased $6.5 million to $99.7 million, or 37.1% of sales, compared to $93.2 million, or 33.0% of sales, in the third quarter of 2021. Adjusted SG&A (a non-GAAP measure) for the third quarter of 2022 was $99.8 million, compared to $93.5 million in the third quarter of 2021. As a percentage of sales, adjusted SG&A increased 400 basis points, to 37.1% of sales, compared to 33.1% for the third quarter in 2021, which is primarily driven by investments to support the Company’s long-term growth, continued investment in customer facing and distribution center personnel, and deleverage on lower net sales. During the third quarter, we also implemented cost savings measures including a moderate reduction of headcount and a delayed cadence of hiring at our corporate office.

SG&A expense for the first nine months of 2022 increased $9.0 million to $300.8 million, or 35.5% of sales, compared to $291.8 million, or 33.7% of sales, in the first nine months of 2021. SG&A in the first nine months of 2022 and 2021 included certain costs related to legal matters and settlements. Excluding these items as shown in the table that follows, adjusted SG&A (a non-GAAP measure) for the first nine months of 2022 was $301.0 million, compared to $284.0 million in the first nine months of 2021. As a percentage of sales, adjusted SG&A (a non-GAAP measure) increased 270 basis points, to 35.5% of sales, compared to 32.8% for the first nine months in 2021, reflecting the same drivers as the quarter. The Company redeemed $2.9 million and $3.1 million of MDL and Gold vouchers during the first nine months of 2022 and 2021, respectively, and relieved the accrual for legal matters and settlements for the full amount, relieved inventory at its cost, and the remaining amount -- the gross margin for the items sold of $1.1 million in 2022 and $1.2 million in 2021 -- was recorded as a reduction in SG&A expense.

21

We believe that the following items set forth in the table below can distort the visibility of our ongoing performance and that the evaluation of our financial performance can be enhanced by use of supplemental presentation of our results that exclude the impact of these items.

	Three Months Ended								Nine Months Ended
	September 30,								September 30,
	2022				2021				2022				2021
	$		% of Sales		$		% of Sales		$		% of Sales		$		% of Sales
	(dollars in thousands)								(dollars in thousands)
SG&A, as reported (GAAP)	$	99,692	37.1	%	$	93,165	33.0	%	$	300,804	35.5	%	$	291,767	33.7	%
(Recovery) Accrual for Legal Matters and Settlements2		(150)	(0.1)	%		(400)	(0.1)	%		(150)	(0.0)	%		7,275	0.8	%
Legal and Professional Fees3		—	—	%		43	0.0	%		—	—	%		470	0.1	%
Sub-Total Items above		(150)	(0.1)	%		(357)	(0.1)	%		(150)	(0.0)	%		7,745	0.9	%
Adjusted SG&A (a non-GAAP measure)	$	99,842	37.1	%	$	93,522	33.1	%	$	300,954	35.5	%	$	284,022	32.8	%

2 The 2022 amount represents insurance recovery related to the Gold Litigation recorded in the third quarter of 2022. The 2021 amounts represent the charge to earnings for the Mason and Savidis matters in the first quarter of 2021 and a $0.4 million insurance recovery related to the MDL matter in the third quarter of 2021. These items are described more fully in Item 1, Note 7 to the condensed consolidated financial statements.

3 Represents charges to earnings related to our defense of certain significant legal actions during the period. This does not include all legal costs incurred by the Company.

Operating (Loss) Income and Operating Margin

Operating loss was $4.1 million for the third quarter of 2022 compared to operating income of $12.0 million for the third quarter of 2021. Adjusted operating loss (a non-GAAP measure) in the third quarter of 2022 was $4.3 million, down $15.9 million from operating income of $11.7 million in the prior-year period. As a percentage of net sales, adjusted operating margin (a non-GAAP measure) for the third quarter of 2022 was (1.6)%, down 570 basis points from 4.1% in the third quarter of 2021, which reflected the increased selling, general and administrative expenses and decreased gross margin as described in the above sections.

Operating income was $5.6 million for the first nine months of 2022 compared to $41.8 million for the first nine months of 2021. Adjusted operating income (a non-GAAP measure) in the first nine months of 2022 was $6.4 million, down $36.5 million from the $42.9 million for the prior-year period. As a percentage of net sales, adjusted operating margin (a non-GAAP measure) for the first nine months of 2022 was 0.8%, down 420 basis points from 5.0% in the first nine months of 2021, which reflected the increased selling, general and administrative expenses and decreased gross margin as described in the above sections.

22

We believe that the following items set forth in the table below can distort the visibility of our ongoing performance and that the evaluation of our financial performance can be enhanced by use of supplemental presentation of our results that exclude the impact of these items.

	Three Months Ended									Nine Months Ended
	September 30,									September 30,
	2022					2021				2022					2021
	$		% of Sales			$		% of Sales		$		% of Sales			$		% of Sales
	(dollars in thousands)									(dollars in thousands)
Operating (Loss) Income, as reported (GAAP)	$	(4,110)		(1.5)	%	$	12,036	4.3	%	$	5,607		0.7	%	$	41,756	4.8	%
Gross Margin Items:
Antidumping Adjustments1		—		—	%		—	—	%		977		0.1	%		(6,566)	(0.8)	%
Gross Margin Subtotal		—		—	%		—	—	%		977		0.1	%		(6,566)	(0.8)	%
SG&A Items:
(Recovery) Accrual for Legal Matters and Settlements2		(150)		(0.1)	%		(400)	(0.1)	%		(150)		(0.0)	%		7,275	0.8	%
Legal and Professional Fees3		—		—	%		43	0.0	%		—		—	%		470	0.1	%
SG&A Subtotal		(150)		(0.1)	%		(357)	(0.1)	%		(150)		(0.0)	%		7,745	0.9	%
Adjusted Operating (Loss) Income/Margin (a non-GAAP measure)	$	(4,260)		(1.6)	%	$	11,679	4.1	%	$	6,434		0.8	%	$	42,935	5.0	%

^1,2,3    See the Gross Profit and SG&A sections above for more detailed explanations of these individual items.

Other Expense (Income)

In the third quarter of 2022, we had other expense of $0.6 million compared to other expense of $18.0 thousand for the third quarter of 2021. Adjusted other expense (a non-GAAP measure) was $0.6 million for the third quarter of 2022, which is an increase of $0.6 million compared to the third quarter of 2021 driven by interest expense on borrowings under our Credit Agreement compared to no borrowings during the prior period.

The Company had other expense of $0.8 million for the first nine months of 2022 compared to other income of $0.3 million for the comparable period in 2021. While both years included interest on borrowings on our Credit Agreement, during the second quarter of 2021, the Company repaid all borrowings under our Credit Agreement, minimalizing interest expense for the first nine months of 2021.

Adjusted other expense (a non-GAAP measure) was $0.8 million for the first nine months of 2022, which is a decrease of $0.8 million compared to the first nine months of 2021 due to the interest impact related to antidumping adjustments. Adjusted Other Expense reflects favorable adjustments of $1.7 thousand and $1.8 million in 2022 and 2021 for the reversal of interest expense associated with an antidumping duty rate refund.

23

We believe that the following item set forth in the table below can distort the visibility of our ongoing performance and that the evaluation of our financial performance can be enhanced by use of supplemental presentation of our results that exclude the impact of these items.

	Three Months Ended								Nine Months Ended
	September 30,								September 30,
	2022				2021				2022				2021
	$		% of Sales		$		% of Sales		$		% of Sales		$		% of Sales
	(dollars in thousands)								(dollars in thousands)
Other Expense (Income), as reported (GAAP)	$	646	0.2	%	$	18	0.0	%	$	830	0.1	%	$	(252)	(0.0)	%
Interest Impact Related to Antidumping Adjustments4		—	—	%		—	—	%		(2)	(0.0)	%		(1,841)	(0.2)	%
Sub-Total Items above		—	—	%		—	—	%		(2)	(0.0)	%		(1,841)	(0.2)	%
Adjusted Other Expense/Adjusted Other Expense as a % of Sales (a non-GAAP measure)	$	646	0.2	%	$	18	0.0	%	$	832	0.1	%	$	1,589	0.2	%

4 Represents the interest income impact of certain antidumping adjustments related to applicable prior-year shipments of engineered hardwood from China.

Provision for Income Taxes

The Company calculates its quarterly tax provision pursuant to the guidelines in Accounting Standards Codification ("ASC") 740-270 "Income Taxes." Generally, ASC 740-270 requires companies to estimate the annual effective tax rate for current year ordinary income. The estimated annual effective tax rate represents the best estimate of the tax provision in relation to the best estimate of pre-tax ordinary income or loss. The estimated annual effective tax rate is then applied to year-to-date ordinary income or loss to calculate the year-to-date interim tax provision and is adjusted for discrete items that occur within the period.

For the three months ended September 30, 2022, the Company recognized income tax benefit of $1.0 million, which represented an effective tax rate of 20.6%. For the three months ended September 30, 2021, the Company recognized income tax expense of $3.2 million, which represented an effective tax rate of 27.0%. The lower effective tax rate in the current period primarily reflects the greater impact of permanent items on the pretax ordinary loss.

For the nine months ended September 30, 2022, the Company recognized income tax expense of $1.8 million, which represented an effective tax rate of 37.2%. For the nine months ended September 30, 2021, the Company recognized income tax expense of $10.6 million, which represented an effective tax rate of 25.3%. The higher effective tax rate in the current period primarily reflects the greater impact of permanent items on the lower pretax ordinary income.

The Company has a valuation allowance recorded against certain of its net deferred tax assets of $2.4 million as of September 30, 2022, and December 31, 2021, because the jurisdiction and nature of the assets makes realization of these deferred tax assets uncertain. The Company intends to maintain this valuation allowance on its deferred tax assets until there is sufficient evidence to support the realizability of those deferred tax assets.

Net (Loss) Income per Diluted Share

Net loss per diluted share was $0.13 for the three months ended September 30, 2022, compared to net income per diluted share of $0.30 for the three months ended September 30, 2021. Adjusted loss per diluted share was $0.14 for the three months ended September 30, 2022, compared to net income per diluted share of $0.29 for the three months ended September 30, 2021.

Net income per diluted share was $0.10 for the nine months ended September 30, 2022, compared to $1.06 for the nine months ended September 30, 2021. Adjusted earnings per diluted share was $0.12 for the nine months ended September 30, 2022, compared to $1.05 for the nine months ended September 30, 2021.

24

We believe that each of the items below can distort the visibility of our ongoing performance and that the evaluation of our financial performance can be enhanced by use of supplemental presentation of our results that exclude the impact of these items.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
	(in thousands)				(in thousands)
Net (Loss) Income, as reported (GAAP)	$	(3,774)	$	8,779	$	2,999	$	31,390
Net (Loss) Income per Diluted Share (GAAP)	$	(0.13)	$	0.30	$	0.10	$	1.06
Gross Margin Items:
Antidumping Adjustments1		—		—		719		(4,846)
Gross Margin (Loss) Subtotal		—		—		719		(4,846)
SG&A Items:
(Recovery) Accrual for Legal Matters and Settlements2		(110)		(295)		(110)		5,369
Legal and Professional Fees3		—		32		—		347
SG&A Subtotal		(110)		(263)		(110)		5,716
Other Expense (Income) Items:
Interest Impact Related to Antidumping Adjustments4		—		—		(1)		(1,359)
Other Expense (Income) Subtotal		—		—		(1)		(1,359)
Adjusted (Loss) Earnings	$	(3,884)	$	8,516	$	3,607	$	30,901
Adjusted (Loss) Earnings per Diluted Share (a non-GAAP measure)	$	(0.14)	$	0.29	$	0.12	$	1.05

^1,2,3,4    See the Gross Profit, SG&A and Other Expense (Income) sections above for more detailed explanations of these individual items. These items have been tax affected at the Company’s incremental rate, which was 26.4% for the 2022 period and 26.2% for the 2021 period.

Seasonality

Our net sales fluctuate slightly as a result of seasonal factors, and we adjust merchandise inventories in anticipation of those factors, causing variations in our build of merchandise inventories. Generally, we experience higher-than-average net sales in the spring and fall, when more home remodeling activities are taking place, and lower-than-average net sales in the winter months and during the hottest summer months. These seasonal fluctuations, however, are minimized to some extent by our national presence, as markets experience different seasonal characteristics. Those historical trends have been and continue to be affected by supply chain constraints and the COVID-19 pandemic.

Liquidity, Capital Resources and Cash Flows

Our strong balance sheet and liquidity provide us with the financial flexibility to fund our growth initiatives and position LL Flooring for long-term success. Our principal sources of liquidity at September 30, 2022 were $6.1 million of cash and cash equivalents on our balance sheet and $127.8 million of availability under our Revolving Loan. As of September 30, 2022, there was a $69.0 million outstanding balance on our Revolving Loan.

Our net cash flows used in operating activities were $123.8 million during the nine months ended September 30, 2022, which was primarily the result of purchases of inventory ($113.8 million), redemption of customer deposits and store credits ($18.2 million), and payments for legal matters and settlements ($8.1 million).

Through the nine months ended September 30, 2022, net cash flows used in investing activities included $16.8 million in capital expenditures for store rebranding, opening 15 new stores and investments in digital. For 2022 we currently expect capital expenditure investments of $20 million to $22 million, including the opening of 18 new stores and the continuation of the investing activities described above.

25

On April 30, 2021 we entered into a Second Amendment to the Credit Agreement to extend the maturity date to April 30, 2026, convert the FILO Term Loan into the Revolving Credit Facility, decrease the margin for LIBOR Rate Loans, and reduce the LIBOR floor, which is described more fully in Item 1, Note 5 to the condensed consolidated financial statements.

The Company continues to navigate uncertainty in the macroeconomic environment related to inflation, higher interest rates, lower existing home sales, a shift in COVID-19 spend from home remodeling to travel and entertainment, and economic and employment uncertainty. As of September 30, 2022, we have rebuilt inventory by more than $111.2 million after an extended period of supply chain constraints. We believe that cash flows from operations, together with cash on hand, and the liquidity under our Credit Agreement will be sufficient to meet our obligations, fund our settlements, operations, anticipated capital expenditures, and potential share repurchases for the next 12 months. We prepare our forecasted cash flow and liquidity estimates based on assumptions that we believe to be reasonable but are also inherently uncertain. Actual future cash flows could differ from these estimates.

Merchandise Inventories

Merchandise inventories at September 30, 2022 increased $111.2 million from December 31, 2021 primarily due to increased purchases to replenish inventory to support the Company’s strategy to place inventory close to its customers and to support new stores, as well as, to a lesser extent, inflation. The Company believes that it has rebuilt a solid mix of quality flooring inventory that is largely evergreen in nature. We consider merchandise inventories either “available for sale” or “inbound in-transit,” based on whether we have physically received and inspected the products at an individual store location, in our distribution centers or in another facility where we control and monitor inspection. 

Merchandise inventories and available inventory per store in operation were as follows:

	As of September 30,		As of December 31,		As of September 30,
	2022		2021		2021
	(in thousands)
Inventory – Available for Sale	$	334,808	$	197,927	$	190,985
Inventory – Inbound In-Transit		30,814		56,458		34,013
Total Merchandise Inventories	$	365,622	$	254,385	$	224,998
Available Inventory Per Store	$	763	$	467	$	453

Available inventory per store at September 30, 2022 was higher than at December 31, 2021 and September 30, 2021 due to the same drivers as the increase in merchandise inventories, partially offset by the opening of new stores.

Inbound in-transit inventory generally varies due to the timing of certain international shipments and certain seasonal factors, including international holidays, rainy seasons, and specific merchandise category planning.

Critical Accounting Policies and Estimates

Critical accounting policies are those that we believe are both significant and that require us to make difficult, subjective, or complex judgments, often because we need to estimate the effect of inherently uncertain matters. We base our estimates and judgments on historical experiences and various other factors that we believe to be appropriate under the circumstances. Actual results may differ from these estimates, and we might obtain different estimates if we used different assumptions or conditions. We have had no significant changes in our Critical Accounting Policies and Estimates since our annual report on Form 10-K for the year ended December 31, 2021.

26

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Interest Rate Risk.

The Company can be exposed to interest rate risk because of variable rate borrowings under the credit facility. To the extent the Company borrows at LIBOR, financial results are subject to changes in the market rate of interest as well as the expected transition from the LIBOR reference rate in 2022. As of September 30, 2022, we had $69.0 million outstanding under our Credit Agreement, which carried a weighted average interest rate of 4.6% repayable at any time. A hypothetical 1% increase in interest rates would cause an increase of $0.7 million of annual interest if outstanding for the full year.

We currently do not engage in any interest rate hedging activity. However, in the future, in an effort to mitigate losses associated with interest rate risks, we may at times enter into derivative financial instruments, although we have not historically done so. We do not, and do not intend to, engage in the practice of trading derivative securities for profit.

Item 4. Controls and Procedures.

Evaluation of disclosure controls and procedures. Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined under Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the quarter ended September 30, 2022. Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective as of September 30, 2022.

Changes in Internal Control over Financial Reporting. There has been no change in our internal control over financial reporting that occurred during the most recent quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II
OTHER INFORMATION

Item 1. Legal Proceedings.

Information with respect to this item may be found in Note 7, “Commitments and Contingencies”, to the condensed consolidated financial statements in Item 1 of Part I, which is incorporated herein by reference.

Item 1A. Risk Factors.

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, Item 1A, “Risk Factors,” in our annual report on Form 10-K for the year ended December 31, 2021, which could materially affect our business, financial condition or future results.

27

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

The following table presents our share repurchase activity for the quarter ended September 30, 2022 (in thousands, except per share amounts):

				Total Number		Maximum Dollar Value
				of Shares		of Shares That May Yet
				Purchased as		Be Purchased as
	Total Number		Average	Part of Publicly		Part of Publicly
	of Shares		Price Paid	Announced		Announced
Period	Purchased2		per Share2	Programs		Programs1
July 1, 2022 to July 31, 2022	—		—	—		43,000
August 1, 2022 to August 31, 2022	—		—	—		43,000
September 1, 2022 to September 30, 2022	—		—	—		43,000
Total	—	$	—	—	$	43,000

1 In February 2022, the Company’s board of directors raised its authorization for the repurchase of up to $50.0 million of the Company’s common stock. In April 2022, the Company resumed its share repurchase program. The Company made cash payments of $7.0 million to repurchase 571,332 shares under the share repurchase authorization during the second quarter of 2022. There remains $43.0 million outstanding under the share repurchase authorization.

2 We also repurchased 3,963 shares of our common stock, at an average price of $10.23, in connection with the net settlement of shares issued as a result of the vesting of restricted shares during the quarter ended September 30, 2022.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

None.

Item 5. Other Information.

None.

Item 6. Exhibits.

The exhibits listed in the following exhibit index are furnished as part of this report.

28

EXHIBIT INDEX

Exhibit
Number	Exhibit Description
10.1	LL Flooring Holdings, Inc. Amended Outside Directors Deferral Plan (filed herewith).
31.1	Certification of Principal Executive Officer of LL Flooring Holdings, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Principal Financial Officer of LL Flooring Holdings, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Principal Executive Officer and Principal Financial Officer of LL Flooring Holdings, Inc. pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	The following financial statements from the Company’s Form 10-Q for the quarter ended September 30, 2022, formatted in Inline XBRL: (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income, (iii) Condensed Consolidated Statements of Stockholders’ Equity, (iv) Condensed Consolidated Statements of Cash Flows, and (v) Notes to Condensed Consolidated Financial Statements
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

29

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		LL FLOORING HOLDINGS, INC.
		(Registrant)
Date: November 1, 2022	By:	/s/ Nancy A. Walsh
		Nancy A. Walsh
		Chief Financial Officer (Principal Financial Officer)

30

EX-10.1

Exhibit 10.1

LL FLOORING HOLDINGS, INC.

OUTSIDE DIRECTORS DEFERRAL PLAN

Adopted

January 1, 2009

Amended

September 29, 2022

LL Flooring Holdings, Inc.

Outside Directors Deferral Plan

Adopted January 1, 2009

Amended September 29, 2022

Table of Contents

INTRODUCTION‌1

ARTICLE I - Definition of Terms‌1

1.01.Account‌1

1.02.Administrator‌1

1.03.Affiliate‌1

1.04.Beneficiary‌1

1.05.Board‌1

1.06.Change in Control‌1

1.07.Closing Price‌2

1.08Code‌2

1.09.Common Stock‌2

1.10.Compensation‌2

1.11.Corporation‌3

1.12.Deferral Contributions‌3

1.13.Deferral Election‌3

1.14.Deferred Stock Unit‌3

1.15.Effective Date‌3

1.16.Eligible Director‌3

1.17.Participant‌3

1.18.Plan‌3

1.19.Plan Year‌3

1.20.Section 409A‌3

1.21.Unforeseeable Emergency‌4

ARTICLE II - Eligibility and Participation‌4

2.01.Eligibility‌4

2.02.Participation‌4

2.03.Length of Participation‌4

ARTICLE III - Determination of Deferral‌4

3.01.Commencement of Active Participation‌4

3.02.Deferral Election‌4

3.03.Equitable Adjustment in Case of Error or Omission‌5

ARTICLE IV - Accounts and Investments‌5

4.01.Deferred Stock Units‌5

4.02.Hypothetical Nature of Accounts and Investments‌6

ARTICLE V - Vesting‌6

ARTICLE VI - Payment‌6

6.01.Separation from Service‌6

6.02.Payment of Death Benefit‌7

6.03.Unforeseeable Emergencies‌7

6.04.Effect of Change in Control‌7

6.05.Form of Payment‌8

6.06.Benefit Determination and Payment Procedure‌8

6.07.Distribution of Benefit When Distributee Cannot Be Located‌8

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LL Flooring Holdings, Inc.

Outside Directors Deferral Plan

Adopted January 1, 2009

Amended September 29, 2022

6.08.Acceleration of Benefits Prohibited‌8

6.09.Beneficiary Designation‌8

ARTICLE VII - Plan Administration‌9

7.01.Appointment of Administrator‌9

7.02.Duties and Responsibilities of Plan Administrator‌9

ARTICLE VIII - Amendment or Termination of Plan‌9

ARTICLE IX - Claims Procedures‌10

9.01.Initial Claims‌10

9.02.Claims Appeals‌10

9.03.Claim Limitation Period‌11

ARTICLE X - Miscellaneous‌12

10.01Unfunded Plan‌12

10.02Trust‌12

10.03Non-assignability‌12

10.04Notices and Elections‌12

10.05Governing Law‌12

10.06Binding Effect‌12

10.07Severability‌12

10.08Gender and Number‌13

10.09Titles and Captions‌13

10.10Section 409A‌13

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LL Flooring Holdings, Inc.

Outside Directors Deferral Plan

Adopted January 1, 2009

Amended September 29, 2022

INTRODUCTION

On November 21, 2008, the Board of Directors of LL Flooring Holdings, Inc. (formerly known as Lumber Liquidators Holdings, Inc.), adopted the Outside Directors Deferral Plan, effective January 1, 2009, and amended, effective September 29, 2022, under which non-employee directors of LL Flooring Holdings, Inc. have the opportunity to defer receipt of certain Compensation until departure from the Board. In so doing, the Board of Directors intends to provide an incentive to the non-employee directors to own shares of the Corporation’s Common Stock, thereby aligning their interests more closely with the interests of the Corporation’s shareholders.

ARTICLE I

Definition of Terms

The following words and terms as used in this Plan shall have the meaning set forth below, unless a different meaning is clearly required by the context:

1.01.Account

“Account” means a bookkeeping account established for a Participant under Article IV hereof.

1.02.Administrator

“Administrator” means the Compensation Committee of the Board unless responsibility is delegated as provided for in Article VII hereof.

1.03.Affiliate

“Affiliate” means any subsidiary, parent, affiliate, or other related business entity to the Corporation.

1.04.Beneficiary

“Beneficiary” means the person or persons designated by a Participant or otherwise entitled pursuant to Plan section 6.09 to receive benefits under the Plan attributable to such Participant after the death of such Participant.

1.05.Board

“Board” means the present and any succeeding Board of Directors of the Corporation, unless such term is used with respect to a particular Affiliate and its Directors, in which event it shall mean the present and any succeeding Board of Directors of that Affiliate.

1.06.Change in Control

“Change in Control” means, with respect to a Participant, the date on which the Corporation for which the Participant is providing services at the time of the event experiences any of the following events:

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LL Flooring Holdings, Inc.

Outside Directors Deferral Plan

Adopted January 1, 2009

Amended September 29, 2022

(i)any person, including a “group” as defined below, acquires ownership of the Common Stock that, together with the Common Stock already held by such person or group, represents 50% or more of the total fair market value or total voting power of the then outstanding Common Stock;

(ii)any person, including a “group” as defined below, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of Common Stock possessing 30% or more or of the total voting power of the Common Stock;

(iii)a majority of members of the Board is replaced during a 12- month period by directors whose appointment or election is not endorsed by a majority of the members of the Board prior to such appointment or election; or

(iv)any person, including a “group” as defined below, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the Corporation having a total gross fair market value of 40% or more or more of the total gross fair market value of all the assets of the Corporation immediately prior to such acquisition or acquisitions.

The term “group” shall have the same meaning as in Section 13(d)(3) of the Securities Exchange Act of 1934, modified as may be necessary to comply with the requirements of Section 1.409A-3(i)(5)(v) of the Treasury regulations. This definition of “Change in Control” is intended to satisfy the requirements of Section 1.409A-3(i)(5) of the Treasury Regulations, the terms of which are incorporated herein by reference.

1.07.Closing Price

“Closing Price” means the closing price of a share of Common Stock as reported on the New York Stock Exchange composite tape on such day or, if the Common Stock was not traded on the New York Stock Exchange on such day, then on the next preceding day that the Common Stock was traded on such market, all as reported by such source as the Administrator may select.

1.08Code

“Code” means the Internal Revenue Code of 1986, as the same may be amended from time to time.

1.09.Common Stock

“Common Stock” means the common stock of the Corporation, $0.001 value.

1.10.Compensation

“Compensation” means fees payable to a Participant for service as a member of the Board, in the form of annual retainer and committee fees paid by the Corporation to an Eligible Director but excluding any such Compensation deferred from a prior period, expense reimbursement and allowances and benefits not normally paid in cash to the Participant. Such fees may be payable in cash or in shares of Common

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Outside Directors Deferral Plan

Adopted January 1, 2009

Amended September 29, 2022

Stock with a vesting period of at least one year, in such proportions determined under the Director Compensation policies in effect from time to time.

1.11.Corporation

“Corporation” means LL Flooring Holdings, Inc. (formerly known as Lumber Liquidators Holdings, Inc.), or any successor thereto.

1.12.Deferral Contributions

“Deferral Contributions” means that portion of a Participant’s Compensation which is deferred under the Plan.

1.13.Deferral Election

“Deferral Election” means an irrevocable written election to defer Compensation which is executed by the Eligible Director and timely filed with the Administrator.

1.14.Deferred Stock Unit

“Deferred Stock Unit” means a hypothetical share of the Corporation’s Common Stock.

1.15.Effective Date

The “Effective Date” of the Plan is January 1, 2009.

1.16.Eligible Director

“Eligible Director” means a director of the Corporation who is not an employee of the Corporation.

1.17.Participant

“Participant” means an Eligible Director who elects to participate in the Plan.

1.18.Plan

“Plan” means the LL Flooring Holdings, Inc. Outside Directors Deferral Plan.

1.19.Plan Year

“Plan Year” means the 12-month period beginning each January 1.

1.20.Section 409A

“Section 409A” means Section 409A of the Code and the regulations and guidance promulgated thereunder.

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Outside Directors Deferral Plan

Adopted January 1, 2009

Amended September 29, 2022

1.21.Unforeseeable Emergency

“Unforeseeable Emergency” means a severe financial hardship to the Participant resulting from a sudden and unexpected illness or accident of the Participant or of a dependent of the Participant, loss of the Participant’s property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the Participant’s control. The circumstances that will constitute an Unforeseeable Emergency will depend upon the facts of each case.

ARTICLE II

Eligibility and Participation

2.01.Eligibility

Each Eligible Director may participate in the Plan and elect to defer Compensation for a Plan Year beginning with the Plan Year that commences January 1, 2009.

2.02.Participation

In order to participate in the Plan, an Eligible Director must file with the Administrator a Deferral Election, as provided in Section 3.02. The Compensation Committee may establish such other conditions to enrollment, enrollment periods or other requirements as it determines in its sole discretion are necessary.

2.03.Length of Participation

An individual who is or becomes a Participant shall be or remain a Participant as long as he or she has a Deferral Election in effect or is entitled to future benefits under the terms of the Plan.

ARTICLE III

Determination of Deferral

3.01.Commencement of Active Participation

An Eligible Director shall become a Participant with respect to a Plan Year only if he or she is expected to have Compensation during such Plan Year and he or she timely files and has in effect a Deferral Election for such Plan Year.

3.02.Deferral Election

(a)Amount of Deferral Contributions. A Participant may elect to defer up to 100% of his or her Compensation in 25% increments and have that Compensation invested in Deferred Stock Units. In calculating the number of Deferred Stock Units, amounts shall be rounded to the nearest whole share of Common Stock.

(i)Deferred Stock Units attributable to the deferral of cash Compensation shall be credited as of the day on which such Compensation is otherwise payable in accordance with the Corporation’s then applicable director Compensation policies (the “Payment Date”), and the

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Outside Directors Deferral Plan

Adopted January 1, 2009

Amended September 29, 2022

number of Deferred Stock Units shall be determined by dividing the Participant’s deferred Compensation payable on the Payment Date by the Closing Price as of the Payment Date.

(ii)Deferred Stock Units credited with respect to a restricted Common Stock award shall be determined using the Closing Price as of the grant date of the award of such shares of Common Stock.

(b)Deferral Elections. Except as provided in subsection (c) and (d) below, a Participant may make an election to defer Compensation for a Plan Year only if such election is made no later than December 31 of the prior Plan Year, or by such earlier date as may be announced by the Administrator. A separate Deferral Election must be filed for each Plan Year. Each Deferral Election shall be made on a form provided by the Administrator and shall specify such additional information as the Administrator may require.

(c)First Year of Eligibility. In the case of the first Plan Year in which an Eligible Director becomes eligible to participate in the Plan, the Eligible Director must make an initial deferral election within 30 days after he or she becomes eligible to participate in the Plan. Such election shall only be valid with respect to Compensation paid for services rendered after the date of the initial deferral election.

(d)Subsequent Elections. A Participant may delay the timing of a previously-scheduled payment or may change the form of a payment only if such subsequent deferral elections meets all of the following requirements and any other applicable requirements of Section 409A: (i) the subsequent deferral election shall not take effect until at least 12 months after the date on which it is made; (ii) the election must be made at least 12 months prior to the date the payment is scheduled to be made, or for installment payments, at least 12 months prior to the date the first of such installments is scheduled to be made; and (iii) the subsequent deferral election must delay the payment for at least five years from the date the payment would otherwise have been made. For installment payments, the delay is measured from the date the first payment was scheduled to be made. Any such subsequent deferral election under this Section 3.02(d) shall be made on a form provided by the Administrator for such purpose and shall specify such additional information as the Administrator may require.

3.03.Equitable Adjustment in Case of Error or Omission

If an error or omission is discovered in the Account of a Participant, the Administrator shall make such equitable adjustment as the Administrator deems appropriate.

ARTICLE IV

Accounts and Investments

4.01.Deferred Stock Units

(a)Except as provided below, a Participant’s Account shall be treated as if it were invested in Deferred Stock Units that are equivalent in value to the fair market value of the shares of the Common Stock.

(b)The number of Deferred Stock Units credited to a Participant’s Account shall be increased on each date on which a dividend is paid on the Common Stock. The number of additional Deferred Stock Units credited to a Participant’s Account as a result of such increase shall be determined

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LL Flooring Holdings, Inc.

Outside Directors Deferral Plan

Adopted January 1, 2009

Amended September 29, 2022

by (i) multiplying the total number of Deferred Stock Units (with fractional Deferred Stock Units rounded off to the nearest thousandth) credited to the Participant’s Account immediately before such increase by the amount of the dividend paid per share of the Common Stock on the dividend payment date, and (ii) dividing the product so determined by the Closing Price on the dividend payment date.

(c)The dollar value of the Deferred Stock Units credited to a Participant’s Account on any date shall be determined by multiplying the number of Deferred Stock Units (including fractional Deferred Stock Units) credited to the Participant’s Account by the Closing Price on that date.

(d)In the event of a transaction or event described in this subsection (d), the number of Deferred Stock Units credited to a Participant’s Account shall be adjusted in such manner as the Board, in its sole discretion, deems equitable. A transaction or event is described in this subsection (d) if (i) it is a dividend (other than regular quarterly dividends) or other distribution (whether in the form of cash, shares, other securities, or other property), extraordinary cash dividend, recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, repurchase, or exchange of shares or other securities, the issuance or exercisability of stock purchase rights, the issuance of warrants or other rights to purchase shares or other securities, or other similar corporate transaction or event and (ii) the Board determines that such transaction or event affects the shares of the Corporation’s common stock, such that an adjustment pursuant to this subsection (d) is appropriate to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan.

4.02.Hypothetical Nature of Accounts and Investments

The Accounts established under this Article IV shall be maintained for bookkeeping purposes only. Neither the Plan nor the Accounts established under the Plan shall hold any actual funds or assets. The Deferred Stock Units established hereunder shall be used solely to determine the amounts to be paid hereunder, shall not represent an equity security of the Corporation, and shall not carry any voting or dividend rights.

ARTICLE V

Vesting

A Participant’s Account attributable to cash Compensation deferred shall be fully vested and non-forfeitable at all times. A Participant's Account attributable to restricted Common Shares deferred shall vest on the first anniversary of the date such shares are awarded.

ARTICLE VI

Payment

6.01.Separation from Service

Subject to Section 3.02(d), a Participant may elect to receive the distribution of his or her Account in the form of (A) one lump-sum payment 60 days following his or her separation from service on the Board (or as soon thereafter as is administratively practical), (B) annual distributions over a three-year period beginning 60 days following his or her separation from service on the Board (or as soon thereafter as is administratively practical), or (C) annual distributions over a five-year period beginning 60 days following his or her separation from service on the Board (or as soon thereafter as is administratively practical).

6

LL Flooring Holdings, Inc.

Outside Directors Deferral Plan

Adopted January 1, 2009

Amended September 29, 2022

6.02.Payment of Death Benefit

The Account of a Participant who dies prior to the payment of his or her entire Account under Plan section 6.01 shall be payable to his or her Beneficiary 60 days following the date of the Participant’s death, or as soon thereafter as is administratively practical.

6.03.Unforeseeable Emergencies

A distribution of a portion of the Participant’s Account because of an Unforeseeable Emergency will be permitted only to the extent required by the Participant to satisfy the emergency need after (i) reimbursement or Compensation through insurance or otherwise, (ii) obtaining liquidation of the Participant’s assets, to the extent such liquidation would not itself cause a severe financial hardship, or (iii) suspension of deferrals under the Plan. Whether an Unforeseeable Emergency has occurred will be determined by the Administrator, in its sole and exclusive discretion. Distributions in the event of an Unforeseeable Emergency may be made by and with the approval of the Administrator upon written request by a Participant and shall be payable from the Participant’s Account as soon as practicable and in any event no later than 30 days following the Administrator’s determination that an Unforeseeable Emergency has occurred and authorization of payment from the Participant's Account.

6.04.Effect of Change in Control

(a)Upon a Change in Control, the Corporation shall establish, if one has not been established, a grantor trust, as described in Section 10.02 and shall contribute to such trust within seven days of the Change in Control and within 30 days of the end of each Plan Year thereafter, a lump sum payment equal to the difference between the aggregate value of all Participants’ Accounts and the value of the assets of the trust on the date of the Change in Control or end of the Plan Year.

(b)Notwithstanding any other provision in any other Article of this Plan to the contrary, in the event a Participant ceases to serve as a Director of the Corporation (or as a Director of any publicly-held acquiring parent corporation in the event the Corporation is not the surviving publicly-held parent corporation in the Change in Control transaction) within two years following a change in control event as defined in Treasury Regulations section 1.409A-3(i)(5), with respect to the Corporation, (i) the value of all amounts deferred by a Participant which have not yet been credited to the Participant’s Account and (ii) the remaining value of such Participant’s Account shall be paid to the Participant in a lump-sum payment no later than 30 days after the date of the Participant’s separation from service on the Board. The value of such Participant’s Deferred Stock Units shall be paid in shares of Common Stock (or the stock of an Acquiring Corporation as provided in this Plan section), with fractional shares paid in cash.

(c)Upon a Change in Control, each Participant’s Deferred Stock Units shall be adjusted as provided in Section 4.01(d). The amount of such adjustment shall be determined by the Board (which, for this purpose, shall be comprised solely of employee members of the Board prior to the Change in Control) so as to reflect fairly and equitably appropriate circumstances as the Board deems appropriate, including, without limitation, the recent price of shares of the Common Stock. For purposes of adjustments under this Plan section, the value of a Participant’s Deferred Stock Units shall be adjusted to the greater of (1) the Closing Price on or nearest the date on which the Change in Control is deemed to occur, or (2) the highest per share price for shares of the Common Stock actually paid in connection with the Change in Control. In the event the consideration received in the Change in Control transaction by the

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Outside Directors Deferral Plan

Adopted January 1, 2009

Amended September 29, 2022

holders of the Common Stock includes shares of stock of another corporation (an “Acquiring Corporation”), the adjustment under this Plan section shall include converting each Deferred Stock Unit into units of stock of the Acquiring Corporation of the same class as the shares received by the holders of the Common Stock in the Change in Control transaction using the same exchange ratio as the exchange ratio used in the Change in Control transaction and such units shall be deemed to be equivalent in value to the fair market value of such shares of the Acquiring Corporation. Such units shall thereafter be deemed to be Deferred Stock Units within the meaning of this Plan and accounted for and adjusted accordingly.

6.05.Form of Payment

A Participant’s Account shall be paid in a lump sum in shares of Common Stock, with any fractional share paid in cash. The payment of such shares shall be made pursuant to the Lumber Liquidators, Inc. 2011 Equity Compensation Plan (or any successor plan, as applicable).

6.06.Benefit Determination and Payment Procedure

The Administrator shall make all determinations concerning eligibility for benefits under the Plan, the time or terms of payment, and the form or manner of payment to the Participant or the Participant’s Beneficiary, in the event of the death of the Participant. The Administrator shall promptly notify the Corporation of each such determination that benefit payments are due and provide to the Corporation all other information necessary to allow the Corporation to carry out such determination, whereupon the Corporation shall pay such benefits in accordance with the Administrator’s determination.

6.07.Distribution of Benefit When Distributee Cannot Be Located

The Administrator shall make all reasonable attempts to determine the identity and/or whereabouts of a Participant or a Participant’s Beneficiary entitled to benefits under the Plan, including the mailing by certified mail of a notice to the last known address shown on the Corporation’s or the Administrator’s records. If the Administrator is unable to locate such a person entitled to benefits hereunder, or if there has been no claim made for such benefits, the Corporation shall continue to hold the benefit due such person, subject to any applicable statute of escheats.

6.08.Acceleration of Benefits Prohibited

Except as provided in Treasury Regulation section 1.409A-3(j), no acceleration in the time or schedule of any payment or amount scheduled to be paid from the Participant’s Account is permitted.

6.09.Beneficiary Designation

A Participant may designate a Beneficiary to receive the value of his or her Account upon death. Any Beneficiary designation made hereunder shall be effective only if properly signed and dated by the Participant and delivered to the Administrator prior to the time of the Participant’s death. Any Beneficiary designation hereunder shall remain effective until changed or revoked hereunder. A Beneficiary designation may be changed by the Participant at any time, or from time to time, by filing a new designation in writing with the Administrator. If the Participant dies without having designated a Beneficiary, or if the Beneficiary so designated has predeceased him, then his or her estate shall be deemed to be his or her Beneficiary.

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LL Flooring Holdings, Inc.

Outside Directors Deferral Plan

Adopted January 1, 2009

Amended September 29, 2022

ARTICLE VII

Plan Administration

7.01.Appointment of Administrator

The Compensation Committee may appoint one or more persons to serve as the Administrator for the purpose of administering the Plan. In the event more than one person is appointed, the persons shall form a committee for the purpose of functioning as the Administrator. The person or persons serving as Administrator shall serve for indefinite terms at the pleasure of the Compensation Committee, and may, by 30 days prior written notice to the Compensation Committee, terminate such appointment.

7.02.Duties and Responsibilities of Plan Administrator

(a)The Administrator shall maintain and retain necessary records regarding its administration of the Plan.

(b)The Administrator is empowered to settle claims against the Plan and to make such equitable adjustments in a Participant’s or Beneficiary’s rights or entitlements under the Plan as it deems appropriate in the event an error or omission is discovered or claimed in the operation or administration of the Plan.

(c)The Administrator may construe the Plan, correct defects, supply omissions or reconcile inconsistencies to the extent necessary to effectuate the Plan, and such action shall be conclusive.

(d)The Administrator, in its discretion, may delegate to one or more third party administrators all or part of the Administrator’s duties with respect to the administration of the Plan. The Administrator may consult with counsel, who may be counsel to the Corporation, and shall not incur any liability for any action taken in good faith in reliance upon the advice of counsel. The Administrator may revoke or amend the terms of a delegation or consultation at any time, but such action shall not invalidate any prior actions of the Administrator’s delegate or delegates that were consistent with the terms of the Plan. The express grant in the Plan of any specific power to the Administrator shall not be construed as limiting any power or authority of the Administrator. Any decision made, or action taken, by the Administrator or in connection with the administration of this Plan shall be final and conclusive. All expenses of administering this Plan shall be borne by the Corporation.

ARTICLE VIII

Amendment or Termination of Plan

The Plan may be terminated or amended at any time by the Board, effective as of any date specified; provided, however, that any termination must comply with the requirements of Section 409A. Any such action taken by the Board shall be evidenced by a resolution and shall be communicated to Participants and Beneficiaries prior to the effective date thereof. No amendment or termination shall decrease the value of a Participant’s Account accrued prior to the effective date of the amendment or termination.

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LL Flooring Holdings, Inc.

Outside Directors Deferral Plan

Adopted January 1, 2009

Amended September 29, 2022

ARTICLE IX

Claims Procedures

9.01.Initial Claims

(a)Any claim a Participant may have with respect to eligibility, participation, benefits or other aspects of the operation or administration of the Plan, including but not limited to: recovery of benefits under the Plan; enforcing rights under the Plan; or clarification with respect to rights to future benefits under the Plan, shall be made in writing to the Administrator within 90 days following the date a Participant knew or should have known of the facts upon which the claim is based. The Administrator will provide a Participant with the necessary forms and make all determinations as to the right of any person to a disputed benefit.

(b)If a Participant makes a claim for benefits under the Plan, the Participant will be notified of the acceptance or denial of his or her claim within 90 days from the date the Administrator receives a Participant’s claim. In some cases, a Participant’s request may take more time to review and an additional processing period of up to 90 days may be required. If that happens, the Participant will be notified in writing. The written notice of extension will indicate the circumstances requiring the extension of time and the date by which the Administrator expects to make a determination with respect to the claim. If the extension is required due to a Participant’s failure to submit information necessary to decide the claim, the period for making the determination will be tolled from the date on which the extension notice is sent to the Participant until the date on which the Participant responds to the Plan’s request for information.

(c)If a Participant’s claim is wholly or partially denied, or any other adverse benefit determination is made with respect to a Participant’s claim, the Administrator will furnish the Participant with a written notice of this denial. This written notice will be provided to the Participant within a reasonable period of time (generally 90 days) after the receipt of the Participant’s claim by the Administrator, subject to any tolling period as set forth above. The written notice will contain (i) the specific reason or reasons for the denial; (ii) specific reference to those Plan provisions on which the denial is based; (iii) a description of any additional information or material necessary to correct the Participant’s claim and an explanation of why such material or information is necessary; and (iv) a description of the Plan’s appeals procedures (described below) and the applicable time limits, as well as a statement of the Participant’s right to bring a civil action under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) following an adverse benefit determination on review.

9.02.Claims Appeals

(a)If a Participant’s claim has been denied, or any other adverse benefit determination is made regarding a Participant’s claim, and a Participant wishes to submit a claim for review, the Participant must file his or her claim for review, in writing, with the Administrator. The Participant must file the claim for review no later than 60 days after he or she has received written notification of the denial of his or her claim for benefits (or, if none was provided, no later than 60 days after the deemed denial of a Participant’s claim). In connection with the request for review, a Participant (or the Participant’s duly authorized representative) may submit to the Administrator written comments, documents, records, and other information relating to the claim. In addition, a Participant will be provided, upon written request and free of charge, with reasonable access to (and copies of) all documents, records, and other information relevant to the claim. The review by the Administrator will

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Outside Directors Deferral Plan

Adopted January 1, 2009

Amended September 29, 2022

take into account all comments, documents, records, and other information a Participant submits relating to the claim.

(b)The Administrator will make a final written decision on a claim review, in most cases, within 60 days after receiving a Participant’s written claim for review. In some cases, a Participant’s claim may take more time to review, and an additional processing period of up to 60 days may be required. If that happens, a Participant will be notified in writing. The written notice of extension will indicate the special circumstances requiring the extension of time and the date by which the Administrator expects to make a determination with respect to the claim. If the extension is required due to a Participant’s failure to submit information necessary to decide the claim, the period for making the determination will be tolled from the date on which the extension notice is sent to a Participant until the date on which a Participant responds to the Administrator’s request for information.

(c)The Administrator’s decision on a Participant’s claim for review will be communicated to the Participant in writing. If an adverse benefit determination is made, this notice will include (i) the specific reasons(s) for the adverse benefit determination with references to the specific Plan provisions on which the determination is based; (ii) a statement that a Participant is entitled to receive, upon request and free of charge, reasonable access to (and copies of) all documents, records and other information relevant to the claim; and (iii) a statement of a Participant’s right to bring a civil action under Section 502(a) of ERISA.

Before a Participant files a civil action under Section 502(a) of ERISA with respect to any claims under the Plan, a Participant must have filed a claim and appeal with the Plan Administrator, as described herein, and a Participant’s claim and subsequent appeal must have been denied in whole or in part.

(d)All interpretations, determinations and decisions of the Administrator with respect to any claim, claim on review or any other matter relating to the Plan will be made in its sole discretion based on the Plan documents and will be deemed final and conclusive and binding on all affected parties.

9.03.Claim Limitation Period

No legal or equitable action to enforce a Participant’s rights (or clarify a Participant’s right to future benefits) under the Plan may be brought unless and until a Participant has followed the claims and appeals procedures described herein, and the benefits requested have been denied in whole or in part, or there is some other adverse benefit determination. In addition, no legal or equitable action to enforce a Participant’s rights (or clarify a Participant’s right to future benefits) under the Plan, or against the Administrator or any other Plan fiduciary may be brought more than one year following the earlier of (i) the date that such one-year limitations period would commence under applicable law, or (ii) the date upon which a Participant knew or should have known that the Participant did not receive an amount due under the Plan, or (iii) the date on which the Participant fully exhausted the Plan’s administrative remedies.

11

LL Flooring Holdings, Inc.

Outside Directors Deferral Plan

Adopted January 1, 2009

Amended September 29, 2022

ARTICLE X

Miscellaneous

10.01Unfunded Plan

All Plan Participants and Beneficiaries are general unsecured creditors of the Corporation with respect to the benefits due hereunder and the Plan constitutes a mere promise by the Corporation to make benefit payments in the future. It is the intention of the Corporation that the Plan be considered unfunded for tax purposes.

10.02Trust

The Corporation may, but is not required to, establish a grantor trust which may be used to hold assets of the Corporation which are maintained as reserves against the Corporation’s unfunded, unsecured obligations hereunder. Such reserves shall at all times be subject to the claims of the Corporation’s creditors. To the extent such trust or other vehicle is established, and assets contributed, for the purpose of fulfilling the Corporation’s obligation hereunder, then such obligation of the Corporation shall be reduced to the extent such assets are utilized to meet its obligations hereunder. Any such trust and the assets held thereunder are intended to conform in substance to the terms of the model trust described in Revenue Procedure 92-64.

10.03Non-assignability

The interests of each Participant under the Plan are not subject to claims of the Participant’s creditors; and neither the Participant nor his or her Beneficiary shall have any right to sell, assign, transfer or otherwise convey the right to receive any payments hereunder or any interest under the Plan, which payments and interest are expressly declared to be non-assignable and non- transferable.

10.04Notices and Elections

All notices required to be given in writing and all elections required to be made in writing under any provision of the Plan shall be invalid unless made on such forms as may be provided or approved by the Administrator and, in the case of a notice or election by a Participant or Beneficiary, unless executed by the Participant or Beneficiary giving such notice or making such election. Notices and elections shall be deemed given or made when received by any member of the committee that serves as Administrator.

10.05Governing Law

The Plan shall be construed, enforced and administered in accordance with the laws of the Commonwealth of Virginia.

10.06Binding Effect

The Plan shall be binding upon and inure to the benefit of the Corporation, its successors and assigns, and the Participant and his or her heirs, executors, administrators and legal representatives.

10.07Severability

12

LL Flooring Holdings, Inc.

Outside Directors Deferral Plan

Adopted January 1, 2009

Amended September 29, 2022

If any provision of the Plan should for any reason be declared invalid or unenforceable by a court of competent jurisdiction, the remaining provisions shall nevertheless remain in full force and effect.

10.08Gender and Number

In the construction of the Plan, the masculine shall include the feminine or neuter and the singular shall include the plural and vice-versa in all cases where such meanings would be appropriate.

10.09Titles and Captions

Titles and captions and headings herein have been inserted for convenience of reference only and are to be ignored in any construction of the provisions hereof.

10.10Section 409A

(a)Any benefit, payment or other right provided by the Plan shall be provided or made in a manner, and at such time, in such form and subject to such election procedures (if any), as complies with the applicable requirements of Section 409A to avoid a plan failure described in Section 409A(a)(1), including without limitation, deferring payment until the occurrence of a specified payment event described in Section 409A(a)(2). Notwithstanding any other provision hereof or document pertaining hereto, the Plan shall be so construed and interpreted to meet the applicable requirements of Section 409A to avoid a plan failure described in Section 409A(a)(1).

(b)It is specifically intended that all elections, consents and modifications thereto under the Plan will comply with the requirements of Section 409A (including any transition or grandfather rules thereunder). The Corporation is authorized to adopt rules or regulations deemed necessary or appropriate in connection therewith to anticipate and/or comply the requirements of Section 409A (including any transition or grandfather rules thereunder) and to declare any election, consent or modification thereto void if non-compliant with Section 409A.

(c) Notwithstanding anything in the Plan to the contrary, in the event that an Eligible Director is deemed to be a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, no payments that are “deferred compensation” subject to Section 409A that are made by reason of his or her “separation from service” within the meaning of Section 409A shall be made to the Eligible Director prior to the date that is six months after the date of his or her “separation from service” or, if earlier, his or her date of death. Immediately following any applicable six-month delay, all such delayed payments will be paid in a single lump sum. In addition, for purposes of the Plan, with respect to payments of any amounts that are considered to be “deferred compensation” subject to Section 409A, references to “termination of employment” (and substantially similar phrases) shall be interpreted and applied in a manner that is consistent with the requirements of Section 409A. Except as permitted under Section 409A, any deferred compensation that is subject to Section 409A and is payable to or for an Eligible Director’s benefit under any Corporation-sponsored plan, program, agreement or arrangement may not be reduced by, or offset against, any amount owing by such Eligible Director to the Corporation or any Affiliate.

13

EX-31.1

EXHIBIT 31.1

SECTION 302 CERTIFICATION

I, Charles E. Tyson, certify that:

1. I have reviewed this quarterly report on Form 10-Q of LL Flooring Holdings, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 1, 2022	/s/ Charles E. Tyson
	Charles E. Tyson
	President and Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

SECTION 302 CERTIFICATION

I, Nancy A. Walsh, certify that:

1. I have reviewed this quarterly report on Form 10-Q of LL Flooring Holdings, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 1, 2022	/s/ Nancy A. Walsh
	Nancy A. Walsh
	Chief Financial Officer
	(Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In accordance with 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, Charles E. Tyson, President and Chief Executive Officer of LL Flooring Holdings, Inc. (the "Registrant"), and Nancy A. Walsh, Chief Financial Officer of the Registrant, each hereby certifies that, to the best of his or her knowledge:

1. The Registrant's quarterly report on Form 10-Q for the quarter ended September 30, 2022, to which this Certification is attached as Exhibit 32.1 (the "Periodic Report"), fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

/s/ Charles E. Tyson	/s/ Nancy A. Walsh
Charles E. Tyson	Nancy A. Walsh
President and Chief Executive Officer	Chief Financial Officer
(Principal Executive Officer)	(Principal Financial Officer)
Date: November 1, 2022	Date: November 1, 2022

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2022	Oct. 28, 2022
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2022
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	001-33767
Entity Registrant Name	LL Flooring Holdings, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	27-1310817
Entity Address, Address Line One	4901 Bakers Mill Lane
Entity Address, City or Town	Richmond
Entity Address, State or Province	VA
Entity Address, Postal Zip Code	23230
City Area Code	800
Local Phone Number	366-4204
Title of 12(b) Security	Common Stock
Trading Symbol	LL
Security Exchange Name	NYSE
Entity Interactive Data Current	Yes
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Entity Central Index Key	0001396033
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		29,301,879
Entity Current Reporting Status	Yes

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Current Assets:
Cash and Cash Equivalents	$ 6,051	$ 85,189
Merchandise Inventories	365,622	254,385
Prepaid Expenses	11,200	9,160
Other Current Assets	16,673	11,094
Total Current Assets	399,546	359,828
Property and Equipment, net	100,555	96,926
Operating Lease Right-of-Use Assets	124,531	119,510
Goodwill	9,693	9,693
Net Deferred Tax Assets	11,285	11,336
Other Assets	6,209	8,599
Total Assets	651,819	605,892
Current Liabilities:
Accounts Payable	62,103	63,464
Customer Deposits and Store Credits	48,877	67,063
Accrued Compensation	7,592	10,128
Sales and Income Tax Liabilities	3,887	4,297
Accrual for Legal Matters and Settlements - Current	22,881	33,611
Operating Lease Liabilities - Current	34,293	33,060
Other Current Liabilities	25,073	20,717
Total Current Liabilities	204,706	232,340
Other Long-Term Liabilities	6,965	4,268
Operating Lease Liabilities - Long-Term	100,861	97,163
Credit Agreement	69,000
Total Liabilities	381,532	333,771
Stockholders' Equity:
Common Stock ($0.001 par value; 35,000 shares authorized; 30,743 and 30,536 shares issued and 28,686 and 29,113 shares outstanding, respectively)	31	31
Treasury Stock, at cost (2,057 and 1,423 shares, respectively)	(153,284)	(145,337)
Additional Capital	230,918	227,804
Retained Earnings	192,622	189,623
Total Stockholders' Equity	270,287	272,121
Total Liabilities and Stockholders' Equity	$ 651,819	$ 605,892

XML

Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands	Sep. 30, 2022	Dec. 31, 2021
Statement Of Financial Position [Abstract]
Common Stock, par value	$ 0.001	$ 0.001
Common Stock, shares authorized	35,000	35,000
Common Stock, shares, issued	30,743	30,536
Common Stock, shares outstanding	28,686	29,113
Treasury Stock, shares	2,057	1,423

XML

Condensed Consolidated Statements of Income and Comprehensive Income - USD ($) shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Net Sales	$ 268,821,000	$ 282,229,000	$ 846,810,000	$ 867,063,000
Cost of Sales	173,239,000	177,028,000	540,399,000	533,540,000
Gross Profit	95,582,000	105,201,000	306,411,000	333,523,000
Selling, General and Administrative Expenses	99,692,000	93,165,000	300,804,000	291,767,000
Operating Income	(4,110,000)	12,036,000	5,607,000	41,756,000
Other (Income) Expense	646,000	18,000	830,000	(252,000)
Income Before Income Taxes	(4,756,000)	12,018,000	4,777,000	42,008,000
Income Tax (Benefit) Expense	(982,000)	3,239,000	1,778,000	10,618,000
Net Income	$ (3,774,000)	$ 8,779,000	$ 2,999,000	$ 31,390,000
Net Income per Common Share-Basic	$ (0.13)	$ 0.30	$ 0.10	$ 1.08
Net Income per Common Share-Diluted	$ (0.13)	$ 0.30	$ 0.10	$ 1.06
Weighted Average Common Shares Outstanding:
Basic	28,668	29,082	28,859	28,984
Diluted	28,668	29,455	29,010	29,494
Product [Member]
Net Sales	$ 229,204,000	$ 240,802,000	$ 731,044,000	$ 750,388,000
Cost of Sales	142,041,000	144,307,000	449,987,000	442,914,000
Net Services Sales
Net Sales	39,617,000	41,427,000	115,766,000	116,675,000
Cost of Sales	$ 31,198,000	$ 32,721,000	$ 90,412,000	$ 90,626,000

XML

Condensed Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands	Common Stock [Member]	Treasury Stock [Member]	Additional Capital [Member]	Retained Earnings [Member]	Total
Beginning Balance at Dec. 31, 2020	$ 30,000	$ (142,977,000)	$ 222,628,000	$ 147,925,000	$ 227,606,000
Beginning Balance (in shares) at Dec. 31, 2020	28,911
Beginning Balance, Treasury (in shares) at Dec. 31, 2020		1,318
Stock-Based Compensation Expense			3,945,000		3,945,000
Exercise of Stock Options			63,000		63,000
Exercise of Stock Options (in shares)	6
Release of Restricted Shares (in shares)	172
Common Stock Repurchased		$ (2,101,000)			(2,101,000)
Common Stock Repurchased, (in treasury shares)		89
Net Income				31,390,000	31,390,000
Ending Balance at Sep. 30, 2021	$ 30,000	$ (145,078,000)	226,636,000	179,315,000	260,903,000
Ending Balance, Treasury (in shares) at Sep. 30, 2021		1,407
Ending Balance (in shares) at Sep. 30, 2021	29,089
Beginning Balance at Jun. 30, 2021	$ 30,000	$ (144,788,000)	225,287,000	170,536,000	251,065,000
Beginning Balance (in shares) at Jun. 30, 2021	29,063
Beginning Balance, Treasury (in shares) at Jun. 30, 2021		1,392
Stock-Based Compensation Expense			1,349,000		1,349,000
Release of Restricted Shares (in shares)	26
Common Stock Repurchased		$ (290,000)			(290,000)
Common Stock Repurchased, (in treasury shares)		15
Net Income				8,779,000	8,779,000
Ending Balance at Sep. 30, 2021	$ 30,000	$ (145,078,000)	226,636,000	179,315,000	260,903,000
Ending Balance, Treasury (in shares) at Sep. 30, 2021		1,407
Ending Balance (in shares) at Sep. 30, 2021	29,089
Beginning Balance at Dec. 31, 2021	$ 31,000	$ (145,337,000)	227,804,000	189,623,000	$ 272,121,000
Beginning Balance (in shares) at Dec. 31, 2021	29,113
Beginning Balance, Treasury (in shares) at Dec. 31, 2021		1,423			1,423
Stock-Based Compensation Expense			2,818,000		$ 2,818,000
Exercise of Stock Options			296,000		296,000
Exercise of Stock Options (in shares)	21
Release of Restricted Shares (in shares)	123
Common Stock Repurchased		$ (7,947,000)			(7,947,000)
Common Stock Repurchased, (in treasury shares)		634
Common Stock Repurchased (in shares)	(571)
Net Income				2,999,000	2,999,000
Ending Balance at Sep. 30, 2022	$ 31,000	$ (153,284,000)	230,918,000	192,622,000	$ 270,287,000
Ending Balance, Treasury (in shares) at Sep. 30, 2022		2,057			2,057
Ending Balance (in shares) at Sep. 30, 2022	28,686
Beginning Balance at Jun. 30, 2022	$ 31,000	$ (153,244,000)	230,086,000	196,396,000	$ 273,269,000
Beginning Balance (in shares) at Jun. 30, 2022	28,680
Beginning Balance, Treasury (in shares) at Jun. 30, 2022		2,053
Stock-Based Compensation Expense			832,000		832,000
Release of Restricted Shares (in shares)	6
Common Stock Repurchased		$ (40,000)			(40,000)
Common Stock Repurchased, (in treasury shares)		4
Net Income				(3,774,000)	(3,774,000)
Ending Balance at Sep. 30, 2022	$ 31,000	$ (153,284,000)	$ 230,918,000	$ 192,622,000	$ 270,287,000
Ending Balance, Treasury (in shares) at Sep. 30, 2022		2,057			2,057
Ending Balance (in shares) at Sep. 30, 2022	28,686

XML

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Cash Flows from Operating Activities:
Net Income (Loss)	$ 2,999	$ 31,390
Adjustments to Reconcile Net Income (Loss):
Depreciation and Amortization	13,723	13,985
Deferred Income Taxes Provision	51	28
Income on Vouchers Redeemed for Legal Settlements	(1,051)	(1,183)
Stock-Based Compensation Expense	2,818	3,945
Provision for Inventory Obsolescence Reserves	742	1,784
Loss (Gain) on Disposal of Fixed Assets		31
Changes in Operating Assets and Liabilities:
Merchandise Inventories	(113,828)	15,683
Accounts Payable	(1,619)	(17,277)
Customer Deposits and Store Credits	(18,186)	8,832
Accrued Compensation	(2,536)	(6,144)
Prepaid Expenses and Other Current Assets	(4,861)	(792)
Accrual for Legal Matters and Settlements	293	7,733
Payments for Legal Matters and Settlements	(8,123)	(101)
Other Assets and Liabilities	5,814	(7,634)
Net Cash Provided by Operating Activities	(123,764)	50,280
Cash Flows from Investing Activities:
Purchases of Property and Equipment	(16,787)	(12,276)
Other Investing Activities	64	58
Net Cash Used in Investing Activities	(16,723)	(12,218)
Cash Flows from Financing Activities:
Borrowings on Credit Agreement	201,000
Payments on Credit Agreement	(132,000)	(101,000)
Proceeds from the Exercise of Stock Options	296	64
Common Stock Repurchased	(7,947)	(2,101)
Other Financing Activities		(755)
Net Cash Used in Financing Activities	61,349	(103,792)
Net Increase in Cash and Cash Equivalents	(79,138)	(65,730)
Cash and Cash Equivalents, Beginning of Period	85,189	169,941
Cash and Cash Equivalents, End of Period	6,051	104,211
Supplemental disclosure of non-cash operating activities:
Relief of Inventory for Vouchers Redeemed for Legal Settlements	1,849	1,944
Supplemental disclosure of non-cash investing activities:
Tenant Improvement Allowance for Leases	$ (1,148)	$ (1,053)

XML

Basis of Presentation

9 Months Ended

Sep. 30, 2022

Basis of Presentation [Abstract]

Basis of Presentation

Note 1.       Basis of Presentation

LL Flooring Holdings, Inc., formerly Lumber Liquidators Holdings, Inc., and its direct and indirect subsidiaries (collectively and, where applicable, individually, “LL Flooring” or the “Company”) engage in business as a multi-channel specialty retailer of hard-surface flooring, and hard-surface flooring enhancements and accessories, operating as a single operating segment. The Company offers an extensive assortment of hard-surface flooring including waterproof hybrid resilient, waterproof vinyl plank, solid and engineered hardwood, laminate, bamboo, tile, and cork, with a wide range of flooring enhancements and accessories to complement. The Company also provides in-home delivery and installation services to its customers. The Company primarily sells to consumers or to Pros on behalf of consumers through a network of store locations in metropolitan areas. At September 30, 2022, the Company’s 439 stores spanned 47 states in the United States (“U.S.”). In addition to the store locations, the Company’s products may be ordered, and customer questions/concerns addressed, through both its customer contact center in Richmond, Virginia, and its digital platform, LLFlooring.com.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q for interim financial reporting pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, all adjustments (consisting of normal and recurring adjustments except those otherwise described herein) considered necessary for a fair presentation have been included in the accompanying condensed consolidated financial statements. However, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements. Therefore, the interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s annual report filed on Form 10-K for the year ended December 31, 2021.

The condensed consolidated financial statements of the Company include the accounts of its wholly owned subsidiaries. All intercompany transactions have been eliminated in consolidation.

XML

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2022

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note 2.       Summary of Significant Accounting Policies

Fair Value of Financial Instruments

The carrying amounts of financial instruments such as cash and cash equivalents, accounts payable and other liabilities approximates fair value because of the short-term nature of these items. The carrying value of the revolving credit facility approximates fair value due to the variable rate of interest.

Merchandise Inventories

The Company values merchandise inventories at the lower of cost or net realizable value. The method by which amounts are removed from inventory is weighted average cost. All of the hardwood flooring purchased from vendors is either prefinished or unfinished, and in immediate saleable form. The Company relies on a select group of international and domestic suppliers to provide imported flooring products that meet the Company’s specifications. Both international and domestic inventory is subject to increased cost as a result of inflation. The Company is subject to risks associated with obtaining products from abroad, including disruptions or delays in production, shipments, supply chain, delivery or processing, including due to the COVID-19 pandemic.

Included in merchandise inventories are tariff-related costs, including Section 301 tariffs on certain products imported from China in recent years. The Company has deployed pricing, promotion, and alternative country sourcing strategies to mitigate tariff-related costs and improve gross margin. The Company continues to monitor the market to inform its pricing and promotional strategies.

Recognition of Net Sales

The Company generates revenues primarily by retailing merchandise in the form of hard-surface flooring and accessories. Additionally, the Company expands its revenues by offering services to deliver and/or install this merchandise for its customers; it considers these services to be separate performance obligations. The separate performance obligations are detailed on the customer’s invoice(s) and the customer often purchases flooring merchandise without purchasing installation or delivery services. Merchandise and services sales occur through the Company’s network of 439 stores across the U.S., a customer contact center, and its digital platform, LLFlooring.com. The Company’s agreements with its customers are of short duration (less than a year) and as such the Company has elected not to disclose revenue for partially satisfied contracts that will be completed in the days following the end of a period as permitted by GAAP. The Company reports its revenues exclusive of sales taxes collected from customers and remitted to governmental taxing authorities, consistent with past practice.

Revenue is based on consideration specified in a contract with a customer and excludes any sales incentives from vendors and amounts collected on behalf of third parties. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product to a customer or performing services for a customer. Revenues from installation and freight services are recognized when the delivery is made or the installation is complete, which approximates the recognition of revenue over time due to the short duration of service provided. The price of the Company’s merchandise and services is specified in the respective contract and detailed on the invoice agreed to with the customer including any discounts. The Company generally requires customers to pay a deposit, equal to approximately half of the retail sales value, when ordering merchandise not regularly carried in a given location or not currently in stock. In addition, the Company generally does not extend credit to its customers with payment due in full at the time the customer takes possession of merchandise or when the service is provided. Customer payments and deposits received in advance of the customer taking possession of the merchandise or receiving the services are recorded as deferred revenues in the accompanying condensed consolidated balance sheet caption “Customer Deposits and Store Credits.”

The following table shows the activity in this account for the periods noted:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Customer Deposits and Store Credits, Beginning Balance	$	(58,427)	$	(67,731)	$	(67,063)	$	(61,389)
New Deposits		(276,235)		(304,604)		(884,551)		(935,576)
Recognition of Revenue		268,821		282,229		846,810		867,063
Sales Tax included in Customer Deposits		15,980		16,936		51,152		52,708
Other		984		2,949		4,775		6,973
Customer Deposits and Store Credits, Ending Balance	$	(48,877)	$	(70,221)	$	(48,877)	$	(70,221)

Subject to limitations under the Company’s policy, return of unopened merchandise is accepted for 90 days, subject to the discretion of the store manager. The amount of revenue recognized for flooring merchandise is adjusted for expected returns, which are estimated based on the Company’s historical data, current sales levels, and forecasted economic trends. The Company uses the expected value method to estimate returns because it has a large number of contracts with similar characteristics. The Company reduces revenue by the amount of expected returns and records it within “Other Current Liabilities” on the condensed consolidated balance sheet. In addition, the Company recognizes a related asset for the right to recover returned merchandise and records it in the “Other Current Assets” caption of the accompanying condensed consolidated balance sheet. This amount was $1.3 million at September 30, 2022. The Company recognizes sales commissions as incurred since the amortization period is less than one year.

In total, the Company offers hundreds of different flooring products; however, no single flooring product represented a significant portion of its sales mix. By major product category, the Company’s sales mix was as follows:

	Three Months Ended September 30,								Nine Months Ended September 30,
	2022				2021				2022				2021
Manufactured Products1	$	128,213	48	%	$	129,543	46	%	$	405,654	48	%	$	401,373	46	%
Solid and Engineered Hardwood		62,838	23	%		69,090	24	%		203,785	24	%		220,887	26	%
Installation and Delivery Services		39,617	15	%		41,427	15	%		115,766	14	%		116,675	13	%
Moldings and Accessories and Other		38,153	14	%		42,169	15	%		121,605	14	%		128,128	15	%
Total	$	268,821	100	%	$	282,229	100	%	$	846,810	100	%	$	867,063	100	%

¹     Includes engineered vinyl plank, laminate, vinyl and tile.

Cost of Sales

Cost of sales includes the cost of products sold, including tariffs, the cost of installation services, and transportation costs from vendors to the Company’s distribution centers or store locations. It also includes transportation costs from distribution centers to store locations, transportation costs for the delivery of products from store locations to customers, certain costs of quality control procedures, warranty and customer satisfaction costs, inventory adjustments including obsolescence and shrinkage, and costs to produce and ship samples, which are net of vendor allowances.

The Company offers a range of limited warranties for the durability of the finish on its prefinished products to its services provided. These limited warranties range from one to 100 years, with lifetime warranties for certain of the Company’s products. Warranty reserves are based primarily on claims experience, sales history and other considerations, including payments made to satisfy customers for claims not directly related to the warranty on the Company’s products. Warranty costs are recorded in cost of sales. The related reserve of $1.0 million at September 30, 2022, was recorded in “Other Current Liabilities” on the accompanying condensed consolidated balance sheet. The Company seeks recovery from its vendors and third-party independent contractors of installation services for certain amounts paid.

Vendor allowances mostly consist of volume rebates and are accrued as earned, with those allowances received as a result of attaining certain purchase levels accrued over the incentive period based on estimates of purchases. Volume rebates earned are initially recorded as a reduction in merchandise inventories and a subsequent reduction in cost of sales when the related product is sold. Reimbursement received for the cost of producing samples is recorded as an offset against cost of sales.

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Stockholders' Equity

9 Months Ended

Sep. 30, 2022

Stockholders' Equity [Abstract]

Stockholders' Equity

Note 3.       Stockholders’ Equity

Net (Loss) Income per Common Share

The following table sets forth the computation of basic and diluted net (loss) income per common share:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Net (Loss) Income	$	(3,774)	$	8,779	$	2,999	$	31,390
Weighted Average Common Shares Outstanding—Basic		28,668		29,082		28,859		28,984
Effect of Dilutive Securities:
Common Stock Equivalents		—		373		151		510
Weighted Average Common Shares Outstanding—Diluted		28,668		29,455		29,010		29,494
Net (Loss) Income per Common Share—Basic	$	(0.13)	$	0.30	$	0.10	$	1.08
Net (Loss) Income per Common Share—Diluted	$	(0.13)	$	0.30	$	0.10	$	1.06

The following shares have been excluded from the computation of Weighted Average Common Shares Outstanding—Diluted because the effect would be anti-dilutive:

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2022	2021	2022	2021
Stock Options	633	222	448	167
Restricted Shares	503	280	365	100

Stock Repurchase Program

During the nine months ended September 30, 2022, the Company’s board of directors raised its authorization for the repurchase of up to $50.0 million of the Company’s common stock, and the Company resumed its share repurchase program. The Company made cash payments of $7.0 million to repurchase 571,332 shares under the share repurchase authorization during the nine months ended September 30, 2022. There remains $43.0 million outstanding under the share repurchase authorization.

Outside of the share repurchase program, during the nine months ended September 30, 2022, the Company repurchased $0.9 million, or 63,261 shares, of its common stock through the net settlement of shares issued as a result of the vesting of restricted shares.

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Stock-Based Compensation

9 Months Ended

Sep. 30, 2022

Stock-Based Compensation [Abstract]

Stock-Based Compensation

Note 4.       Stock-based Compensation

The following table summarizes share activity related to employee stock options and restricted stock awards (“RSAs”):

		Restricted Stock
	Stock Options	Awards
Options Outstanding/Nonvested RSAs, December 31, 2021	625	631
Granted	175	400
Options Exercised/RSAs Released	(21)	(168)
Forfeited	(60)	(100)
Options Outstanding/Nonvested RSAs, September 30, 2022	719	763

The Company granted a target of 94,621 performance-based RSAs with a grant date fair value of $1.5 million during the nine months ended September 30, 2022 and a target of 47,768 performance-based RSAs with a grant date fair value of $1.1 million during the nine months ended September 30, 2021. The performance-based RSAs in both years were awarded to certain members of senior management in connection with the achievement of specific key financial metrics that will be measured over separate respective three-year periods and which will vest at the end of each respective three-year period if the respective performance conditions are met. In addition, the number of 2020 performance-based awards that will ultimately vest is also contingent upon the results of a relative total shareholder return multiple by the end of year three, the 2022 fiscal year. The Company assesses the probability of achieving these metrics on a quarterly basis. For these awards, the Company recognizes the fair value expense ratably over the performance and vesting period. These awards are included above in RSAs Granted.

Under the Company’s equity incentive plan, the Company’s non-employee directors are compensated with an annual RSA grant. The amount of outstanding nonvested RSAs granted to non-employee directors was 43,139 and 18,306 shares at September 30, 2022 and December 31, 2021, respectively. The Company also maintains the Outside Directors Deferral Plan under which each of the Company’s non-employee directors has the opportunity to elect annually to defer certain fees (which are payable in cash or in shares of Common Stock with a vesting period of at least one year) until departure from the board. A non-employee director may elect to defer up to 100% of his or her fees and have such fees invested in deferred stock units. Deferred stock units must be settled in common stock upon the director’s

departure from the board. There were 234,401 and 177,448 deferred stock units outstanding at September 30, 2022 and December 31, 2021, respectively.

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Credit Agreement

9 Months Ended

Sep. 30, 2022

Credit Agreement

Credit Agreement

Note 5.      Credit Agreement

The Company has a credit agreement (the “Credit Agreement”) with Bank of America, N.A. and Wells Fargo Bank, N.A. (the “Lenders”). On April 30, 2021, the Company entered into a Second Amendment to the Credit Agreement (the “Second Amendment”) with the Lenders. The execution of the Second Amendment, among other things, terminated the FILO Term Loans and converted those commitments to the Revolving Credit Facility. The total size of the Credit Agreement remained at $200 million, and the Company has an option to increase the Revolving Credit Facility to a maximum total amount of $250 million. The maturity date of the Credit Agreement was extended to April 30, 2026.

The Revolving Credit Facility is secured by security interests in the Collateral (as defined in the Credit Agreement), which includes substantially all assets of the Company including, among other things, the Company’s inventory and credit card receivables, and the Company’s East Coast distribution center located in Sandston, Virginia. Under the terms of the Credit Agreement, the Company has the ability to release the East Coast distribution center from the Collateral under certain conditions.

The Second Amendment decreased the margin for LIBOR Rate Loans (as defined in the Second Amendment) to a range of 1.25% to 1.75% over the applicable LIBOR Rate with respect to revolving loans (as defined in the Second Amendment) depending on the Company’s average daily excess borrowing availability, a decrease of 1.25% from rates prior to the Second Amendment. As previously stated, the FILO Term Loans were terminated by this Second Amendment. The amendment decreased the LIBOR Rate Floor from 1.00% to 0.25%. The Second Amendment also decreased the unused commitment fee of 0.50% per annum to 0.25% per annum on the average daily unused amount of the Revolving Credit Facility during the most recently completed calendar quarter. The weighted average interest rate applicable to the Company’s Revolving Credit Facility for the nine months ended September 30, 2022 was 4.6%.

The Credit Agreement contains a fixed charge coverage ratio covenant that becomes effective only when specified availability under the Revolving Credit Facility falls below the greater of $17.5 million or 10% of the Revolving Loan Cap (as defined in the Credit Agreement).

Except as set forth in the Second Amendment, all other terms and conditions of the Credit Agreement remain in place.

As of September 30, 2022, there was $69.0 million outstanding under the Revolving Credit Facility. The Company had $3.2 million in letters of credit which reduces its availability. As of September 30, 2022, there was $127.8 million of availability under the Revolving Credit Facility.

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Taxes

9 Months Ended

Sep. 30, 2022

Income Taxes [Abstract]

Income Taxes

Note 6.       Taxes

The Company calculates its quarterly tax provision pursuant to the guidelines in Accounting Standards Codification ("ASC") 740-270 "Income Taxes." Generally, ASC 740-270 requires companies to estimate the annual effective tax rate for current year ordinary income. The estimated annual effective tax rate represents the best estimate of the tax provision in relation to the best estimate of pre-tax ordinary income or loss. The estimated annual effective tax rate is then applied to year-to-date ordinary income or loss to calculate the year-to-date interim tax provision and is adjusted for discrete items that occur within the period.

For the three months ended September 30, 2022, the Company recognized income tax benefit of $1.0 million, which represented an effective tax rate of 20.6%. For the three months ended September 30, 2021, the Company recognized income tax expense of $3.2 million, which represented an effective tax rate of 27.0%. The lower effective tax rate in the current period primarily reflects the greater impact of permanent items on the pretax ordinary loss.

For the nine months ended September 30, 2022, the Company recognized income tax expense of $1.8 million, which represented an effective tax rate of 37.2%. For the nine months ended September 30, 2021, the Company recognized income tax expense of $10.6 million, which represented an effective tax rate of 25.3%. The higher effective tax rate in the current period primarily reflects the greater impact of permanent items on the lower pretax ordinary income.

The Company has a valuation allowance recorded against certain of its net deferred tax assets of $2.4 million as of September 30, 2022, and December 31, 2021, because the jurisdiction and nature of the assets makes realization of these deferred tax assets uncertain. The Company intends to maintain this valuation allowance on its deferred tax assets until there is sufficient evidence to support the realizability of those deferred tax assets.

In February 2022, the Company received sales tax and use tax assessments from the Commonwealth of Virginia covering part of 2014 through 2017. The Company believes there are some factual errors, is disputing this assessment, and will defend itself vigorously in this matter. Given the uncertainty of the final resolution, the Company cannot reasonably estimate the loss or range of loss, if any, that may result from this action and therefore no specific accrual has been made related to this. Any losses could, potentially, have a material adverse effect, individually or collectively, on the Company’s results of operations, financial condition and liquidity.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2022

Commitments and Contingencies [Abstract]

Commitments and Contingencies

Note 7.       Commitments and Contingencies

The following chart shows the activity related to the Balance Sheet “Accrual for Legal Matters and Settlements.” The matters themselves are described in greater detail in the paragraphs that follow the chart.

Litigation Matter Description		December 31, 2021 Accrual for Legal Matters and Settlements - Current		Accruals		Settlement Payments		Vouchers Redeemed		September 30, 2022 Accrual for Legal Matters and Settlements - Current
MDL	$	10,656	$	—	$	—	$	(1,231)	$	9,425	1
Gold		14,885		—		—		(1,670)		13,215	1
Mason		7,000		129		(7,129)		—		—
Other Matters		1,070		164		(993)		—		241
	$	33,611	$	293	$	(8,122)	$	(2,901)	$	22,881
Litigation Matter Description		December 31, 2020 Accrual for Legal Matters and Settlements - Current		Accruals		Settlement Payments		Vouchers Redeemed		September 30, 2021 Accrual for Legal Matters and Settlements - Current
MDL	$	14,000	$	—	$	—	$	(2,781)	$	11,219
Gold		16,000		—		—		(346)		15,654
Mason		—		7,000		—		—		7,000
Other Matters		398		733		(101)		—		1,030
	$	30,398	$	7,733	$	(101)	$	(3,127)	$	34,903

1 The remaining accrual will be fulfilled by redeeming vouchers as discussed below.

Employment Cases

Mason Lawsuit

In August 2017, Ashleigh Mason, Dan Morse, Ryan Carroll and Osagie Ehigie filed a purported collective and class action lawsuit in the United States District Court for the Eastern District of New York on behalf of all current and

former store managers, store managers in training, and similarly situated current and former employees (collectively, the “Mason Putative Class Employees”) alleging that the Company violated the Fair Labor Standards Act (“FLSA”) and New York Labor Law (“NYLL”) by classifying the Mason Putative Class Employees as exempt (the “Mason matter”). The alleged violations include failure to pay for overtime work.

In April 2021, the Company entered into a Memorandum of Understanding (“Mason MOU”) with counsel for the lead plaintiffs in the Mason matter. Under the terms of the Mason MOU, the Company agreed to pay up to $7.0 million to settle the claims asserted in the Mason matter.

In the first quarter of 2022, the court gave final approval to the settlement. As a result of the final approval, the Company paid $7.0 million, plus an additional $0.1 million in taxes, in the second quarter of 2022 to a court appointed administrator who handles distribution to the plaintiffs. Any checks issued to the Collective Members and the New York Non Opt-Ins which are not cashed by March 1, 2023, will revert to the Company.

Savidis Lawsuit

In April 2020, LL Flooring was served with a lawsuit filed by Tanya Savidis, on behalf of herself and all others similarly situated (collectively, the “Savidis Plaintiffs”). Ms. Savidis filed a purported class action lawsuit in the Superior Court of California, County of Alameda on March 6, 2020, on behalf of all current and former LL Flooring employees employed as non-exempt employees. The complaint alleges violation of the California Labor Code including, among other items, failure to pay minimum wages and overtime wages, failure to provide meal periods, failure to permit rest breaks, failure to reimburse business expenses, failure to provide accurate wage statements, failure to pay all wages due upon separation within the required time, and engaging in unfair business practices (the “Savidis matter”).

In December 2020, the Company began contacting individuals who constitute the Savidis Plaintiffs and offered individual settlements in satisfaction of their claims. In April 2021, the Company entered into a Memorandum of Understanding (“Savidis MOU”) with counsel for the lead plaintiffs in the Savidis matter. Under the terms of the Savidis MOU, the Company agreed to pay $0.9 million reduced by a credit of $0.1 million for amounts already paid to the individuals who accepted the Company’s prior settlement offer. In January 2022, the Court provided final approval of the settlement. In April 2022, the Company paid $0.8 million to a court appointed administrator who handles the distribution to the class members who did not opt out of participating in the settlement. Settlement checks were mailed to class members in May 2022, and the Company expects the Court to dismiss the matter during the fourth quarter of 2022.

Antidumping and Countervailing Duties Investigation

The Company is subject to antidumping (“AD”) and countervailing duties (“CVD”) for certain imports of multilayered wood flooring from China. The Company’s multilayered wood flooring imports from China accounted for approximately 3% of its flooring purchases in 2021.

At the time of import, the Company makes deposits at the then prevailing rate. This rate is subsequently reviewed to establish the final rate. When rates are declared final by the United States Department of Commerce (“DOC”), the Company accrues a receivable or payable depending on where that final rate compares to the deposits it has made. The Company and/or the domestic manufacturers can appeal the final rate for any period. Because of the length of time for finalization of rates as well as appeals, any subsequent adjustment of AD and CVD rates typically flows through a period different from those in which the inventory was originally purchased and/or sold.

Results by period for the Company are shown below. The “Total AD/CVD Receivable/Liability Balance as of September 30, 2022” represents the amount the Company would receive or pay (net of any collections or payments) as the result of subsequent adjustment to rates whether due to finalization by the DOC or because of action of a court based on appeals by various parties. It does not include any initial amounts paid for AD or CVD in the current period at the in-effect rate at that time.

The Company recorded net interest expense related to antidumping of $0.05 million for the nine months ended September 30, 2022 compared to net interest income of $1.8 million for the nine months ended September 30, 2021. The

amounts for both years are included in “Other Expense” on the condensed consolidated statements of income. The estimated associated interest payable and receivable for each period is not included in the table below but is included in the same financial statement line item on the Company’s condensed consolidated balance sheet as the associated liability and receivable balance for each period.

Antidumping
Review Period1	Period Covered	Rates at which Company Deposited	Final Rates		Other Current Assets		Other Assets		Other Current Liabilities		Other Long-Term Liabilities
1	May 2011 - Nov 2012	6.78% / 3.3%	0%2	$	1,526	$	-	$	-	$	-
2	Dec 2012 - Nov 2013	3.30%	3.92%3		-		-		(205)		-
3	Dec 2013 - Nov 2014	3.3% / 5.92%	0%4		1,821		-		-		-
6	Dec 2016 - Nov 2017	17.37% / 0.00%	42.57% / 0.0%5		503		-		-		(1,464)
7	Dec 2017 - Nov 2018	0.00%	0%6		-		-		-		-
8	Dec 2018 - Nov 2019	0.00%	0%7		-		-		-		-
9	Dec 2019 - Nov 2020	0.00%	39.27%8		-		-		-		(1,137)
Total AD Receivable/Liability Balance as of September 30, 2022				$	3,850	$	-	$	(205)	$	(2,601)
Countervailing
Review Period	Period Covered	Rates at which Company Deposited	Final Rates		Other Current Assets		Other Assets		Other Current Liabilities		Other Long-Term Liabilities
1 & 2	April 2011 - Dec 2012	1.50%	0.83% / 0.99%	$	-	$	243	$	-	$	-
3	Jan 2013 - Dec 2013	1.50%	1.38%		-		37		-		-
4	Jan 2014 - Dec 2014	1.50% / 0.83%	1.06%		-		16		-		-
5	Jan 2015 - Dec 2015	0.83% / 0.99%	0.11% / 0.85%9		73		-		-		-
6	Jan 2016 - Dec 2016	0.99% / 1.38%	3.10% / 2.96%10		-		-		(38)		-
7	Jan 2017 - Dec 2017	1.38% / 1.06%	20.75%11		-		-		-		(1,651)
8	Jan 2018 - Dec 2018	1.06%	6.13%12		-		-		-		(287)
9	Jan 2019 - Dec 2019	0.00% / 0.85% / 2.96%	3.36% / 9.85%13		-		-		-		(81)
Total CVD Receivable/Liability Balance as of September 30, 2022				$	73	$	296	$	(38)	$	(2,019)

1 The fourth and fifth annual antidumping review periods have been settled and are no longer included on the chart above.

2 In the first quarter of 2022, pursuant to the Court of International Trade (“CIT”) order on appeal the DOC recalculated the final rates for the first annual review period at 0.0%. As a result, the Company recorded an additional $0.2 million receivable with a corresponding reduction of cost of sales during the first quarter of 2022.

3 In the second quarter of 2020, on appeal the DOC offered to reduce the rate for the second annual review period to 3.92% from 13.74%. The reduced rate was accepted by the CIT in the fourth quarter of 2020, and the Company reversed $3.9 million of its $4.1 million liability, with a corresponding reduction of cost of sales.

4 In the third quarter of 2020, on appeal the DOC offered to reduce the rate for the third annual review period to 0.0% from 17.37%. The reduced rate was accepted by the CIT in the first quarter of 2021, and the Company reversed the entire $4.7 million liability, with a corresponding reduction of cost of sales, and recorded a $1.8 million receivable and favorable adjustment to cost of sales for deposits made at previous preliminary rates.

5 In the third quarter of 2019, the DOC issued the final rates for the sixth annual review period at 42.57% and 0% depending on the vendor. As a result, the Company recorded a liability of $0.8 million with a corresponding reduction of cost of sales during the year ended December 31, 2019. The Company received payments during 2019 for its vendor with a final rate of 0.0% and the remaining balance of $0.5 million as of June 30, 2021 was included in other current assets on the condensed consolidated balance sheet. The vendors with a final rate of 42.57% are under appeal and the balance of $1.5 million as of September 30, 2022 was included in other long-term liabilities on the condensed consolidated balance sheet.

6 In the fourth quarter of 2021, the DOC issued a final rate of 0.0% for the seventh annual review period. The final rate is currently under appeal.

7 In the fourth quarter of 2021, the DOC issued a final rate of 0.0% for the eighth annual review period. The final rate is currently under appeal.

8 In the second quarter of 2022, the DOC issued the final rate for the ninth annual review period at 39.27%. As a result, the Company recorded a $1.1 million liability with a corresponding increase in cost of sales during the second quarter of 2022. The final rate is currently under appeal.

9 In the second quarter of 2018, the DOC issued the final rates for the fifth annual review period at 0.11% and 0.85% depending on the vendor. As a result, in the second quarter of 2018, the Company recorded a receivable of $0.1 million for deposits made at previous preliminary rates, with a corresponding reduction of cost of sales.

10 In the third quarter of 2019, the DOC issued the final rates for the sixth annual review period at 3.1% and 2.96% depending on the vendor. As a result, the Company recorded a liability of $0.4 million with a corresponding reduction of cost of sales during the year ended December 31, 2019. As of September 30, 2022, the remaining liability balance was $38.3 thousand.

11 In the fourth quarter of 2020, the DOC issued the final rate 20.75% for the seventh annual review period. As a result, the Company recorded a liability of $1.7 million with a corresponding increase to cost of sales during the year ended December 31, 2020. The final rate is currently under appeal.

12 In October 2021, the DOC issued the final rate of 6.13% for the eighth annual review period. As a result, in October 2021 the Company recorded a $0.3 million liability with a corresponding increase in cost of sales. The final rate is currently under appeal.

13 In the second quarter of 2022, the DOC issued the final rates for the ninth annual review period at 3.36% and 9.85% depending on the vendor. As a result, the Company recorded a liability of $0.1 million with a corresponding increase in cost of sales in the second quarter of 2022. The final rate is currently under appeal.

Litigation Relating to Bamboo Flooring

In 2019, the Company finalized a settlement agreement to resolve claims related to Morning Star bamboo flooring (the “Gold Litigation”). Under the terms of the settlement agreement, the Company contributed $14.0 million in cash (the “Gold Cash Payment”) and provided $16.0 million in store-credit vouchers, for an aggregate settlement of up to $30.0 million. Cash and vouchers, which generally have a three-year life, were distributed by the administrator in 2021. The Company will monitor and evaluate the redemption of vouchers on a quarterly basis. The Company’s current expectation is that recipients bargained for this compensation as part of the settlement and therefore will redeem their voucher for product as intended.

As of September 30, 2022, the remaining accrual related to these matters was $13.2 million for vouchers. As $1.7 million of vouchers were redeemed during the first nine months of 2022, the Company relieved the accrual for legal matters and settlements for the full amount, relieved inventory at its cost, and the remaining amount -- the gross margin for the items sold of $0.6 million was recorded as a reduction in “Selling, General and Administrative Expenses” (“SG&A”) on the condensed consolidated statement of operations. The Company included those amounts in “Gold” in the chart above.

Litigation Related to Formaldehyde-Abrasion MDLs

In 2018, the Company entered into a settlement agreement to resolve claims related to Chinese-manufactured laminate products (the “Formaldehyde-Abrasion MDL”). Under the terms of the settlement agreement, the Company funded $22.0 million in cash and provided $14.0 million in store-credit vouchers for an aggregate settlement amount of $36.0 million to settle claims. Cash and vouchers, which generally have a three-year life, were distributed by the administrator in the fourth quarter of 2020. The Company will monitor and evaluate the redemption of vouchers on a quarterly basis. The Company’s current expectation is that recipients bargained for this compensation as part of the settlement and therefore will redeem their voucher for product as intended.

As of September 30, 2022, the remaining accrual related to these matters was $9.4 million for vouchers. As $1.2 million of vouchers were redeemed during the first nine months of 2022, the Company relieved the accrual for legal matters and settlements for the full amount, relieved inventory at its cost, and the remaining amount -- the gross margin for the items sold of $0.5 million was recorded as a reduction in “Selling, General and Administrative Expenses” (“SG&A”) on the condensed consolidated statement of operations. The Company included those amounts in “MDL” in the chart above.

Section 301 Tariffs

Since September 2018, pursuant to Section 301 of the Trade Act of 1974, the United States Trade Representative (“USTR”) has imposed tariffs on certain goods imported from China over four tranches (“Lists”).

Products imported by the Company fall within Lists 3 and 4a for which tariffs range from 10% to 25%. On September 10, 2020 several importers of vinyl flooring filed a lawsuit with the Court of International Trade (“CIT”) challenging the Section 301 tariffs under Lists 3 and 4a. The Company has also filed a companion case at the CIT challenging the legitimacy of the USTR’s actions. On April 1, 2022 the CIT remanded the matter back to the USTR to explain its process for considering objections to the 301 tariffs and to reply to the CIT by June 30, 2022. Based on a USTR request, this deadline was extended to August 1, 2022. On August 1, 2022 the USTR filed its remand comments as well as a request to supplement the record. On September 14, 2022, the Company filed their response to the USTR’s August 1, 2022 remand determination pursuant to the CIT April 1, 2022 order. The USTR has until October 28, 2022 to address the Company’s response. The ruling will rest with the CIT upon review of the USTR’s remand. The Company is unable to predict the timing or outcome of the ruling by the USTR and/or CIT. If these appeals are successful, the Company should qualify for refunds on these Section 301 tariffs.

Other Matters

The Company is also, from time to time, subject to claims and disputes arising in the normal course of business. In the opinion of management, while the outcome of any such claims and disputes cannot be predicted with certainty, its ultimate liability in connection with these matters is not expected to have a material adverse effect on the Company’s results of operations, financial position or liquidity.

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2022

Summary of Significant Accounting Policies [Abstract]

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The carrying amounts of financial instruments such as cash and cash equivalents, accounts payable and other liabilities approximates fair value because of the short-term nature of these items. The carrying value of the revolving credit facility approximates fair value due to the variable rate of interest.

Merchandise Inventories

Merchandise Inventories

The Company values merchandise inventories at the lower of cost or net realizable value. The method by which amounts are removed from inventory is weighted average cost. All of the hardwood flooring purchased from vendors is either prefinished or unfinished, and in immediate saleable form. The Company relies on a select group of international and domestic suppliers to provide imported flooring products that meet the Company’s specifications. Both international and domestic inventory is subject to increased cost as a result of inflation. The Company is subject to risks associated with obtaining products from abroad, including disruptions or delays in production, shipments, supply chain, delivery or processing, including due to the COVID-19 pandemic.

Included in merchandise inventories are tariff-related costs, including Section 301 tariffs on certain products imported from China in recent years. The Company has deployed pricing, promotion, and alternative country sourcing strategies to mitigate tariff-related costs and improve gross margin. The Company continues to monitor the market to inform its pricing and promotional strategies.

Recognition of Net Sales

Recognition of Net Sales

The Company generates revenues primarily by retailing merchandise in the form of hard-surface flooring and accessories. Additionally, the Company expands its revenues by offering services to deliver and/or install this merchandise for its customers; it considers these services to be separate performance obligations. The separate performance obligations are detailed on the customer’s invoice(s) and the customer often purchases flooring merchandise without purchasing installation or delivery services. Merchandise and services sales occur through the Company’s network of 439 stores across the U.S., a customer contact center, and its digital platform, LLFlooring.com. The Company’s agreements with its customers are of short duration (less than a year) and as such the Company has elected not to disclose revenue for partially satisfied contracts that will be completed in the days following the end of a period as permitted by GAAP. The Company reports its revenues exclusive of sales taxes collected from customers and remitted to governmental taxing authorities, consistent with past practice.

Revenue is based on consideration specified in a contract with a customer and excludes any sales incentives from vendors and amounts collected on behalf of third parties. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product to a customer or performing services for a customer. Revenues from installation and freight services are recognized when the delivery is made or the installation is complete, which approximates the recognition of revenue over time due to the short duration of service provided. The price of the Company’s merchandise and services is specified in the respective contract and detailed on the invoice agreed to with the customer including any discounts. The Company generally requires customers to pay a deposit, equal to approximately half of the retail sales value, when ordering merchandise not regularly carried in a given location or not currently in stock. In addition, the Company generally does not extend credit to its customers with payment due in full at the time the customer takes possession of merchandise or when the service is provided. Customer payments and deposits received in advance of the customer taking possession of the merchandise or receiving the services are recorded as deferred revenues in the accompanying condensed consolidated balance sheet caption “Customer Deposits and Store Credits.”

The following table shows the activity in this account for the periods noted:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Customer Deposits and Store Credits, Beginning Balance	$	(58,427)	$	(67,731)	$	(67,063)	$	(61,389)
New Deposits		(276,235)		(304,604)		(884,551)		(935,576)
Recognition of Revenue		268,821		282,229		846,810		867,063
Sales Tax included in Customer Deposits		15,980		16,936		51,152		52,708
Other		984		2,949		4,775		6,973
Customer Deposits and Store Credits, Ending Balance	$	(48,877)	$	(70,221)	$	(48,877)	$	(70,221)

Subject to limitations under the Company’s policy, return of unopened merchandise is accepted for 90 days, subject to the discretion of the store manager. The amount of revenue recognized for flooring merchandise is adjusted for expected returns, which are estimated based on the Company’s historical data, current sales levels, and forecasted economic trends. The Company uses the expected value method to estimate returns because it has a large number of contracts with similar characteristics. The Company reduces revenue by the amount of expected returns and records it within “Other Current Liabilities” on the condensed consolidated balance sheet. In addition, the Company recognizes a related asset for the right to recover returned merchandise and records it in the “Other Current Assets” caption of the accompanying condensed consolidated balance sheet. This amount was $1.3 million at September 30, 2022. The Company recognizes sales commissions as incurred since the amortization period is less than one year.

In total, the Company offers hundreds of different flooring products; however, no single flooring product represented a significant portion of its sales mix. By major product category, the Company’s sales mix was as follows:

	Three Months Ended September 30,								Nine Months Ended September 30,
	2022				2021				2022				2021
Manufactured Products1	$	128,213	48	%	$	129,543	46	%	$	405,654	48	%	$	401,373	46	%
Solid and Engineered Hardwood		62,838	23	%		69,090	24	%		203,785	24	%		220,887	26	%
Installation and Delivery Services		39,617	15	%		41,427	15	%		115,766	14	%		116,675	13	%
Moldings and Accessories and Other		38,153	14	%		42,169	15	%		121,605	14	%		128,128	15	%
Total	$	268,821	100	%	$	282,229	100	%	$	846,810	100	%	$	867,063	100	%

¹     Includes engineered vinyl plank, laminate, vinyl and tile.

Cost of Sales

Cost of Sales

Cost of sales includes the cost of products sold, including tariffs, the cost of installation services, and transportation costs from vendors to the Company’s distribution centers or store locations. It also includes transportation costs from distribution centers to store locations, transportation costs for the delivery of products from store locations to customers, certain costs of quality control procedures, warranty and customer satisfaction costs, inventory adjustments including obsolescence and shrinkage, and costs to produce and ship samples, which are net of vendor allowances.

The Company offers a range of limited warranties for the durability of the finish on its prefinished products to its services provided. These limited warranties range from one to 100 years, with lifetime warranties for certain of the Company’s products. Warranty reserves are based primarily on claims experience, sales history and other considerations, including payments made to satisfy customers for claims not directly related to the warranty on the Company’s products. Warranty costs are recorded in cost of sales. The related reserve of $1.0 million at September 30, 2022, was recorded in “Other Current Liabilities” on the accompanying condensed consolidated balance sheet. The Company seeks recovery from its vendors and third-party independent contractors of installation services for certain amounts paid.

Vendor allowances mostly consist of volume rebates and are accrued as earned, with those allowances received as a result of attaining certain purchase levels accrued over the incentive period based on estimates of purchases. Volume rebates earned are initially recorded as a reduction in merchandise inventories and a subsequent reduction in cost of sales when the related product is sold. Reimbursement received for the cost of producing samples is recorded as an offset against cost of sales.

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Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2022

Summary of Significant Accounting Policies [Abstract]

Schedule of Customer Deposits and Store Credits

The following table shows the activity in this account for the periods noted:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Customer Deposits and Store Credits, Beginning Balance	$	(58,427)	$	(67,731)	$	(67,063)	$	(61,389)
New Deposits		(276,235)		(304,604)		(884,551)		(935,576)
Recognition of Revenue		268,821		282,229		846,810		867,063
Sales Tax included in Customer Deposits		15,980		16,936		51,152		52,708
Other		984		2,949		4,775		6,973
Customer Deposits and Store Credits, Ending Balance	$	(48,877)	$	(70,221)	$	(48,877)	$	(70,221)

Sales Mix by Major Product

In total, the Company offers hundreds of different flooring products; however, no single flooring product represented a significant portion of its sales mix. By major product category, the Company’s sales mix was as follows:

	Three Months Ended September 30,								Nine Months Ended September 30,
	2022				2021				2022				2021
Manufactured Products1	$	128,213	48	%	$	129,543	46	%	$	405,654	48	%	$	401,373	46	%
Solid and Engineered Hardwood		62,838	23	%		69,090	24	%		203,785	24	%		220,887	26	%
Installation and Delivery Services		39,617	15	%		41,427	15	%		115,766	14	%		116,675	13	%
Moldings and Accessories and Other		38,153	14	%		42,169	15	%		121,605	14	%		128,128	15	%
Total	$	268,821	100	%	$	282,229	100	%	$	846,810	100	%	$	867,063	100	%

¹     Includes engineered vinyl plank, laminate, vinyl and tile.

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Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2022

Stockholders' Equity [Abstract]

Computation of Basic and Diluted Net Income Loss Per Common Share

The following table sets forth the computation of basic and diluted net (loss) income per common share:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Net (Loss) Income	$	(3,774)	$	8,779	$	2,999	$	31,390
Weighted Average Common Shares Outstanding—Basic		28,668		29,082		28,859		28,984
Effect of Dilutive Securities:
Common Stock Equivalents		—		373		151		510
Weighted Average Common Shares Outstanding—Diluted		28,668		29,455		29,010		29,494
Net (Loss) Income per Common Share—Basic	$	(0.13)	$	0.30	$	0.10	$	1.08
Net (Loss) Income per Common Share—Diluted	$	(0.13)	$	0.30	$	0.10	$	1.06

Anti-Dilutive Securities Excluded from Computation of Weighted Average Common Shares Outstanding Diluted

The following shares have been excluded from the computation of Weighted Average Common Shares Outstanding—Diluted because the effect would be anti-dilutive:

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2022	2021	2022	2021
Stock Options	633	222	448	167
Restricted Shares	503	280	365	100

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Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2022

Stock-Based Compensation [Abstract]

Summary Of Activity Related To Stock Options And Restricted Stock Awards

The following table summarizes share activity related to employee stock options and restricted stock awards (“RSAs”):

		Restricted Stock
	Stock Options	Awards
Options Outstanding/Nonvested RSAs, December 31, 2021	625	631
Granted	175	400
Options Exercised/RSAs Released	(21)	(168)
Forfeited	(60)	(100)
Options Outstanding/Nonvested RSAs, September 30, 2022	719	763

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Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2022

Commitments and Contingencies [Abstract]

Schedule of activity related to the Balance Sheet Accrual for Legal Matters and Settlements

Litigation Matter Description		December 31, 2021 Accrual for Legal Matters and Settlements - Current		Accruals		Settlement Payments		Vouchers Redeemed		September 30, 2022 Accrual for Legal Matters and Settlements - Current
MDL	$	10,656	$	—	$	—	$	(1,231)	$	9,425	1
Gold		14,885		—		—		(1,670)		13,215	1
Mason		7,000		129		(7,129)		—		—
Other Matters		1,070		164		(993)		—		241
	$	33,611	$	293	$	(8,122)	$	(2,901)	$	22,881
Litigation Matter Description		December 31, 2020 Accrual for Legal Matters and Settlements - Current		Accruals		Settlement Payments		Vouchers Redeemed		September 30, 2021 Accrual for Legal Matters and Settlements - Current
MDL	$	14,000	$	—	$	—	$	(2,781)	$	11,219
Gold		16,000		—		—		(346)		15,654
Mason		—		7,000		—		—		7,000
Other Matters		398		733		(101)		—		1,030
	$	30,398	$	7,733	$	(101)	$	(3,127)	$	34,903

1 The remaining accrual will be fulfilled by redeeming vouchers as discussed below.

Schedule of Other Commitments

Antidumping
Review Period1	Period Covered	Rates at which Company Deposited	Final Rates		Other Current Assets		Other Assets		Other Current Liabilities		Other Long-Term Liabilities
1	May 2011 - Nov 2012	6.78% / 3.3%	0%2	$	1,526	$	-	$	-	$	-
2	Dec 2012 - Nov 2013	3.30%	3.92%3		-		-		(205)		-
3	Dec 2013 - Nov 2014	3.3% / 5.92%	0%4		1,821		-		-		-
6	Dec 2016 - Nov 2017	17.37% / 0.00%	42.57% / 0.0%5		503		-		-		(1,464)
7	Dec 2017 - Nov 2018	0.00%	0%6		-		-		-		-
8	Dec 2018 - Nov 2019	0.00%	0%7		-		-		-		-
9	Dec 2019 - Nov 2020	0.00%	39.27%8		-		-		-		(1,137)
Total AD Receivable/Liability Balance as of September 30, 2022				$	3,850	$	-	$	(205)	$	(2,601)
Countervailing
Review Period	Period Covered	Rates at which Company Deposited	Final Rates		Other Current Assets		Other Assets		Other Current Liabilities		Other Long-Term Liabilities
1 & 2	April 2011 - Dec 2012	1.50%	0.83% / 0.99%	$	-	$	243	$	-	$	-
3	Jan 2013 - Dec 2013	1.50%	1.38%		-		37		-		-
4	Jan 2014 - Dec 2014	1.50% / 0.83%	1.06%		-		16		-		-
5	Jan 2015 - Dec 2015	0.83% / 0.99%	0.11% / 0.85%9		73		-		-		-
6	Jan 2016 - Dec 2016	0.99% / 1.38%	3.10% / 2.96%10		-		-		(38)		-
7	Jan 2017 - Dec 2017	1.38% / 1.06%	20.75%11		-		-		-		(1,651)
8	Jan 2018 - Dec 2018	1.06%	6.13%12		-		-		-		(287)
9	Jan 2019 - Dec 2019	0.00% / 0.85% / 2.96%	3.36% / 9.85%13		-		-		-		(81)
Total CVD Receivable/Liability Balance as of September 30, 2022				$	73	$	296	$	(38)	$	(2,019)

1 The fourth and fifth annual antidumping review periods have been settled and are no longer included on the chart above.

2 In the first quarter of 2022, pursuant to the Court of International Trade (“CIT”) order on appeal the DOC recalculated the final rates for the first annual review period at 0.0%. As a result, the Company recorded an additional $0.2 million receivable with a corresponding reduction of cost of sales during the first quarter of 2022.

3 In the second quarter of 2020, on appeal the DOC offered to reduce the rate for the second annual review period to 3.92% from 13.74%. The reduced rate was accepted by the CIT in the fourth quarter of 2020, and the Company reversed $3.9 million of its $4.1 million liability, with a corresponding reduction of cost of sales.

4 In the third quarter of 2020, on appeal the DOC offered to reduce the rate for the third annual review period to 0.0% from 17.37%. The reduced rate was accepted by the CIT in the first quarter of 2021, and the Company reversed the entire $4.7 million liability, with a corresponding reduction of cost of sales, and recorded a $1.8 million receivable and favorable adjustment to cost of sales for deposits made at previous preliminary rates.

5 In the third quarter of 2019, the DOC issued the final rates for the sixth annual review period at 42.57% and 0% depending on the vendor. As a result, the Company recorded a liability of $0.8 million with a corresponding reduction of cost of sales during the year ended December 31, 2019. The Company received payments during 2019 for its vendor with a final rate of 0.0% and the remaining balance of $0.5 million as of June 30, 2021 was included in other current assets on the condensed consolidated balance sheet. The vendors with a final rate of 42.57% are under appeal and the balance of $1.5 million as of September 30, 2022 was included in other long-term liabilities on the condensed consolidated balance sheet.

6 In the fourth quarter of 2021, the DOC issued a final rate of 0.0% for the seventh annual review period. The final rate is currently under appeal.

7 In the fourth quarter of 2021, the DOC issued a final rate of 0.0% for the eighth annual review period. The final rate is currently under appeal.

8 In the second quarter of 2022, the DOC issued the final rate for the ninth annual review period at 39.27%. As a result, the Company recorded a $1.1 million liability with a corresponding increase in cost of sales during the second quarter of 2022. The final rate is currently under appeal.

9 In the second quarter of 2018, the DOC issued the final rates for the fifth annual review period at 0.11% and 0.85% depending on the vendor. As a result, in the second quarter of 2018, the Company recorded a receivable of $0.1 million for deposits made at previous preliminary rates, with a corresponding reduction of cost of sales.

10 In the third quarter of 2019, the DOC issued the final rates for the sixth annual review period at 3.1% and 2.96% depending on the vendor. As a result, the Company recorded a liability of $0.4 million with a corresponding reduction of cost of sales during the year ended December 31, 2019. As of September 30, 2022, the remaining liability balance was $38.3 thousand.

11 In the fourth quarter of 2020, the DOC issued the final rate 20.75% for the seventh annual review period. As a result, the Company recorded a liability of $1.7 million with a corresponding increase to cost of sales during the year ended December 31, 2020. The final rate is currently under appeal.

12 In October 2021, the DOC issued the final rate of 6.13% for the eighth annual review period. As a result, in October 2021 the Company recorded a $0.3 million liability with a corresponding increase in cost of sales. The final rate is currently under appeal.

13 In the second quarter of 2022, the DOC issued the final rates for the ninth annual review period at 3.36% and 9.85% depending on the vendor. As a result, the Company recorded a liability of $0.1 million with a corresponding increase in cost of sales in the second quarter of 2022. The final rate is currently under appeal.

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Basis of Presentation (Narrative) (Details)	Sep. 30, 2022 store state
Basis of Presentation [Abstract]
Number of States in which Entity Operates | state	47
Number of Stores | store	439

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Summary of Significant Accounting Policies (Narrative) (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2022 USD ($) store state	Dec. 31, 2021 USD ($)
Organization And Business Operations [Line Items]
Number of states in which stores operates | state	47
Number of stores | store	439
Cash and Cash Equivalents	$ 6,051	$ 85,189
Asset for right to recover returned merchandise	$ 1,300
Minimum years of product warranty	1 year
Maximum years of product warranty	100 years
Product warranty reserve	$ 1,000
Deferred Income Tax Assets, Net	$ 11,285	$ 11,336
U.S.
Organization And Business Operations [Line Items]
Number of stores | store	439

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Summary of Significant Accounting Policies (Schedule of Deferred Revenues) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Customer Deposits and Store Credits, Beginning Balance			$ (67,063,000)
Customer Deposits and Store Credits, Beginning Balance	$ (58,427,000)	$ (67,731,000)	(67,063,000)	$ (61,389,000)
New Deposits	(276,235,000)	(304,604,000)	(884,551,000)	(935,576,000)
Recognition of Revenue	268,821,000	282,229,000	846,810,000	867,063,000
Sales Tax included in Customer Deposits	15,980,000	16,936,000	51,152,000	52,708,000
Other	984,000	2,949,000	4,775,000	6,973,000
Customer Deposits and Store Credits, Ending Balance	(48,877,000)		(48,877,000)
Customer Deposits and Store Credits, Ending Balance	(48,877,000)	(70,221,000)	(48,877,000)	(70,221,000)
Net Services Sales
Recognition of Revenue	$ 39,617,000	$ 41,427,000	$ 115,766,000	$ 116,675,000

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Summary of Significant Accounting Policies (Sales Mix by Major Product) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Product Information [Line Items]
Net Sales	$ 268,821,000	$ 282,229,000	$ 846,810,000	$ 867,063,000
Sales Revenue, Product Line [Member] | Product Concentration Risk [Member]
Product Information [Line Items]
Net Sales	$ 268,821,000	$ 282,229,000	$ 846,810,000	$ 867,063,000
Percent	100.00%	100.00%	100.00%	100.00%
Product [Member]
Product Information [Line Items]
Net Sales	$ 229,204,000	$ 240,802,000	$ 731,044,000	$ 750,388,000
Manufactured Products | Sales Revenue, Product Line [Member] | Product Concentration Risk [Member]
Product Information [Line Items]
Net Sales	$ 128,213,000	$ 129,543,000	$ 405,654,000	$ 401,373,000
Percent	48.00%	46.00%	48.00%	46.00%
Solid and Engineered Hardwood [Member] | Sales Revenue, Product Line [Member] | Product Concentration Risk [Member]
Product Information [Line Items]
Net Sales	$ 62,838,000	$ 69,090,000	$ 203,785,000	$ 220,887,000
Percent	23.00%	24.00%	24.00%	26.00%
Moldings and Accessories [Member] | Sales Revenue, Product Line [Member] | Product Concentration Risk [Member]
Product Information [Line Items]
Net Sales	$ 38,153,000	$ 42,169,000	$ 121,605,000	$ 128,128,000
Percent	14.00%	15.00%	14.00%	15.00%
Installation and Delivery Services | Sales Revenue, Product Line [Member] | Product Concentration Risk [Member]
Product Information [Line Items]
Net Sales	$ 39,617,000	$ 41,427,000	$ 115,766,000	$ 116,675,000
Percent	15.00%	15.00%	14.00%	13.00%

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Stockholders' Equity (Computation of Basic and Diluted Net Income Loss Per Common Share) (Details) - USD ($) $ / shares in Units, shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Stockholders' Equity [Abstract]
Net Income (Loss)	$ (3,774,000)	$ 8,779,000	$ 2,999,000	$ 31,390,000
Weighted Average Common Shares Outstanding-Basic	28,668	29,082	28,859	28,984
Effect of Dilutive Securities:
Common Stock Equivalents		373	151	510
Weighted Average Common Shares Outstanding-Diluted	28,668	29,455	29,010	29,494
Net Income per Common Share-Basic	$ (0.13)	$ 0.30	$ 0.10	$ 1.08
Net Income per Common Share-Diluted	$ (0.13)	$ 0.30	$ 0.10	$ 1.06

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Stockholders' Equity (Anti-Dilutive Securities Excluded from Computation of Weighted Average Common Shares Outstanding-Diluted) (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Stock Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from computation of earning per share	633	222	448	167
Restricted Shares [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from computation of earning per share	503	280	365	100

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Stockholders' Equity (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2022	Sep. 30, 2021	Feb. 28, 2022
Stock Repurchase Programs [Line Items]
Payments for repurchase of common stock		$ 7,947	$ 2,101
Stock Repurchase Program [Member]
Stock Repurchase Programs [Line Items]
Stock repurchase program, authorized amount				$ 50,000
Common stock repurchased, remaining authorized amount	$ 43,000	43,000
Payments for repurchase of common stock	$ 7,000
Shares repurchased	571,332
Outside of the Share Repurchase Program [Member]
Stock Repurchase Programs [Line Items]
Payments for repurchase of common stock		$ 900
Shares repurchased		63,261

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Stock Based Compensation (Narrative) (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Deferred stock units outstanding	234,401		177,448
Non Employee Director [Member]
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Deferred percentage of director fees invested in deferred stock units	100.00%
Shares outstanding	43,139		18,306
Vesting period of grants	1 year
Restricted Shares [Member]
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Shares outstanding	763,000		631,000
Awards granted	400,000
Forfeited	100,000
Performance-Base Restricted Stock Awards [Member]
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Weighted average period of recognition	3 years
Awards granted	94,621	47,768
Grant date fair value of awards	$ 1.5	$ 1.1
Vesting period of grants	3 years
Performance-Base Restricted Stock Awards [Member] | Management [Member]
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Share-based compensation terms	The performance-based RSAs in both years were awarded to certain members of senior management in connection with the achievement of specific key financial metrics that will be measured over separate respective three-year periods and which will vest at the end of each respective three-year period if the respective performance conditions are met. In addition, the number of 2020 performance-based awards that will ultimately vest is also contingent upon the results of a relative total shareholder return multiple by the end of year three, the 2022 fiscal year. The Company assesses the probability of achieving these metrics on a quarterly basis.

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Stock-Based Compensation (Summary of Activity Related to Stock Options) (Details) shares in Thousands	9 Months Ended
	Sep. 30, 2022 shares
Stock Option [Member]
Shares
Beginning Balance	625
Granted	175
Exercised	(21)
Forfeited	(60)
Ending Balance	719
Restricted Shares [Member]
Shares
Beginning Balance	631
Granted	400
Released	(168)
Forfeited	(100)
Ending Balance	763

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Credit Agreement (Narrative) (Details) - USD ($) $ in Thousands	4 Months Ended	9 Months Ended		17 Months Ended
	Apr. 29, 2021	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022
Line of Credit Facility [Line Items]
Payments on Credit Agreement		$ 132,000	$ 101,000
Second Amendment
Line of Credit Facility [Line Items]
Percent Decrease in interest rate from amendment		1.25%
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Letters of credit outstanding		$ 69		$ 69
Credit facility remaining borrowing capacity		127,800		127,800
Revolving Credit Facility [Member] | Credit Agreement [Member]
Line of Credit Facility [Line Items]
Credit facility, unused capacity, commitment fee percentage	0.50%
Line of Credit Covenant Trigger		$ 17,500		$ 17,500
Line of credit covenant trigger percentage		10.00%		10.00%
Revolving Credit Facility [Member] | Second Amendment
Line of Credit Facility [Line Items]
Maximum borrowing capacity		$ 200,000		$ 200,000
Credit facility, unused capacity, commitment fee percentage				0.25%
Average interest rate		4.60%		4.60%
Credit facility maturity date		Apr. 30, 2026
Option to increase aggregate amount		$ 250,000		$ 250,000
Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | Credit Agreement [Member]
Line of Credit Facility [Line Items]
Margin (as a percent)	1.25%
Libor Floor Rate	1.00%
Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | Second Amendment
Line of Credit Facility [Line Items]
Margin (as a percent)				1.75%
Libor Floor Rate				0.25%
Letter of Credit [Member] | Credit Agreement [Member]
Line of Credit Facility [Line Items]
Letters of credit outstanding		$ 3,200		$ 3,200

XML

Taxes (Narrative) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Income Taxes [Abstract]
Effective tax rate	20.60%	27.00%	37.20%	25.30%
Valuation allowance	$ 2,400,000		$ 2,400,000		$ 2,400,000
Income Tax (Benefit) Expense	$ (982,000)	$ 3,239,000	$ 1,778,000	$ 10,618,000

XML

Commitments and Contingencies (Narrative) (Details) - USD ($)	1 Months Ended		3 Months Ended			9 Months Ended		12 Months Ended
	Apr. 30, 2022	Apr. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2019	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021	Dec. 31, 2018	Dec. 31, 2020
Loss Contingencies [Line Items]
Accrued expenses						$ 293,000	$ 7,733,000
Accrual for Legal Matters and Settlements - Current			$ 22,881,000			22,881,000		$ 33,611,000
Vouchers Accrued or (Redeemed) During Period						(2,901,000)	(3,127,000)
Gross profit			95,582,000	$ 105,201,000		306,411,000	333,523,000
Other Current Liabilities
Loss Contingencies [Line Items]
Contingent Liability			205,000			205,000
Accrual for Legal Matters and Settlements Current [Member]
Loss Contingencies [Line Items]
Accrual for Legal Matters and Settlements - Current			22,881,000	34,903,000		22,881,000	34,903,000	$ 33,611,000		$ 30,398,000
Antidumping Duties [Member]
Loss Contingencies [Line Items]
Loss Contingency Multilayered Hardwood Products Purchase Percentage								3.00%
Antidumping Duties [Member] | Other Expense [Member]
Loss Contingencies [Line Items]
Interest income						50,000.00	1,800,000
Litigation Relating to Formaldehyde Abrasion MDL's [Member]
Loss Contingencies [Line Items]
Litigation Settlement, Amount									$ 36,000,000.0
Vouchers Accrued or (Redeemed) During Period						(1,231,000)	(2,781,000)
Litigation Relating to Formaldehyde Abrasion MDL's [Member] | Accrual for Legal Matters and Settlements Current [Member]
Loss Contingencies [Line Items]
Accrual for Legal Matters and Settlements - Current			9,425,000	11,219,000		9,425,000	11,219,000	$ 10,656,000		$ 14,000,000
Litigation Relating to Formaldehyde Abrasion MDL's [Member] | Selling, General and Administrative Expenses [Member]
Loss Contingencies [Line Items]
Gross profit						500,000
Litigation Relating to Bamboo Flooring
Loss Contingencies [Line Items]
Litigation Settlement, Amount					$ 30,000,000.0
Vouchers Accrued or (Redeemed) During Period						(1,700,000)
Litigation Relating to Bamboo Flooring | Other Current Liabilities
Loss Contingencies [Line Items]
Accrual for Legal Matters and Settlements - Current			13,200,000			13,200,000
Litigation Relating to Bamboo Flooring | Selling, General and Administrative Expenses [Member]
Loss Contingencies [Line Items]
Payment of litigation settlement						600,000
Mason
Loss Contingencies [Line Items]
Litigation Settlement, Expense			100,000
Payment of litigation settlement			$ 7,000,000.0
Litigation Settlement, Amount		$ 7,000,000.0
Accrued expenses						$ 129,000	7,000,000
Mason | Accrual for Legal Matters and Settlements Current [Member]
Loss Contingencies [Line Items]
Accrual for Legal Matters and Settlements - Current				$ 7,000,000			$ 7,000,000	$ 7,000,000
Savidis
Loss Contingencies [Line Items]
Payment of litigation settlement	$ 800,000
Litigation Settlement, Amount		900,000
Settlement amount reduced		$ 100,000
Cash and or Common Stock [Member] | Litigation Relating to Formaldehyde Abrasion MDL's [Member]
Loss Contingencies [Line Items]
Litigation Settlement, Amount									22,000,000.0
Cash Payments [Member] | Litigation Relating to Bamboo Flooring
Loss Contingencies [Line Items]
Litigation Settlement, Amount					14,000,000.0
In Store Credit [Member] | Litigation Relating to Formaldehyde Abrasion MDL's [Member]
Loss Contingencies [Line Items]
Litigation Settlement, Amount									$ 14,000,000.0
In Store Credit [Member] | Litigation Relating to Bamboo Flooring
Loss Contingencies [Line Items]
Litigation Settlement, Amount					$ 16,000,000.0

XML

Commitments and Contingencies - Litigation matters (rollforward) (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended	9 Months Ended		12 Months Ended
	Apr. 30, 2021	Sep. 30, 2019	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2018
Loss Contingencies [Line Items]
Accrual for Legal Matters and Settlements - Current			$ 33,611
Accruals During Period			293	$ 7,733
Settlement Payments During Period			(8,122)	(101)
Vouchers Accrued or (Redeemed) During Period			(2,901)	(3,127)
Accrual for Legal Matters and Settlements - Current			22,881
Accrual for Legal Matters and Settlements Current [Member]
Loss Contingencies [Line Items]
Accrual for Legal Matters and Settlements - Current			33,611	30,398
Accrual for Legal Matters and Settlements - Current			22,881	34,903
Litigation Relating to Bamboo Flooring
Loss Contingencies [Line Items]
Vouchers Accrued or (Redeemed) During Period			(1,700)
Litigation Settlement, Amount		$ 30,000
Litigation Relating to Bamboo Flooring | Cash Payments [Member]
Loss Contingencies [Line Items]
Litigation Settlement, Amount		14,000
Litigation Relating to Bamboo Flooring | In Store Credit [Member]
Loss Contingencies [Line Items]
Litigation Settlement, Amount		$ 16,000
Litigation Relating to Bamboo Flooring | Other Current Liabilities
Loss Contingencies [Line Items]
Accrual for Legal Matters and Settlements - Current			13,200
Litigation Relating to Formaldehyde Abrasion MDL's [Member]
Loss Contingencies [Line Items]
Vouchers Accrued or (Redeemed) During Period			(1,231)	(2,781)
Litigation Settlement, Amount					$ 36,000
Litigation Relating to Formaldehyde Abrasion MDL's [Member] | Cash and or Common Stock [Member]
Loss Contingencies [Line Items]
Litigation Settlement, Amount					22,000
Litigation Relating to Formaldehyde Abrasion MDL's [Member] | In Store Credit [Member]
Loss Contingencies [Line Items]
Litigation Settlement, Amount					$ 14,000
Litigation Relating to Formaldehyde Abrasion MDL's [Member] | Accrual for Legal Matters and Settlements Current [Member]
Loss Contingencies [Line Items]
Accrual for Legal Matters and Settlements - Current			10,656	14,000
Accrual for Legal Matters and Settlements - Current			9,425	11,219
Gold
Loss Contingencies [Line Items]
Vouchers Accrued or (Redeemed) During Period			(1,670)	(346)
Gold | Accrual for Legal Matters and Settlements Current [Member]
Loss Contingencies [Line Items]
Accrual for Legal Matters and Settlements - Current			14,885	16,000
Accrual for Legal Matters and Settlements - Current			13,215	15,654
Mason
Loss Contingencies [Line Items]
Accruals During Period			129	7,000
Settlement Payments During Period			(7,129)
Litigation Settlement, Amount	$ 7,000
Mason | Accrual for Legal Matters and Settlements Current [Member]
Loss Contingencies [Line Items]
Accrual for Legal Matters and Settlements - Current			7,000
Accrual for Legal Matters and Settlements - Current				7,000
Other Matters
Loss Contingencies [Line Items]
Accruals During Period			164	733
Settlement Payments During Period			(993)	(101)
Other Matters | Accrual for Legal Matters and Settlements Current [Member]
Loss Contingencies [Line Items]
Accrual for Legal Matters and Settlements - Current			1,070	398
Accrual for Legal Matters and Settlements - Current			$ 241	$ 1,030

XML

Commitments and Contingencies (Schedule of Other Commitments) (Details) - USD ($)	1 Months Ended			3 Months Ended								9 Months Ended	12 Months Ended													19 Months Ended	21 Months Ended
	Oct. 31, 2021	Apr. 30, 2021	Sep. 30, 2020	Sep. 30, 2022	Mar. 31, 2022	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2019	Jun. 30, 2018	Sep. 30, 2022	Nov. 30, 2020	Dec. 31, 2019	Nov. 30, 2019	Dec. 31, 2018	Nov. 30, 2018	Dec. 31, 2017	Nov. 30, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Nov. 30, 2014	Dec. 31, 2013	Nov. 30, 2013	Nov. 30, 2012	Dec. 31, 2012	Sep. 30, 2021	Mar. 31, 2021
Other Current Assets [Member]
Loss Contingencies [Line Items]
Contingent Receivable				$ 3,850,000								$ 3,850,000
Other Current Liabilities
Loss Contingencies [Line Items]
Contingent Liability				(205,000)								(205,000)
Other Noncurrent Liabilities [Member]
Loss Contingencies [Line Items]
Contingent Liability				(2,601,000)								(2,601,000)
Antidumping Duties [Member] | First Annual Review [Member]
Loss Contingencies [Line Items]
Loss Contingency Modified Purchase Price Of Antidumping Duty Rate					0.00%																					0.00%
Additional Contingent Receivable					$ 200,000
Antidumping Duties [Member] | First Annual Review [Member] | Other Current Assets [Member]
Loss Contingencies [Line Items]
Contingent Receivable				1,526,000								1,526,000
Antidumping Duties [Member] | Second Annual Review [Member]
Loss Contingencies [Line Items]
Loss Contingency Purchase Price Of Antidumping Duty Rate																									3.30%
Loss Contingency Modified Purchase Price Of Antidumping Duty Rate								3.92%	13.74%																3.92%
Contingent Liability						$ (4,100,000)
Decrease in contingent liability						$ 3,900,000
Antidumping Duties [Member] | Second Annual Review [Member] | Other Current Liabilities
Loss Contingencies [Line Items]
Contingent Liability				(205,000)								(205,000)
Antidumping Duties [Member] | Third Annual Review [Member]
Loss Contingencies [Line Items]
Loss Contingency Purchase Price Of Antidumping Duty Rate							17.37%
Loss Contingency Modified Purchase Price Of Antidumping Duty Rate			0.00%																				0.00%
Contingent Receivable																													$ 1,800,000
Contingent Liability																													$ (4,700,000)
Antidumping Duties [Member] | Third Annual Review [Member] | Other Current Assets [Member]
Loss Contingencies [Line Items]
Contingent Receivable				1,821,000								1,821,000
Antidumping Duties [Member] | Sixth Annual Review [Member]
Loss Contingencies [Line Items]
Loss Contingency Modified Purchase Price Of Antidumping Duty Rate																			0.00%
Contingent Receivable																												$ 500,000
Contingent Liability														$ (800,000)
Antidumping Duties [Member] | Sixth Annual Review [Member] | Other Current Assets [Member]
Loss Contingencies [Line Items]
Contingent Receivable				503,000								503,000
Antidumping Duties [Member] | Sixth Annual Review [Member] | Other Noncurrent Liabilities [Member]
Loss Contingencies [Line Items]
Contingent Liability				$ (1,464,000)								(1,464,000)
Antidumping Duties [Member] | Seventh Annual Review [Member]
Loss Contingencies [Line Items]
Loss Contingency Purchase Price Of Antidumping Duty Rate																	0.00%
Loss Contingency Modified Purchase Price Of Antidumping Duty Rate																	0.00%
Loss Contingency Preliminary Purchase Price Of Anti dumping Duty Rate									0.0
Antidumping Duties [Member] | Eighth Annual Review [Member]
Loss Contingencies [Line Items]
Loss Contingency Purchase Price Of Antidumping Duty Rate		0.00%													0.00%
Loss Contingency Modified Purchase Price Of Antidumping Duty Rate															0.00%
Antidumping Duties [Member] | Ninth Annual Review [Member]
Loss Contingencies [Line Items]
Loss Contingency Purchase Price Of Antidumping Duty Rate													0.00%
Loss Contingency Modified Purchase Price Of Antidumping Duty Rate				39.27%									39.27%
Contingent Liability				$ (1,100,000)								(1,100,000)
Antidumping Duties [Member] | Ninth Annual Review [Member] | Other Noncurrent Liabilities [Member]
Loss Contingencies [Line Items]
Contingent Liability				(1,137,000)								$ (1,137,000)
Antidumping Duties [Member] | Minimum [Member] | Sixth Annual Review [Member]
Loss Contingencies [Line Items]
Loss Contingency Modified Purchase Price Of Antidumping Duty Rate										0.00%				0.00%
Antidumping Duties [Member] | Maximum [Member] | Sixth Annual Review [Member]
Loss Contingencies [Line Items]
Loss Contingency Modified Purchase Price Of Antidumping Duty Rate										42.57%		42.57%
Countervailing Duties [Member] | Other Current Assets [Member]
Loss Contingencies [Line Items]
Contingent Receivable				73,000								$ 73,000
Countervailing Duties [Member] | Other Assets [Member]
Loss Contingencies [Line Items]
Contingent Receivable				296,000								296,000
Countervailing Duties [Member] | Other Current Liabilities
Loss Contingencies [Line Items]
Contingent Liability				(38,000)								(38,000)
Countervailing Duties [Member] | Other Noncurrent Liabilities [Member]
Loss Contingencies [Line Items]
Contingent Liability				(2,019,000)								(2,019,000)
Countervailing Duties [Member] | First and Second Annual Review [Member]
Loss Contingencies [Line Items]
Loss Contingency Purchase Price Of Countervailing Duties Rate																											1.50%
Countervailing Duties [Member] | First and Second Annual Review [Member] | Other Assets [Member]
Loss Contingencies [Line Items]
Contingent Receivable				243,000								243,000
Countervailing Duties [Member] | Third Annual Review [Member]
Loss Contingencies [Line Items]
Loss Contingency Purchase Price Of Countervailing Duties Rate																								1.50%
Loss Contingency Modified Purchase Price Of Countervailing Duties Rate																								1.38%
Countervailing Duties [Member] | Third Annual Review [Member] | Other Assets [Member]
Loss Contingencies [Line Items]
Contingent Receivable				37,000								37,000
Countervailing Duties [Member] | Fourth Annual Review [Member]
Loss Contingencies [Line Items]
Loss Contingency Modified Purchase Price Of Countervailing Duties Rate																						1.06%
Countervailing Duties [Member] | Fourth Annual Review [Member] | Other Assets [Member]
Loss Contingencies [Line Items]
Contingent Receivable				16,000								16,000
Countervailing Duties [Member] | Fifth Annual Review [Member] | Other Current Assets [Member]
Loss Contingencies [Line Items]
Contingent Receivable				73,000								73,000
Countervailing Duties [Member] | Sixth Annual Review [Member]
Loss Contingencies [Line Items]
Contingent Liability				(38,300)								(38,300)		$ (400,000)
Countervailing Duties [Member] | Sixth Annual Review [Member] | Other Current Liabilities
Loss Contingencies [Line Items]
Contingent Liability				(38,000)								(38,000)
Countervailing Duties [Member] | Seventh Annual Review [Member]
Loss Contingencies [Line Items]
Loss Contingency Modified Purchase Price Of Countervailing Duties Rate						20.75%												20.75%
Contingent Liability						$ (1,700,000)
Countervailing Duties [Member] | Seventh Annual Review [Member] | Other Noncurrent Liabilities [Member]
Loss Contingencies [Line Items]
Contingent Liability				(1,651,000)								(1,651,000)
Countervailing Duties [Member] | Eighth Annual Review [Member]
Loss Contingencies [Line Items]
Loss Contingency Purchase Price Of Countervailing Duties Rate																1.06%
Loss Contingency Modified Purchase Price Of Countervailing Duties Rate	6.13%															6.13%
Contingent Liability	$ (300,000)
Countervailing Duties [Member] | Eighth Annual Review [Member] | Other Noncurrent Liabilities [Member]
Loss Contingencies [Line Items]
Contingent Liability				(287,000)								(287,000)
Countervailing Duties [Member] | Ninth Annual Review [Member]
Loss Contingencies [Line Items]
Contingent Liability				(100,000)								(100,000)
Countervailing Duties [Member] | Ninth Annual Review [Member] | Other Noncurrent Liabilities [Member]
Loss Contingencies [Line Items]
Contingent Liability				$ (81,000)								$ (81,000)
Countervailing Duties [Member] | Minimum [Member] | First and Second Annual Review [Member]
Loss Contingencies [Line Items]
Loss Contingency Modified Purchase Price Of Countervailing Duties Rate																											0.83%
Countervailing Duties [Member] | Minimum [Member] | Fifth Annual Review [Member]
Loss Contingencies [Line Items]
Loss Contingency Modified Purchase Price Of Countervailing Duties Rate											0.11%
Countervailing Duties [Member] | Minimum [Member] | Sixth Annual Review [Member]
Loss Contingencies [Line Items]
Loss Contingency Modified Purchase Price Of Countervailing Duties Rate										2.96%
Countervailing Duties [Member] | Maximum [Member] | First and Second Annual Review [Member]
Loss Contingencies [Line Items]
Loss Contingency Modified Purchase Price Of Countervailing Duties Rate																											0.99%
Countervailing Duties [Member] | Maximum [Member] | Fifth Annual Review [Member]
Loss Contingencies [Line Items]
Loss Contingency Modified Purchase Price Of Countervailing Duties Rate											0.85%
Countervailing Duties [Member] | Maximum [Member] | Sixth Annual Review [Member]
Loss Contingencies [Line Items]
Loss Contingency Modified Purchase Price Of Countervailing Duties Rate										3.10%
Deposit One [Member] | Ninth Annual Review [Member]
Loss Contingencies [Line Items]
Loss Contingency Modified Purchase Price Of Countervailing Duties Rate														3.36%
Deposit One [Member] | Antidumping Duties [Member] | First Annual Review [Member]
Loss Contingencies [Line Items]
Loss Contingency Purchase Price Of Antidumping Duty Rate																										6.78%
Deposit One [Member] | Antidumping Duties [Member] | Third Annual Review [Member]
Loss Contingencies [Line Items]
Loss Contingency Purchase Price Of Antidumping Duty Rate																							3.30%
Deposit One [Member] | Antidumping Duties [Member] | Sixth Annual Review [Member]
Loss Contingencies [Line Items]
Loss Contingency Purchase Price Of Antidumping Duty Rate																			17.37%
Loss Contingency Modified Purchase Price Of Antidumping Duty Rate																			42.57%
Deposit One [Member] | Countervailing Duties [Member] | Fourth Annual Review [Member]
Loss Contingencies [Line Items]
Loss Contingency Purchase Price Of Countervailing Duties Rate																						1.50%
Deposit One [Member] | Countervailing Duties [Member] | Fifth Annual Review [Member]
Loss Contingencies [Line Items]
Loss Contingency Purchase Price Of Countervailing Duties Rate																					0.83%
Loss Contingency Modified Purchase Price Of Countervailing Duties Rate																					0.11%
Contingent Receivable											$ 100,000
Deposit One [Member] | Countervailing Duties [Member] | Sixth Annual Review [Member]
Loss Contingencies [Line Items]
Loss Contingency Purchase Price Of Countervailing Duties Rate																				0.99%
Loss Contingency Modified Purchase Price Of Countervailing Duties Rate																				3.10%
Deposit One [Member] | Countervailing Duties [Member] | Seventh Annual Review [Member]
Loss Contingencies [Line Items]
Loss Contingency Purchase Price Of Countervailing Duties Rate																		1.38%
Deposit One [Member] | Countervailing Duties [Member] | Ninth Annual Review [Member]
Loss Contingencies [Line Items]
Loss Contingency Purchase Price Of Countervailing Duties Rate				3.36%										0.00%
Deposit Two [Member] | Antidumping Duties [Member] | First Annual Review [Member]
Loss Contingencies [Line Items]
Loss Contingency Purchase Price Of Antidumping Duty Rate																										3.30%
Deposit Two [Member] | Antidumping Duties [Member] | Third Annual Review [Member]
Loss Contingencies [Line Items]
Loss Contingency Purchase Price Of Antidumping Duty Rate																							5.92%
Deposit Two [Member] | Antidumping Duties [Member] | Sixth Annual Review [Member]
Loss Contingencies [Line Items]
Loss Contingency Purchase Price Of Antidumping Duty Rate																			0.00%
Deposit Two [Member] | Countervailing Duties [Member] | Fourth Annual Review [Member]
Loss Contingencies [Line Items]
Loss Contingency Purchase Price Of Countervailing Duties Rate																						0.83%
Deposit Two [Member] | Countervailing Duties [Member] | Fifth Annual Review [Member]
Loss Contingencies [Line Items]
Loss Contingency Purchase Price Of Countervailing Duties Rate																					0.99%
Loss Contingency Modified Purchase Price Of Countervailing Duties Rate																					0.85%
Deposit Two [Member] | Countervailing Duties [Member] | Sixth Annual Review [Member]
Loss Contingencies [Line Items]
Loss Contingency Purchase Price Of Countervailing Duties Rate																				1.38%
Loss Contingency Modified Purchase Price Of Countervailing Duties Rate																				2.96%
Deposit Two [Member] | Countervailing Duties [Member] | Seventh Annual Review [Member]
Loss Contingencies [Line Items]
Loss Contingency Purchase Price Of Countervailing Duties Rate																		1.06%
Deposit Two [Member] | Countervailing Duties [Member] | Ninth Annual Review [Member]
Loss Contingencies [Line Items]
Loss Contingency Purchase Price Of Countervailing Duties Rate				9.85%										0.85%
Loss Contingency Modified Purchase Price Of Countervailing Duties Rate														9.85%
Deposit Three [Member] | Countervailing Duties [Member] | Ninth Annual Review [Member]
Loss Contingencies [Line Items]
Loss Contingency Purchase Price Of Countervailing Duties Rate														2.96%