C O M PA N Y N O T E

July 18, 2019

Lumber Liquidators Holdings, Inc. (LL) Neutral

Model Update

CONCLUSION
PRICE: US$11.90
We are lowering our Q2 comp and EPS estimates considering what appears to be a
TARGET: US$12.00
sluggish industry backdrop in Q2. We are also lowering our full year gross margin estimate 20x 2020E EPS of $0.58
as prior guidance only assumed 10% tariffs, which has since moved to 25%. As a result
our PT goes from $13 to $12. Peter J. Keith
Sr Research Analyst, Piper Jaffray & Co.
R I S K S TO A C H I E V E M E N T O F P T & R E C O M M E N D AT I O N 212 284-5040, peter.j.keith@pjc.com
Risks include macroeconomic factors affecting the housing market and remodeling activity, Robert A. Friedner
product availability, supplier dependence, execution of store expansion strategy. Research Analyst, Piper Jaffray & Co.
212 284-9444, robert.a.friedner@pjc.com
C O M PA N Y D E S C R I P T I O N
Lumber Liquidators is the largest U.S. specialty retailer of hardwood flooring products. Changes Previous Current
Rating — Neutral
Price Tgt US$13.00 US$12.00
FY19E Rev (mil) US$1,119.6 US$1,116.7
FY20E Rev (mil) US$1,157.1 US$1,154.1
FY19E EPS US$0.58 US$0.44
FY20E EPS US$0.63 US$0.58
52-Week High / Low US$26.40 / US$8.81
Shares Out (mil) 28.6
Market Cap. (mil) US$340.3
Avg Daily Vol (000) 1,289
Book Value/Share US$5.00
Net Cash Per Share US$(1.74)
Debt to Total Capital 31.9%
Yield 0.00%
Fiscal Year End Dec
Price Performance - 1 Year
USD
30

25

20

15

10

5
Jul-18 Sep-18 Nov-18 Jan-19 Mar-19 May-19 Jul-19

Source: Bloomberg

REVENUE (US$ m) EARNINGS PER SHARE (US$)

YEAR
Mar Jun Sep Dec FY FY RM Mar Jun Sep Dec FY FY P/E
2018A 261.8 283.5 270.5 268.9 1,084.6 0.3x 0.05 0.09 0.27 0.17 0.57 20.9x
2019E 266.2A 289.1 280.3 281.0 1,116.7 0.3x (0.11)A 0.05 0.30 0.20 0.44 27.0x
2020E 274.7 299.3 289.7 290.4 1,154.1 0.3x 0.03 0.09 0.26 0.20 0.58 20.5x

Piper Jaffray does and seeks to do business with companies covered in its research reports. As a result, investors should be aware
that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only
a single factor in making their investment decisions. This report should be read in conjunction with important disclosure information,
including an attestation under Regulation Analyst certification, found on pages 5 - 6 of this report or at the following site:
http://www.piperjaffray.com/researchdisclosures .
Lumber Liquidators Holdings, Inc. Page 1 of 6
 Lumber Liquidators Holdings, Inc. (LL) 1 2 3 Piper Jaffray
4

Income Statement Model Peter Keith, Sr. Research Analyst, 212-284-5040

December Fiscal Year-End
($Millions, Except Per Share Amounts)
Model as of 7/17/19
Current disclosure information for this company can be found at:
http://www.piperjaffray.com/researchdisclosures
2018A 2019E 2020E
Qtr Mar Jun Sept Dec Mar Jun Sept Dec Mar Jun Sept Dec
Q1A Q2A Q3A Q4A Q1A Q2E Q3E Q4E Q1E Q2E Q3E Q4E 2015A 2016A 2017A 2018A 2019E 2020E
Sales $261.8 $283.5 $270.5 $268.9 $266.2 $289.1 $280.3 $281.0 $274.7 $299.3 $289.7 $290.4 $978.8 $960.6 $1,028.9 $1,084.6 $1,116.7 $1,154.1
Cost of Goods Sold 166.8 184.3 172.6 174.7 172.6 188.2 177.5 182.5 174.7 193.4 182.7 187.2 699.9 656.7 663.7 698.4 720.9 737.9
Gross Profit 95.0 99.2 97.9 94.3 93.6 100.9 102.8 98.5 100.0 105.9 107.0 103.3 278.9 303.9 365.3 386.3 395.8 416.2
SG&A Expense 93.1 96.2 89.2 87.6 95.2 98.7 93.0 91.5 98.0 101.9 95.9 94.3 362.1 397.5 354.7 366.1 378.4 390.0
Operating Income (EBIT) 1.9 3.0 8.6 6.7 (1.6) 2.2 9.8 7.0 2.0 4.1 11.1 9.0 (83.2) (93.6) 10.6 20.2 17.4 26.2
EBITDA 6.6 7.8 13.1 11.1 2.7 7.2 14.4 11.5 2.0 4.1 13.4 11.9 (65.8) (76.1) 28.3 38.6 35.8 31.4
Other (Income) Expense 0.3 0.3 0.5 1.6 1.3 0.8 0.9 1.0 0.8 0.6 0.8 0.9 0.2 0.6 1.6 2.8 3.9 3.1
Pretax Income 1.5 2.6 8.1 5.1 (2.9) 1.4 8.9 6.0 1.2 3.5 10.4 8.0 (83.4) (94.3) 9.0 17.4 13.4 23.1
Income Taxes 0.2 0.2 0.2 0.4 0.2 0.0 0.3 0.2 0.3 0.9 2.6 2.0 (27.0) (25.7) 2.0 1.0 0.7 5.8
Operating Net Income 1.3 2.4 7.9 4.7 (3.1) 1.3 8.6 5.8 0.9 2.6 7.8 6.0 (56.4) (68.6) 7.0 16.4 12.7 17.3
Extraordinary Items 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 (20.0) 0.0 0.0 0.0
Reported Net Income 1.3 2.4 7.9 4.7 (3.1) 1.3 8.6 5.8 0.9 2.6 7.8 6.0 (56.4) (68.6) (13.1) 16.4 12.7 17.3
Operating EPS-Diluted $0.05 $0.09 $0.27 $0.17 ($0.11) $0.05 $0.30 $0.20 $0.03 $0.09 $0.26 $0.20 ($2.08) ($2.51) $0.24 $0.57 $0.44 $0.58
Reported EPS-Diluted ($0.07) $0.09 $0.27 $0.17 ($0.17) $0.05 $0.30 $0.20 $0.03 $0.09 $0.26 $0.20 ($2.08) ($2.51) ($0.46) $0.57 $0.44 $0.58
Wtd. Avg. Shares -- Diluted 28.5 28.5 28.7 28.6 28.6 28.8 29.0 29.2 29.4 29.6 29.8 30.0 27.1 27.3 28.7 28.6 28.9 29.7

Annual Growth Rates

Sales 5.4% 7.6% 5.2% 3.5% 1.7% 2.0% 3.6% 4.5% 3.2% 3.5% 3.4% 3.3% (6.6%) (1.9%) 7.1% 5.4% 3.0% 3.4%
SG&A 1.3% 8.3% 1.9% 1.3% 2.3% 2.6% 4.3% 4.5% 2.9% 3.2% 3.0% 3.0% 15.3% 9.8% (10.8%) 3.2% 3.4% 3.0%
Operating Income (EBIT) (136.6%) (38.5%) 68.5% 17.8% (186.5%) (27.0%) 13.4% 4.5% (226.0%) 85.9% 13.7% 28.2% (180.0%) 12.6% (111.3%) 91.3% (14.1%) 51.0%
Net Income, Before Extra. Items (122.2%) (41.9%) 136.6% (13.9%) (332.0%) (45.3%) 10.0% 23.3% (128.7%) 95.5% (10.0%) 3.3% (189.1%) 21.5% (110.2%) 135.2% (22.5%) 36.4%
Operating EPS (122.0%) (42.0%) 138.0% (13.0%) (331.0%) (46.0%) 9.0% 21.0% (128.0%) 90.0% (12.0%) 1.0% (190.0%) 20.7% (109.6%) 137.5% (22.8%) 31.8%

Margin and Expense Analysis

Gross Margin 36.3% 35.0% 36.2% 35.1% 35.2% 34.9% 36.7% 35.1% 36.4% 35.4% 36.9% 35.6% 28.5% 31.6% 35.5% 35.6% 35.4% 36.1%
SG&A Expense 35.6% 33.9% 33.0% 32.6% 35.8% 34.1% 33.2% 32.6% 35.7% 34.0% 33.1% 32.5% 37.0% 41.4% 34.5% 33.8% 33.9% 33.8%
Operating Income (EBIT) 0.7% 1.1% 3.2% 2.5% (0.6%) 0.8% 3.5% 2.5% 0.7% 1.4% 3.8% 3.1% (8.5%) (9.7%) 1.0% 1.9% 1.6% 2.3%
EBITDA ex Var Comp 6.6 7.8 13.1 11.1 2.7 2.2 9.8 7.0 2.0 4.1 11.1 9.0 (65.8) (76.1) 28.3 38.6 35.8 45.1
EBITDA Margin ex Var Comp 2.5% 2.8% 4.8% 4.1% 1.0% 0.8% 3.5% 2.5% 0.7% 1.4% 3.8% 3.1% (6.7%) (7.9%) 2.7% 3.6% 3.2% 3.9%
Net Income 0.5% 0.9% 2.9% 1.8% (1.2%) 0.5% 3.1% 2.1% 0.3% 0.9% 2.7% 2.1% (5.8%) (7.1%) 0.7% 1.5% 1.1% 1.5%
Tax Rate 13.2% 7.4% 2.8% 7.0% (7.3%) 3.0% 3.0% 3.0% 25.0% 25.0% 25.0% 25.0% 32.4% 27.3% 22.3% 5.6% 5.2% 25.0%

Y/Y Margin Changes (bps)

Gross Margin 134 (56) 14 (40) (112) (10) 50 0 125 50 25 50 (1,143) 314 387 11 (17) 62
SG&A Expense (144) 23 (106) (70) 21 20 20 0 (10) (10) (10) (10) 700 439 (691) (72) 14 (10)
Operating Income (EBIT) 277 (79) 120 30 (132) (30) 30 0 135 60 35 60 (1,843) (125) 1,077 84 (31) 72

Same-Store Sales 2.9% 4.7% 2.1% 0.4% (0.8%) (1.0%) 1.0% 2.0% 1.0% 1.0% 1.0% 1.0% (11.1%) (4.2%) 5.5% 2.6% 0.3% 1.0%

Store-Level Analysis
Beginning Stores 393 398 406 409 413 413 418 421 424 424 429 432 352 375 383 393 413 424
New Stores, Net 5 8 3 4 0 5 3 3 0 5 3 3 23 8 10 20 11 11
Ending Stores 398 406 409 413 413 418 421 424 424 429 432 435 375 383 393 413 424 435
Avg. Stores 396 402 408 411 413 416 420 423 424 427 431 434 364 379 388 403 419 430
Beginning Selling Square Footage (in Thousands) 2,540.1 2,572.8 2,625.0 2,644.6 2,670.8 2,670.8 2,703.4 2,723.0 2,742.6 2,742.6 2,775.3 2,794.9 2,272.2 2,422.5 2,474.8 2,540.1 2,670.8 2,742.6
New Square Footage 32.7 52.3 19.6 26.1 0.0 32.7 19.6 19.6 0.0 32.7 19.6 19.6 150.3 52.3 65.3 130.7 71.9 71.9
Ending Square Footage 2,572.8 2,625.0 2,644.6 2,670.8 2,670.8 2,703.4 2,723.0 2,742.6 2,742.6 2,775.3 2,794.9 2,814.5 2,422.5 2,474.8 2,540.1 2,670.8 2,742.6 2,814.5
Square Footage Growth 3.4% 5.5% 5.7% 5.1% 3.8% 3.0% 3.0% 2.7% 2.7% 2.7% 2.6% 2.6% 6.6% 2.2% 2.6% 5.1% 2.7% 2.6%
Average Store Size 6.5 6.5 6.5 6.5 6.5 6.5 6.5 6.5 6.5 6.5 6.5 6.5 6.5 6.5 6.5 6.5 6.5 6.5
Sales Per Avg. Store 0.66 0.71 0.66 0.65 0.64 0.70 0.67 0.67 0.65 0.70 0.67 0.67 2.69 2.53 2.65 2.69 2.67 2.69
Sales Per Avg. Selling Sq. Ft. in 000s 0.10 0.11 0.10 0.10 0.10 0.11 0.10 0.10 0.10 0.11 0.10 0.10 0.42 0.39 0.41 0.42 0.41 0.42
Comp Square Footage 2,474.8 2,487.8 2,487.8 2,500.9 2,540.1 2,572.8 2,625.0 2,644.6 2,670.8 2,670.8 2,703.4 2,723.0 2,164.4 2,326.1 2,440.5 2,487.8 2,595.6 2,628.3
Comp Store Sales / Sq Ft 0.10 0.11 0.11 0.10 0.10 0.11 0.10 0.10 0.10 0.11 0.10 0.10 0.43 0.40 0.41 0.42 0.42 0.42
Comp Store Sales 254.9 275.9 261.9 258.9 258.0 277.8 272.2 273.0 268.9 290.2 282.1 282.8 918.9 926.2 1,010.1 1,051.6 1,080.9 1,091.8
New Square Footage 98.0 137.2 156.8 169.9 130.7 130.7 98.0 98.0 71.9 104.5 91.5 91.5 199.3 127.4 63.7 140.5 114.3 99.6
New Store Productivity Factor 67.9% 49.9% 80.0% 80.0% 80.0% 80.0% 80.0% 80.0% 80.0% 80.0% 80.0% 80.0% 68.3% 67.3% 73.8% 69.4% 80.0% 80.0%
New Store Sales / Sq Ft 0.07 0.06 0.08 0.08 0.08 0.09 0.08 0.08 0.08 0.09 0.08 0.08 0.29 0.27 0.31 0.29 0.33 0.33
New Store Sales 6.9 7.6 13.2 14.1 10.6 11.3 8.1 8.1 5.8 9.1 7.6 7.6 59.9 34.4 18.9 41.7 38.1 33.3

Per Square Foot

Sales 102.40 109.08 102.65 101.19 99.68 107.59 103.30 102.84 100.15 108.49 104.02 103.55 417.89 392.53 412.23 415.31 413.41 413.88
Gross Profit 37.15 38.16 37.14 35.47 35.05 37.54 37.89 36.05 36.47 38.39 38.42 36.82 119.34 124.17 146.34 147.92 146.53 147.95
SG&A 36.42 37.01 33.86 32.95 35.66 36.73 34.29 33.48 35.72 36.92 34.42 33.61 154.60 162.54 142.14 140.24 140.15 140.22
Y/Y Change in SG&A (1.7%) 3.7% (3.5%) (3.9%) (2.1%) (0.8%) 1.2% 1.6% 0.2% 0.5% 0.4% 0.4% 7.8% 5.1% (12.6%) (1.3%) (0.1%) 0.0%
Depreciation 1.85 1.86 1.70 1.65 1.61 1.70 1.70 1.70 1.70 1.70 1.70 1.70 7.42 7.15 7.11 7.06 6.71 6.80
Inventory 104.77 109.70 114.14 117.20 115.73 116.68 115.15 115.66 #DIV/0! #DIV/0! #DIV/0! #DIV/0! 116.14 104.33 111.37 111.45 115.81 #DIV/0!

Lumber Liquidators Holdings, Inc. Page 2 of 6

Lumber Liquidators Holdings, Inc. (LL) Piper Jaffray
Balance Sheet Model Peter Keith, Sr. Research Analyst, 212-284-5040
December Fiscal Year-End
($Millions, Except Per Share Amounts)

2018A 2019E 2020E

Mar Jun Sept Dec Mar Jun Sept Dec Mar Jun Sept Dec
Q1A Q2A Q3A Q4A Q1A Q2E Q3E Q4E Q1E Q2E Q3E Q4E 2015A 2016A 2017A 2018A 2019E 2020E
Cash $12.6 $11.1 $11.8 $11.6 $17.1 $15.8 $3.7 $3.8 $13.9 $16.5 $7.6 $3.2 $26.7 $10.3 $19.9 $11.6 $3.8 $3.2
Receivables 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Merchandise Inventories 273.4 296.8 304.7 318.3 299.9 294.0 300.5 308.8 307.9 302.3 309.0 316.1 244.4 301.9 262.3 318.3 308.8 316.1
Other Current Assets 19.5 18.8 20.0 36.5 40.5 19.4 20.5 37.5 41.8 20.1 21.2 38.8 51.7 48.2 15.8 36.5 37.5 38.8
Current Assets 305.5 326.8 336.4 366.3 357.5 329.2 324.6 350.1 363.6 338.9 337.9 358.1 322.8 360.4 298.0 366.3 350.1 358.1
PP&E, Net 98.9 98.1 93.5 93.7 92.0 91.6 91.5 91.5 91.5 90.9 90.7 90.6 122.0 115.0 100.5 93.7 91.5 90.6
Deferred Income Taxes 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Operating Lease 111.0 111.0 111.0 111.0 111.0 111.0 111.0 111.0
Other Assets 12.3 13.4 13.3 15.5 15.9 13.9 13.7 16.0 16.4 14.4 14.2 16.5 11.4 13.2 12.3 15.5 16.0 16.5
Total Assets 416.7 438.3 443.2 475.5 576.4 545.6 540.7 568.5 582.6 555.1 553.7 576.1 456.2 488.6 410.8 475.5 568.5 576.1
0.0
Accounts Payable 60.7 73.4 64.4 73.4 55.9 76.0 76.2 85.7 67.3 88.2 78.3 87.7 55.2 120.6 67.7 73.4 85.7 87.7
Customer Deposits/Store Credits 43.5 45.3 43.5 40.3 47.6 46.7 44.7 41.5 49.2 48.5 46.3 42.9 33.8 32.6 38.5 40.3 41.5 42.9
Operating Lease Liabilities 30.2 30.2 30.2 30.2 30.2 30.2 30.2 30.2
Other Current Liabilities 70.5 69.7 70.0 128.4 130.3 71.8 55.2 55.8 134.6 74.5 57.2 57.7 38.7 33.4 71.9 128.4 55.8 57.7
Current Portion of LTD 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Current Liabilities 174.7 188.4 177.9 242.1 264.1 224.8 206.3 213.2 281.4 241.3 212.1 218.5 127.7 186.7 178.2 242.1 213.2 218.5
LTD and Capital Leases 26.0 35.0 43.0 65.0 67.0 75.0 80.0 95.0 40.0 50.0 70.0 80.0 20.0 40.0 15.0 65.0 95.0 80.0
Deferred Rent & Tax Liability 0.0 0.0 0.0 0.8 0.8 0.0 0.0 0.0 0.0 0.0 0.0 0.0 10.6 9.9 0.6 0.8 0.0 0.0
Preferred Stock 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Operating Lease Liabilities - LT 88.3 88.3 88.3 88.3 88.3 88.3 88.3 88.3
Other Long-Term Liabilities 19.7 18.9 18.9 20.2 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 20.3 21.1 19.2 20.2 12.8 12.8
Shareholders' Equity 196.3 196.0 203.5 147.4 143.3 144.7 153.3 159.1 160.0 162.7 170.4 176.5 277.6 230.9 197.8 147.4 159.1 176.5
Liabilities & Equity 416.7 438.3 443.2 475.5 576.4 545.6 540.7 568.5 582.6 555.1 553.7 576.1 456.2 488.6 410.8 475.5 568.5 576.1

Balance Sheet Metrics

Inventory Turns 2.52x 2.52x 2.43x 2.34x 2.31x 2.33x 2.35x 2.40x 2.39x 2.39x 2.39x 2.39x 2.51x 2.40x 2.35x 2.41x 2.30x 2.31x
A/P to Inventory Ratio 24.0% 23.5% 22.9% 22.1% 20.9% 22.2% 25.6% 26.6% 24.8% 25.5% 27.2% 26.6% 24.3% 32.2% 33.4% 24.3% 25.4% 27.7%
Net Cash per Share ($0.47) ($0.84) ($1.08) ($1.87) ($1.74) ($2.05) ($2.63) ($3.12) ($0.88) ($1.13) ($2.09) ($2.56) $0.25 ($1.09) $0.17 ($1.87) ($3.15) ($2.58)
Book Value per Share $6.89 $6.87 $7.08 $5.15 $5.00 $5.01 $5.28 $5.44 $5.44 $5.49 $5.71 $5.87 $10.25 $8.46 $6.90 $5.15 $5.50 $5.93
Debt / Total Capital Ratio 11.7% 15.2% 17.4% 30.6% 31.9% 34.1% 34.3% 37.4% 20.0% 23.5% 29.1% 31.2% 6.7% 14.8% 7.0% 30.6% 37.4% 31.2%
GMROI 1.40 1.40 1.35 1.29 1.26 1.27 1.29 1.32 1.33 1.34 1.34 1.35 1.00 1.11 1.29 1.33 1.26 1.33
Return on Average Equity (ROAE) 7.3% 6.4% 8.6% 8.8% 6.9% 6.8% 7.9% 8.5% 10.8% 11.3% 10.5% 10.4% (18.5%) (27.0%) (6.1%) 9.5% 8.3% 10.3%

% Sales Analysis
LTM Sales ($Millions) 1,042.3 1,062.3 1,075.6 1,084.6 1,089.1 1,094.7 1,104.5 1,116.7 1,125.1 1,135.3 1,144.7 1,154.1 978.8 960.6 1,028.9 1,084.6 1,116.7 1,125.1
LTM COGS 668.9 683.3 691.4 698.4 704.2 708.1 713.0 720.9 722.9 728.0 733.3 737.9 699.9 656.7 663.7 698.4 720.9 722.9
Other Current Assets 1.9% 1.8% 1.9% 3.4% 3.7% 1.8% 1.9% 3.4% 3.7% 1.8% 1.9% 3.4% 5.3% 5.0% 1.5% 3.4% 3.4% 3.7%
Deferred Income Taxes 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Other Assets 1.2% 1.3% 1.2% 1.4% 1.5% 1.3% 1.2% 1.4% 1.5% 1.3% 1.2% 1.4% 1.2% 1.4% 1.2% 1.4% 1.4% 1.5%
Customer Deposits/Store Credits 4.2% 4.3% 4.0% 3.7% 4.4% 4.3% 4.0% 3.7% 4.4% 4.3% 4.0% 3.7% 3.5% 3.4% 3.7% 3.7% 3.7% 4.4%
Other Current Liabilities 6.8% 6.6% 6.5% 11.8% 12.0% 6.6% 5.0% 5.0% 12.0% 6.6% 5.0% 5.0% 4.0% 3.5% 7.0% 11.8% 5.0% 12.0%
W/C As A Percent of Sales 19.5% 20.5% 21.6% 22.4% 22.4% 19.9% 20.3% 20.0% 21.4% 18.9% 20.2% 19.8% 21.6% 19.3% 18.3% 20.3% 21.0% 20.1%
F/C As A Percent of Sales 9.6% 9.3% 8.9% 8.6% 8.5% 8.4% 8.3% 8.2% 8.1% 8.0% 7.9% 7.8% 12.6% 12.3% 10.5% 9.0% 8.3% 8.1%
Cash Conversion Cycle (0.0)
+ Receivables Collection Period (DSO) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
+ Inventory Days 149.2 158.5 160.8 166.3 155.4 151.5 153.8 156.3 155.4 151.5 153.8 156.3 127.5 167.8 144.2 166.3 156.3 155.4
- Payables Days 33.1 39.2 34.0 38.4 29.0 39.2 39.0 43.4 34.0 44.2 39.0 43.4 28.8 67.1 37.2 38.4 43.4 34.0
= Cash Conversion Cycle 116.1 119.3 126.8 128.0 126.4 112.3 114.8 113.0 121.4 107.3 114.8 113.0 98.6 100.7 107.0 128.0 113.0 121.4
Average Inv Per Store 0.691 0.738 0.748 0.774 0.726 0.708 0.716 0.731 0.726 0.709 0.718 0.729 0.672 0.797 0.676 0.790 0.738 0.736
Inventory Turns 2.5x 2.5x 2.4x 2.3x 2.3x 2.3x 2.4x 2.4x 2.4x 2.4x 2.4x 2.4x 2.5x 2.4x 2.4x 2.4x 2.3x 2.3x
Average Stores 396 402 408 411 413 416 420 423 424 427 431 434 363 379 386 404 418 420
PPE / Store 0.250 0.244 0.229 0.228 0.223 0.223 0.223 0.223 0.223 0.223 0.223 0.223 0.328 0.301 0.258 0.228 0.223 0.223

Lumber Liquidators Holdings, Inc. Page 3 of 6

 Piper Jaffray
Peter Keith, Sr. Research Analyst, 212-284-5040

Lumber Liquidators Holdings, Inc. (LL)

Cash Flow Model
December Fiscal Year-End
($Millions, Except Per Share Amounts)

2018A 2019E 2020E

Mar Jun Sept Dec Mar Jun Sept Dec Mar Jun Sept Dec
Q1A Q2A Q3A Q4A Q1A Q2E Q3E Q4E Q1E Q2E Q3E Q4E 2015A 2016A 2017A 2018A 2019E 2020E
Net Income ($2.0) ($1.5) $5.9 ($56.9) ($4.9) $1.3 $8.6 $5.8 $0.9 $2.6 $7.8 $6.0 ($56.4) ($68.6) ($37.8) ($54.4) $10.9 $17.3
Depreciation & Amortization 4.7 4.8 4.5 4.4 4.3 5.0 4.6 4.5 4.4 5.1 4.7 4.6 17.4 17.5 17.7 18.4 18.4 18.9
Stock Based Compensation 0.9 1.3 1.0 1.0 1.0 (0.8) 0.0 0.0 0.0 0.0 0.0 0.0 3.9 5.6 4.7 4.1 0.2 0.0
Other 0.0 0.0 1.8 3.4 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 19.9 34.7 4.6 5.2 0.1 0.0
Changes in Assets & Liabilities:
Inventory (14.5) (24.2) (5.8) (14.7) 17.3 5.9 (6.5) (8.3) 0.9 5.6 (6.8) (7.1) 42.8 (62.1) 32.6 (59.2) 8.4 (7.3)
Other Assets & Liabilities (4.0) 12.8 (11.7) 45.8 (11.3) (16.2) (19.4) (12.4) 63.4 (16.3) (30.1) (13.5) (18.4) 45.3 17.5 42.9 (59.3) 3.5
NET CASH PROVIDED BY OPERATING: (14.9) (6.6) (4.3) (17.2) 6.5 (4.8) (12.6) (10.4) 69.7 (3.0) (24.4) (9.9) 9.2 (27.6) 39.4 (43.0) (21.3) 32.4

Capital Expenditures (3.0) (3.5) (4.1) (3.7) (3.2) (4.5) (4.5) (4.5) (4.5) (4.5) (4.5) (4.5) (22.5) (8.9) (7.4) (14.3) (16.7) (18.0)
Cash Paid for Acquisition & Other 0.0 0.0 0.5 0.3 0.0 0.0 0.6 3.1 0.9 0.0 0.0
NET CASH PROVIDED BY INVESTING: (3.0) (3.5) (3.5) (3.4) (3.2) (4.5) (4.5) (4.5) (4.5) (4.5) (4.5) (4.5) (22.5) (8.3) (4.3) (13.5) (16.7) (18.0)

Prin. (Payments) Borrow. on Debt and Cap. Lease 11.0 9.0 8.0 22.0 2.0 8.0 5.0 15.0 (55.0) 10.0 20.0 10.0 20.0 18.6 (25.0) 50.0 30.0 (15.0)
Other (0.9) (0.3) 0.4 (0.0) (0.7) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.6 (1.2) (0.8) (0.7) 0.0
Stock Repurchase 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 (0.3) (0.4) 0.0 0.0 0.0 0.0
NET CASH USED IN FINANCING ACTIVITIES: 10.1 8.7 8.4 22.0 1.3 8.0 5.0 15.0 (55.0) 10.0 20.0 10.0 19.7 18.8 (26.2) 49.2 29.3 (15.0)

Exchange Rate Impact 0.5 (0.0) 0.1 (1.7) 1.0 (0.0) 0.7 0.8 (1.1) 1.0 0.0

NET INCREASE (DECREASE) IN CASH (7.3) (1.5) 0.7 (0.3) 5.5 (1.3) (12.1) 0.1 10.2 2.5 (8.9) (4.4) 6.4 (16.4) 9.7 (8.4) (7.8) (0.6)

Beginning Balance of Cash 19.9 12.6 11.1 11.8 11.6 17.1 15.8 3.7 3.8 13.9 16.5 7.6 20.3 26.7 10.3 19.9 11.6 3.8
Ending Balance of Cash 12.6 11.1 11.8 11.6 17.1 15.8 3.7 3.8 13.9 16.5 7.6 3.2 26.7 10.3 19.9 11.6 3.8 3.2

Lumber Liquidators Holdings, Inc. Page 4 of 6

 C O M PA N Y N O T E
July 18, 2019

IMPORTANT RESEARCH DISCLOSURES

Rating and Price Target History for: Lumber Liquidators Holdings, Inc. (LL) as of 07-17-2019
07/27/16 11/30/16 05/04/17 08/01/17 10/31/17 02/27/18 05/01/18 07/31/18 10/30/18 03/18/19 04/30/19
N:$17 N:$19 N:$20 N:$32 N:$34 N:$24 N:$22 N:$21 N:$11 N:$10 N:$13
45
40
35
30
25
20
15
10
5
Q2 Q3 2017 Q1 Q2 Q3 2018 Q1 Q2 Q3 2019 Q1 Q2 Q3

Created by: BlueMatrix

Notes: The boxes on the Rating and Price Target History chart above indicate the date of the fundamental Equity Research Note, the rating and the price
target. Each box represents a date on which an analyst made a change to a rating or price target, except for the first box, which may only represent the
first Note written during the past three years.
Legend:
I: Initiating Coverage
R: Resuming Coverage
T: Transferring Coverage
D: Discontinuing Coverage
S: Suspending Coverage
OW: Overweight
N: Neutral
UW: Underweight
NA: Not Available
UR: Under Review

Distribution of Ratings/IB Services

Piper Jaffray

IB Serv./Past 12 Mos.
Rating Count Percent Count Percent
BUY [OW] 410 63.27 99 24.15
HOLD [N] 229 35.34 16 6.99
SELL [UW] 9 1.39 0 0.00

Note: Distribution of Ratings/IB Services shows the number of companies currently covered by fundamental equity research in each rating category from
which Piper Jaffray and its affiliates received compensation for investment banking services within the past 12 months. FINRA rules require disclosure
of which ratings most closely correspond with "buy," "hold," and "sell" recommendations. Piper Jaffray ratings are not the equivalent of buy, hold or sell,
but instead represent recommended relative weightings. Nevertheless, Overweight corresponds most closely with buy, Neutral with hold and Underweight
with sell. See Stock Rating definitions below.

Analyst Certification — Peter J. Keith, Sr Research Analyst

The views expressed in this report accurately reflect my personal views about the subject company and the subject security. In addition, no part of my
compensation was, is, or will be directly or indirectly related to the specific recommendations or views contained in this report.

Piper Jaffray research analysts receive compensation that is based, in part, on overall firm revenues, which include investment banking revenues.

Time of dissemination: 18 July 2019 03:30EDT.

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 C O M PA N Y N O T E
July 18, 2019

Research Disclosures
Piper Jaffray was making a market in the securities of Lumber Liquidators Holdings, Inc. at the time this research report was published. Piper Jaffray will
buy and sell Lumber Liquidators Holdings, Inc. securities on a principal basis.

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