2014 ANNUAL YEAR ENDED REPORT 12.31.2014 “I just can’t stop staring at it!! The shine, the beautiful natural wood...it’s just beautiful and I love it!! We chose Bellawood for our lakehouse and it looks like a brand new home. We couldn’t be happier!!” Cathy, Michigan “Everyone at the store was very helpful and wanted to make sure we knew what we were doing, sent emails with instructional videos, great in suggesting what materials we would need. Great service!” Deb, Ohio “We are beyond thrilled with the way the floor turned out and so thankful to the Lumber Liquidators team for all their help and expertise in answering our MANY questions… Definitely a 10 out of 10 for this whole experience.” Duarte, Massachusetts Our customers say it best! “We’ve received so many compliments. Friends have actually touched the floor to be convinced it is laminate and not actually wood (and still questioned it). Great product!” Monica, New Jersey “ We just p urchased the house and got rid of really crummy carpeting in our family room and dining room . We installed Engineered Red O ak from L umber L iq uidators and the res ults are stunning . T he price was right and the installation went very well . We are totally p leased with the new floor . ” Bob , New Hamps hire “We absolutely love our new floors! We put them in our kitchen, hallway and laundry room as well. They’re very durable and the handscraping adds a great touch.” Tim, Florida “We removed carpet & installed cork throughout the entire home. The product is great to work with & extremely warm & friendly to the feet.” Travis, Oklahoma “We just finished our hardwood throughout our lower level. My husband completed the project on his own. We are impressed with the quality of the wood. Most of all it has completely transformed our home. We receive compliments from everyone. The hickory is beautiful!!! We love the variations in each board. Would definitely recommend it. Lumber Liquidators was also easy to work with and knowledgeable with our questions, this being our first experience with hardwood. Can’t wait to do the second story soon!!!!” John, Illinois April 10, 2015 Dear Shareholders, Lumber Liquidators had one of its most important years in 2014 as we completed several strategic initiatives and made significant progress on others. The hard work we put into our East Coast distribution center paid off, and as of early 2015, that facility became fully operational. Our store expansion and showroom re-designs are already paying dividends. We made a comprehensive assessment of our value proposition and implemented marketing changes that have improved our customer metrics. We are so proud of our employees for their persistence and dedication during the headwinds of 2014, and we are resolved to maintain that dedication amidst recent trials in 2015. To be sure, the strategic investments we made in 2014 will be instrumental in navigating what has already been a demanding year. We remain confident that we have a superior product, great customers, dedicated employees, a growing presence in new markets, an improving infrastructure and a value proposition to customers that is unmatched in the marketplace. The Lumber Liquidators team is more dedicated than ever to delivering improvements and reaffirming our competitive advantage through a commitment to investing in our value proposition. 2014 Financial Highlights In 2014, we focused on infrastructure investment, enhanced customer perception and store expansion, all of which will help propel growth. Despite the headwinds of 2014, our team delivered a solid year: Net sales growth of 4.7% to $1.05 billion; 34 new stores, bringing our total to 352 stores in 46 states and Canada; and Fully diluted earnings per share of $2.31. Commitment to our Multi-Year Strategic Initiatives Our team remained committed to our multi-year initiatives throughout 2014, implementing our strategic initiatives and enhancing our value proposition, including: Optimized Supply Chain. Throughout 2014, Lumber Liquidators invested in infrastructure to strengthen and optimize our sourcing and supply chain. We opened our first distribution facility on the West Coast and completed our million square foot East Coast distribution center. These facilities will support our continued expansion and speed to market, and we believe will result in improvements in both our margin and inventory management. Implemented New Marketing Initiatives. In 2014, Lumber Liquidators focused on improving consumer metrics through a number of marketing initiatives aimed at broadening our customer base and perception. Through a number of modifications to our promotional focus, advertising cadence and outstanding advertised retail price points, we gained ground in the marketplace. Shortly after making these changes, we saw improvements in our demand metrics and conversion of interest into invoiced sales. Expanded Stores and Services. Lumber Liquidators remained dedicated to enhancing the customer experience through the continued rollout of stores and showroom enhancements. We are two years into a multi-year plan to remodel existing stores. At the end of 2014, approximately 29% of our 352 stores featured our expanded showroom format. The new look and feel continues to yield dividends and outperforms our historical model. Additionally, we expanded installation services provided by Lumber Liquidators to 85 stores by the end of the year. Invested in the Best People to Serve our Customers. During the year, Lumber Liquidators made continued investments in its people for the benefit of our customers and shareholders. As part of our commitment to quality and responsible sourcing, we announced the appointment of a Chief Compliance and Sustainability Officer. We will continue to make investments in the development of a world-class team, which is a critical component of our value proposition. In early 2015, we completed our fourth annual Lumber Liquidators University (“LLU”) program that brought all our stores and our leadership team together in order to reinforce our long-term vision and reiterate our future priorities and goals. Our unity and commitment across the organization have never been greater. Opportunities for Growth in 2015 and Beyond In 2015, we remain focused on growth. We believe growth will come as we stay focused on what got us this far: a strong value proposition, a robust infrastructure, a commitment to the customer and a world-class team. Our continued investment in store-based expansion offers opportunities to improve the customer experience and maximize our market share. With the infrastructure for future growth in place, we intend for 2015 to be a year where improved execution across our operations begins to lever the significant investments made in 2014. Our focus on our marketing, merchandise allocation and product development will generate greater flexibility in expanding and enhancing our value proposition. Additionally, we will continue hiring, training and retraining the best people to serve our customers. As we began 2015, Lumber Liquidators faced a number of challenges. We want to reassure you that our team remains vigilant and more committed than ever to upholding the principals of integrity and value that built this company. We are dedicated to continuing to fight for our customers, for our employees, and for you, our shareholders. We want to thank our entire organization across the U.S., Canada and Shanghai for their dedication and ongoing efforts, as well as our customers, suppliers and shareholders for their continued support. We have confidence in our team and look forward to continuing to build Lumber Liquidators together with you for years to come. Tom Sullivan Robert Lynch Founder and Chairman of the Board President and Chief Executive Officer 2014 Financial Highlights $1,125 Net Sales $1,000.2 $1,047.4 $1,000 $875 $813.3 $750 $681.6 $620.3 $625 $500 MILLIONS $375 $250 $125 $0 2010 2011 2012 2013 2014 375 352 325 Stores Open 318 34 288 30 275 263 25 40 225 223 37 175 125 75 Beginning of the year 186 223 263 288 318 0 Net new stores 2010 2011 2012 2013 2014 $95.0 Net Income $80.0 $77.4 $65.0 $63.4 $50.0 $47.1 MILLIONS $35.0 $26.3 $26.3 $20.0 $5.0 $0 2010 2011 2012 2013 2014 19% Moldings and Accessories 19% Laminate 40% Solid and Engineered Hardwood 19% Bamboo, 3% Non-Merchandise Cork, Vinyl Plank Services and Other Lumber Liquidators 2014 Product Mix BOARD OF DIRECTORS OFFICERS SHAREHOLDER INFORMATION Thomas D. Sullivan Raymond E. Cotton, III Founder and Chairman of the Board, Senior Vice President, Corporate Address Lumber Liquidators Holdings, Inc. Chief Compliance and Lumber Liquidators Holdings, Inc. Sustainability Officer 3000 John Deere Road Macon F. Brock, Jr. Toano, VA 23168 Founder and Chairman of the Board, Carl R. Daniels (757) 259-4280 Dollar Tree, Inc. Senior Vice President, Supply Chain Independent Registered Robert M. Lynch Public Accounting Firm President and E. Livingston B. Haskell Ernst & Young LLP Chief Executive Officer, Secretary; Lumber Liquidators Holdings, Inc. General Corporate Counsel Transfer Agent & Registrar Computershare Douglas T. Moore Robert M. Lynch P.O. Box 30170 President and Chief Executive Officer, President and College Station, TX 77842 Med-Air Homecare; Principal, Chief Executive Officer (800) 662-7232 First Street Consulting, LLC Marco Q. Pescara New York Stock Exchange John M. Presley Chief Marketing Officer Ticker Symbol: LL Managing Director and Chief Executive Officer, William K. Schlegel Investor Relations First Capital Bancorp Chief Merchandising Officer Ashleigh McDermott Lumber Liquidators Holdings, Inc. Peter B. Robinson Charles A. Schwartz 3000 John Deere Road Executive Vice President (ret.), Chief Information Officer; Toano, VA 23168 Burger King Corporation Senior Vice President, (757) 566-7512 Business Development [email protected] Martin F. Roper http://ir.lumberliquidators.com President and Daniel E.