RICHMOND, Va. - LL Flooring Holdings, Inc. (NYSE: LL), a prominent retailer of hard-surface flooring, is facing delisting from the New York Stock Exchange (NYSE) following its voluntary Chapter 11 bankruptcy filing. The NYSE Regulation staff has initiated the delisting process due to the company's non-compliance with listing standards.
The flooring company, which operates over 300 stores nationwide, disclosed on Monday that it had been informed by the NYSE of the impending delisting. Trading of LL Flooring's common stock on the NYSE has been suspended with immediate effect.
Despite this setback, LL Flooring's common stock is expected to continue trading in the over-the-counter (OTC) market under the ticker symbol LLFLQ. This move allows the company to maintain a presence in the public markets while it navigates through the Chapter 11 process.
The Chapter 11 proceedings are part of LL Flooring's broader restructuring efforts. The company has not released specific details about the potential outcomes of these proceedings or the impact on its operations and financial performance.
LL Flooring has historically offered a diverse range of flooring options, including waterproof vinyl plank, solid and engineered hardwood, laminate, bamboo, and more, catering to both online customers and those visiting their brick-and-mortar stores.
In other recent news, LL Flooring has initiated Chapter 11 bankruptcy proceedings, securing $130 million in debtor-in-possession financing from a bank group led by Bank of America. The company's assets are estimated to be between $500 million and $1 billion, while its liabilities range from $100 million to $500 million. This move is part of the company's strategy to restructure its business and address its financial challenges.
LL Flooring also announced the declassification of its board, a decision approved by shareholders at the 2024 Annual Meeting. The company's board will now be elected annually, aligning with a growing trend among public companies. Moreover, F9 Investments successfully placed all three of its nominees on the Board of Directors for LL Flooring, indicating shareholders' support for these new directors.
In the midst of these developments, LL Flooring reported a significant decrease in total revenues and comparable store sales, alongside an adjusted operating loss of $28.7 million.
To offset these financial challenges, the company is implementing cost management strategies, aiming for profitability at a sales level of $930 million to $1 billion. Additionally, the company is exploring the sale of its Sandston, Virginia distribution center to improve liquidity.
On the analyst front, Loop Capital has reduced its price target for LL Flooring due to persistent sales challenges. Meanwhile, Glass Lewis & Co., a proxy advisory firm, has advised shareholders to elect three director nominees proposed by F9 Investments, LL Flooring's largest shareholder. These are the recent developments surrounding LL Flooring.
InvestingPro Insights
Amidst the challenges faced by LL Flooring Holdings, Inc. (NYSE: LL), the company's financial health and stock performance metrics provide a clearer picture of its current market standing. According to InvestingPro data, LL Flooring has a market capitalization of $25.81 million, suggesting a relatively small size within the retail sector. The company's Price / Book multiple as of the last twelve months ending Q1 2024 stands at just 0.2, which could indicate that the stock is trading below the value of its net assets, often seen as a point of interest for value investors.
However, LL Flooring's revenue has seen a significant decline of 20.5% over the last twelve months as of Q1 2024. This downward trend is also reflected in a quarterly revenue drop of 21.69% for Q1 2024. These figures underscore the financial difficulties the company is experiencing, which may have contributed to the decision to file for Chapter 11 bankruptcy.
InvestingPro Tips highlight that LL Flooring is quickly burning through cash and analysts anticipate a sales decline in the current year. These factors may affect the company's ability to make interest payments on its debt, which is characterized as a significant burden. With the stock experiencing high price volatility, it's evident that LL Flooring's path ahead is fraught with uncertainty.
For investors seeking a deeper understanding of LL Flooring's financial health and future prospects, InvestingPro offers additional insights. There are 19 more InvestingPro Tips available, which could provide valuable guidance during these turbulent times for the company. For a comprehensive analysis, interested parties can visit https://www.investing.com/pro/LL for a full range of expert tips and real-time data.
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