Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________________________________ For the quarterly period ended September 29, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FORM 10-Q _________________________________________ For the transition period from ____ to ____ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 001-38070 _________________ ...

Floor & Decor Holdings, Inc. (NYSE:FND) Q2 2022 Earnings Conference Call August 4, 2022 5:00 PM ET Company Participants Wayne Hood - Vice President-Investor Relations Tom Taylor - Chief Executive Officer Trevor Lang - Executive Vice President and Chief Financial Officer Ersan Sayman - Executive Vice President of Merchandising Conference Call Participants John Parke - Wells Fargo Steven Zaccone - Citi Jackie Sussman - Morgan Stanley Chuck Grom - Gordon Haskett Greg Melich - Evercore Steve Forbes - Guggenheim ...

FORM 10-Q Filing Information [Registrant Details](index=1&type=section&id=Registrant%20Details) Floor & Decor Holdings, Inc. filed its Form 10-Q for the period ended June 30, 2022, as a Large Accelerated Filer with Class A common stock traded on the NYSE - Registrant: **Floor & Decor Holdings, Inc.**[2](index=2&type=chunk) - Filing Period: Quarterly period ended **June 30, 2022**[2](index=2&type=chunk) Class A Common Stock Listing | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | :------------------ | :---------------- | :---------------------------------------- | | Class A common stock, $0.001 par value per share | FND | New York Stock Exchange | Filer Status | Filer Status | | | :-------------------- | :--- | | Large Accelerated Filer | ☒ | [Shares Outstanding](index=1&type=section&id=Shares%20Outstanding) As of August 1, 2022, the company had 106,037,344 shares of Class A common stock outstanding - Class A common stock outstanding at August 1, 2022: **106,037,344 shares**[5](index=5&type=chunk) Part I – Financial Information [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations and comprehensive income, statements of stockholders' equity, and statements of cash flows, along with their accompanying notes for Floor & Decor Holdings, Inc. and its subsidiaries [Condensed Consolidated Balance Sheets (Unaudited)](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(Unaudited)) The balance sheet shows an increase in total assets, primarily driven by higher inventories and fixed assets, alongside an increase in total liabilities, notably trade accounts payable and revolving line of credit borrowings, with total stockholders' equity also increasing Condensed Consolidated Balance Sheets (in thousands) | Item | As of June 30, 2022 | As of December 30, 2021 | Change (2022 vs 2021) | | :-------------------------------- | :------------------- | :---------------------- | :-------------------- | | Cash and cash equivalents | $6,177 | $139,444 | $(133,267) | | Inventories, net | $1,344,136 | $1,008,151 | $335,985 | | Total current assets | $1,511,268 | $1,273,345 | $237,923 | | Total assets | $4,199,377 | $3,730,695 | $468,682 | | Trade accounts payable | $770,198 | $661,883 | $108,315 | | Revolving line of credit | $68,600 | — | $68,600 | | Total current liabilities | $1,197,279 | $1,032,015 | $165,264 | | Total liabilities | $2,705,091 | $2,407,496 | $297,595 | | Total stockholders' equity | $1,494,286 | $1,323,199 | $171,087 | [Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Unaudited)) The company reported increased net sales for both the thirteen and twenty-six weeks ended June 30, 2022, but experienced a slight decrease in net income for both periods, primarily due to higher cost of sales and increased provision for income taxes Condensed Consolidated Statements of Operations (Thirteen Weeks Ended, in thousands, except per share data) | Item | June 30, 2022 | July 1, 2021 | Change ($) | Change (%) | | :-------------------------- | :------------ | :----------- | :--------- | :--------- | | Net sales | $1,089,846 | $860,108 | $229,738 | 26.7% | | Gross profit | $436,282 | $365,438 | $70,844 | 19.4% | | Operating income | $106,410 | $98,557 | $7,853 | 8.0% | | Net income | $81,832 | $82,916 | $(1,084) | (1.3)% | | Basic earnings per share | $0.78 | $0.79 | $(0.01) | (1.3)% | | Diluted earnings per share | $0.76 | $0.77 | $(0.01) | (1.3)% | Condensed Consolidated Statements of Operations (Twenty-six Weeks Ended, in thousands, except per share data) | Item | June 30, 2022 | July 1, 2021 | Change ($) | Change (%) | | :-------------------------- | :------------ | :----------- | :--------- | :--------- | | Net sales | $2,118,580 | $1,642,645 | $475,935 | 29.0% | | Gross profit | $844,340 | $702,371 | $141,969 | 20.2% | | Operating income | $200,382 | $194,506 | $5,876 | 3.0% | | Net income | $152,783 | $158,712 | $(5,929) | (3.7)% | | Basic earnings per share | $1.45 | $1.52 | $(0.07) | (4.6)% | | Diluted earnings per share | $1.42 | $1.48 | $(0.06) | (4.1)% | [Condensed Consolidated Statements of Stockholders' Equity (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity%20(Unaudited)) Total stockholders' equity increased from $1,323.2 million at December 31, 2021, to $1,494.3 million at June 30, 2022, driven by net income, stock-based compensation expense, and other comprehensive gains Changes in Stockholders' Equity (in thousands) | Item | Balance, December 31, 2021 | Balance, June 30, 2022 | Change | | :-------------------------------- | :------------------------- | :--------------------- | :----- | | Additional Paid-in Capital | $450,332 | $466,260 | $15,928 | | Accumulated Other Comprehensive Income | $535 | $2,911 | $2,376 | | Retained Earnings | $872,226 | $1,025,009 | $152,783 | | Total Stockholders' Equity | $1,323,199 | $1,494,286 | $171,087 | - Key contributors to the increase in stockholders' equity include net income of **$152.8 million** and stock-based compensation expense of **$10.9 million** for the twenty-six weeks ended June 30, 2022[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) Net cash provided by operating activities significantly decreased year-over-year, primarily due to increased inventory. Investing activities saw higher capital expenditures, while financing activities shifted from a net use to a net provision of cash, driven by ABL borrowings Cash Flow Summary (Twenty-six Weeks Ended, in thousands) | Activity | June 30, 2022 | July 1, 2021 | Change | | :------------------------------------ | :------------ | :----------- | :------- | | Net cash provided by operating activities | $7,853 | $256,617 | $(248,764) | | Net cash used in investing activities | $(210,631) | $(195,445) | $(15,186) | | Net cash provided by (used in) financing activities | $69,511 | $(2,851) | $72,362 | | Net (decrease) increase in cash and cash equivalents | $(133,267) | $58,321 | $(191,588) | | Cash and cash equivalents, end of period | $6,177 | $366,093 | $(359,916) | - The decrease in operating cash flow was primarily due to a **$336 million** net increase in inventory to support operations[16](index=16&type=chunk)[121](index=121&type=chunk) - Increased cash used in investing activities was driven by an **$82.2 million** increase in capital expenditures for new stores and distribution center relocation[123](index=123&type=chunk) - The shift in financing activities was primarily due to **$336.8 million** in ABL borrowings during the current period[16](index=16&type=chunk)[125](index=125&type=chunk) [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) These notes provide detailed information on the company's accounting policies, revenue recognition, debt structure, income taxes, commitments, stock-based compensation, earnings per share, fair value measurements, and a significant subsequent event regarding its ABL facility [1. Basis of Presentation and Summary of Significant Accounting Policies](index=8&type=section&id=1.%20Basis%20of%20Presentation%20and%20Summary%20of%20Significant%20Accounting%20Policies) Floor & Decor is a multi-channel specialty retailer of hard-surface flooring, operating 174 warehouse-format stores and five design studios across 34 states as of June 30, 2022. The financial statements are prepared in accordance with GAAP for interim information, and the impact of COVID-19 remains uncertain. No material updates to significant accounting policies were made since the last Annual Report - Business: Multi-channel specialty retailer and commercial flooring distributor of hard-surface flooring and related accessories[18](index=18&type=chunk) - Store Count (as of June 30, 2022): **174 warehouse-format stores** and **5 small-format standalone design studios** in **34 states**[19](index=19&type=chunk) - COVID-19 Impact: Operations not negatively impacted in the first 26 weeks of fiscal 2022, but future impacts remain highly uncertain[23](index=23&type=chunk) - Accounting Policies: No updates to significant accounting policies since the Annual Report[24](index=24&type=chunk) - Recently Issued Accounting Pronouncements: Evaluating ASU No. 2021-01 (Reference Rate Reform) impact; ASU No. 2021-08 (Business Combinations) not expected to have a material impact[25](index=25&type=chunk)[26](index=26&type=chunk) [2. Revenue](index=9&type=section&id=2.%20Revenue) Net sales are recognized when customers obtain control of inventory. Contract liabilities, primarily deferred revenue, loyalty program liabilities, and unredeemed gift cards, increased significantly. Laminate/luxury vinyl plank and tile remain the largest product categories by net sales Contract Liabilities (in thousands) | Item | As of June 30, 2022 | As of December 30, 2021 | | :------------------------------------ | :------------------ | :---------------------- | | Deferred revenue | $20,220 | $14,492 | | Loyalty program liabilities | $27,500 | $20,400 | | Unredeemed gift cards | $9,400 | $5,300 | | Total contract liabilities | $57,100 | $40,200 | - Approximately **$14.9 million** of contract liabilities outstanding as of December 30, 2021, were recognized in revenue during the twenty-six weeks ended June 30, 2022[29](index=29&type=chunk) Net Sales by Product Category (Thirteen Weeks Ended, in thousands) | Product Category | June 30, 2022 Net Sales | % of Net Sales | July 1, 2021 Net Sales | % of Net Sales | | :------------------------------ | :---------------------- | :------------- | :--------------------- | :------------- | | Laminate / luxury vinyl plank | $299,610 | 27% | $214,642 | 25% | | Tile | $248,295 | 23% | $208,379 | 24% | | Decorative accessories / wall tile | $190,966 | 18% | $163,956 | 19% | | Installation materials and tools | $178,319 | 16% | $141,369 | 16% | | Wood | $71,489 | 7% | $66,158 | 8% | | Natural stone | $55,248 | 5% | $51,983 | 6% | | Adjacent categories | $17,837 | 2% | $13,587 | 2% | | Other | $28,082 | 2% | $34 | 0% | | **Total** | **$1,089,846** | **100%** | **$860,108** | **100%** | Net Sales by Product Category (Twenty-six Weeks Ended, in thousands) | Product Category | June 30, 2022 Net Sales | % of Net Sales | July 1, 2021 Net Sales | % of Net Sales | | :------------------------------ | :---------------------- | :------------- | :--------------------- | :------------- | | Laminate / luxury vinyl plank | $581,845 | 27% | $400,677 | 24% | | Tile | $478,906 | 23% | $397,815 | 24% | | Decorative accessories / wall tile | $382,001 | 18% | $321,330 | 20% | | Installation materials and tools | $346,164 | 16% | $271,970 | 17% | | Wood | $143,435 | 7% | $128,289 | 8% | | Natural stone | $108,704 | 5% | $101,234 | 6% | | Adjacent categories | $34,025 | 2% | $25,823 | 1% | | Other | $43,500 | 2% | $(4,493) | 0% | | **Total** | **$2,118,580** | **100%** | **$1,642,645** | **100%** | [3. Debt](index=11&type=section&id=3.%20Debt) The company's long-term debt increased to $264.2 million as of June 30, 2022, primarily due to borrowings under its Asset-based Loan (ABL) Facility. The company remains in compliance with all material covenants under its credit agreements Long-Term Debt Summary (in thousands) | Item | As of June 30, 2022 | As of December 30, 2021 | | :------------------------------------ | :------------------ | :---------------------- | | Term Loan Facility (par value) | $205,025 | $206,602 | | Asset-based Loan Facility (par value) | $68,600 | — | | Total secured debt at par value | $273,625 | $206,602 | | Less: unamortized discount and debt issuance costs | $7,891 | $8,737 | | Total long-term debt | $264,157 | $195,762 | - Net availability under the ABL Facility was **$308.9 million** as of June 30, 2022, after accounting for outstanding borrowings and letters of credit[39](index=39&type=chunk) - The company is in compliance with all material covenants under its Term Loan Facility and ABL Facility credit agreements[41](index=41&type=chunk) Interest Expense, Net (in thousands) | Period | June 30, 2022 | July 1, 2021 | | :-------------------- | :------------ | :----------- | | Thirteen Weeks Ended | $1,672 | $1,293 | | Twenty-six Weeks Ended | $2,834 | $2,681 | [4. Income Taxes](index=12&type=section&id=4.%20Income%20Taxes) The effective income tax rates for the thirteen and twenty-six weeks ended June 30, 2022, increased compared to the prior year periods, primarily due to lower excess tax benefits from stock option exercises and restricted stock vesting Effective Income Tax Rates | Period | June 30, 2022 | July 1, 2021 | | :-------------------- | :------------ | :----------- | | Thirteen Weeks Ended | 21.9% | 14.8% | | Twenty-six Weeks Ended | 22.7% | 17.3% | - The higher effective tax rates in 2022 were mainly due to year-over-year decreases in excess tax benefits related to stock option exercises and vesting of restricted stock and restricted stock units[42](index=42&type=chunk)[106](index=106&type=chunk) [5. Commitments and Contingencies](index=13&type=section&id=5.%20Commitments%20and%20Contingencies) The company has significant long-term operating lease commitments, with a weighted average remaining lease term of approximately 11 years. Total operating lease costs increased year-over-year. The company is also involved in ongoing litigation, including a wrongful death lawsuit and a derivative complaint, with outcomes currently unpredictable - Weighted average discount rate for leases: **5.2%** as of June 30, 2022 and July 1, 2021[44](index=44&type=chunk) - Weighted average remaining lease term: Approximately **11 years** as of June 30, 2022 and July 1, 2021[44](index=44&type=chunk) Total Operating Lease Cost (in thousands) | Period | June 30, 2022 | July 1, 2021 | | :-------------------- | :------------ | :----------- | | Thirteen Weeks Ended | $59,178 | $50,980 | | Twenty-six Weeks Ended | $115,988 | $98,749 | Future Minimum Lease Payments (as of June 30, 2022, in thousands) | Year | Amount | | :------------------------------------ | :------- | | Twenty-six weeks ending Dec 29, 2022 | $83,803 | | 2023 | $186,105 | | 2024 | $177,128 | | 2025 | $165,580 | | 2026 | $156,229 | | Thereafter | $1,013,830 | | Total minimum lease payments | $1,782,675 | | Present value of future minimum lease payments | $1,304,210 | - Litigation: The company is a defendant in a wrongful death lawsuit (Nguyen v. Inspections Now, Inc.) and a putative derivative complaint (Lincolnshire Police Pension Fund v. Taylor, et al.), with the ultimate timing or outcome of these cases currently not reasonably estimable[51](index=51&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk) [6. Stock-based Compensation](index=15&type=section&id=6.%20Stock-based%20Compensation) Stock-based compensation expense increased to $10.9 million for the twenty-six weeks ended June 30, 2022. The company granted new service-based and performance-based restricted stock units (RSUs) during the period - Stock-based compensation expense: **$10.9 million** for the twenty-six weeks ended June 30, 2022 (vs. **$10.1 million** for the prior year period)[55](index=55&type=chunk) Stock Option Activity (Twenty-six Weeks Ended June 30, 2022) | Item | Options | Weighted Average Exercise Price | | :-------------------------- | :-------- | :------------------------------ | | Outstanding at Dec 31, 2021 | 2,503,654 | $26.81 | | Exercised | (240,735) | $21.50 | | Forfeited or expired | (34,211) | $52.88 | | Outstanding at June 30, 2022 | 2,228,708 | $26.99 | | Vested and exercisable at June 30, 2022 | 1,831,270 | $22.01 | Restricted Stock Unit Activity (Twenty-six Weeks Ended June 30, 2022) | Item | Service-based | Performance-based | Total Restricted Stock Units | | :-------------------------- | :------------ | :---------------- | :--------------------------- | | Unvested at Dec 31, 2021 | 214,778 | — | 214,778 | | Granted | 230,208 | 36,566 | 266,774 | | Vested | (52,351) | — | (52,351) | | Forfeited | (9,718) | — | (9,718) | | Unvested at June 30, 2022 | 382,917 | 36,566 | 419,483 | Restricted Stock Award Activity (Twenty-six Weeks Ended June 30, 2022) | Item | Service-based | Performance-based | Total Stock Return (TSR) | Total Restricted Stock Awards | | :-------------------------- | :------------ | :---------------- | :----------------------- | :---------------------------- | | Unvested at Dec 31, 2021 | 144,725 | 160,315 | 104,456 | 409,496 | | Vested | (24,656) | — | — | (24,656) | | Forfeited | (16,195) | (25,997) | (16,939) | (59,131) | | Unvested at June 30, 2022 | 103,874 | 134,318 | 87,517 | 325,709 | [7. Earnings Per Share](index=16&type=section&id=7.%20Earnings%20Per%20Share) Basic and diluted earnings per share slightly decreased for both the thirteen and twenty-six weeks ended June 30, 2022, compared to the prior year periods, reflecting the change in net income and weighted average shares outstanding Earnings Per Share (in thousands, except per share data) | Item | Thirteen Weeks Ended June 30, 2022 | Thirteen Weeks Ended July 1, 2021 | Twenty-six Weeks Ended June 30, 2022 | Twenty-six Weeks Ended July 1, 2021 | | :------------------------------------ | :--------------------------------- | :-------------------------------- | :----------------------------------- | :---------------------------------- | | Net income | $81,832 | $82,916 | $152,783 | $158,712 | | Basic weighted average shares outstanding | 105,545 | 104,544 | 105,471 | 104,309 | | Diluted weighted average shares outstanding | 107,300 | 107,265 | 107,431 | 107,186 | | Basic earnings per share | $0.78 | $0.79 | $1.45 | $1.52 | | Diluted earnings per share | $0.76 | $0.77 | $1.42 | $1.48 | - Potentially dilutive securities excluded from diluted EPS due to anti-dilutive effect for the twenty-six weeks ended June 30, 2022, included **71 thousand stock options** and **225 thousand restricted stock units**[61](index=61&type=chunk) [8. Fair Value Measurements](index=16&type=section&id=8.%20Fair%20Value%20Measurements) The company's contingent earn-out liabilities, primarily from the Spartan Surfaces acquisition, had an estimated fair value of $9.3 million as of June 30, 2022. Interest rate cap contracts, designated as cash flow hedges, had a total fair value of approximately $4.0 million Contingent Earn-out Liabilities (in thousands) | Item | Amount | | :-------------------------- | :------- | | Balance at December 30, 2021 | $10,231 | | Fair value adjustments | $1,389 | | Payments | $(2,571) | | Balance at June 30, 2022 | $9,329 | - The **$1.4 million** net increase in fair value of contingent earn-out liabilities was recognized in general and administrative expense[66](index=66&type=chunk) - Total fair value of interest rate cap contracts: Approximately **$4.0 million** as of June 30, 2022 (vs. **$0.5 million** as of December 30, 2021)[69](index=69&type=chunk) [9. Subsequent Event](index=17&type=section&id=9.%20Subsequent%20Event) Subsequent to the reporting period, on August 4, 2022, the company amended its ABL Facility, increasing revolving commitments to $800 million and extending the maturity date to August 4, 2027 - ABL Facility Amendment (August 4, 2022): Increased revolving commitments to **$800 million** and extended maturity to **August 4, 2027**[70](index=70&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=17&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and operational results, highlighting key performance indicators, the impact of COVID-19, liquidity, capital resources, and critical accounting policies, also including forward-looking statements and risk factors [Forward-Looking Statements](index=18&type=section&id=Forward-Looking%20Statements) The report contains forward-looking statements regarding future operating results, financial position, business strategy, and the impact of COVID-19. These statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially - Key risk factors include: overall economic decline, inflation/interest rates, supply chain disruptions, inability to anticipate consumer demand, inability to pass along cost increases, challenges in managing growth and new store openings, and geopolitical risks[74](index=74&type=chunk)[78](index=78&type=chunk) [Overview](index=19&type=section&id=Overview) Floor & Decor is a high-growth, multi-channel specialty retailer of hard surface flooring, serving Pro, DIY, and BIY customers. As of June 30, 2022, it operated 174 warehouse-format stores and five design studios. The company continued strategic investments in new stores, product innovation, customer technology, and Pro customer resources during the first twenty-six weeks of fiscal 2022 - Business Model: Offers broad assortment of hard-surface flooring (tile, wood, laminate, vinyl, natural stone) and accessories at everyday low prices[77](index=77&type=chunk) - Customer Segments: Professional installers and commercial businesses ('Pro'), Do it Yourself customers ('DIY'), and Buy it Yourself customers ('BIY')[77](index=77&type=chunk) - Strategic Investments (Twenty-six Weeks Ended June 30, 2022): * Opened **15 new warehouse-format stores** and **three design studios**, closing one warehouse-format store * Relocated Houston distribution center to a larger facility * Increased staffing and improved in-stock inventory levels * Focused on innovative new products and localized assortments * Invested in connected customer, in-store designer, and store-focused technology * Added resources for Pro customers, including professional external sales staff * Enhanced in-store shopping experience[79](index=79&type=chunk)[83](index=83&type=chunk) [COVID-19 Update](index=20&type=section&id=COVID-19%20Update) The company continues to monitor and respond to the COVID-19 pandemic, focusing on employee/customer safety, brand strength, staffing, inventory, and strategic positioning. Supply chain disruptions, labor shortages, and increased costs persist, though the company has managed to partially pass on cost increases. Future impacts remain uncertain due to evolving public health restrictions and consumer behavior - Five Priorities for COVID-19 Response: * Protect health and safety of employees and customers * Maintain brand strength and support customers (including small businesses) * Invest in store and distribution center staffing * Increase in-stock inventory positions with supply chain partners * Position Floor & Decor to emerge strong[81](index=81&type=chunk) - Supply Chain Impact: Labor shortages, congestion, and disruptions continue, leading to significant cost increases, particularly in shipping. The company is partially passing these costs to customers[82](index=82&type=chunk) - Future Uncertainty: Potential for future store closures, operational restrictions, staffing challenges, and changes in consumer behavior due to ongoing pandemic developments[83](index=83&type=chunk) [Key Performance Indicators](index=21&type=section&id=Key%20Performance%20Indicators) Management uses several key performance indicators to assess business performance, including comparable store sales, new store openings, gross profit and margin, operating income, and non-GAAP measures like EBITDA and Adjusted EBITDA - Key Performance Indicators: * Comparable store sales * Number of new store openings * Gross profit and gross margin * Operating income * EBITDA and Adjusted EBITDA[84](index=84&type=chunk) [Results of Operations](index=22&type=section&id=Results%20of%20Operations) The company experienced strong net sales growth driven by new store openings and increased average ticket, despite a decrease in comparable customer transactions. Gross margin declined due to higher supply chain costs. Operating expenses increased with store growth, while general and administrative expenses saw leverage. Net income slightly decreased due to higher costs and tax rates Selected Financial Information | Item | Thirteen Weeks Ended June 30, 2022 | Thirteen Weeks Ended July 1, 2021 | Twenty-six Weeks Ended June 30, 2022 | Twenty-six Weeks Ended July 1, 2021 | | :------------------------------------ | :--------------------------------- | :-------------------------------- | :----------------------------------- | :---------------------------------- | | Comparable store sales (% change) | 9.2% | 68.4% | 11.7% | 48.1% | | Comparable average ticket (% change) | 17.9% | 3.9% | 17.2% | 2.9% | | Comparable customer transactions (% change) | (7.3)% | 62.1% | (4.7)% | 43.9% | | Number of warehouse-format stores | 174 | 147 | 174 | 147 | | Adjusted EBITDA (in thousands) | $150,297 | $137,024 | $286,074 | $264,099 | | Adjusted EBITDA margin | 13.8% | 15.9% | 13.5% | 16.1% | - Net Sales: * Thirteen Weeks: Increased **$229.7 million (26.7%)** to **$1,089.8 million**, driven by **9.2% comparable store sales growth** and new stores[91](index=91&type=chunk)[92](index=92&type=chunk) * Twenty-six Weeks: Increased **$475.9 million (29.0%)** to **$2,118.6 million**, driven by **11.7% comparable store sales growth** and new stores[91](index=91&type=chunk)[92](index=92&type=chunk) * Comparable sales growth was primarily from a higher average ticket (**17.9%** for 13 weeks, **17.2%** for 26 weeks), offsetting decreased customer transactions[93](index=93&type=chunk) - Gross Profit and Gross Margin: * Thirteen Weeks: Gross profit increased **19.4%** to **$436.3 million**; gross margin declined **250 basis points** to **40.0%** due to higher supply chain costs[94](index=94&type=chunk) * Twenty-six Weeks: Gross profit increased **20.2%** to **$844.3 million**; gross margin declined **290 basis points** to **39.9%** due to higher supply chain costs[95](index=95&type=chunk) - Operating Expenses: * Selling and Store Operating Expenses: Increased **30.8%** (13 weeks) and **31.1%** (26 weeks) primarily due to new stores and increased staffing. As a percentage of net sales, increased **70 basis points** (13 weeks) and **40 basis points** (26 weeks)[96](index=96&type=chunk)[97](index=97&type=chunk)[98](index=98&type=chunk) * General and Administrative Expenses: Increased **0.5%** (13 weeks) and **11.2%** (26 weeks) due to store growth support and Spartan subsidiary expenses. As a percentage of net sales, decreased **120 basis points** (13 weeks) and **80 basis points** (26 weeks) due to lower employee incentive compensation accruals and absence of prior year acquisition expenses[99](index=99&type=chunk)[100](index=100&type=chunk)[101](index=101&type=chunk) * Pre-Opening Expenses: Decreased **4.7%** (13 weeks) due to lower occupancy costs; increased **15.7%** (26 weeks) due to more stores opening or preparing for opening[102](index=102&type=chunk) - Interest Expense, Net: Increased **29.3%** (13 weeks) and **5.7%** (26 weeks) due to interest rate increases on outstanding debt and higher ABL borrowings, partially offset by increased capitalized interest[103](index=103&type=chunk) - Provision for Income Taxes: Increased to **$22.9 million** (13 weeks) and **$44.8 million** (26 weeks). Effective tax rates increased to **21.9%** (13 weeks) and **22.7%** (26 weeks) primarily due to lower excess tax benefits from stock-based compensation[104](index=104&type=chunk)[105](index=105&type=chunk)[106](index=106&type=chunk) [Non-GAAP Financial Measures](index=25&type=section&id=Non-GAAP%20Financial%20Measures) The company uses EBITDA and Adjusted EBITDA as key metrics to assess financial performance, evaluate business strategies, and compare against peers. These non-GAAP measures exclude certain expenses not indicative of core operating performance, such as stock-based compensation and acquisition-related costs Reconciliation of Net Income to EBITDA and Adjusted EBITDA (in thousands) | Item | Thirteen Weeks Ended June 30, 2022 | Thirteen Weeks Ended July 1, 2021 | Twenty-six Weeks Ended June 30, 2022 | Twenty-six Weeks Ended July 1, 2021 | | :------------------------------------ | :--------------------------------- | :-------------------------------- | :----------------------------------- | :---------------------------------- | | Net income | $81,832 | $82,916 | $152,783 | $158,712 | | Depreciation and amortization | $37,517 | $27,377 | $71,637 | $52,897 | | Interest expense, net | $1,672 | $1,293 | $2,834 | $2,681 | | Income tax expense | $22,906 | $14,348 | $44,765 | $33,113 | | **EBITDA** | **$143,927** | **$125,934** | **$272,019** | **$247,403** | | Stock-based compensation expense | $4,889 | $5,319 | $10,869 | $10,053 | | Acquisition and integration expense | — | $3,166 | — | $3,166 | | Tariff refund adjustments | — | $1,728 | — | $1,728 | | COVID-19 costs | — | $408 | — | $624 | | Other (e.g., Houston DC relocation, earn-out fair value adjustments) | $1,481 | $469 | $3,186 | $1,125 | | **Adjusted EBITDA** | **$150,297** | **$137,024** | **$286,074** | **$264,099** | [Liquidity and Capital Resources](index=26&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is primarily from cash flows from operations and its ABL Facility. Unrestricted liquidity was $315.1 million as of June 30, 2022. Capital expenditures for fiscal 2022 are projected between $480 million and $500 million, mainly for new stores and infrastructure. The company's credit ratings remain positive, and it continues to mitigate the impact of U.S. tariffs on Chinese imports - Unrestricted liquidity as of June 30, 2022: **$315.1 million** (consisting of **$6.2 million cash** and **$308.9 million ABL availability**)[114](index=114&type=chunk) - Fiscal 2022 Capital Expenditure Plans (projected **$480 million-$500 million**): * **$374 million-$386 million** for 32 new warehouse-format stores, 4 design studios, relocations, and 2023 store construction * **$70 million-$74 million** for existing store remodels and distribution centers * **$36 million-$40 million** for IT infrastructure, e-commerce, and store support center initiatives[118](index=118&type=chunk)[121](index=121&type=chunk) - Credit Ratings: Moody's (**Ba3**) and Standard & Poor's (**BB-**) ratings maintained with a positive outlook in fiscal 2022[126](index=126&type=chunk) - U.S. Tariffs: Approximately **30%** of products sold in fiscal 2021 were from China. Mitigation efforts include negotiating lower vendor costs, increasing retail prices, and sourcing from alternative countries. The company expects to recover **$21.9 million** in tariff refunds, with **$15.6 million** received as of June 30, 2022[128](index=128&type=chunk)[129](index=129&type=chunk) [Critical Accounting Policies and Estimates](index=29&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) The company's financial statements rely on estimates and assumptions. Management has assessed the impact of COVID-19 and is not aware of any specific events requiring updates to critical accounting policies or materially affecting asset/liability carrying values as of the report date. No material changes to critical accounting policies were disclosed - No material changes to critical accounting policies and estimates as disclosed in the Annual Report[131](index=131&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=29&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk exposure is to interest rate fluctuations on its variable-rate credit facilities. A 1.0% increase in interest rates would increase interest expense by approximately $2.7 million over the next twelve months, partially offset by existing interest rate cap agreements - Interest Rate Risk: A **1.0%** increase in the effective interest rate on variable-rate debt (Term Loan Facility: **$205.0 million**, ABL Facility: **$68.6 million**) would increase interest expense by approximately **$2.7 million** over the next twelve months[133](index=133&type=chunk) - Mitigation: Two **$75.0 million** interest rate cap agreements are in place, capping LIBOR at **1.75%** through April 2024, partially offsetting potential interest expense increases[133](index=133&type=chunk) [Item 4. Controls and Procedures](index=30&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2022. There have been no material changes in internal control over financial reporting during the fiscal quarter - Disclosure Controls and Procedures: Effective at the reasonable assurance level as of **June 30, 2022**[135](index=135&type=chunk) - Internal Control Over Financial Reporting: No material changes during the fiscal quarter ended **June 30, 2022**[136](index=136&type=chunk) Part II – Other Information [Item 1. Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 5, 'Commitments and Contingencies,' for details on legal proceedings, which include a wrongful death lawsuit and a putative derivative complaint - Refer to Note 5, 'Commitments and Contingencies,' for information on legal proceedings[137](index=137&type=chunk) [Item 1A. Risk Factors](index=30&type=section&id=Item%201A.%20Risk%20Factors) This section directs readers to the 'Risk Factors' section in the company's Annual Report on Form 10-K for a comprehensive discussion of factors that could materially affect the business, financial condition, and operating results - Refer to Part I, 'Item 1A. Risk Factors' in the Annual Report filed **February 24, 2022**, for a description of risk factors[138](index=138&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=30&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or use of proceeds to report for the period - None[139](index=139&type=chunk) [Item 3. Defaults Upon Senior Securities](index=30&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities to report for the period - None[140](index=140&type=chunk) [Item 4. Mine Safety Disclosures](index=30&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - Not applicable[141](index=141&type=chunk) [Item 5. Other Information](index=30&type=section&id=Item%205.%20Other%20Information) There is no other information to report under this item - None[142](index=142&type=chunk) [Item 6. Exhibits](index=31&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including corporate governance documents, certifications, and XBRL-related documents - Key Exhibits: * Amended & Restated Certificate of Incorporation * Second Amended and Restated Bylaws * Certifications of Principal Executive Officer and Principal Financial Officer (Sections 302 and 906 of Sarbanes-Oxley Act) * XBRL Instance Document, Taxonomy Extension Schema, Calculation Linkbase, Definition Linkbase, Label Linkbase, and Presentation Linkbase Documents * Cover Page Interactive Data File[143](index=143&type=chunk) [Signatures](index=32&type=section&id=Signatures) The report is duly signed on behalf of Floor & Decor Holdings, Inc. by its Chief Executive Officer, Thomas V. Taylor, and Executive Vice President and Chief Financial Officer, Trevor S. Lang, as of August 4, 2022

Floor & Decor Holdings, Inc. (NYSE:FND) Q1 2022 Earnings Conference Call May 5, 2022 4:30 PM ET Company Participants Wayne Hood – Vice President-Investor Relations Tom Taylor – Chief Executive Officer Trevor Lang – Executive Vice President and Chief Financial Officer Brian Robbins – Executive Vice President, Business Development Strategy Conference Call Participants Steve Forbes – Guggenheim Zack Fadem – Wells of Fargo Michael Lasser – UBS Chuck Grom – Gordon Haskett Chris Horvers – JPMorgan Jackie Sussman ...

Table of Contents 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 March 31, 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 001-38070 _____________________ ...

Floor & Decor Holdings, Inc. (NYSE:FND) Q4 2021 Results Conference Call February 24, 2022 5:00 PM ET Company Participants Wayne Hood - VP, IR Tom Taylor - CEO Lisa Laube - President Trevor Lang - EVP and CFO Conference Call Participants Michael Lasser - UBS John Parke - Gordon Haskett Simeon Gutman - Morgan Stanley Karen Short - Barclays Greg Melich - Evercore ISI Steven Forbes - Guggenheim Jonathan Matuszewski - Jefferies Christian Carlino - JP Morgan Patrick Hollander - Goldman Sachs Steven Zaccone - Citi ...

For the fiscal year ended December 30, 2021 Floor & Decor Holdings, Inc. (Exact name of registrant as specified in its charter) UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Table of Contents Commission file number 001-38070 30339 (Zip Code) Registrant's teleph ...

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, 2021 Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________________________________ 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 001-38070 _________________ ...

Floor & Decor Holdings, Inc. (NYSE:FND) Q2 2021 Earnings Conference Call August 5, 2021 5:00 PM ET Company Participants Wayne Hood - VP, IR Tom Taylor - CEO Lisa Laube - President Trevor Lang - EVP and CFO Conference Call Participants Karen Short - Barclays Chris Horvers - JPMorgan Simeon Gutman - Morgan Stanley Michael Lasser - UBS Steven Forbes - Guggenheim Securities Chuck Grom - Gordon Haskett Elizabeth Suzuki - Bank of America Justin Kleber - Baird Jonathan Matuszewski - Jefferies Operator Good afterno ...

For the quarterly period ended July 1, 2021 Table of Contents 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 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 001-38070 _______________________ ...