August 5, 2015 — Lumber Liquidators expects to face regulatory action for formaldehyde in flooring and posted an unexpected loss this quarter.
CNBC reports that the stock dropped another 27% to just over $13 per share in trading today, down more than 70% this year and hitting a 4-year low.
Lumber Liquidators has been in turmoil since March, when a “60 Minutes” investigation found evidence that the company was selling Chinese-made laminate wood floors with dangerous levels of formaldehyde, a known carcinogen.
The California Air Resources Board (CARB) has informed Lumber Liquidators that samples tested earlier this year exceeded the state’s limits for formaldehyde emissions. According to the regulatory filing:
“While we believe that CARB may assert a claim against us, we cannot estimate the reasonably possible loss or range of loss that may result from this matter given that CARB is still conducting its investigation and no notice of violation has been issued.”
Lumber Liquidators is facing about 100 lawsuits seeking class action status. The company also disclosed that it has faced criminal charges from the Justice Department, but now expects a $3.2 million fine for violating federal laws by selling illegally logged wood from Russia’s far east, home of the endangered Siberian tiger, according to the Motley Fool.