Lumber Liquidators Won't Resume Sales of Inventory of Chinese-Made Laminate

Lumber Liquidators Holdings Inc. has agreed not to resume the sale of its inventory of Chinese-made laminate wood flooring at the center of a cancer-risk controversy and pledged to continue testing the floors.

The laminate flooring shouldn't be removed, officials warn, as it could increase exposure to formaldehyde, a known carcinogen. Instead, consumers should contact the company to obtain a free testing kit.

Shares, down nearly one-quarter this year, rose 10% to $14.52 in after-hours trading.

More than 600,000 people bought the laminate flooring in question in the U.S. over a roughly four-year period through May 2015, when the company stopped selling it, according to the U.S. Consumer Product Safety Commission.

Lumber Liquidators said none of the more than 1,300 planks tested so far came back with levels of formaldehyde above government guidelines.

The company came under further scrutiny in March 2015 after the CBS program "60 Minutes" aired a segment alleging the laminate-flooring material sold by Lumber Liquidators and made in China didn't meet California's emissions standards on levels of formaldehyde.

The Consumer Product Safety Commission and the Centers for Disease Control and Prevention's National Center for Environmental Health/Agency for Toxic Substances and Disease Registry found that eye, nose, and throat irritation could happen in some cases based on higher formaldehyde emitting samples. Very high levels of formaldehyde in homes could also be linked with a small increase in cancer risk, the government officials found.

Lumber Liquidators has since put in place stricter safeguards and sells laminate flooring only from North America and Europe.

The fallout, however, has dragged the company's results, pushing it into its first annual loss in at least a decade.

In May, the company reported its loss widened more than fourfold in the first quarter to $32.4 million as sales fell 10%.

Write to Maria Armental at [e-mail]

(END) Dow Jones Newswires

June 16, 2016 23:55 ET (03:55 GMT)

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