Lumber Liquidators (LL) Surge on California Air Resources Board Settlement
Shares of Toano, Virginia, based Lumber Liquidators Holdings, Inc. (LL) rose on Tuesday, against the backdrop of a mixed day in stocks overall. Lumber Liquidators stock was up 15.97%, rising $1.92 per share, to close at $13.94, on volume of 7,744,957 shares. The company announced that it has reached a settlement with the California Air Resources Board (CARB) that fully resolves an inquiry regarding certain laminate flooring products, manufactured in China, and sold by the company.
Founded in 1994, Lumber Liquidators Holdings, Inc. is a multi channel specialty retailer of hardwood flooring and hardwood flooring enhancements and accessories. It operates more than 370 locations in the U.S. It offers exotic and domestic hardwood species, engineered hardwood, laminate, vinyl plank, bamboo and cork direct to the consumer. The company also provides a wide selection of flooring enhancements and accessories, including moldings, noise reducing underlay, adhesives and flooring tools. The stock trades on the New York Stock Exchange.
Tuesday's agreement resolves the California Air Resources Board's inquiry about the laminate flooring product in question, and CARB has concluded the review with no formal finding of violation. Lumber Liquidators has not provided an admission of wrong doing. The company will comply with a series of voluntary compliance procedures to be sure that all of the company's flooring products comply with CARB's formaldehyde standards. California's formaldehyde standards are considered the most stringent in the country.
Meanwhile, Lumber Liquidators will pay $2.5 million to CARB to settle the issue. As part of the settlement, CARB expressly recognized that actions taken by Lumber Liquidators lacked evidence of actual harm to public health, safety and welfare. Lumber Liquidators has also agreed to cooperate with CARB in developing a testing program designed to establish best practices and protocols for testing flooring products.
The agreement removes a contingency that has been hanging over the company since 2015, and is seen as a positive for the stock.
"Consumer safety is our top priority and, over the past year, we have implemented a number of customer-focused initiatives," said Lumber Liquidators CEO John Presley. "We strengthened our quality assurance procedures, launched the largest voluntary testing program in our nation's history and, in May 2015, voluntarily suspended the sale of all laminate flooring sourced from China. We look forward to continuing to work with CARB to establish new industry standards for flooring product testing. We believe today's settlement will go a long way in helping us to execute our strategy, which includes rebuilding our brand and communicating – with clarity and candor – the value of our products to our customers and stakeholders."
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