Lumber Liquidators will give consumers who purchased the company’s Chinese-made laminate product free indoor air testing kits and analysis from accredited laboratories. The company will also consider a reinstallation if the customer is not satisfied.
The company made the announcement during a conference call Thursday morning that discussed the safety of Lumber Liquidators Chinese-made laminate flooring, which was called into question by a “60 Minutes” report that aired Sunday, March 1, and sent the company’s stock spiraling down by 20 percent before the market opened the next morning. The report claimed the laminate product had unsafe levels of formaldehyde in excess of CARB Phase 2 standards.
Air quality testing will be done by an independent third-party lab, said CEO Robert Lynch during the call, outlining the testing process.
“Unfavorable results will lead to further steps to determine air quality and the source,” he said.
A slide from the Lumber Liquidators conference call presentation shows how the company plans to deal with customers’ air quality concerns.
The last step could be that Lumber Liquidators will pay to reinstall the a floor, Lynch said. He added that the company expects a reinstallation to range from $3,000–$4,000.
Fewer than 1,000 consumers had requested air quality testing kits since the report aired, CEO Robert Lynch said during the conference call.
During the call, Lynch and CFO Dan Terrell repeatedly asserted that the Chinese-made laminate product and all Lumber Liquidators products are safe and do not pose significant health or safety issues.
A model of formaldehyde emissions from Lumber Liquidators products created by a consulting firm for the retailer indicated that “our laminate would add about 5 parts per billion of formaldehyde to indoor air when it is installed,” Lynch said.
A slide from the Lumber Liquidators conference call presentation shows how formaldehyde levels in flooring decrease over time.
That level would decrease within a year as formaldehyde off-gasses, to about 2 parts per billion, and would continue to decrease to less than 1 part per billion within five to 10 years, Lynch said.
“All those levels are well below the levels that health experts would be concerned about,” he said.
Lynch also detailed why the company does not agree with the testing method “60 Minutes” used to claim the laminate flooring had levels of formaldehyde illegal under CARB. The deconstructed testing that was performed for “60 Minutes,” which involves taking the laminate floor apart and testing the MDF core, does not test the product how it would actually be used in a house, Lynch said.
A slide from the Lumber Liquidators conference call presentation diagrams the manufacturing process of a laminate floor product, as well as when that product is tested.
The company also discussed how CARB Phase 2 testing does not require deconstructive testing. Concurrently, industry organizations including the Federal Wood Industries Coalition (a group of 17 organizations, including the National Wood Flooring Association) and a coalition consisting of the Kitchen Cabinet Manufacturers Association, American Home Furnishings Alliance, and International Wood Products Association released statements regarding the deconstructive testing method.
“CARB has used this approach as a ‘rough’ screening method, but the procedure is not part of the regulation nor has it been adopted by ASTM or other consensus standards bodies,” according to the FWIC statement.
Lynch explained that the company undertakes its own finished goods testing, which evaluates a whole product (i.e., as it is actually used) in contrast to the deconstructed product test used by “60 Minutes” investigators.
In the wake of the “60 Minutes” report, more than a dozen class action lawsuits have been filed accusing Lumber Liquidators of selling Chinese-made laminate with unsafe levels of formaldehyde and mislabeling the product as compliant with CARB Phase 2 standards.
The New York and Connecticut state attorney generals have announced their own investigations into Lumber Liquidators products sold in their respective states.
The Consumer Product Safety Commission may also be considering its own investigation after Sen. Bill Nelson, D-Fla., asked it and other federal agencies to look into the matter. While the CPSC has not confirmed an investigation, it did ask “60 Minutes” for results from the tests the program commissioned on the laminate flooring.
Lumber Liquidators stock opened Thursday at $34.65. The stock, as of 2 p.m. CT, increased to $36.05 and was continuing upward as of the time of this posting. The company’s stock has been steadily increasing this week since closing on March 9 at $27.95, its the lowest value since April 2007.
