Lumber Liquidators said Thursday that it would provide free indoor air testing to consumers after a report that accused the company of selling laminate flooring from China that contained high levels of formaldehyde.
Consumers can request free indoor air quality test kits that will be analyzed by accredited laboratories, the company said. Results will be emailed within a week to 10 days.
The company outlined its plan during a call to address a recent report on the CBS News program “60 Minutes,” which said the discount flooring retailer sold wood that violated safety limits set by the California Air Resources Board. Lumber Liquidators disputed the accusations and testing methods used by the news program, and has maintained that its products are safe.
Shares of Lumber Liquidators rose over 4 percent on Thursday, and were up at least 5 percent more in after-hours trading.
Lumber Liquidators did not provide a plan for consumers to test specifically whether the flooring itself violated safety standards. While indoor air test kits can measure the amount of a pollutant in the air, they do not identify the source of the contaminant. Many items like furniture and disinfectants can leak formaldehyde, and consumers might not be able to determine how much of it was coming from Lumber Liquidators’ flooring or from other sources.
Fewer than 1,000 customers with laminate floors from China have requested air quality testing kits, the company said Thursday.
If results are above “accepted thresholds,” Lumber Liquidators will evaluate whether more testing is required.
The company did not elaborate on the nature of those tests, or whether it would pay for the removal of flooring.
Lumber Liquidators’ response has done little to soothe the anxieties of investors. The stock has dropped about 30 percent since the March 1 report.
On Thursday, Lumber Liquidators projected that sales would be $253.6 million to $265.6 million in the first quarter, an increase of 3 to 7.8 percent from the period last year. Analysts polled by Thomson Reuters had expected revenue of $275.98 million.
Expenses were expected to increase 9 to 10 percent, including about $1.8 million of fees relating to the CBS broadcast, the company said.
The company said Thursday that sales had fallen 7.5 percent since the “60 Minutes” report, compared with the same period last year.
Federal regulators have scrambled to respond to public concern. While the Environmental Protection Agency is in the final stages of adopting rules similar to those in California, it does not yet enforce them. The Consumer Product Safety Commission, which typically oversees household items like kitchen appliances and toys, may wind up leading any investigation.
Laminate flooring is an artificial product that is a cheaper alternative to hardwood and other higher-end wood products. The core of a board is made up of various materials, including wood, glued together with an adhesive that typically includes formaldehyde. A top layer is then placed on the core to produce the final panel.
Formaldehyde seeps into the air over time, and California tests the emission level of the core. Once the top layer of wood is added, however, that emission rate can drop, something Lumber Liquidators emphasized on Thursday.
While formaldehyde is a known carcinogen, its long-term health effects are not well understood. Exposure to a lot of formaldehyde in a short period can produce immediate symptoms like burning of the eyes and throat, and can aggravate asthma.
But scientists do not know definitively how much formaldehyde, and over what time period, can cause certain types of cancers.
The company said that its laminate floors would typically add 5 parts per billion to a home when first installed. Some state health officials suggest that formaldehyde levels in the home should not exceed 40 parts per billion.
Within a year of installation, the company said, the emission rate will drop by more than half.