Lumber Liquidators fighting back
Rocked by a "60 Minutes" exposemore than a week ago, Toano, Virginia-based Lumber Liquidators emphasized “Our products are safe,” during a business update conference call on Thursday.
Tom Sullivan, the company’s founder and chairman who was grilled by Anderson Cooper on the CBS news program, did not participate in the call. But president and CEO Rob Lynch took the offensive.
“First and foremost, I want to reassure all of you, all of our customers and the general public that we are confident that all of our products are safe and none of our products pose significant health or safety issues,” Lynch said.
While "60 Minutes" accused the company of excessive levels of formaldehyde in its laminate flooring, Lynch’s defense of the company included a deep dive into the role of fromaldehyde. “As lamination actually helps seal-in the formaldehyde from the core, as '60 Minutes' acknowledged, formaldehyde emissions arising from our products are a small fraction of the levels the media has discussed.”
"... we are confident that all of our products are safe and none of our products pose significant health or safety issues.”
Lynch also hammered home five steps the 350-store retail company takes that go above and beyond the regulatory requirements:
“First, CARB regulates products sold in California, but we require all of our suppliers to comply with CARB standards regardless of what state or country the product is being sold in,” he said.
“Second, Lumber Liquidators is one of the only flooring retailers that we know of to invest in, install and operate a lab with emission-testing capabilities. This is a state-of-the-art facility. It includes two temperature and humidity controlled conditioning rooms, and two formaldehyde emission chambers that mirror the capabilities of CARB and other state of the art emission testing facilities. The type of chambers, ASTM International D6007, correlate to a CARB-approved Third Party Certifier.
"Third, we test products as they are actually used in a consumer’s home -- in their finished state. CARB considers the emissions of the core MDF, but we do this testing to make sure that the entire product is also safe. Fourth, we perform supplier site audits. This means that we show up at our suppliers’ facilities on an announced and unannounced basis, and perform our own testing to make sure the cores are compliant. CARB doesn’t require this, but we do it anyway.
“Lastly, we perform quarterly invoice and supplier document reviews to verify CARB compliance. During these reviews we look at the documentation from our suppliers and verify that CARB’s standards are being met."
[The company posted a transcript of its conference callhere.]
Lend added that Lumber Liquidators’ most popular products -- hardwood floors and vinyl flooring -- are untouched by the recent allegations.
He spoke at great length about the CARB emission standards, and the difference between deconstructive testing, the kind that "60 Minutes" used, and the kind of testing that measures how a product will perform in a house.
Meanwhile, the company continues to face lawsuits orchestrated by short sellers, he claimed.
From a financial perspective, the company said comp-store sales following the broadcast of the "60 Minutes" episode fell about 13%. The company’s stock price has dropped about 50% in the last month.