Lumber Liquidators reports Q1 loss, faces criminal charges

Toano, Va. -- Lumber Liquidators Holdings reported a first-quarter loss of $7.8 million, swinging from a profit of $13.7 million in the year-ago period and missing Wall Street expectations. Revenue of $260 million in the period met analysts’ forecasts.



The company warned that that sales and margins will likely remain depressed this month, as it fights allegations that some of its Chinese-made laminate flooring products are unsafe. The Justice Department is seeking criminal charges against Lumber Liquidators in the ongoing investigation over the imported products. The investigation was first revealed in a CBS “60 Minutes” expose in early March, alleging that the company’s laminate flooring made in China contained high levels of formaldehyde. Lumber Liquidators maintains that it complies with applicable regulations for its products, including California standards for formaldehyde emissions.



In a filing with the Securities and Exchange Commission, the company revealed that the Department of Justice was seeking criminal charges under the Lacey Act which, among other things, bans illegally sourced wood products. More than 100 class-action lawsuits are pending.



CFO Dan Terrell will leave the company in June. He has held the position since October 2006. The company appointed Ernst & Young veteran Gregory Whirley Jr. as interim CFO.