Lumber Liquidators falls in premarket on revised CDC report

Frequent exposure was also tied to a higher risk of suffering from respiratory problems and irritation in the eyes, nose and throat.

Lumber Liquidators is still facing a probe in California into charges that its China-sourced laminates have excessive levels of carcinogens.

Investors had been somewhat encouraged due to the February 10 report of the CDC that suggested the formaldehyde level in the select types of laminate flooring might cause between 2 and 9 cancer cases for every 100,000 people. The agency subsequently learned that the risk was six to 30 cases.

Lumber Liquidators is providing indoor air quality testing at no cost to qualifying customers.

The agency said the discrepancy came from regulators using the wrong ceiling height to determine the exposure risk. Lumber Liquidators tumbled 20 percent to $11.40 at the close in NY, the biggest drop since August 5. The CDC and a sister agency analyzed the results to calculate the health impact of the detected levels of formaldehyde. Furthermore, the company stopped selling Chinese-made laminate flooring past year, specifically because of the concerns.

However, less than two weeks later, the tables were completely turned for Lumber Liquidators over the weekend after the CDC released another report, reversing its previous findings.

Formaldehyde is a colorless gas with a pungent smell, used among other things to manufacture building materials and household products.

A sign hangs above the entrance a Lumber Liquidators store on April 29, 2015 in Chicago, Illinois.

“Health risks of people who have the laminate flooring are being revised to reflect greater exposure to formaldehyde, which could cause eye, nose, and throat irritation for anyone”, the CDC stated.

The company eventually reached a $10 million settlement with the Justice Department last fall and pleaded guilty to making false declarations on import documentation about the source of some of its flooring.

Beyond potentially scaring away more customers, the increased risk assessment from the CDC may also make the civil lawsuits brought against the company more costly, even devastating, according to Basham.

Lumber Liquidators was not available for comment outside regular business hours.