The shares of Lumber Liquidators dropped nearly 15% following a report from the Centers for Disease Control (CDC), which revealed the increased the risk of cancer from the laminate flooring that contains formaldehyde. The US-based health regulator released a health report linked with increased cancer risk in certain flooring laminated with formaldehyde.
The CDC report showed that the continuous exposure to formaldehyde raised the risk of cancer factor. According to the report, formaldehyde could result in 6 to 30 cancer victims from per 100,000 people with direct contact to the laminate flooring. Earlier, the CDC had anticipated cancer cases to be in the range of 2 to 9 victims. The previous report failed to mention the name of the manufacturer.
However, the recent report linked the cancer risks to formaldehyde laminate flooring manufactured by Lumber Liquidators. The company was charged in 2015 that its flooring products contain formaldehyde that poses cancer risks in people having continuous exposure to the flooring. As a result of this allegation, the chief executive officer stepped down from the company's board. Lumber Liquidators also stopped the sale of the contentious product from China. During the previous fall, the company entered into a settlement deal worth at $10 million and begged mercy for providing false details in the import documentation regarding the source of its certain flooring products, as reported by CNN Money.
The company sells flooring products worth over $120 million on an annual basis. Apart from the cancer risk factors associated with the flooring surface, the CDC report showed that there also greater risks of eye irritation, asthma, throat irritation, and nose irritation. The US Environmental Protection Agency advises people to reduce formaldehyde exposure by improving their ventilation, using air conditioners to normalise the environment temperature, and by using humidifiers, USA TODAY reports.
The surface flooring products accounted for 13.2% of total sales in the nine-month period of 2015, a decrease of 18.5% from the previous period. Lumber Liquidators' third quarter net sales dropped 11.3% to $236.1 million over the last year period.
Bloomberg quoted the company's email statement, in which the Virginia-based firm pledged to work with veracity and supply flooring products of high quality to its customers. Formaldehyde, a flammable, hue less chemical used for manufacturing household products, could become a toxic substance for humans. The shares of the company stumbled 20% to $11.40 during the closing trading session in New York.
The company is facing many health issues related to its flooring products and it is working hard to settle the issues by focussing more on the sources of the flooring materials. Lumber Liquidators need to reduce the level of formaldehyde content while manufacturing the laminate flooring products.
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