The shares of Lumber Liquidators Holdings Inc (NYSE:LL) surged after announcing its settlement agreement with the California Air Resources Board (CARB) in connection with the investigation on some of its laminated flooring products from China.
The stock price of Lumber Liquidators increased more than 15% to $13.86 per share at the time of this writing around 1:36 in the afternoon in New York.
Lumber Liquidators agreements with CARB
As part of the settlement agreement, Lumber Liquidators agreed to implement a series of voluntary compliance procedures to ensure that the company’s flooring products meet California’s formaldehyde standards— the most stringent in the United States.
The hardwood flooring retailer also agreed to pay $2.5 million to CARB to settle the investigation. The agency recognized the actions taken by the company to ensure compliance and the lack of evidence of actual harm to the health, safety and welfare of the public.
The California clean air agency concluded its investigation with no formal finding of violation or admission of wrongdoing on the part of Lumber Liquidators.
The company made a commitment with CARB to collaborate in pioneering a program designed to establish best practices and protocols for testing flooring products.
The program will become the new standard the industry and ensure that all products are tested appropriately and consistently on behalf of consumers and businesses.
Lumber Liquidators strengthened QA procedures
In a statement, Lumber Liquidators CEO John Presley said, “Consumer safety is our top priority and, over the past year, we have implemented a number of customer-focused initiatives.”
Prsley added that the company strengthened its quality assurance procedures and launched the largest voluntary testing program in the history of the country. Lumber Liquidators also suspended the sale of all laminate flooring from China in May 2015.
“We look forward to continuing to work with CARB to establish new industry standards for flooring product testing. We believe today’s settlement will go a long way in helping us to execute our strategy, which includes rebuilding our brand and communicating – with clarity and candor – the value of our products to our customers and stakeholders,” said Presley.