NEW YORK CITY - Wood flooring supplier Lumber Liquidators' stock fell 11% to $76.63 following reports of formaldehyde in its China-sourced engineered flooring. An analyst for said lab tests confirmed the high levels of formaldehyde.

The author of the report,  Xuhua Xu, said a number of consumers posted comments online complaining of allergic reactions characteristic of formaldehyde exposure, following installation of Lumber Liquidators flooring in their home. Xuhua Xu suggested a relationship between Lumber Liquidators' $8 million acquisition of Sequoia Flooring in Shanghai, and the appearance of potentially non-CARB compliant engineered flooring in its U.S. supply chain.

The report first surfaced June 20, 2013, at, which included lab reports and shipping labels backing up the  the alleged sales of hardwood flooring products that potentially contained illegal levels of formaldehyde, a known carcinogen. Lumber Liquidators' stock price dropped from the June 19, 2013 close of $86.03 to $82.16 on June 20, 2013 on unusually heavy trading volume.

On June 21, 2013, the company's stock price dropped further to close at $76.63, for a total two-day drop of approximately 11%. Last year, Lumber Liquidators' net sales rose 19.3% to $813.3 million; net income increased 79.2% to $47.1 million

For the year, net sales rose 19.3% to $813.3 million; net income increased 79.2% to $47.1 million. - See more at:

The site includes an open letter by author Xuhua Xu to Mary D. Nichols, Chairman of the California Air Resources Board, which begins:

I am writing this letter to express concerns about the potentially significant and egregious violation of Airborne Toxic Control Measures (ATCM) to reduce formaldehyde emissions from composite wood products by a major U.S. hardwood flooring company, Lumber Liquidators Holdings Inc.

Lumber Liquidators is one of the nation’s largest flooring companies specializing in hardwood, engineered hardwood, bamboo and laminated flooring products.The Company operates a total of 279 retail stores in the United States and sold over $800 millio n worth of hardwood flooring products in fiscal year 2012.

By the very nature of its operation, its products are subject to CARB regulations regarding formaldehyde emission compliance in composite wood products. There are reasons to believe the Company has been knowingly selling noncompliant products to consumers and the stated compliance on some of its products is inaccurate.

Lumber Liquidators, based in Toano, VA, had not issued a response to the reports.