Shares of Lumber Liquidators Holdings (LL) took a beating after the company revealed an upcoming negative "60 Minutes" interview and possible criminal charges it could face.
Toano, Virginia-based Lumber Liquidators Wednesday reported a profit and revenues for the fourth quarter that missed Wall Street estimates. However, during the earnings conference call, the company's top level management warned about a upcoming negative "60 Minutes" episode of the company on the CBS Television.
"We now believe the news program '60 Minutes' will feature our company in an unfavorable light with regard to our sourcing and product quality, specifically relating to laminates," Rob Lynch, the company's president and CEO said on the call, according to a CNBC report.
Further, the company in its 10K filing said that "In recent communications, the DOJ indicated that it is contemplating seeking criminal charges under the Lacey Act."
Lumber Liquidators said that on September 26, 2013, search warrants were executed at its corporate offices in Toano and Richmond, Virginia by the Department of Homeland Security's Immigration and Customs Enforcement and the U.S. Fish and Wildlife Service. The warrants requested information, primarily documentation, related to the importation of certain of its wood flooring products.
The Lacey Act is a conservation law in the United States that bans trafficking in wildlife, fish, and plants that have been illegally possessed, transported or sold. In 2008, the Act was amended to include plants and plant products such as timber and paper.
For the fourth quarter, Lumber Liquidators reported a profit of $17.3 million or $0.64 per share, down from $20.8 million or $0.74 per share last year. Sales rose to $272.0 million from $258.4 million last year. Analysts polled by Thomson Reuters estimated earnings of $0.76 per share on revenues of $279.52 million for the quarter.
LL shares are currently trading at $57.44, down $11.33 or 16.48%, on the NYSE.
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