Lumber Liquidators (LL) - Get Report shares were down 12% in trading Monday after the hardwood flooring retailer swung to a fourth-quarter loss as payouts from legal settlements weighed on its bottom line.
The Toano, Virginia-based company reported a loss of $56.9 million, or $1.99 a share, after reporting a profit of $3 million, or 10 cents a shares, a year ago. On an adjusted basis, the company reported earnings of 17 cents per share, topping analysts' expectations by a nickel.
Revenue of $268.9 million was below Wall Street's $273.2 million expectations.
The company reported paying $61 million in accruals from legal settlements with local and federal regulators for misleading investors about selling laminate flooring with excessive amounts of formaldehyde. The company's settlement agreement didn't force it to admit fault or liability.
"2018 was a year of transformation for Lumber Liquidators, during which we executed on our growth initiatives, put significant legacy legal issues behind us, and laid the groundwork to position us for long-term success," CEO Dennis Knowles said.
Just last week the company agreed to pay $33 million to the Securities and Exchange Commission and federal prosecutors in relation to the formaldehyde settlement agreement.
The company was accused on knowing that its largest Chinese supplier had failed third-party formaldehyde emissions testing and was unable to produce documentation showing regulatory compliance.
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