LUMBER LIQUIDATORS: Sales would have to crash 27% before we would need more cash (LL)

Shares of Lumber Liquidators, America's largest specialty hardwood retailer, jumped on Thursday after the company hosted a call to address concerns about its Chinese-manufactured laminate flooring.

The company didn't take any questions on this call. It said folks could submit questions afterward that would be addressed on another call.

Lumber Liquidators' stock was last trading up about 14% after being halted earlier.

Shares of Lumber Liquidators had collapsed about 36% since a damning "60 Minutes" report aired.

On March 1, a "60 Minutes" investigation found that Lumber Liquidatorsappearedto be selling laminate flooring from China with levels of formaldehyde higher than what is permitted under California law. High levels of formaldehyde have been tied to numerous health concerns.

During the conference call, Lumber Liquidators discussed its forecasts.The one important detail that emerged is that management said sales would have to fall 27% before the trouble starts:

Using our conservative estimate of cash on hand at March 31st, reasonable inventory levels and the low end of our capital expenditures outlook, we believe net sales would have to fall 27.0% below 2014, before we would seek liquidity from either our revolving facility or our asset base. As a further reference, this sales level would be 24.0% below 2013, and even 6.4% below 2012.

"Though our trends are only over a short 9-day period of time and therefore subject to change, we do not currently see evidence that would indicate a sustained drop in net sales as severe as 27% below 2014."

The broadcast has affected the business. Lumber Liquidators said its net sales had fallen 7.5% from the same period last year:

Our total net sales in the 9 days following the broadcast are down approximately 7.5% to the same period in 2014, with comparable store net sales down approximately 12.7%. Our open orders remain higher than last year, currently up 12.6% to $45.9 million, and include approximately $5.3 million, or 11.5%, of laminate orders.

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LUMBER LIQUIDATORS: Sales would have to crash 27% before we would need more cash (LL)