CARB 2 Compliance Information

Important CARB 2 Compliance Information

March 2, 2015

Dear Valued Customer,

Last night there was a piece on 60 Minutes that highlighted the improprieties of Lumber Liquidators (LL). The feature focused on their alleged illegal procurement of protected wood species (Violating the Lacy Act) & misrepresenting their laminate flooring as being CARB 2 compliant. CARB 2 is a system that specifies the allowable formaldehyde content in flooring coreboards (plywood, HDF and MDF). Excessive amounts of formaldehyde emissions can cause respiratory issues and/or lead to cancer. Allegedly, Lumber Liquidators was advertising that their flooring was CARB 2 compliant and safe. However, when their flooring samples were sent to 3rd party independent testing facilities it was discovered that those product samples were 8-10+ times over the CARB 2 legal limit. Allegedly, this fraudulent activity was done to reduce costs by 10% to help them be the low cost provider. The damage to LL could be huge as class action lawsuits are being filed by homeowners who unknowingly purchased unsafe flooring products from LL. Further, some LL management could go to jail on Lacey Act violations and their stock price continues to plummet.

While exposing LL’s misbehavior is generally good, this doesn't necessarily help the industry. Many homeowners will naturally assume that all products from China are unsafe. This is unfortunate for those of us who manufacture in China and play by the rules.

In anticipation of any questions you may receive pertaining to the 60 minutes piece on LL we think it's important for you to know the following with regards to Meritage Hardwood Company and our position on this topic.

1) At present time there are no state laws outside of California that specify formaldehyde content for Flooring products containing composite wood (plywood, HDF, MDF). California is the only state that has adopted such measures with their CARB Program (California Air & Resource Board). They initially started with CARB phase 1 and then tightened up to the current CARB phase 2 program.

2) The Federal government is working to adopt the California program over the next 1-2 years, However, this will be a difficult task because they want 3rd party testing of random (or perhaps all) shipments that arrive to the US. The 3rd party testing facilities will test to make sure the products received are in fact CARB 2 as specified & required. If they do not meet CARB 2 then the importer of record could face punitive damages.

3) In anticipation of the Federal program and to "do the right thing" Meritage Hardwood Company converted over to CARB 2 coreboards back in 2011 - 2013. Again, this is not something that we had to do but we did it anyway and it added over $500,000 to our product costs annually. If you hear that our products are more expensive than Brand X, this is the reason. We add 10% cost to our imported goods to make them safe and to "Do the right thing". We want to offer safe products to the market & be a responsible company.

4) Our suppliers & production facilities are very reputable and have a longstanding history of producing reliable & safe products. We follow the rules so our shipments are produced per CARB 2 spec with the same stringent requirements that Meritage Hardwood Company places on product design & development.

5) Each carton of flooring produced for Meritage Hardwood Company has a label on the ends to confirm CARB Phase 2 certification.

Please feel free to inquire if you should have any further questions regarding this issue. It's very important that we all understand this issue and we can educate you on the facts during the selection & buying process.

Sincerely,

Meritage Hardwood Company Management

Click here to read more about our commitment to Formaldehyde compliance standards