Lumber Liquidators Holdings Inc. (NYSE: LL) reported its first-quarter financial results before the markets opened Wednesday. The flooring company had a net loss of $0.29 per share on $260.0 million in revenue. The Thomson Reuters consensus estimates were $0.15 in earnings per share (EPS) on $258.24 million in revenue. In the same period of the previous year, the company posted EPS of $0.49 and revenue of $246.29 million.

Gross margin was 35.2% in the first quarter of 2015, compared to gross margin from the previous first quarter of 41.1%.

Currently, Lumber Liquidators cannot estimate a full-year outlook, but does expect that it will open between 25 and 35 new store locations, remodel a total of 10 to 20 existing stores, and have capital expenditures between $20 million and $30 million. There are consensus estimates for the full year of $1.40 in EPS on $1.08 billion in revenue.

A change in senior management within Lumber Liquidators will be coming shortly. Daniel Terrell agreed to step down as chief financial officer (CFO), effective June 1. Taking his place will be Gregory Whirley Jr., Senior Vice President of Finance, who will serve as interim CFO.

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Robert M. Lynch, president and CEO, commented on the first-quarter earnings:

Taking care of our customers continues to be our top priority and we have dedicated resources toward that goal. Additionally during the quarter, we completed the transition and consolidation of our four existing East Coast distribution facilities into our new million square foot distribution center in Virginia, and we are now effectively serving our stores with that facility. Costs related to legal and professional fees and a regulatory accrual were significant in the first quarter, however, we are committed to addressing the challenges presented while maintaining our focus on our core business and value proposition.

To end the first quarter, Lumber Liquidators had $43.9 million in cash and cash equivalents.

For some background: This company had a really rough first quarter, starting when the TV news show “60 Minutes” told 13.3 million viewers that the company’s products contain high levels of formaldehyde, a known carcinogen.

Shares of Lumber Liquidators suffered following that report, until activist investor Robert Chapman, CEO of Chapman Capital, got involved. Chapman has taken a long position in the stock, despite its drop of approximately 55% year to date. As reported on CNBC, his position makes up about 15% of his fund, Chapman Capital, and is partly composed of call options.

On CNBC Chapman further commented:

This is precisely the fodder that makes for good investments. You can go through a lot of volatility in these things. There’s going to be a lot of headlines risk for a while. … It’s just the nature of the beast, but it’s that inherent fear that’s baked into these stocks that provides the huge opportunity.

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Lumber Liquidators is now in even more hot water, according to a recent U.S. Securities and Exchange Commission (SEC) filing. The company has revealed that it may be under a “criminal investigation” regarding its imported products. According to a 10-Q filing on April 29, 2015:

On September 26, 2013, sealed search warrants were executed at the Company’s corporate offices. … The search warrants requested information, primarily documentation, related to the importation of certain of the Company’s wood flooring products in accordance with the Lacey Act. Since then, the Company has been cooperating with the federal authorities, including the Department of Justice (“DOJ”), in their investigation. In recent communications, the DOJ indicated that it is seeking criminal charges under the Lacey Act.

Based on the information available, including communications with the Justice Department, Lumber Liquidators expects a loss of roughly $10,000.

The filing went on to state:

In March 2015, we received a grand jury subpoena issued in connection with a criminal investigation. … Based on the subpoena and SEC request, we believe the focus of both the U.S. Attorney investigation and SEC staff inquiry are connected to recent concerns about our laminate flooring sourced from China and primarily relate to compliance with disclosure and trading requirements under the securities laws. We, along with the Special Committee, are fully cooperating with the U.S. Attorney’s subpoena, the SEC request to preserve information and the related investigations by the U.S. Attorney and SEC staff.

Shares of Lumber Liquidators dropped about 19% at $27.05 on Wednesday morning. The stock has a consensus analyst price target of $40.25 and a 52-week trading range of $27.01 to $92.49.

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