UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
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| Item 2.02 | Results of Operations and Financial Condition |
On March 11, 2021, Tile Shop Holdings, Inc. (the “Company”) issued a press release announcing its financial results for the three months and fiscal year ended December 31, 2020. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Pursuant to the rules and regulations of the Securities and Exchange Commission, such exhibit and the information set forth therein and in this Item 2.02 have been furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liability under that section nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing regardless of any general incorporation language.
| Item 9.01 | Financial Statements and Exhibits |
| (d) | Exhibits. |
| 99.1 | Press Release of Tile Shop Holdings, Inc., dated March 11, 2021. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| TILE SHOP HOLDINGS, INC. | ||
| By /s/ Nancy DiMattia | ||
| Date: March 11, 2021 | Name: Nancy DiMattia | |
| Title: Chief Financial Officer |
Exhibit 99.1
THE TILE SHOP REPORTS Fourth QUARTER 2020 RESULTS
MINNEAPOLIS – March 11, 2021 – Tile Shop Holdings, Inc. (OTC Pink: TTSH) (the “Company”), a specialty retailer of natural stone and man-made tiles, setting and maintenance materials, and related accessories, today announced results for its fourth quarter ended December 31, 2020.
Fourth Quarter Summary
Net Sales Increased 3.8%
Comparable Store Sales Increased 3.3%
Gross Margin of 68.5%
SG&A Expenses Decreased $5.0 Million
Net income of $1.4 Million; Adjusted EBITDA of $10.8 Million
Management Commentary – Cabell Lolmaugh, CEO
“I am pleased to report that we were able to fully repay our outstanding debt during the fourth quarter of 2020. This accomplishment marks a milestone in our Company’s history made possible by successfully executing our initiatives to reduce expenses and improve cash flow over the last twelve months,” stated Cabell Lolmaugh, CEO. “As we turn the page to 2021, we are shifting our attention to focus on objectives that we believe will be catalysts for driving revenue growth and improving our overall profitability.”
| Three Months Ended | Full Year Ended | |||||||||||||||
| (unaudited, amounts in thousands, except share and per | December 31, | December 31, | ||||||||||||||
| share data) | 2020 | 2019 | 2020 | 2019 | ||||||||||||
| Net sales | $ | 81,556 | $ | 78,596 | $ | 325,057 | $ | 340,351 | ||||||||
| Net sales growth (decline) (1) | 3.8 | % | (6.4 | )% | (4.5 | )% | (4.7 | )% | ||||||||
| Comparable store sales growth (decline) (2) | 3.3 | % | (6.6 | )% | (5.6 | )% | (4.6 | )% | ||||||||
| Gross margin rate | 68.5 | % | 68.4 | % | 68.1 | % | 69.4 | % | ||||||||
| Income (loss) from operations as a % of net sales | 3.3 | % | (5.6 | )% | 2.0 | % | (0.4 | )% | ||||||||
| Net income (loss) | $ | 1,375 | $ | (4,246 | ) | $ | 6,031 | $ | (4,463 | ) | ||||||
| Net income (loss) per share | $ | 0.03 | $ | (0.09 | ) | $ | 0.12 | $ | (0.09 | ) | ||||||
| Adjusted EBITDA | $ | 10,843 | $ | 5,089 | $ | 39,953 | $ | 34,846 | ||||||||
| Adjusted EBITDA as a % of net sales | 13.3 | % | 6.5 | % | 12.3 | % | 10.2 | % | ||||||||
| Number of stores open at the end of period | 142 | 142 | 142 | 142 | ||||||||||||
| (1) | As compared to the prior year period. |
| (2) | The comparable store sales operating metric is the percentage change in sales of comparable stores period over period. A store is considered comparable on the first day of the 13th full month of operation. When a store is relocated, it is excluded from the comparable store sales calculation. Comparable store sales include total purchases by customers less any actual returns. The Company includes the change in allowance for anticipated sales returns applicable to comparable stores in the comparable store sales calculation. Comparable store sales data reported by other companies may be prepared on a different basis and therefore may not be useful for purposes of comparing the Company’s results to those of other businesses. Company management believes the comparable store sales operating metric provides useful information to both management and investors to evaluate the Company’s performance, the effectiveness of its strategy and its competitive position. |
FOURTH QUARTER 2020
Net Sales
Net sales in the fourth quarter of 2020 were $81.6 million and increased by $3.0 million, or 3.8% when compared to net sales during the fourth quarter of 2019. Comparable store sales increased $2.6 million, or 3.3%, for the fourth quarter of 2020 compared to the fourth quarter of 2019, due to improved customer conversion. The improvement in conversion was partially offset by a decrease in traffic from the fourth quarter of 2019 when compared to the to the fourth quarter of 2020. Our stores continued to operate at a reduced number of hours during the fourth quarter of 2020 when compared to the same period in 2019. Additionally, we continued to experience elevated levels of in-stock outages which had an adverse impact on sales during the fourth quarter of 2020.
Gross Profit
Gross profit in the fourth quarter of 2020 was $55.9 million and increased by $2.1 million, or 3.9% when compared to the fourth quarter of 2019. The gross margin rate was 68.5% for the fourth quarter of 2020 and 68.4% for the fourth quarter of 2019. The improvement in the gross margin rate was primarily due to reduced inventory write-downs and better pricing which were partially offset by a higher mix of delivery services rendered during the fourth quarter of 2020.
Selling, General and Administrative Expenses
Selling, general and administrative (“SG&A”) expenses in the fourth quarter of 2020 were $53.2 million and decreased by $5.0 million, or 8.6% when compared to the fourth quarter of 2019. The decrease in SG&A expense was primarily due to a decrease in store hours during the fourth quarter of 2019 as compared to the fourth quarter of 2020, which contributed to a $1.5 million reduction in compensation and benefits expenses. In addition, depreciation expense decreased by $1.4 million and legal, accounting, and consulting fees decreased by $1.2 million.
Inventory
Inventory decreased by $23.3 million from $97.6 million at the end of the fourth quarter of 2019 to $74.3 million at the end of the fourth quarter of 2020.
Long-Term Debt
As of December 31, 2020, the Company had no outstanding debt.
NON-GAAP INFORMATION
Adjusted EBITDA
Adjusted EBITDA for the fourth quarter of 2020 increased to $10.8 million, as compared with $5.1 million for the fourth quarter of 2019. See the table below for a reconciliation of GAAP net income (loss) to Adjusted EBITDA.
| Three Months Ended | ||||||||||||||||
| (unaudited, $ in thousands) | December 31, | |||||||||||||||
| 2020 | % of net sales | 2019 | % of net sales | |||||||||||||
| Net income (loss) | $ | 1,375 | 1.7 | % | $ | (4,246 | ) | (5.4 | )% | |||||||
| Interest expense | 228 | 0.3 | % | 843 | 1.1 | % | ||||||||||
| Provision for (benefit from) income taxes | 1,072 | 1.3 | % | (1,022 | ) | (1.3 | )% | |||||||||
| Depreciation & amortization | 7,598 | 9.3 | % | 9,038 | 11.5 | % | ||||||||||
| Stock based compensation | 570 | 0.7 | % | 476 | 0.6 | % | ||||||||||
| Adjusted EBITDA | $ | 10,843 | 13.3 | % | $ | 5,089 | 6.5 | % | ||||||||
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| Full Year Ended | ||||||||||||||||
| (unaudited, $ in thousands) | December 31, | |||||||||||||||
| 2020 | % of net sales | 2019 | % of net sales(1) | |||||||||||||
| Net income (loss) | $ | 6,031 | 1.9 | % | $ | (4,463 | ) | (1.3 | )% | |||||||
| Interest expense | 1,874 | 0.6 | % | 3,792 | 1.1 | % | ||||||||||
| Benefit from income taxes | (1,529 | ) | (0.5 | )% | (674 | ) | (0.2 | )% | ||||||||
| Depreciation & amortization | 31,336 | 9.6 | % | 33,546 | 9.9 | % | ||||||||||
| Stock based compensation | 2,241 | 0.7 | % | 2,645 | 0.8 | % | ||||||||||
| Adjusted EBITDA | $ | 39,953 | 12.3 | % | $ | 34,846 | 10.2 | % | ||||||||
(1) Amounts do not foot due to rounding.
Pretax Return on Capital Employed
Pretax Return on Capital Employed was 4.2% for the trailing twelve months as of the end of the fourth quarter of 2020 compared to (0.7%) for the trailing twelve months as of the end of the fourth quarter of 2019. See the Pretax Return on Capital Employed calculation in the table below.
| (unaudited, $ in thousands) | December 31, | |||||||
| 2020(1) | 2019(1) | |||||||
| Income (loss) from operations (trailing twelve months) | $ | 6,376 | $ | (1,357 | ) | |||
| Total Assets | 364,099 | 415,107 | ||||||
| Less: Accounts payable | (14,905 | ) | (23,362 | ) | ||||
| Less: Income tax payable | (111 | ) | (49 | ) | ||||
| Less: Other accrued liabilities | (38,365 | ) | (26,146 | ) | ||||
| Less: Lease liability | (153,427 | ) | (162,077 | ) | ||||
| Less: Other long-term liabilities | (4,137 | ) | (3,816 | ) | ||||
| Capital Employed | $ | 153,154 | $ | 199,657 | ||||
| Pretax Return on Capital Employed | 4.2 | % | (0.7 | )% | ||||
(1) Income statement accounts represent the activity for the trailing twelve months ended as of each of the balance sheet dates. Balance sheet accounts represent the average account balance for the four quarters ended as of each of the balance sheet dates.
Non-GAAP Financial Measures
The Company calculates Adjusted EBITDA by taking net income (loss) calculated in accordance with GAAP, and adjusting for interest expense, income taxes, depreciation and amortization, and stock-based compensation expense. Adjusted EBITDA margin is equal to Adjusted EBITDA divided by net sales. The Company calculates Pretax Return on Capital Employed by taking income (loss) from operations divided by capital employed. Capital employed equals total assets less accounts payable, income taxes payable, other accrued liabilities, lease liability and other long-term liabilities. Other companies may calculate Adjusted EBITDA and Pretax Return on Capital Employed differently, limiting the usefulness of these measures for comparative purposes.
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The Company believes that these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to the Company’s financial condition and results of operations. Company management uses these non-GAAP measures to compare Company performance to that of prior periods for trend analyses, for purposes of determining management incentive compensation, for budgeting and planning purposes and for assessing the effectiveness of capital allocation over time. These measures are used in monthly financial reports prepared for management and the Board of Directors. The Company believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the Company’s financial measures with other specialty retailers, many of which present similar non-GAAP financial measures to investors.
Company management does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitations of these non-GAAP financial measures are that they exclude significant expenses and income that are required by GAAP to be recognized in the Company’s consolidated financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by management about which expenses and income are excluded or included in determining these non-GAAP financial measures. In order to compensate for these limitations, management presents non-GAAP financial measures in connection with GAAP results. The Company urges investors to review the reconciliation of these non-GAAP financial measures to the comparable GAAP financial measures and not to rely on any single financial measure to evaluate the business.
IMPACT OF THE COVID-19 PANDEMIC
The COVID-19 pandemic has had a significant impact on the Company’s operations in 2020, and is likely to continue to have an impact on the Company in the future. The Company experienced a sharp decline in traffic toward the end of the first quarter of 2020 following the onset of COVID-19 in the United States and actions taken by state and local governments to encourage shelter in place practices. In response to this development, the Company took steps to reduce SG&A expenses by eliminating a portion of its workforce, reducing store hours, curtailing advertising spending, reducing the number of replenishment trucks sent from its distribution centers to its stores and limiting other SG&A spending when possible.
The Company also took steps to conserve cash that included working with its landlords to defer rent payments for many of its retail locations throughout the second quarter of 2020. As of December 31, 2020, the deferred rent balance was $2.1 million. The deferred rent balance is recorded as a liability within the current portion of lease liability and long-term lease liability, net balances. The majority of the remaining payments are expected to occur between the first quarter of 2021 and the third quarter of 2021. Additionally, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) contains provisions providing for the deferral of the employer portion of social security taxes incurred through the end of 2020. As of December 31, 2020, the Company had deferred $2.7 million in social security tax payments. The deferred amounts are recorded as a liability within other accrued liabilities in the Company’s consolidated balance sheets.
As state and local governments started lifting restrictions toward the end of the second quarter of 2020, the Company saw an improvement in traffic and sales trends. Throughout the remainder of 2020, the Company took a cautious approach to investing in activities that would increase its SG&A expenses. While many retailers elected to expand their store hours as state and local restrictions started to ease, the Company maintained a reduced hours schedule throughout the third quarter of 2020. During the fourth quarter of 2020, the Company started making limited adjustments to add hours during the week for select stores. During first quarter of 2021, the Company started adding Sunday hours back to select stores. Overall, the decision to limit the number of hours that the Company’s stores were open had an adverse impact on traffic and sales; however, the SG&A savings realized help drive a substantial improvement in the Company’s net income, operating income, and Adjusted EBITDA. These actions were a key catalyst making it possible to conserve cash and fully repay the Company’s outstanding debt in 2020.
During the third and fourth quarters of 2020, the Company experienced an elevated level of product outages due to vendor production delays and other disruptions in the Company’s supply chain. In many instances, vendor plants were forced to close or operate at a reduced capacity pursuant to a government mandate following the onset of COVID-19. While most vendors have been able to resume normal operations, many continue to work through large backlogs. The Company is actively partnering with its vendors to secure delivery of backordered product.
While the Company is cautiously optimistic with the current business trend and the progress made distributing COVID-19 vaccinations in recent months, a resurgence of COVID-19 cases could have a negative impact on the Company. Specifically, the Company could be adversely impacted by limitations on the Company’s employees to perform their work due to illness caused by the pandemic or local, state, or federal orders requiring the Company’s stores to close or employees to remain at home; limitation of carriers to deliver the Company’s products to customers; product shortages; limitations on the ability of the Company’s customers to conduct their business and purchase the Company’s products and services; and limitations on the ability of the Company’s customers to pay the Company in a timely manner. These events could have a material, adverse effect on the Company’s results of operations, cash flows and liquidity. In addition, even after the COVID-19 pandemic has subsided, the Company may continue to experience adverse impacts to its business as a result of the economic impact of the pandemic.
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OTHER RECENT DEVELOPMENTS
As previously reported, on February 2, 2021, the Company’s Board of Directors (the “Board”) unanimously voted to form a special committee (the “Special Committee”) comprised of Mark J. Bonney, Linda Solheid and Deborah Glasser, three of its independent directors, to evaluate, and to make a recommendation to the Board regarding potential relisting of the Company’s common stock on The Nasdaq Stock Market LLC (“Nasdaq”). Thereafter, the Special Committee undertook a thorough and deliberate process to evaluate the potential benefits, costs, burdens, and process associated with applying for listing and listing the Company’s common stock with Nasdaq, and the Special Committee unanimously recommended that the Board authorize the Company to apply to list its common stock on Nasdaq. On March 1, 2021, after receiving the recommendation of the Special Committee, and evaluating the potential benefits, costs, burdens, and process associated with applying for listing and listing of the Company’s stock on Nasdaq, the Board unanimously voted to authorize the Company to apply for listing of its common stock with Nasdaq. The Company’s common stock is currently quoted on the Pink tier of the OTC Markets under the symbol “TTSH”. The Company has submitted its listing application and will be working diligently to respond to any questions posed by Nasdaq’s representatives in a timely manner. The Company cautions its stockholders and others considering trading its securities that there is no assurance that Nasdaq will approve the Company’s listing application.
OUTLOOK
For the full year ending December 31, 2021, the Company expects:
| Capital Expenditures | $12 - $15 million |
| New Stores | 1 new store |
| Store Relocations | 1 store relocation |
| Inventory | less than $90 million |
WEBCAST AND CONFERENCE CALL
As announced on March 4, 2021, the Company will host a conference call via webcast for investors and other interested parties beginning at 9:00 a.m., Eastern Time, on Thursday, March 11, 2021. The call will be hosted by Cabell Lolmaugh, CEO, Nancy DiMattia, CFO, and Mark Davis, Vice President of Investor Relations and Chief Accounting Officer.
Participants may access the webcast by visiting the Company’s Investor Relations page at www.tileshop.com. The call can also be accessed by dialing (844) 421-0597 or (716) 247-5787 for international participants. A webcast replay of the call will be available on the Company’s Investor Relations page at www.tileshop.com.
The Company intends to use its website, investors.tileshop.com, as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD. Such disclosures will be included on the Company’s website under the heading News and Events. Accordingly, investors should monitor such portions of the Company’s website, in addition to following its press releases, Securities and Exchange Commission filings and public conference calls and webcasts.
Contact:
Investors and Media:
Mark Davis
Vice President of Investor Relations and Chief Accounting Officer
763-852-2978
mark.davis@tileshop.com
ABOUT THE TILE SHOP
Tile Shop Holdings, Inc. (OTC Pink: TTSH), is a leading specialty retailer of natural stone and man-made tiles, setting and maintenance materials, and related accessories in the United States. The Tile Shop offers a wide selection of high-quality products, exclusive designs, knowledgeable staff and exceptional customer service in an extensive showroom environment. The Tile Shop currently operates 143 stores in 31 states and the District of Columbia.
The Tile Shop is a proud member of the American Society of Interior Designers (ASID), National Association of Homebuilders (NAHB), National Kitchen and Bath Association (NKBA), and the National Tile Contractors Association (NTCA). Visit www.tileshop.com. Join The Tile Shop (#thetileshop) on Facebook, Instagram, Pinterest and Twitter.
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FORWARD LOOKING STATEMENTS
This press release includes “forward looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward looking statements may be identified by the use of words such as “anticipate”, “believe”, “expect”, “estimate”, “plan”, “outlook”, and “project” and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward looking statements include any statements regarding the Company’s strategic and operational plan and expected financial performance. Forward looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward looking statements are based on information available at the time such statements are made and/or management’s good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward looking statements, including but not limited to unforeseen events that may affect the retail market or the performance of the Company’s stores. Many of the Company’s risks have been, and may further be, exacerbated by the COVID-19 pandemic. The Company does not intend, and undertakes no duty, to update this information to reflect future events or circumstances. Investors are referred to the most recent reports filed with the Securities and Exchange Commission by the Company.
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Tile Shop Holdings, Inc. and Subsidiaries
Consolidated Balance Sheets
($ in thousands, except share data)
| (Unaudited) | (Audited) | |||||||
| December 31, | December 31, | |||||||
| 2020 | 2019 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 9,617 | $ | 9,104 | ||||
| Restricted cash | 655 | 815 | ||||||
| Receivables, net | 2,975 | 3,370 | ||||||
| Inventories | 74,296 | 97,620 | ||||||
| Income tax receivable | 8,116 | 3,090 | ||||||
| Other current assets, net | 8,995 | 8,180 | ||||||
| Total Current Assets | 104,654 | 122,179 | ||||||
| Property, plant and equipment, net | 99,035 | 130,461 | ||||||
| Right of use asset | 132,374 | 137,737 | ||||||
| Deferred tax assets | 5,341 | 7,196 | ||||||
| Other assets | 1,286 | 2,241 | ||||||
| Total Assets | $ | 342,690 | $ | 399,814 | ||||
| Liabilities and Stockholders' Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 15,382 | $ | 18,181 | ||||
| Current portion of lease liability | 27,223 | 26,993 | ||||||
| Income tax payable | 93 | 87 | ||||||
| Other accrued liabilities | 34,106 | 24,589 | ||||||
| Total Current Liabilities | 76,804 | 69,850 | ||||||
| Long-term debt, net | - | 63,000 | ||||||
| Long-term lease liability, net | 122,678 | 131,451 | ||||||
| Financing lease obligation, net | - | 274 | ||||||
| Other long-term liabilities | 4,146 | 4,340 | ||||||
| Total Liabilities | 203,628 | 268,915 | ||||||
| Stockholders’ Equity: | ||||||||
| Common stock, par value $0.0001; authorized: 100,000,000 shares; issued and outstanding: 51,701,080 and 50,806,674 shares, respectively | 5 | 5 | ||||||
| Preferred stock, par value $0.0001; authorized: 10,000,000 shares; issued and outstanding: 0 shares | - | - | ||||||
| Additional paid-in-capital | 158,556 | 156,482 | ||||||
| Accumulated deficit | (19,487 | ) | (25,518 | ) | ||||
| Accumulated other comprehensive loss | (12 | ) | (70 | ) | ||||
| Total Stockholders' Equity | 139,062 | 130,899 | ||||||
| Total Liabilities and Stockholders' Equity | $ | 342,690 | $ | 399,814 | ||||
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Tile Shop Holdings, Inc. and Subsidiaries
Consolidated Statements of Operations
($ in thousands, except share and per share data)
(2020 unaudited)
| Three Months Ended | Twelve Months Ended, | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Net sales | $ | 81,556 | $ | 78,596 | $ | 325,057 | $ | 340,351 | ||||||||
| Cost of sales | 25,704 | 24,848 | 103,532 | 104,232 | ||||||||||||
| Gross profit | 55,852 | 53,748 | 221,525 | 236,119 | ||||||||||||
| Selling, general and administrative expenses | 53,177 | 58,162 | 215,149 | 237,476 | ||||||||||||
| Income (loss) from operations | 2,675 | (4,414 | ) | 6,376 | (1,357 | ) | ||||||||||
| Interest expense | (228 | ) | (843 | ) | (1,874 | ) | (3,792 | ) | ||||||||
| Other income (expense) | - | (11 | ) | - | 12 | |||||||||||
| Income (loss) before income taxes | 2,447 | (5,268 | ) | 4,502 | (5,137 | ) | ||||||||||
| (Provision for) benefit from income taxes | (1,072 | ) | 1,022 | 1,529 | 674 | |||||||||||
| Net income (loss) | $ | 1,375 | $ | (4,246 | ) | $ | 6,031 | $ | (4,463 | ) | ||||||
| Earnings (loss) per common share: | ||||||||||||||||
| Basic | $ | 0.03 | $ | (0.09 | ) | $ | 0.12 | $ | (0.09 | ) | ||||||
| Diluted | $ | 0.03 | $ | (0.09 | ) | $ | 0.12 | $ | (0.09 | ) | ||||||
| Weighted average shares outstanding: | ||||||||||||||||
| Basic | 50,050,495 | 49,802,402 | 49,957,356 | 50,624,309 | ||||||||||||
| Diluted | 50,994,263 | 49,802,402 | 50,583,742 | 50,624,309 | ||||||||||||
Tile Shop Holdings, Inc. and Subsidiaries
Rate Analysis
(Unaudited)
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Gross margin rate | 68.5 | % | 68.4 | % | 68.1 | % | 69.4 | % | ||||||||
| SG&A expense rate | 65.2 | % | 74.0 | % | 66.2 | % | 69.8 | % | ||||||||
| Income (loss) from operations margin rate | 3.3 | % | (5.6 | )% | 2.0 | % | (0.4 | )% | ||||||||
| Adjusted EBITDA margin rate | 13.3 | % | 6.5 | % | 12.3 | % | 10.2 | % | ||||||||
| 8 |
Tile Shop Holdings, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
($ in thousands)
(2020 unaudited)
| Twelve Months Ended, | ||||||||
| December 31, | ||||||||
| 2020 | 2019 | |||||||
| Cash Flows From Operating Activities | ||||||||
| Net income (loss) | $ | 6,031 | $ | (4,463 | ) | |||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
| Depreciation & amortization | 31,336 | 33,546 | ||||||
| Amortization of debt issuance costs | 473 | 595 | ||||||
| Loss on disposals of property, plant and equipment | - | 399 | ||||||
| Impairment charges | 2,155 | - | ||||||
| Non-cash lease expense | 24,025 | 23,230 | ||||||
| Stock based compensation | 2,241 | 2,645 | ||||||
| Deferred income taxes | 1,855 | (1,621 | ) | |||||
| Changes in operating assets and liabilities: | ||||||||
| Trade receivables | 394 | (286 | ) | |||||
| Inventories | 23,323 | 12,475 | ||||||
| Other current assets, net | (327 | ) | (184 | ) | ||||
| Accounts payable | (3,207 | ) | (4,503 | ) | ||||
| Income tax receivable / payable | (5,020 | ) | 357 | |||||
| Accrued expenses and other liabilities | (17,683 | ) | (23,627 | ) | ||||
| Net cash provided by operating activities | 65,596 | 38,563 | ||||||
| Cash Flows From Investing Activities | ||||||||
| Purchases of property, plant and equipment | (1,968 | ) | (27,000 | ) | ||||
| Proceeds from insurance | - | 610 | ||||||
| Net cash used in investing activities | (1,968 | ) | (26,390 | ) | ||||
| Cash Flows From Financing Activities | ||||||||
| Payments of long-term debt and financing lease obligations | (127,262 | ) | (53,204 | ) | ||||
| Advances on line of credit | 64,100 | 63,000 | ||||||
| Dividends paid | - | (7,706 | ) | |||||
| Repurchases of common stock | - | (10,456 | ) | |||||
| Employee taxes paid for shares withheld | (167 | ) | (256 | ) | ||||
| Net cash used in financing activities | (63,329 | ) | (8,622 | ) | ||||
| Effect of exchange rate changes on cash | 54 | (14 | ) | |||||
| Net change in cash, cash equivalents and restricted cash | 353 | 3,537 | ||||||
| Cash, cash equivalents and restricted cash beginning of period | 9,919 | 6,382 | ||||||
| Cash, cash equivalents and restricted cash end of period | $ | 10,272 | $ | 9,919 | ||||
| Cash and cash equivalents | $ | 9,617 | $ | 9,104 | ||||
| Restricted cash | 655 | 815 | ||||||
| Cash, cash equivalents and restricted cash end of period | $ | 10,272 | $ | 9,919 | ||||
| Supplemental disclosure of cash flow information | ||||||||
| Purchases of property, plant and equipment included in accounts payable and accrued expenses | $ | 407 | $ | 98 | ||||
| Cash paid for interest | 1,976 | 3,735 | ||||||
| Cash paid for taxes, net of refunds | 1,608 | 471 | ||||||
| 9 |