0001552800-21-000009 | 10-Q | XBRL Viewer

Inventories (Tables)

3 Months Ended

Mar. 31, 2021



	(in thousands)
	March 31,		December 31,
	2021		2020
Finished goods	$	69,459	$	72,619
Raw materials		1,513		1,677
Total	$	70,972	$	74,296

Related Party Transactions (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Nanyang Helin Stone Company [Member]
Related Party Transaction [Line Items]
Payments to related party	$ 1.9	$ 7.6
Related party payables due	0.2
Tile Style [Member]
Related Party Transaction [Line Items]
Payments to related party	0.5	$ 0.7
Related party payables due	$ 0.1
Robert Rucker [Member] \| Tile Shop Holdings [Member]
Related Party Transaction [Line Items]
Ownership interest	5.00%

Fair Value of Financial Instruments (Narrative) (Details) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Fair Value of Financial Instruments [Abstract]
Fair value transfers	$ 0
Asset impairment charges	$ 0	$ 2,155,000

Background (Tables)

3 Months Ended

Mar. 31, 2021

Background [Abstract]

Impact of Reclassifications on the Statement of Cash Flows


(in thousands)		Previously Reported		Adjustments		As Revised
Non-cash lease expense	$	-	$	5,868	$	5,868
Changes in operating assets and liabilities:
Accrued expenses and other liabilities		2,973		(6,680)		(3,707)
Other, net		(812)		812		-
Net cash provided by operating activities		22,892		-		22,892

Other Accrued Liabilities (Schedule of Other Accrued Liabilities) (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Other Accrued Liabilities [Abstract]
Customer deposits	$ 17,763	$ 12,225
Sales returns reserve	5,700	4,957
Accrued wages and salaries	6,767	6,561
Payroll and sales taxes	6,454	4,958
Other current liabilities	6,584	5,405
Total other accrued liabilities	$ 43,268	$ 34,106

Equity Incentive Plans

3 Months Ended

Mar. 31, 2021

Equity Incentive Plans [Abstract]

Equity Incentive Plans

Note 10: Equity Incentive Plans

Stock options:

The Company measures and recognizes compensation expense for all stock based awards at fair value. The financial statements for the three months ended March 31, 2021 and 2020 include compensation expense for the portion of outstanding awards that vested during those periods. The Company recognizes stock based compensation expenses on a straight-line basis over the requisite service period of the award, which is generally the option vesting term. Total stock based compensation expense related to stock options was $0.1 million for both the three months ended March 31, 2021 and March 31, 2020. Stock based compensation expense pertaining to stock options is included in selling, general and administrative expenses in the accompanying Consolidated Statements of Income.

As of March 31, 2021, the Company had outstanding stock options to purchase 1,002,695 shares of common stock at a weighted average exercise price of $10.96.

Restricted stock:

The Company awards restricted common shares to selected employees and to non-employee directors. Recipients are not required to provide any consideration upon vesting of the award. Restricted stock awards are subject to certain restrictions on transfer, and all or part of the shares awarded may be subject to forfeiture upon the occurrence of certain events, including employment termination. Certain awards are also subject to forfeiture if the Company fails to attain certain performance targets. The restricted stock is valued at its grant date fair value and expensed over the requisite service period or the vesting term of the awards. The Company adjusts the cumulative expense recognized on awards with performance conditions based on the probability of achieving the performance condition. Total stock based compensation expense related to restricted stock was $0.5 million for both the three months ended March 31, 2021 and March 31, 2020. Stock based compensation expense pertaining to restricted stock awards is included in selling, general and administrative expenses in the accompanying Consolidated Statements of Income.

As of March 31, 2021, the Company had 1,693,794 outstanding restricted common shares.

Income Taxes (Narrative) (Details) - USD ($)	3 Months Ended
Income Taxes (Narrative) (Details) - USD ($)	Mar. 31, 2021	Mar. 31, 2020
Income Taxes [Abstract]
Effective income tax rate	21.40%	100.60%
Federal statutory rate		35.00%
Income tax benefit associated with restricted stock award vestings	$ 300,000
Liability for uncertain tax positions	0	$ 0
Income tax interest and penalties related to uncertain tax positions	$ 0	$ 0

Long-term Debt

3 Months Ended

Mar. 31, 2021

Long-term Debt [Abstract]

Long-term Debt

Note 7: Long-term Debt

On September 18, 2018, Holdings and its operating subsidiary, The Tile Shop, LLC, entered into a Credit Agreement with Bank of America, N.A., Fifth Third Bank and Citizens Bank (the “Credit Agreement”). The Credit Agreement provides the Company with a senior credit facility consisting of a $100.0 million revolving line of credit through September 18, 2023. Borrowings pursuant to the Credit Agreement initially bear interest at a LIBOR or base rate. The LIBOR-based rate ranges from LIBOR plus 1.50% to 2.25% depending on the Company’s rent adjusted leverage ratio. The base rate is equal to the greatest of (a) the Federal funds rate plus 0.50%, (b) the Bank of America “prime rate,” and (c) the Eurodollar rate plus 1.00%, in each case plus 0.50% to 1.25% depending on the Company’s rent adjusted leverage ratio. At March 31, 2021 the base interest rate was 4.00% and the LIBOR-based interest rate was 1.86%. The Company had no borrowings outstanding on its revolving line of credit as of March 31, 2021. In addition, the Company has standby letters of credit outstanding related to its workers’ compensation and medical insurance policies. Standby letters of credit totaled $2.4 million as of both March 31, 2021 and December 31, 2020. There was $97.6 million available for borrowing on the revolving line of credit as of March 31, 2021, which may be used to support the Company’s growth and for working capital purposes.

The Credit Agreement is secured by virtually all of the assets of the Company, including but not limited to, inventory, receivables, equipment and real property. The Credit Agreement contains customary events of default, conditions to borrowings, and restrictive covenants, including restrictions on the Company’s ability to dispose of assets, make acquisitions, incur additional debt, incur liens, or make investments. The Credit Agreement also includes financial and other covenants, including covenants to maintain certain fixed charge coverage ratios and consolidated total rent adjusted leverage ratios. The Company was in compliance with the covenants as of March 31, 2021.

Background (Impact of Reclassifications on the Statement of Cash Flows) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Non-cash lease expense	$ 6,155	$ 5,868
Accrued expenses and other liabilities	3,427	(3,707)
Net cash provided by operating activities	$ 30,114	22,892
Previously Reported [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Accrued expenses and other liabilities		2,973
Other, net		(812)
Net cash provided by operating activities		22,892
Adjustments [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Non-cash lease expense		5,868
Accrued expenses and other liabilities		(6,680)
Other, net		$ 812

New Markets Tax Credit (Narrative) (Details) - USD ($) $ in Millions	1 Months Ended	3 Months Ended
	Dec. 31, 2016	Mar. 31, 2021
New Market Tax Credit Disclosure [Line Items]
Investment fund cash		$ 0.7
Twain Investment Fund 192 [Member]
New Market Tax Credit Disclosure [Line Items]
Net proceeds from contribution	$ 1.9
Contribution liability compliance period		7 years
Contribution liability		$ 1.3
Contribution liability, current		0.5
Contribution liability, noncurrent		$ 0.8
Twain Investment Fund 192 [Member] \| Tile Shop Holdings [Member]
New Market Tax Credit Disclosure [Line Items]
Syndicate costs	1.3
Twain Investment Fund 192 [Member] \| Tile Shop Lending [Member]
New Market Tax Credit Disclosure [Line Items]
Loan amount	$ 6.7
Loan interest rate	1.37%
Oklahoma [Member] \| U.S. Bank Community [Member]
New Market Tax Credit Disclosure [Line Items]
Financing agreement project cost	$ 9.2
U.S. Bank Community [Member] \| Twain Investment Fund 192 [Member]
New Market Tax Credit Disclosure [Line Items]
Contribution to affiliate	$ 3.2

Income Taxes

3 Months Ended

Mar. 31, 2021

Income Taxes [Abstract]

Income Taxes

Note 4: Income Taxes

The Company's effective tax rate on net income before taxes for the three months ended March 31, 2021 and 2020 was 21.4% and (100.6)%, respectively. The Company’s effective tax rate during the three months ended March 31, 2020 included adjustments resulting from the enactment of the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act), which gave the Company the ability to carry back federal net operating losses to years with a federal statutory rate of 35%. The Company’s effective tax rate during the three months ended March 31, 2021 included a $0.3 million tax benefit associated with restricted stock award vestings that occurred during the quarter.

The Company records interest and penalties relating to uncertain tax positions in income tax expense. As of March 31, 2021 and 2020, the Company had not recognized any liabilities for uncertain tax positions, nor had interest and penalties related to uncertain tax positions been accrued.

Revenues (Schedule of Revenues Disaggregated by Product Category) (Details)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Disaggregation of Revenue [Line Items]
Total revenue	100.00%	100.00%
Man-Made Tiles [Member]
Disaggregation of Revenue [Line Items]
Total revenue	46.00%	46.00%
Natural Stone Tiles [Member]
Disaggregation of Revenue [Line Items]
Total revenue	29.00%	29.00%
Setting And Maintenance Materials [Member]
Disaggregation of Revenue [Line Items]
Total revenue	15.00%	14.00%
Accessories [Member]
Disaggregation of Revenue [Line Items]
Total revenue	8.00%	10.00%
Delivery Service [Member]
Disaggregation of Revenue [Line Items]
Total revenue	2.00%	1.00%

Inventories (Schedule of Inventories) (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Inventories [Abstract]
Finished goods	$ 69,459	$ 72,619
Raw materials	1,513	1,677
Total	$ 70,972	$ 74,296

Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2021

Fair Value of Financial Instruments [Abstract]

Summary of Fair Value of Financial Assets Measured on a Recurring Basis



	Pricing	Fair Value at
	Category	March 31, 2021		December 31, 2020
Assets		(in thousands)
Cash and cash equivalents	Level 1	$	35,933	$	9,617
Restricted cash	Level 1		655		655

Inventories

3 Months Ended

Mar. 31, 2021

Inventories [Abstract]

Inventories

Note 3: Inventories

Inventories are stated at the lower of cost (determined using the moving average cost method) or net realizable value. Inventories consist primarily of merchandise held for sale. Inventories were comprised of the following as of March 31, 2021 and December 31, 2020:



	(in thousands)
	March 31,		December 31,
	2021		2020
Finished goods	$	69,459	$	72,619
Raw materials		1,513		1,677
Total	$	70,972	$	74,296

The Company provides provisions for losses related to shrinkage and other amounts that are otherwise not expected to be fully recoverable. These provisions are calculated based on historical shrinkage, selling price, margin and current business trends. The provision for losses related to shrinkage and other amounts was $0.7 million and $0.6 million as of March 31, 2021 and December 31, 2020, respectively.

Revenues (Tables)

3 Months Ended

Mar. 31, 2021

Revenues [Abstract]

Schedule of Revenues Disaggregated by Product Category



	For the three months ended
	March 31,
	2021		2020
Man-made tiles	46	%	46	%
Natural stone tiles	29		29
Setting and maintenance materials	15		14
Accessories	8		10
Delivery service	2		1
Total	100	%	100	%

Schedule of Components of Returns Reserve


	(in thousands)
	March 31,		December 31,
	2021		2020
Other current accrued liabilities	$	5,700	$	4,957
Other current assets		1,676		1,516
Sales returns reserve, net	$	4,024	$	3,441

Long-term Debt (Narrative) (Details) - USD ($)	3 Months Ended
Long-term Debt (Narrative) (Details) - USD ($)	Mar. 31, 2021	Dec. 31, 2020
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Credit facility, amount outstanding	$ 0
Credit Agreement [Member]
Debt Instrument [Line Items]
Credit facility, maximum borrowing capacity	$ 100,000,000.0
Credit facility, expiration date	Sep. 18, 2023
Credit facility, available borrowing capacity	$ 97,600,000
Credit Agreement [Member] \| London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument [Line Items]
Credit facility effective interest rate	1.86%
Credit Agreement [Member] \| London Interbank Offered Rate (LIBOR) [Member] \| Minimum [Member]
Debt Instrument [Line Items]
Credit facility, spread on variable interest rate	1.50%
Credit Agreement [Member] \| London Interbank Offered Rate (LIBOR) [Member] \| Maximum [Member]
Debt Instrument [Line Items]
Credit facility, spread on variable interest rate	2.25%
Credit Agreement [Member] \| Base Rate [Member]
Debt Instrument [Line Items]
Credit facility effective interest rate	4.00%
Credit Agreement [Member] \| Base Rate [Member] \| Minimum [Member]
Debt Instrument [Line Items]
Credit facility, spread on variable interest rate	0.50%
Credit Agreement [Member] \| Base Rate [Member] \| Maximum [Member]
Debt Instrument [Line Items]
Credit facility, spread on variable interest rate	1.25%
Credit Agreement [Member] \| Base Rate - Federal Funds [Member]
Debt Instrument [Line Items]
Credit facility, spread on variable interest rate	0.50%
Credit Agreement [Member] \| Base Rate - Eurodollar [Member]
Debt Instrument [Line Items]
Credit facility, spread on variable interest rate	1.00%
Credit Agreement [Member] \| Letter of Credit [Member]
Debt Instrument [Line Items]
Credit facility, amount outstanding	$ 2,400,000	$ 2,400,000

Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Current assets:
Cash and cash equivalents	$ 35,933	$ 9,617
Restricted cash	655	655
Receivables, net	3,015	2,975
Inventories	70,972	74,296
Income tax receivable	6,631	8,116
Other current assets, net	7,921	8,995
Total Current Assets	125,127	104,654
Property, plant and equipment, net	94,769	99,035
Right of use asset	127,395	132,374
Deferred tax assets	5,454	5,341
Other assets	1,219	1,286
Total Assets	353,964	342,690
Current liabilities:
Accounts payable	16,803	15,382
Income tax payable	167	93
Current portion of lease liability	29,440	27,223
Other accrued liabilities	43,268	34,106
Total Current Liabilities	89,678	76,804
Long-term debt
Long-term lease liability, net	116,357	122,678
Other long-term liabilities	3,573	4,146
Total Liabilities	209,608	203,628
Stockholders’ Equity:
Common stock, par value $0.0001; authorized: 100,000,000 shares; issued and outstanding: 51,932,704 and 51,701,080 shares, respectively	5	5
Preferred stock, par value $0.0001; authorized: 10,000,000 shares; issued and outstanding: 0 shares
Additional paid-in-capital	158,545	158,556
Accumulated deficit	(14,190)	(19,487)
Accumulated other comprehensive loss	(4)	(12)
Total Stockholders' Equity	144,356	139,062
Total Liabilities and Stockholders' Equity	$ 353,964	$ 342,690

Leases (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended
Leases (Narrative) (Details) - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020
Lessee, Lease, Description [Line Items]
COVID related deferred rent	$ 1.1	$ 2.1
COVID related deferred rent payments	$ 1.0
Minimum [Member]
Lessee, Lease, Description [Line Items]
Lease term	10 years
Maximum [Member]
Lessee, Lease, Description [Line Items]
Lease term	15 years

Inventories (Narrative) (Details) - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020
Inventories [Abstract]
Inventory, provision for shrinkage and other	$ 0.7	$ 0.6

Background (Policy)

3 Months Ended

Mar. 31, 2021

Background [Abstract]

Nature of Business

The Company is a specialty retailer of natural stone and man-made tiles, setting and maintenance materials, and related accessories in the United States. The Company manufactures its own setting and maintenance materials, such as thinset, grout, and sealers. The Company’s primary market is retail sales to consumers, contractors, designers and home builders. As of March 31, 2021, the Company had 143 stores in 31 states and the District of Columbia, with an average size of approximately 20,000 square feet. The Company has distribution centers located in Michigan, New Jersey, Oklahoma, Virginia and Wisconsin. The Company also has a sourcing office located in China.

Basis of Presentation

The accompanying Consolidated Financial Statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the rules and regulations for reporting on Form 10-Q. Accordingly, they do not include certain information and disclosures required for comprehensive financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and are of a normal recurring nature, including the elimination of all intercompany transactions. Operating results for the three months ended March 31, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2021.

These statements should be read in conjunction with the Consolidated Financial Statements and footnotes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020. The accounting policies used in preparing these Consolidated Financial Statements are the same as those described in Note 1 to the Consolidated Financial Statements in such Form 10-K.

Reclassification

Certain amounts in the prior year financial statements have been reclassified for comparative purposes to conform to the presentation for the quarter ended March 31, 2021. Specifically, the Company elected to change the way it presents cash flows from operating leases in its Statement of Cash Flows. In the three months ended March 31, 2020, the Company presented the net change in the right of use asset and lease liabilities as other, net within the operating section of the Statement of Cash Flows. During the third quarter of 2020, the Company determined it would be more appropriate to disaggregate this activity. The amortization of the right of use assets is now presented as a non-cash lease expense within the operating section of the Statement of Cash Flows. Lease payments, net of the accretion of lease liabilities, are now presented as a change in accrued expenses and other liabilities within the operating section of the Statement of Cash Flows.

The impact of this change on the Statement of Cash Flows presented as of March 31, 2020 follows:


(in thousands)		Previously Reported		Adjustments		As Revised
Non-cash lease expense	$	-	$	5,868	$	5,868
Changes in operating assets and liabilities:
Accrued expenses and other liabilities		2,973		(6,680)		(3,707)
Other, net		(812)		812		-
Net cash provided by operating activities		22,892		-		22,892

The change in classification had no impact on the Company’s pretax earnings, earnings per share, net cash provided by operating activities or balance sheets in any period.

Recently Adopted Accounting Pronouncements and Accounting Pronouncements Not Yet Adopted

Recently Adopted Accounting Pronouncements

In the first quarter of fiscal 2021, the Company adopted new accounting requirements related to the measurement of credit losses on financial instruments, including trade receivables. The new standard and subsequent amendments replaced the incurred loss impairment model with a forward-looking expected credit loss model, which will generally result in earlier recognition of credit losses. The Company’s allowance for doubtful accounts represents its estimate of expected credit losses related to its trade receivables. To estimate the allowance for doubtful accounts, the Company leverages information on historical losses, current conditions, and reasonable and supportable forecasts of future conditions. Account balances are written off against the allowance when the Company deems the amount is uncollectible. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.

Accounting Pronouncements Not Yet Adopted

In March 2020, the Financial Accounting Standards Board (FASB) issued guidance providing optional expedients and exceptions to account for the effects of reference rate reform to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued. The optional guidance is effective as of the beginning of the reporting period when the election is made through December 31, 2022. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements.

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Consolidated Statements of Comprehensive Income (Loss) [Abstract]
Net income	$ 5,297	$ 3,502
Currency translation adjustment	8	(16)
Other comprehensive income (loss)	8	(16)
Comprehensive income	$ 5,305	$ 3,486

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

Leases (Summary of Other Lease Information) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Leases [Abstract]
Operating cash flows from operating leases	$ 8,482	$ 9,067
Operating cash flows from financing leases		22
Financing cash flows from financing leases		$ 60

Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2021	Dec. 31, 2020
Consolidated Balance Sheets [Abstract]
Common stock, par value (per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	51,932,704	51,701,080
Common stock, shares outstanding	51,932,704	51,701,080
Preferred stock, par value (per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0

Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2021	May 03, 2021
Document And Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2021
Document Transition Report	false
Entity File Number	001-35629
Entity Registrant Name	TILE SHOP HOLDINGS, INC.
Entity Incorporation State Country Code	DE
Entity Tax Identification Number	45-5538095
Entity Address, Address Line 1	14000 Carlson Parkway
Entity Address City Or Town	Plymouth
Entity Address State Or Province	MN
Entity Address Postal Zip Code	55441
City Area Code	763
Local Phone Number	852-2950
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (in shares)		51,925,262
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Amendment Flag	false
Document Fiscal Period Focus	Q1
Entity Central Index Key	0001552800

Other Accrued Liabilities

3 Months Ended

Mar. 31, 2021

Other Accrued Liabilities [Abstract]

Other Accrued Liabilities

Note 6: Other Accrued Liabilities

Other accrued liabilities consisted of the following:



	(in thousands)
	March 31,		December 31,
	2021		2020
Customer deposits	$	17,763	$	12,225
Sales returns reserve		5,700		4,957
Accrued wages and salaries		6,767		6,561
Payroll and sales taxes		6,454		4,958
Other current liabilities		6,584		5,405
Total other accrued liabilities	$	43,268	$	34,106

Revenues (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended
Revenues (Narrative) (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Revenues [Abstract]
Customer deposit balance	$ 17,763	$ 12,225
Customer deposit balance, revenues recognized	10,400
Accounts receivable	$ 3,015	$ 2,975

Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2021

Fair Value of Financial Instruments [Abstract]

Fair Value of Financial Instruments

Note 9: Fair Value of Financial Instruments

Fair value is the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. To measure fair value, the Company uses a three-tier valuation hierarchy based upon observable and non-observable inputs:

Level 1 – Unadjusted quoted prices that are available in active markets for the identical assets or liabilities at the measurement date.

Level 2 – Significant other observable inputs available at the measurement date, other than quoted prices included in Level 1, either directly or indirectly, including:

Quoted prices for similar assets or liabilities in active markets;

Quoted prices for identical or similar assets or liabilities in non-active markets;

Inputs other than quoted prices that are observable for the asset or liability; and

Inputs that are derived principally from or corroborated by other observable market data.

Level 3 – Significant unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment.

The following table sets forth by level within the fair value hierarchy the Company’s financial assets that were accounted for at fair value on a recurring basis at March 31, 2021 and December 31, 2020 according to the valuation techniques the Company uses to determine their fair values. There have been no transfers of assets among the fair value hierarchies presented.



	Pricing	Fair Value at
	Category	March 31, 2021		December 31, 2020
Assets		(in thousands)
Cash and cash equivalents	Level 1	$	35,933	$	9,617
Restricted cash	Level 1		655		655

The following methods and assumptions were used to estimate the fair value of each class of financial instrument. There have been no changes in the valuation techniques used by the Company to value the Company’s financial instruments.

Cash and cash equivalents: Consists of cash on hand and bank deposits. The value was measured using quoted market prices in active markets. The carrying amount approximates fair value.

Restricted cash: Consists of cash and cash equivalents held in bank deposit accounts restricted as to withdrawal or that are under the terms of use for current operations. The value was measured using quoted market prices in active markets. The carrying amount approximates fair value.

Fair value measurements also apply to certain non-financial assets and liabilities measured at fair value on a nonrecurring basis. Property, plant and equipment and right of use assets are measured at fair value when an impairment is recognized and the related assets are written down to fair value. No impairment charges were recorded during the three months ended March 31, 2021. During

the three months ended March 31, 2020, the Company recognized a $2.2 million charge in selling, general and administrative expenses to write-down property, plant, and equipment and right of use assets to their estimated fair values. The Company measured the fair value of these assets based on projected cash flows, an estimated risk-adjusted rate of return, and market rental rates for comparable properties. Projected cash flows are considered Level 3 inputs. Market rental rates for comparable properties are considered Level 2 inputs.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Leases (Tables)

3 Months Ended

Mar. 31, 2021

Leases [Abstract]

Schedule of Lease Assets and Liabilities


Leases (in thousands)	Classification		March 31, 2021		December 31, 2020
Assets
Operating lease assets	Right of use asset	$	127,395	$	132,374
Total leased assets		$	127,395	$	132,374

Liabilities
Current
Operating	Current portion of lease liability	$	29,440	$	27,223
Noncurrent
Operating	Long-term lease liability, net		116,357		122,678
Total lease liabilities		$	145,797	$	149,901

Summary of Lease Cost


		Three months ended
Lease cost (in thousands)	Classification		March 31, 2021		March 31, 2020
Operating lease cost	SG&A expenses	$	8,478	$	8,221
Financing lease cost
Amortization of leased assets	SG&A expenses		-		12
Interest on lease liabilities	Interest expense		-		16
Variable lease cost⁽¹⁾	SG&A expenses		3,708		3,398
Short term lease cost	SG&A expenses		124		248
Net lease cost		$	12,310	$	11,895

⁽¹⁾Variable lease costs consist primarily of taxes, insurance, and common area or other maintenance costs for the Company’s leased facilities.

Summary of Other Lease Information


	Three months ended
Other Information (in thousands)		March 31, 2021		March 31, 2020
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	8,482	$	9,067
Operating cash flows from financing leases	$	-	$	22
Financing cash flows from financing leases	$	-	$	60

Related Party Transactions

3 Months Ended

Mar. 31, 2021

Related Party Transactions

Note 12: Related Party Transactions

On July 9, 2018, Fumitake Nishi, a former Company employee and the brother-in-law of Robert A. Rucker, the Company’s former Interim Chief Executive Officer and President, former member of the Company’s Board of Directors, and holder of more than 5% of the Company’s common stock as of March 31, 2021, informed the Company he had reacquired a majority of the equity of one of its key vendors, Nanyang Helin Stone Co. Ltd (“Nanyang”). Mr. Nishi also has an ownership interest in Tilestyling Co. Ltd (“Tile Style”), a vendor from which the Company started acquiring product in 2020. Nanyang and Tile Style supply the Company with natural stone products, including hand-crafted mosaics, listellos and other accessories. The Company paid $7.6 million to Nanyang in connection with purchases made during the year ended December 31, 2020. During the three months ended March 31, 2021, the Company purchased $1.9 million of products from Nanyang. As of March 31, 2021, the accounts payable due to Nanyang was $0.2 million. The Company paid $0.7 million to Tile Style in connection with purchases made during the year ended December 31, 2020. During the three months ended March 31, 2021, the Company purchased $0.5 million of products from Tile Style. As of March 31, 2021, the accounts payable due to Tile Style was $0.1 million. Mr. Nishi’s employment with the Company was terminated on January 1, 2014 as a result of several violations of the Company’s code of business conduct and ethics policy. Certain of those violations involved his undisclosed ownership of Nanyang at that time.

Management and the Audit Committee have evaluated these relationships and determined that it would be in the Company’s best interests to continue purchasing products from Nanyang and to begin purchasing products from Tile Style. The Company believes Nanyang and Tile Style each provide an important combination of quality, product availability and pricing, and relying solely on other vendors to supply similar product to the Company would not be in the Company’s best interests. The Company and the Audit Committee will continue to review future purchases from Nanyang and Tile Style and compare the pricing for products purchased from each of Nanyang and Tile Style to the pricing of same or similar products purchased from unrelated vendors.

Other Accrued Liabilities (Tables)

3 Months Ended

Mar. 31, 2021

Other Accrued Liabilities [Abstract]

Schedule of Other Accrued Liabilities



	(in thousands)
	March 31,		December 31,
	2021		2020
Customer deposits	$	17,763	$	12,225
Sales returns reserve		5,700		4,957
Accrued wages and salaries		6,767		6,561
Payroll and sales taxes		6,454		4,958
Other current liabilities		6,584		5,405
Total other accrued liabilities	$	43,268	$	34,106

Consolidated Statements of Income - USD ($) $ in Thousands	3 Months Ended
Consolidated Statements of Income - USD ($) $ in Thousands	Mar. 31, 2021	Mar. 31, 2020
Consolidated Statements of Operations [Abstract]
Net sales	$ 92,084	$ 94,279
Cost of sales	27,898	29,324
Gross profit	64,186	64,955
Selling, general and administrative expenses	57,278	62,361
Income from operations	6,908	2,594
Interest expense	(168)	(848)
Income before income taxes	6,740	1,746
(Provision) benefit for income taxes	(1,443)	1,756
Net income	$ 5,297	$ 3,502
Income per common share:
Basic	$ 0.11	$ 0.07
Diluted	$ 0.10	$ 0.07
Weighted average shares outstanding:
Basic	50,105,825	49,842,072
Diluted	51,056,798	49,842,072

Consolidated Statements of Cash Flows - USD ($)	3 Months Ended
Consolidated Statements of Cash Flows - USD ($)	Mar. 31, 2021	Mar. 31, 2020
Cash Flows From Operating Activities
Net income	$ 5,297,000	$ 3,502,000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	7,194,000	8,215,000
Amortization of debt issuance costs	76,000	149,000
Impairment charges	0	2,155,000
Non-cash lease expense	6,155,000	5,868,000
Stock based compensation	592,000	566,000
Deferred income taxes	(113,000)	4,456,000
Changes in operating assets and liabilities:
Receivables	(40,000)	(839,000)
Inventories	3,324,000	11,325,000
Other current assets, net	1,064,000	223,000
Accounts payable	1,580,000	(2,772,000)
Income tax receivable / payable	1,558,000	(6,249,000)
Accrued expenses and other liabilities	3,427,000	(3,707,000)
Net cash provided by operating activities	30,114,000	22,892,000
Cash Flows From Investing Activities
Purchases of property, plant and equipment	(3,202,000)	(645,000)
Net cash used in investing activities	(3,202,000)	(645,000)
Cash Flows From Financing Activities
Payments of long-term debt and financing lease obligations		(79,160,000)
Advances on line of credit		53,600,000
Employee taxes paid for shares withheld	(603,000)	(79,000)
Net cash used in financing activities	(603,000)	(25,639,000)
Effect of exchange rate changes on cash	7,000	(11,000)
Net change in cash, cash equivalents and restricted cash	26,316,000	(3,403,000)
Cash, cash equivalents and restricted cash beginning of period	10,272,000	9,919,000
Cash, cash equivalents and restricted cash end of period	36,588,000	6,516,000
Cash, cash equivalents and restricted cash end of period	36,588,000	6,516,000
Supplemental disclosure of cash flow information
Purchases of property, plant and equipment included in accounts payable and accrued expenses	161,000	15,000
Cash paid for interest	$ 238,000	833,000
Cash paid for income taxes, net		$ 22,000

Leases (Summary of Lease Cost) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Leases [Abstract]
Operating lease cost	$ 8,478	$ 8,221
Financing lease cost, Amortization of leased assets		12
Financing lease cost, Interest on lease liabilities		16
Variable lease cost	3,708	3,398
Short-term lease cost	124	248
Net lease cost	$ 12,310	$ 11,895

Earnings Per Share

3 Months Ended

Mar. 31, 2021

Earnings Per Share [Abstract]

Earnings Per Share

Note 5: Earnings Per Share

Basic earnings per share is calculated by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is calculated by dividing net income by the weighted-average number of common shares outstanding, after taking into consideration all dilutive potential shares outstanding during the period.

Basic and diluted earnings per share were calculated as follows:



	(dollars in thousands, except per share data)
		For the three months ended
		March 31,
		2021		2020
Net income		$	5,297	$	3,502
Weighted average shares outstanding - basic			50,105,825		49,842,072
Effect of dilutive securities attributable to stock based awards			950,973		-
Weighted average shares outstanding - diluted			51,056,798		49,842,072
Income per common share:
Basic		$	0.11	$	0.07
Diluted		$	0.10	$	0.07
Anti-dilutive securities excluded from earnings per share calculation			1,192,885		2,065,632

Background

3 Months Ended

Mar. 31, 2021

Background [Abstract]

Background

Note 1: Background

Tile Shop Holdings, Inc. (“Holdings,” and together with its wholly owned subsidiaries, the “Company”) was incorporated in Delaware in June 2012.

Reclassification

The impact of this change on the Statement of Cash Flows presented as of March 31, 2020 follows:


(in thousands)		Previously Reported		Adjustments		As Revised
Non-cash lease expense	$	-	$	5,868	$	5,868
Changes in operating assets and liabilities:
Accrued expenses and other liabilities		2,973		(6,680)		(3,707)
Other, net		(812)		812		-
Net cash provided by operating activities		22,892		-		22,892

The change in classification had no impact on the Company’s pretax earnings, earnings per share, net cash provided by operating activities or balance sheets in any period.

Impact of COVID-19 Pandemic

In March 2020, the World Health Organization declared the COVID-19 outbreak a global pandemic. COVID-19 has negatively impacted public health and the global economy, disrupted global supply chains, and created volatility in financial markets. The continuing implications of COVID-19 on the Company remain uncertain and will depend on certain future developments, including the duration, scope and severity of the pandemic and the effects of new variants of COVID-19, some of which may be more virulent or transmissible than the initial strain; its impact on the Company’s employees, customers and suppliers; the range and timing of government mandated restrictions and other measures; and the success of the deployment and widespread adoption of approved COVID-19 vaccines and their effectiveness. This uncertainty could have a material impact on the accounting estimates and

assumptions utilized to prepare the Company’s consolidated financial statements in future reporting periods, which could result in a material adverse impact on the Company’s financial position, results of operations and cash flows.

Recently Adopted Accounting Pronouncements

Accounting Pronouncements Not Yet Adopted

Leases

3 Months Ended

Mar. 31, 2021

Leases [Abstract]

Leases

Note 8: Leases

The Company leases its retail stores, certain distribution space, and office space. Leases generally have a term of ten to fifteen years, and contain renewal options. Assets acquired under operating leases are included in the Company’s right of use assets in the accompanying Consolidated Balance Sheet. The Company’s lease agreements do not contain significant residual value guarantees, restrictions or covenants. The depreciable life of assets and leasehold improvements is limited by the expected lease term.

Following the onset of COVID-19 in 2020, the Company worked 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. During the three months ended March 31, 2021, the Company repaid $1.0 million of the deferred rent balance to its landlords. As of March 31, 2021, the deferred rent balance was $1.1 million. The deferred rent balance is recorded as a liability within the current portion of lease liability balance.


Leases (in thousands)	Classification		March 31, 2021		December 31, 2020
Assets
Operating lease assets	Right of use asset	$	127,395	$	132,374
Total leased assets		$	127,395	$	132,374

Liabilities
Current
Operating	Current portion of lease liability	$	29,440	$	27,223
Noncurrent
Operating	Long-term lease liability, net		116,357		122,678
Total lease liabilities		$	145,797	$	149,901


		Three months ended
Lease cost (in thousands)	Classification		March 31, 2021		March 31, 2020
Operating lease cost	SG&A expenses	$	8,478	$	8,221
Financing lease cost
Amortization of leased assets	SG&A expenses		-		12
Interest on lease liabilities	Interest expense		-		16
Variable lease cost⁽¹⁾	SG&A expenses		3,708		3,398
Short term lease cost	SG&A expenses		124		248
Net lease cost		$	12,310	$	11,895

⁽¹⁾Variable lease costs consist primarily of taxes, insurance, and common area or other maintenance costs for the Company’s leased facilities.


	Three months ended
Other Information (in thousands)		March 31, 2021		March 31, 2020
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	8,482	$	9,067
Operating cash flows from financing leases	$	-	$	22
Financing cash flows from financing leases	$	-	$	60

Revenues

3 Months Ended

Mar. 31, 2021

Revenues [Abstract]

Revenues

Note 2: Revenues

Revenues are recognized when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration received in exchange for those goods or services. Sales taxes are excluded from revenues.

The following table presents revenues disaggregated by product category:



	For the three months ended
	March 31,
	2021		2020
Man-made tiles	46	%	46	%
Natural stone tiles	29		29
Setting and maintenance materials	15		14
Accessories	8		10
Delivery service	2		1
Total	100	%	100	%

The Company generates revenues by selling tile products, setting and maintenance materials, accessories, and delivery services to its customers through its store locations and online. The timing of revenue recognition coincides with the transfer of control of goods and services ordered by the customer which falls into one of three categories described below:

Revenue recognized when an order is placed – If a customer places an order in a store and the contents of their order are available, the Company recognizes revenue concurrent with the exchange of goods for consideration from the customer.

Revenue recognized when an order is picked up – If a customer places an order for items held in a centralized distribution center, the Company requests a deposit from the customer at the time they place the order. Subsequently when the contents of the customer’s order are delivered to the store, the customer returns to the store and picks up the items that were ordered. The Company recognizes revenue on this transaction when the customer picks up their order.

Revenue recognized when an order is delivered – If a customer places an order in a store and requests delivery of their order, the Company prepares the contents of their order, initiates the delivery service, and recognizes revenue once the contents of the customer’s order are delivered.

The Company determines the transaction price of its contracts based on the pricing established at the time a customer places an order. The transaction price does not include sales tax as the Company is a pass-through conduit for collecting and remitting sales tax. Any

discounts applied to an order are allocated proportionately to the base price of the goods and services ordered. Deposits made by customers are recorded in other accrued liabilities. Deferred revenues associated with customer deposits are recognized at the time the Company transfers control of the items ordered or renders the delivery service. In the event an order is partially fulfilled as of the end of a reporting period, revenue will be recognized based on the transaction price allocated to the goods delivered and services rendered. The customer deposit balance was $17.8 million and $12.2 million as of March 31, 2021 and December 31, 2020, respectively. Revenues recognized during the three-month period ended March 31, 2021 that were included in the customer deposit balance as of the beginning of the period were $10.4 million.

The Company extends financing to qualified professional customers who apply for credit. Customers who qualify for an account receive 30-day payment terms. The accounts receivable balance was $3.0 million on both March 31, 2021 and December 31, 2020. The Company expects that the customer will pay for the goods and services ordered within one year from the date the order is placed. Accordingly, the Company qualifies for the practical expedient outlined in ASC 606-10-32-18 and does not adjust the promised amount of consideration for the effects of the financing component.

Customers may return purchased items for an exchange or refund. The Company records a reserve for estimated product returns based on the historical returns trends and the current product sales performance. The Company presents the sales returns reserve as an other current accrued liability and the estimated value of the inventory that will be returned as an other current asset in the Consolidated Balance Sheet. The components of the sales returns reserve reflected in the Consolidated Balance Sheet as of March 31, 2021 and December 31, 2020 were as follows:


	(in thousands)
	March 31,		December 31,
	2021		2020
Other current accrued liabilities	$	5,700	$	4,957
Other current assets		1,676		1,516
Sales returns reserve, net	$	4,024	$	3,441

Leases (Schedule of Lease Assets and Liabilities) (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Leases [Abstract]
Operating lease assets	$ 127,395	$ 132,374
Total leased assets	127,395	132,374
Current operating lease liabilities	29,440	27,223
Noncurrent operating lease liabilities	116,357	122,678
Total lease liabilities	$ 145,797	$ 149,901

Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings (Deficit) [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Total
Beginning balance at Dec. 31, 2019	$ 5	$ 156,482	$ (25,518)	$ (70)	$ 130,899
Beginning balance (in shares) at Dec. 31, 2019	50,806,674
Issuance of restricted shares (in shares)	669,609
Cancellation of restricted shares (in shares)	(79,297)
Stock based compensation		566			566
Tax withholdings related to net share settlements of stock based compensation awards		(79)			(79)
Foreign currency translation adjustments				(16)	(16)
Net income			3,502		3,502
Balance at Mar. 31, 2020	$ 5	156,969	(22,016)	(86)	134,872
Balance (in shares) at Mar. 31, 2020	51,396,986
Beginning balance at Dec. 31, 2020	$ 5	158,556	(19,487)	(12)	$ 139,062
Beginning balance (in shares) at Dec. 31, 2020	51,701,080				51,701,080
Issuance of restricted shares (in shares)	322,024
Cancellation of restricted shares (in shares)	(90,400)
Stock based compensation		592			$ 592
Tax withholdings related to net share settlements of stock based compensation awards		(603)			(603)
Foreign currency translation adjustments				8	8
Net income			5,297		5,297
Balance at Mar. 31, 2021	$ 5	$ 158,545	$ (14,190)	$ (4)	$ 144,356
Balance (in shares) at Mar. 31, 2021	51,932,704				51,932,704

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

Background (Narrative) (Details)	Mar. 31, 2021 ft² store state
Background [Abstract]
Number of stores \| store	143
Number of states in which entity operates \| state	31
Area of stores \| ft²	20,000

Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2021

Earnings Per Share [Abstract]

Schedule of Basic and Diluted Net Income (Loss) Per Share



	(dollars in thousands, except per share data)
		For the three months ended
		March 31,
		2021		2020
Net income		$	5,297	$	3,502
Weighted average shares outstanding - basic			50,105,825		49,842,072
Effect of dilutive securities attributable to stock based awards			950,973		-
Weighted average shares outstanding - diluted			51,056,798		49,842,072
Income per common share:
Basic		$	0.11	$	0.07
Diluted		$	0.10	$	0.07
Anti-dilutive securities excluded from earnings per share calculation			1,192,885		2,065,632

Fair Value of Financial Instruments (Summary of Fair Value of Financial Assets Measured on a Recurring Basis) (Details) - Level 1 [Member] - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	$ 35,933	$ 9,617
Restricted cash	$ 655	$ 655

Equity Incentive Plans (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 0.1	$ 0.1
Stock options outstanding	1,002,695
Stock options outstanding, weighted average exercise price	$ 10.96
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 0.5	$ 0.5
Restricted stock outstanding	1,693,794

New Markets Tax Credit

3 Months Ended

Mar. 31, 2021

New Markets Tax Credit [Abstract]

New Markets Tax Credit

Note 11: New Markets Tax Credit

2016 New Markets Tax Credit

In December 2016, the Company entered into a financing transaction with U.S. Bank Community, LLC (“U.S. Bank”) related to a $9.2 million expansion of the Company’s facility in Durant, Oklahoma. U.S. Bank made a capital contribution to, and Tile Shop Lending, Inc. (“Tile Shop Lending”) made a loan to, Twain Investment Fund 192 LLC (the “Investment Fund”) under a qualified New Markets Tax Credit (“NMTC”) program. The NMTC program was provided for in the Community Renewal Tax Relief Act of 2000 (the “Act”) and is intended to induce capital investment in qualified lower income communities. The Act permits taxpayers to claim credits against their federal income taxes for up to 39% of qualified investments in the equity of community development entities (“CDEs”). CDEs are privately managed investment institutions that are certified to make qualified low-income community investments.

In this transaction, Tile Shop Lending loaned $6.7 million to the Investment Fund at an interest rate of 1.37% per year and with a maturity date of December 31, 2046. The Investment Fund then contributed the loan to a CDE, which, in turn, loaned the funds on similar terms to Tile Shop of Oklahoma, LLC, an indirect, wholly-owned subsidiary of Holdings. The proceeds of the loans from the CDEs (including loans representing the capital contribution made by U.S. Bank, net of syndication fees) were used to partially fund the distribution center project.

In December 2016, U.S. Bank contributed $3.2 million to the Investment Fund and, by virtue of such contribution, is entitled to substantially all of the tax benefits derived from the NMTC, while the Company effectively received net loan proceeds equal to U.S. Bank’s contributions to the Investment Fund. This transaction includes a put/call provision whereby the Company may be obligated or entitled to repurchase U.S. Bank’s interest. The Company believes that U.S. Bank will exercise the put option in December 2023

at the end of the recapture period. The value attributed to the put/call is de minimis. The NMTC is subject to 100% recapture for a period of seven years as provided in the Internal Revenue Code. The Company is required to be in compliance with various regulations and contractual provisions that apply to the NMTC arrangement. Non-compliance with applicable requirements could result in projected tax benefits not being realized and, therefore, could require the Company to indemnify U.S. Bank for any loss or recapture of NMTCs related to the financing until such time as the obligation to deliver tax benefits is relieved. The Company does not anticipate any credit recaptures will be required in connection with this arrangement.

The Company has determined that the financing arrangement with the Investment Fund and CDEs constitutes a variable interest entity (“VIE”). The ongoing activities of the Investment Fund – collecting and remitting interest and fees and NMTC compliance – were all considered in the initial design and are not expected to significantly affect economic performance throughout the life of the Investment Fund. Management considered the contractual arrangements that obligate the Company to deliver tax benefits and provide various other guarantees to the structure; U.S. Bank’s lack of a material interest in the underlying economics of the project; and the fact that the Company is obligated to absorb losses of the Investment Fund. The Company concluded that it is the primary beneficiary of the VIE and consolidated the Investment Fund, as a VIE, in accordance with the accounting standards for consolidation. In 2016, U.S. Bank’s contributions of $3.2 million, net of syndication fees, were included in cash, restricted cash, other accrued liabilities and other long-term liabilities in the consolidated balance sheet. The Company incurred $1.3 million of syndication fees in connection with this transaction, which were classified as other current assets and other non-current assets in the consolidated balance sheet. The Company is recognizing the benefit of this net $1.9 million contribution over the seven-year compliance period as it is being earned through the on-going compliance with the conditions of the NMTC program. As of March 31, 2021, the balance of the contribution liability for this arrangement was $1.3 million, of which $0.5 million was classified as other accrued liabilities on the Consolidated Balance Sheet and $0.8 million was classified as other long-term liabilities on the Consolidated Balance Sheet.

The Company is able to request reimbursement for certain expenditures made in connection with the expansion of the distribution center in Durant, Oklahoma from the Investment Fund. Expenditures that qualify for reimbursement include building costs, equipment purchases, and other expenditures tied to the expansion of the facility. As of March 31, 2021, the remaining balance in the Investment Fund available for reimbursement to the Company was $0.7 million.

Revenues (Schedule of Components of Returns Reserve) (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Revenues [Abstract]
Other current accrued liabilities	$ 5,700	$ 4,957
Other current assets	1,676	1,516
Sales returns reserve, net	$ 4,024	$ 3,441

Earnings Per Share (Schedule of Basic and Diluted Net Income (Loss) Per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Earnings Per Share [Abstract]
Net income	$ 5,297	$ 3,502
Weighted average shares outstanding - basic	50,105,825	49,842,072
Effect of dilutive securities attributable to stock based awards	950,973
Weighted average shares outstanding - diluted	51,056,798	49,842,072
Basic income per common share	$ 0.11	$ 0.07
Diluted income per common share	$ 0.10	$ 0.07
Anti-dilutive securities excluded from earnings per share calculation	1,192,885	2,065,632

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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+ Details

- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

+ References

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