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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION 

Washington, D.C. 20549

_____________________________

FORM 10-Q

_____________________________

(Mark One)

x

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

OR

¨

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the transition period from – to –

 

Commission file number: 001-35629

_____________________________

TILE SHOP HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

_____________________________

Delaware  

45-5538095

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

14000 Carlson Parkway

 

Plymouth, Minnesota 

55441

(Address of principal executive offices)  

(Zip Code)

(763) 852-2950 

(Registrant’s telephone number, including area code)

_____________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.0001 par value

TTSH

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes    ¨ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). x Yes    ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

¨

Accelerated filer

¨

Non-accelerated filer

x

Smaller reporting company

x

Emerging growth company

¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨ Yes    x No

As of August 2, 2021, there were 51,968,043 shares of the registrant’s common stock, par value $0.0001 per share, outstanding.

 

 


TILE SHOP HOLDINGS, INC.

Table of Contents

 

Page

PART I. FINANCIAL INFORMATION

Item 1.

Financial Statements

3

Consolidated Balance Sheets

3

Consolidated Statements of Operations

4

Consolidated Statements of Comprehensive Income (Loss)

5

Consolidated Statements of Stockholders’ Equity

6

Consolidated Statements of Cash Flows

8

Notes to Consolidated Financial Statements

9

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

18

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

26

Item 4.

Controls and Procedures

26

PART II. OTHER INFORMATION

Item 1.

Legal Proceedings

26

Item 1A.

Risk Factors

27

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

27

Item 3.

Defaults Upon Senior Securities

27

Item 4.

Mine Safety Disclosures

27

Item 5.

Other Information

27

Item 6.

Exhibits

30

Signatures

31

 

2


PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

  

Tile Shop Holdings, Inc. and Subsidiaries

Consolidated Balance Sheets

(dollars in thousands, except per share data)

June 30,

December 31,

2021

2020

(unaudited)

(audited)

Assets

Current assets:

Cash and cash equivalents

$

44,750

$

9,617

Restricted cash

655

655

Receivables, net

3,273

2,975

Inventories

68,933

74,296

Income tax receivable

8,911

8,116

Other current assets, net

7,061

8,995

Total Current Assets

133,583

104,654

Property, plant and equipment, net

91,376

99,035

Right of use asset

124,771

132,374

Deferred tax assets

5,515

5,341

Other assets

1,200

1,286

Total Assets

$

356,445

$

342,690

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable

$

16,002

$

15,382

Income tax payable

128

93

Current portion of lease liability

28,640

27,223

Other accrued liabilities

42,708

34,106

Total Current Liabilities

87,478

76,804

Long-term debt

-

-

Long-term lease liability, net

113,234

122,678

Other long-term liabilities

5,275

4,146

Total Liabilities

205,987

203,628

Stockholders’ Equity:

Common stock, par value $0.0001; authorized: 100,000,000 shares; issued and outstanding: 51,912,689 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

159,149

158,556

Accumulated deficit

(8,696)

(19,487)

Accumulated other comprehensive loss

-

(12)

Total Stockholders' Equity

150,458

139,062

Total Liabilities and Stockholders' Equity

$

356,445

$

342,690

See accompanying Notes to Consolidated Financial Statements.

3


Tile Shop Holdings, Inc. and Subsidiaries

Consolidated Statements of Operations

(dollars in thousands, except per share data)

(unaudited)

Three Months Ended

Six Months Ended

June 30,

June 30,

2021

2020

2021

2020

Net sales

$

96,193

$

67,730

$

188,277

$

162,009

Cost of sales

29,768

22,316

57,666

51,640

Gross profit

66,425

45,414

130,611

110,369

Selling, general and administrative expenses

58,811

47,208

116,089

109,569

Income (loss) from operations

7,614

(1,794)

14,522

800

Interest expense

(145)

(559)

(313)

(1,407)

Income (loss) before income taxes

7,469

(2,353)

14,209

(607)

(Provision) benefit for income taxes

(1,975)

1,593

(3,418)

3,349

Net income (loss)

$

5,494

$

(760)

$

10,791

$

2,742

Income (loss) per common share:

Basic

$

0.11

$

(0.02)

$

0.22

$

0.05

Diluted

$

0.11

$

(0.02)

$

0.21

$

0.05

Weighted average shares outstanding:

Basic

50,259,945

49,926,267

50,183,310

49,884,169

Diluted

51,333,949

49,926,267

51,183,259

50,052,990

See accompanying Notes to Consolidated Financial Statements.

 

4


Tile Shop Holdings, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income (Loss)

(dollars in thousands)

(unaudited)

Three Months Ended

Six Months Ended

June 30,

June 30,

2021

2020

2021

2020

Net income (loss)

$

5,494

$

(760)

$

10,791

$

2,742

Currency translation adjustment

4

2

12

(14)

Other comprehensive income (loss)

4

2

12

(14)

Comprehensive income (loss)

$

5,498

$

(758)

$

10,803

$

2,728

See accompanying Notes to Consolidated Financial Statements.


5


Tile Shop Holdings, Inc. and Subsidiaries

Consolidated Statements of Stockholders’ Equity

(dollars in thousands, except per share data)

(unaudited)

Common stock

Shares

Amount

Additional
paid-in
capital

Accumulated

deficit

Accumulated
other
comprehensive
income (loss)

Total

Balance at March 31, 2020

51,396,986

$

5

$

156,969

$

(22,016)

$

(86)

$

134,872

Issuance of restricted shares

28,494

-

-

-

-

-

Cancellation of restricted shares

(55,313)

-

-

-

-

-

Stock based compensation

-

-

538

-

-

538

Tax withholdings related to net share settlements of stock based compensation awards

-

-

(14)

-

-

(14)

Foreign currency translation adjustments

-

-

-

-

2

2

Net loss

-

-

-

(760)

-

(760)

Balance at June 30, 2020

51,370,167

$

5

$

157,493

$

(22,776)

$

(84)

$

134,638

Balance at March 31, 2021

51,932,704

$

5

$

158,545

$

(14,190)

$

(4)

$

144,356

Cancellation of restricted shares

(5,345)

-

-

-

-

-

Stock based compensation

-

-

706

-

-

706

Tax withholdings related to net share settlements of stock based compensation awards

(14,670)

-

(102)

-

-

(102)

Foreign currency translation adjustments

-

-

-

-

4

4

Net income

-

-

-

5,494

-

5,494

Balance at June 30, 2021

51,912,689

$

5

$

159,149

$

(8,696)

$

-

$

150,458

 

See accompanying Notes to Consolidated Financial Statements.

6


Tile Shop Holdings, Inc. and Subsidiaries

Consolidated Statements of Stockholders’ Equity

(dollars in thousands, except per share data)

(unaudited)

Common stock

Shares

Amount

Additional
paid-in
capital

Accumulated

deficit

Accumulated
other
comprehensive
income (loss)

Total

Balance at December 31, 2019

50,806,674

$

5

$

156,482

$

(25,518)

$

(70)

$

130,899

Issuance of restricted shares

698,103

-

-

-

-

-

Cancellation of restricted shares

(134,610)

-

-

-

-

-

Stock based compensation

-

-

1,104

-

-

1,104

Tax withholdings related to net share settlements of stock based compensation awards

-

-

(93)

-

-

(93)

Foreign currency translation adjustments

-

-

-

-

(14)

(14)

Net income

-

-

-

2,742

-

2,742

Balance at June 30, 2020

51,370,167

$

5

$

157,493

$

(22,776)

$

(84)

$

134,638

Balance at December 31, 2020

51,701,080

$

5

$

158,556

$

(19,487)

$

(12)