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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, 2022

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

x

Non-accelerated filer

¨

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 1, 2022, there were 52,257,157 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

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

16

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

22

Item 4.

Controls and Procedures

22

PART II. OTHER INFORMATION

Item 1.

Legal Proceedings

22

Item 1A.

Risk Factors

22

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

23

Item 3.

Defaults Upon Senior Securities

23

Item 4.

Mine Safety Disclosures

23

Item 5.

Other Information

23

Item 6.

Exhibits

25

Signatures

26

 

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,

2022

2021

(unaudited)

(audited)

Assets

Current assets:

Cash and cash equivalents

$

10,506

$

9,358

Restricted cash

655

655

Receivables, net

4,184

3,202

Inventories

110,039

97,175

Income tax receivable

8,548

6,923

Other current assets, net

8,090

9,769

Total Current Assets

142,022

127,082

Property, plant and equipment, net

76,621

82,285

Right of use asset

116,961

123,101

Deferred tax assets

6,435

6,953

Other assets

3,232

1,337

Total Assets

$

345,271

$

340,758

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable

$

30,132

$

30,884

Income tax payable

282

390

Current portion of lease liability

28,126

28,190

Other accrued liabilities

41,236

38,249

Total Current Liabilities

99,776

97,713

Long-term debt

5,000

5,000

Long-term lease liability, net

102,656

110,261

Other long-term liabilities

4,851

5,560

Total Liabilities

212,283

218,534

Stockholders’ Equity:

Common stock, par value $0.0001; authorized: 100,000,000 shares; issued and outstanding: 52,270,922 and 51,963,377 shares, respectively

5

5

Preferred stock, par value $0.0001; authorized: 10,000,000 shares; issued and outstanding: 0 shares

-

-

Additional paid-in capital

127,298

126,920

Retained earnings (accumulated deficit)

5,714

(4,713)

Accumulated other comprehensive (loss) income

(29)

12

Total Stockholders' Equity

132,988

122,224

Total Liabilities and Stockholders' Equity

$

345,271

$

340,758

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,

2022

2021

2022

2021

Net sales

$

107,604

$

96,193

$

210,075

$

188,277

Cost of sales

36,586

29,768

72,212

57,666

Gross profit

71,018

66,425

137,863

130,611

Selling, general and administrative expenses

61,240

58,811

123,349

116,089

Income from operations

9,778

7,614

14,514

14,522

Interest expense

(201)

(145)

(467)

(313)

Income before income taxes

9,577

7,469

14,047

14,209

Provision for income taxes

(2,663)

(1,975)

(3,620)

(3,418)

Net income

$

6,914

$

5,494

$

10,427

$

10,791

Income per common share:

Basic

$

0.14

$

0.11

$

0.21

$

0.22

Diluted

$

0.13

$

0.11

$

0.20

$

0.21

Weighted average shares outstanding:

Basic

50,890,063

50,259,945

50,802,423

50,183,310

Diluted

51,253,543

51,333,949

51,214,607

51,183,259

See accompanying Notes to Consolidated Financial Statements.

 

4


Tile Shop Holdings, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income

(dollars in thousands)

(unaudited)

Three Months Ended

Six Months Ended

June 30,

June 30,

2022

2021

2022

2021

Net income

$

6,914

$

5,494

$

10,427

$

10,791

Currency translation adjustment

(43)

4

(41)

12

Other comprehensive (loss) income

(43)

4

(41)

12

Comprehensive income

$

6,871

$

5,498

$

10,386

$

10,803

See accompanying Notes to Consolidated Financial Statements.


5


Tile Shop Holdings, Inc. and Subsidiaries

Consolidated Statements of Stockholders’ Equity

(dollars in thousands)

(unaudited)

Common stock

Shares

Amount

Additional
paid-in
capital

Accumulated
deficit

Accumulated
other
comprehensive
income (loss)

Total

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

Balance at March 31, 2022

52,112,567

$

5

$

126,805

$

(1,200)

$

14

$

125,624

Issuance of restricted shares

172,429

-

-

-

-

-

Cancellation of restricted shares

(2,918)

-

-

-

-

-

Stock based compensation

-

-

562

-

-

562

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

(11,156)

-

(69)

-

-

(69)

Foreign currency translation adjustments

-

-

-

-

(43)

(43)

Net income

-

-

-

6,914

-

6,914

Balance at June 30, 2022

52,270,922

$

5

$

127,298

$

5,714

$

(29)

$

132,988

See accompanying Notes to Consolidated Financial Statements


6


Tile Shop Holdings, Inc. and Subsidiaries

Consolidated Statements of Stockholders’ Equity

(dollars in thousands)

(unaudited)

 

Common stock

Shares

Amount

Additional
paid-in
capital

Accumulated
deficit

Accumulated
other
comprehensive
income (loss)

Total

Balance at December 31, 2020

51,701,080

$

5

$

158,556

$

(19,487)

$

(12)

$

139,062

Issuance of restricted shares

322,024

-

-

-

-

-

Cancellation of restricted shares

(7,055)

-

-

-

-

-

Stock based compensation

-

-

1,299

-

-

1,299

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

(103,360)

-

(706)

-

-

(706)

Foreign currency translation adjustments

-

-

-

-

12

12

Net income

-

-

-

10,791

-

10,791

Balance at June 30, 2021

51,912,689

$

5

$

159,149

$

(8,696)

$

-

$

150,458

Balance at December 31, 2021

51,963,377

$

5

$

126,920

$

(4,713)

$

12

$