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ttsh-20220630x10q

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


¨	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.

Table of Contents

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

‎

Table of Contents

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.

Table of Contents

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.

Table of Contents

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.

‎

Table of Contents

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

‎

Table of Contents

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	$	122,224
Issuance of restricted shares	592,396		-