Tile Shop (TTSH) 10-Q 27 Oct 16 2016 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Oct. 24, 2016
Document And Entity Information
Entity Registrant Name	TILE SHOP HOLDINGS, INC.
Entity Central Index Key	1,552,800
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Fiscal Period Focus	Q3
Document Period End Date	Sep. 30, 2016
Document Fiscal Year Focus	2,016
Current Fiscal Year End Date	--12-31
Trading Symbol	tts
Amendment Flag	false
Entity Common Stock, Shares Outstanding (in shares)		51,593,979

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 9,835	$ 10,330
Restricted cash	210	219
Trade receivables, net	2,560	1,966
Inventories	66,379	69,878
Prepaid inventory	415	568
Income tax receivable	1,226	735
Other current assets, net	3,890	3,557
Total Current Assets	84,515	87,253
Property, plant and equipment, net	137,774	135,115
Deferred tax assets	19,781	20,846
Other assets	1,723	1,793
Total Assets	243,793	245,007
Current liabilities:
Accounts payable	18,008	14,584
Current portion of long-term debt	5,600	4,744
Income tax payable	404	1,101
Other accrued liabilities	22,764	19,327
Total Current Liabilities	46,776	39,756
Long-term debt, net	18,469	51,178
Capital lease obligation, net	725	797
Deferred rent	37,028	34,983
Other long-term liabilities	3,400	3,092
Total Liabilities	106,398	129,806
Stockholders’ Equity:
Common stock, par value $0.0001; authorized: 100,000,000 shares; issued and outstanding: 51,575,420 and 51,437,973 shares, respectively	5	5
Preferred stock, par value $0.0001; authorized: 10,000,000 shares; issued and outstanding: 0 shares
Additional paid-in-capital	184,893	180,192
Accumulated deficit	(47,482)	(64,985)
Accumulated other comprehensive (loss) income	(21)	(11)
Total Stockholders' Equity	137,395	115,201
Total Liabilities and Stockholders' Equity	$ 243,793	$ 245,007

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2016	Dec. 31, 2015
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	51,575,420	51,437,973
Common stock, shares outstanding	51,575,420	51,437,973
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

Consolidated Statements of Oper

Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Consolidated Statements of Operations [Abstract]
Net sales	$ 78,559	$ 72,404	$ 247,543	$ 221,073
Cost of sales	23,400	21,691	73,980	68,096
Gross profit	55,159	50,713	173,563	152,977
Selling, general and administrative expenses	47,361	44,047	142,300	130,678
Income from operations	7,798	6,666	31,263	22,299
Interest expense	(363)	(503)	(1,382)	(2,101)
Other income	34	34	102	97
Income before income taxes	7,469	6,197	29,983	20,295
Provision for income taxes	(2,886)	(2,436)	(11,793)	(8,385)
Net income	$ 4,583	$ 3,761	$ 18,190	$ 11,910
Income per common share:
Basic	$ 0.09	$ 0.07	$ 0.35	$ 0.23
Diluted	$ 0.09	$ 0.07	$ 0.35	$ 0.23
Weighted average shares outstanding:
Basic	51,426,104	51,161,348	51,388,058	51,137,650
Diluted	51,929,226	51,424,979	51,817,588	51,254,547

Consolidated Statements of Comp

Consolidated Statements of Comprehensive (Loss) Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Consolidated Statements of Comprehensive (Loss) Income [Abstract]
Net income	$ 4,583	$ 3,761	$ 18,190	$ 11,910
Currency translation adjustment	(2)	(7)	(10)	(6)
Other comprehensive (loss) income	(2)	(7)	(10)	(6)
Comprehensive income	$ 4,581	$ 3,754	$ 18,180	$ 11,904

Consolidated Statements of Stoc

Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Treasury Units [Member]	Retained Earnings (Deficit) [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Total
Balance (in shares) at Dec. 31, 2014	51,314,005
Balance at Dec. 31, 2014	$ 5	$ 174,371		$ (80,681)		$ 93,695
Issuance of restricted shares (in shares)	54,036
Issuance of restricted shares
Stock based compensation		5,545				5,545
Stock option exercises (in shares)	69,932
Stock option exercises		276				276
Foreign currency translation adjustments					$ (11)	(11)
Net income				15,696		$ 15,696
Balance (in shares) (Previously Reported [Member]) at Dec. 31, 2015	51,437,973
Balance (in shares) at Dec. 31, 2015	51,437,973					51,437,973
Balance (Previously Reported [Member]) at Dec. 31, 2015	$ 5	180,192		(64,985)	(11)	$ 115,201
Balance (Adjustment For ASU 2016-09 [Member]) at Dec. 31, 2015		687		(687)
Balance at Dec. 31, 2015	$ 5	180,879		(65,672)	(11)	115,201
Issuance of restricted shares (in shares)	73,384
Issuance of restricted shares
Stock based compensation		3,394				3,394
Stock option exercises (in shares)	64,063
Stock option exercises		620				620
Foreign currency translation adjustments					(10)	(10)
Net income				18,190		$ 18,190
Balance (in shares) at Sep. 30, 2016	51,575,420					51,575,420
Balance at Sep. 30, 2016	$ 5	$ 184,893		$ (47,482)	$ (21)	$ 137,395

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Cash Flows From Operating Activities
Net income	$ 18,190	$ 11,910
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation & amortization	16,954	16,597
Amortization of debt issuance costs	416	238
Debt issuance cost writeoff		194
Loss on disposals of property, plant and equipment	420	112
Deferred rent	1,767	2,156
Stock based compensation	3,394	4,226
Deferred income taxes	1,065	954
Changes in operating assets and liabilities:
Trade receivables	(594)	(536)
Inventories	3,499	5,661
Prepaid expenses and other current assets	(303)	(1,634)
Accounts payable	3,337	1,341
Income tax receivable/ payable	(1,188)	7,369
Accrued expenses and other liabilities	3,721	2,793
Net cash provided by operating activities	50,678	51,381
Cash Flows From Investing Activities
Purchases of property, plant and equipment	(19,645)	(12,196)
Proceeds from the sale of property, plant and equipment		9
Net cash used in investing activities	(19,645)	(12,187)
Cash Flows From Financing Activities
Payments of long-term debt and capital lease obligations	(32,132)	(39,662)
Advances on line of credit		10,250
Proceeds from exercise of stock options	620	81
Debt issuance costs		(968)
Security deposits	(6)	(5)
Net cash used in financing activities	(31,518)	(30,304)
Effect of exchange rate changes on cash	(10)	(5)
Net change in cash	(495)	8,885
Cash and cash equivalents beginning of period	10,330	5,759
Cash and cash equivalents end of period	9,835	14,644
Supplemental disclosure of cash flow information
Purchases of property, plant and equipment included in accounts payable and accrued expenses	816	1,370
Cash paid for interest	1,483	2,310
Cash paid for income taxes, net of refunds	$ 12,981	$ 1,016

Background

Background	9 Months Ended
	Sep. 30, 2016
Background [Abstract]
Background	No te 1: Background  The Tile Shop, LLC (“The Tile Shop”) was formed on December 30, 2002, as a Delaware limited liability company and began operations on January 1, 2003. Tile Shop Holdings, Inc. (“Holdings,” and together with its wholly owned subsidiaries, the “Company”) was incorporated under the laws of the state of Delaware in June 2012 to become the parent company of The Tile Shop, LLC.  The Company is a specialty retailer of manufactured and natural stone 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 September 30, 2016 , the Company had 120 stores in 31 states and an on-line retail operation. The Company also has distribution centers located in Michigan, New Jersey, Oklahoma , Virginia, and Wisconsin. The Company has a sourcing operation located in China.  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 and nine months ended September 30, 2016 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2016 .  These statements should be read in conjunction with the Consolidated Financial Statements and footnotes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 . 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. Debt issuance costs presented in the prior year Consolidated Balance Sheet have been reclassified to conform to current year presentation.  Recently Adopted Accounting Pronouncements  In February 2015, the Financial Accounting Standards Board (“FASB”) issued a new accounting standard that will modify current consolidation guidance. The standard makes changes to both the variable interest entity model and the voting interest entity model, including modifying the evaluation of whether limited partnerships or similar legal entities are variable interest entities or voting interest entities and amending the guidance for assessing how relationships of related parties affect the consolidation analysis of variable interest entities. The standard was effective for the Company as of the beginning of fiscal 2016. The adoption of this new standard did not have a material effect on the Company’s financial statements.  In April 2015, the FASB issued a standard that requires debt issuance costs related to a recognized debt liability be presented in the Consolidated Balance Sheet as a direct deduction from the carrying amount of that debt liability. The Company adopted the provisions of this statement in the first quarter of 2016 and prior periods have been retrospectively adjusted. The adoption of this standard resulted in a $0.1 million reduction of other current assets, net, a $0.3 million reduction of other assets, a $0.3 million reduction of the current portion of long term debt, and a $0.1 million reduction of long term debt in the Consolidated Balance Sheet for the period ended December 31, 2015.  In March 2016, the FASB issued a standard that amends and simplifies the accounting for stock compensation. The guidance addresses various stock compensation aspects including accounting for income taxes, classification of excess tax benefits on the statement of cash flows, forfeitures, minimum statutory tax withholding requirements, and classification of employee taxes paid on the statement of cash flows when an employer withholds shares for tax withholding purposes, among other things. In order to simplify the accounting for stock-based compensation, the Company made a change in accounting policy to account for forfeitures when they occur, and as a result, the Company recognized a $0.7 million cumulative-effect reduction to retained earnings under the modified retrospective approach. During the three months ended September 30, 2016, the Company recognized an adjustment to reduce additional paid-in capital and share-based compensation by $0.1 million to account for current year forfeiture activity.  The Company elected prospective transition for the requirement to classify excess tax benefits as an operating activity in the Consolidated Statement of Cash Flows. The adoption did not have a material impact on the amounts reported in the Consolidated Statement of Cash Flows for the nine months ended September 30, 2016. Additionally, the Company will prospectively recognize all excess tax benefits and tax deficiencies as income tax expense or benefit in the Consolidated Statement of Operations as a discrete item in the period in which awards vest. The adoption did not have a material impact on the amounts reported in the Consolidated Statement of Operations for the three and nine months ended September 30, 2016. The Company applied the modified retrospective method to recognize the cumulative effect of previously unrecognized excess tax benefits in opening retained earnings. The adoption did not have a material impact on the amounts reported in the Consolidated Balance Sheet for the year ended December 31, 2015. The Company also retrospectively applied the requirement to present employee taxes paid when an employer withholds shares for tax-withholding purposes as a financing activity in the Consolidated Statement of Cash Flows. The adoption did not have a material impact on the amounts reported in the Consolidated Statement of Cash Flows for the nine months ended September 30, 2016 and 2015.  Accounting Pronouncements Not Yet Adopted  In May 2014, the FASB issued a final standard on revenue from contracts with customers. The new standard sets forth a single comprehensive model for recognizing and reporting revenue. The new standard is effective for the Company in fiscal year 2018 and permits the use of either a retrospective or a cumulative effect transition method. The Company is currently assessing the impact of implementing the new guidance on its consolidated financial statements. In August 2014, the FASB issued a standard requiring an entity’s management to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern within one year after the date of the financial statements. The guidance also sets forth a series of disclosures that are required in the event the entity’s management concludes that there is substantial doubt about the entity’s ability to continue as a going concern. The new standard becomes effective for the Company in the annual financial statements for fiscal 2016 and requires an ongoing evaluation at each interim and annual period thereafter. The Company is currently assessing the effect the new standard will have on its consolidated financial statements.  In July 2015, the FASB issued a standard which simplifies the subsequent measurement of inventory. Currently, an entity is required to measure inventory at the lower of cost or market, whereby market can be replacement cost, net realizable value, or net realizable value less an approximately normal profit margin. The changes require that inventory be measured at the lower of cost and net realizable value, thereby eliminating the use of the other two market methodologies. Net realizable value is defined as the estimated selling prices in the ordinary course of business less reasonably predictable costs of completion, disposal, and transportation. Currently, the Company applies the net realizable value market option to measure inventories at the lower of cost or market. These changes become effective for the Company in fiscal 2017. The Company is currently assessing the effect the new standard will have on its consolidated financial statements.  In February 2016, the FASB issued a standard that primarily requires organizations that lease assets to recognize the rights and obligations created by those leases on the Consolidated Balance Sheet. The standard is effective in 2019, with early adoption permitted. The Company is currently assessing the effect the new standard will have on its consolidated financial statements.  

Inventories

Inventories	9 Months Ended
	Sep. 30, 2016
Inventories [Abstract]
Inventories	Note 2: Inventories  Inventories are stated at the lower of cost (determined on the weighted average cost method) or market. Inventories consist primarily of merchandise held for sale. Inventories were comprised of the following as of September 30, 2016 and December 31, 2015 :      (in thousands)  September 30, December 31,  2016 2015  Finished goods $ 52,896 $ 59,503  Raw materials 2,506 2,681  Finished goods in transit 10,977 7,694  Total $ 66,379 $ 69,878  The Company records 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.

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2016
Income Taxes [Abstract]
Income Taxes	Note 3: Income taxes  The Company’s effective tax rate on net income before income taxes for the three months ended September 30, 2016 and 2015 was 38.6% and 39.3% , respectively. The Company's effective tax rate on net income before income taxes for the nine months ended September 30, 2016 and 2015 was 39.3% and 41.3% , respectively. The improvement in the effective tax rate in 2016 was due to a n increase in incentive stock option exercise activity classified as a disqualifying disposition to the option holder that gives rise to a deduction for the Company. The Company’s tax rate also benefitted from a decrease in non-deductible incentive stock-based compensation expense in 2016 combined with a reduction in the level of state tax rate changes that triggered unfavorable deferred tax adjustments in 2015. For the three months ended September 30, 2016 and 2015 , the Company recorded a provision for income taxes of $2.9 million and $2.4 million, respectively. For the nine months ended September 30, 2016 and 2015 , the Company recorded a provision for income taxes of $11.8 million and $8.4 million, respectively.  The Company records interest and penalties relating to uncertain tax positions in income tax expense. As of September 30, 2016 and 2015 , the Company has not recognized any liabilities for uncertain tax positions nor have interest and penalties related to uncertain tax positions been accrued.

Earnings Per Share

Earnings Per Share	9 Months Ended
	Sep. 30, 2016
Earnings Per Share [Abstract]
Earnings Per Share	Note 4: 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)  For the three months ended For the nine months ended  September 30, September 30,  2016 2015 2016 2015  Net income $ 4,583 $ 3,761 $ 18,190 $ 11,910  Weighted average basic shares outstanding 51,426,104 51,161,348 51,388,058 51,137,650  Effect of dilutive securities attributable to stock-based awards 503,122 263,631 429,530 116,897  Weighted average diluted shares outstanding 51,929,226 51,424,979 51,817,588 51,254,547  Income per common share:  Basic $ 0.09 $ 0.07 $ 0.35 $ 0.23  Dilutive $ 0.09 $ 0.07 $ 0.35 $ 0.23  Anti-dilutive securities excluded from earnings per share calculation 347,699 769,778 409,599 1,021,033 

Other Accrued Liabilities

Other Accrued Liabilities	9 Months Ended
	Sep. 30, 2016
Other Accrued Liabilities [Abstract]
Other Accrued Liabilities	Note 5: Other Accrued Liabilities  Other accrued liabilities consisted of the following:     (in thousands)  September 30, December 31,  2016 2015  Customer deposits $ 7,565 $ 6,026  Accrued wages and salaries 5,629 4,336  Sales return reserve 3,003 2,781  Taxes (other than income taxes) 3,451 3,043  Other accrued liabilities 3,116 3,141  Total other accrued liabilities $ 22,764 $ 19,327 

Long-term Debt

Long-term Debt	9 Months Ended
	Sep. 30, 2016
Long-term Debt [Abstract]
Long-term Debt	Note 6: Long-term Debt  On June 2, 2015, Holdings and its operating subsidiary, The Tile Shop , LLC , as well as certain other subsidiaries of Holdings , entered into a credit agreement with Fifth Third Bank, Bank of America, N.A., and Huntington National Bank (the “Credit Agreement”). The Credit Agreement provides the Company with a $125.0 million senior secured credit facility, comprised of a five -year $50.0 million term loan and a $75.0 million revolving line of credit. 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. Borrowings pursuant to the Credit Agreement bear interest at either a base rate or a LIBOR-based rate, at the option of the Company. The LIBOR-based rate will range from LIBOR plus 1.50% to 2.00% , depending on The Tile Shop’s leverage ratio. The base rate is equal to the greatest of: (a) the Federal funds rate plus 0.50% , (b) the Fifth Third Bank “prime rate,” and (c) the Eurodollar rate plus 1.00% , in each case plus 0.50% to 1.00% depending on The Tile Shop’s leverage ratio. At September 30, 2016 the base interest rate was 4.00% and the LIBOR-based interest rate was 2.03% . Borrowings outstanding consisted of $23.4 million on the term loan as of September 30, 2016 . The Company can elect to prepay the term loan without incurring a penalty. Additional borrowings pursuant to the Credit Agreement may be used to support the Company’s growth and for working capital purposes. The Company incurred $1.0 million of debt issuance costs in connection with the Credit Agreement , which will be amortized over the five-year life of the Credit Agreement. Debt issuance costs attributable to the term loan are classified as a reduction of debt in the Consolidated Balance Sheet. Debt issuance costs attributable to the revolving line of credit are classified as assets in the Consolidated Balance Sheet. The term loan requires quarterly principal payments as follows (in thousands):     Period  December 31, 2016 to June 30, 2017 $ 1,250  September 30, 2017 to June 30, 2018 1,875  September 30, 2018 to March 31, 2020 2,500  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, make investments, or enter into transactions with affiliates on other than terms that could be obtained in an arm’s length transaction. The Credit Agreement also includes financial and other covenants , including covenants to maintain certain fixed charge coverage ratios and rent adjusted leverage ratios. In addition, except with respect to pro rata payments made by The Tile Shop or other subsidiaries to Holdings or any other equity owner of such entity, the Credit Agreement prohibits the payments of cash dividends. The Company was in compliance with the covenants as of September 30, 2016 .  Long-term debt , net of debt issuance costs, consist ed of the following at September 30, 2016 and December 31, 2015 (in thousands):      September 30, December 31,  2016 2015  Term note payable - interest at 2.03% and 2.18% at September 30, 2016 and December 31, 2015, respectively $ 23,264 $ 47,022  Commercial bank credit facility - 8,000  Variable interest rate bonds ( 0.35% at both September 30, 2016 and December 31, 2015), which mature April 1, 2023, collateralized by buildings and equipment 805 900  Total debt obligations 24,069 55,922  Less: current portion 5,600 4,744  Debt obligations, net of current portion $ 18,469 $ 51,178

Fair Value of Financial Instrum

Fair Value of Financial Instruments	9 Months Ended
	Sep. 30, 2016
Fair Value of Financial Instruments [Abstract]
Fair Value of Financial Instruments	Note 7: Fair Value of Financial Instruments  The accompanying C onsolidated F inancial S tatements include the following financial instruments: cash and cash equivalents, trade receivables, accounts payable, accrued expenses, capital leases, notes payable, and debt. At September 30, 2016 and December 31, 2015 , the carrying amount of the Company’s cash and cash equivalents, trade receivables, accounts payable and accrued expenses approximated their fair values due to their short-term maturities. The carrying value of the Company’s borrowings and capital lease obligation approximates fair value based upon the market interest rates available to the Company for debt and capital lease obligations with similar risk and maturities.  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 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. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions.

Equity Incentive Plans

Equity Incentive Plans	9 Months Ended
	Sep. 30, 2016
Equity Incentive Plans [Abstract]
Equity Incentive Plans	Note 8: 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 and nine months ended September 30, 2016 and 2015 include compensation cost for the portion of outstanding awards that vested during those periods. The Company recognizes stock-based compensation costs 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 $0.6 million and $1.1 million for the three months ended September 30, 2016 and 2015 . Total stock-based compensation expense related to stock options was $2.6 million and $2.7 million for the nine months ended September 30, 2016 and 2015 , respectively. Stock-based compensation expense is included in selling, general and administrative expenses in the accompanying Consolidated Statements of Operations.  As of September 30, 2016 , the Company had outstanding stock options to purchase 2,348,777 shares of common stock at a weighted average exercise price of $13.69 .  Restricted stock:  The Company awards restricted comm on shares to selected employees and to non-employee directors. Recipients are not required to provide any consideration other than continued service. Restricted share 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. 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. Total stock-based compensation expense related to restricted stock was $0.3 million and $0.5 million for the three months ended September 30, 2016 and 2015 , respectively. Total stock-based compensation expense related to restricted stock was $0.8 million and $1.5 million for the nine months ended September 30, 2016 and 2015 , respectively. Stock-based compensation expense is included in selling, general and administrative expenses in the accompanying Consolidated Statements of Operations.  As of September 30, 2016 , the Company had 98,384 outstanding restricted common shares.

New Market Tax Credit

New Market Tax Credit	9 Months Ended
	Sep. 30, 2016
New Market Tax Credit [Abstract]
New Market Tax Credit	Note 9: New Market Tax Credit  In July 2013 , the Company entered into a financing transaction with Chase Community Equity (“Chase”), and U.S. Bank Community, LLC (“U.S. Bank”, and, collectively with Chase, the “investors”) related to a $19.1 million acquisition, rehabilitation and construction of the Company’s new distribution and manufacturing center in Durant, Oklahoma. The investors made a capital contribution to, and Tile Shop Lending made a loan to , Chase New Market Tax Credit, The Tile Shop of Oklahoma Investment Fund, LLC, and The Tile Shop Investment Fund LLC (the “Investment Funds”) 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 July 2013, Tile Shop Lending loaned $13.5 million to the Investment Funds at an interest rate of 1.35% per year and with a maturity of September 30, 2043. The Investment Funds then contributed the loan to certain CDEs, 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 the investors, net of syndication fees) were used to partially fund the new manufacturing and distribution center project.  In July 2013, the investors also contributed $5.6 million to the Investment Funds and, by virtue of such contribution, are entitled to substantially all of the tax benefits derived from the NMTCs, while the Company effectively received net loan proceeds equal to the investors’ contributions to the Investment Fund. This transaction includes a put/call provision whereby the Company may be obligated or entitled to repurchase the investors’ interest. The Company believes that the investors will exercise the put option in September 2020 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 the investors 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 Funds and CDEs contains a variable interest entity (“VIE”). The ongoing activities of the Investment Funds – 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 Funds. Management considered the contractual arrangements that obligate the Company to deliver tax benefits and provide various other guarantees to the structure; Chase’s and U.S. Bank’s lack of a material interest in the underling 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 Funds, as a VIE, in accordance with the accounting standards for consolidation. Chase’s and U.S. Bank’s contributions of $4.4 million, net of syndication fees, are included in cash and other long-term liabilities in the accompanying Consolidated Balance Sheet. The benefit of this net $4.4 million contribution is recognized as a decrease in depreciation expense as the Company amortizes the contribution liability 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 September 30, 2016 , the balance of the contribution liability was $2.6 million and is classified as other long-term liabilities on the Consolidated Balance Sheet.

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2016
Commitments and Contingencies [Abstract]
Commitments and Contingencies	Note 10: Commitments and Contingencies  The Company, two of its former executive officers, five of its outside directors, and certain companies affiliated with the directors, are defendants in a consolidated class action brought under the federal securities laws and now pending in the United States District Court for the District of Minnesota under the caption Beaver County Employees’ Retirement Fund, et al. v. Tile Shop Holdings, Inc., et al. Several rel ated actions were filed in 2013 and subsequently consolidated. The plaintiffs are three investors who represent classes consisting of (1) all purchasers of Tile Shop common stock between August 22, 2012 and January 28, 2014 (the “class period”), seeking to pursue remedies under the Securities Exchange Act of 1934; and (2) all purchasers of Tile Shop common stock pursuant and/or traceable to the Company’s December 2012 registration statement, seeking to pursue remedies under the Securities Act of 1933. Six firms who were underwriters in the December 2012 secondary public offering are also named as defendants. The plaintiffs allege that during the class period, defendants failed to disclose certain related party transactions in the Company’s SEC filings and press releases. The plaintiffs assert claims under Sections 11, 12(a)(2), and 15 of the Securities Act of 1933, and under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. In addition to attorneys’ fees and costs, the plaintiffs seek to recover damages on behalf of class members. Discovery has closed, and the parties are in the process of briefing and arguing dispositive motions.  The Company also is a Defendant in three actions brought derivatively on behalf of the Company by three shareholders in the Court of Chancery for the State of Delaware (“Delaware Chancery Court”). Two of the actions were filed in 2015 and then consolidated (the “Consolidated Actions”) . On July 31, 2015, the plaintiff-shareholders in the Consolidated A ctions filed a consolidated complaint. The consolidated complaint names as defendants six members of the Company’s Board of Directors and a former employee of the Company. The third action (the “Third Action”) was filed on or about September 28, 2016 against seven members of the Company’s Board of Directors, a former officer, and a former employee. All of the complaints track many of the same factual allegations as have been made in the above-described federal securities class action. They allege that the defendant-directors and/or officer breached their fiduciary duties by failing to adopt adequate internal controls for the Company, by approving false and misleading statements issued by the Company, by causing the Company to violate generally accepted accounting principles and SEC regulations, by engaging in or approving alleged insider trading, and by permitting the Company’s primary product to contain illegal amounts of lead. The complaints also allege claims for insider trading and/or unjust enrichment. The complaints seek damages, disgorgement, an award of attorneys’ fees and other expenses, and an order compelling changes to the Company’s corporate governance and internal procedures. In 2015, the defendants moved to dismiss the C onsolidated Actions , or in the alternative, to stay the C onsolidated A ction s pending resolution of the Beaver County Employees’ Retirement Fund action described above. Subsequently, upon agreement of the parties, the Court entered an Order staying the C onsolidated A ction s . Recently the Company moved to dismiss the newly-filed Third A ction, or in the alternative, to stay the Third Action until resolution of the Beaver County Employees’ Retirement Fund action described above, or until the Company’s Board of Directors takes action on the demand described below. That motion has not yet been decided.  By letter dated May 19, 2016, a shareholder of the Company , through his attorney and prior to filing the Third Action, demanded that the Board of Directors investigate alleged breaches of fiduciary duty related to the same matters described above, and take action against certain present and former officers and directors of the Company. The Board of Directors has appointed a committee of two independent directors to investigate and evaluate the matters raised in the demand letter, and to recommend to the Company’s Board of Directors what actions, if any should be taken by the Company with respect to the matters raised in the demand letter.  Given the uncertainty of litigation and the preliminary stage of these cases, the Company cannot reasonably estimate the possible loss or range of loss that may result from these actions. The Company maintains directors and officers liability insurance policies that may reduce the Company’s exposure, if any. In the event the Company incurs a loss, the Company will pursue recoveries to the maximum extent available under these policies.  The Company is also, from time to time, subject to claims and disputes arising in the normal course of business. In the opinion of management, while the outcome of such claims and disputes cannot be predicted with certainty, the Company’s ultimate liability in connection with these matters is not expected to have a material adverse effect on the results of operations, financial position, or cash flows.

Inventories (Tables)

Inventories (Tables)	9 Months Ended
	Sep. 30, 2016
Inventories [Abstract]
Schedule of Inventories	   (in thousands)  September 30, December 31,  2016 2015  Finished goods $ 52,896 $ 59,503  Raw materials 2,506 2,681  Finished goods in transit 10,977 7,694  Total $ 66,379 $ 69,878 

Earnings Per Share (Tables)

Earnings Per Share (Tables)	9 Months Ended
	Sep. 30, 2016
Earnings Per Share [Abstract]
Schedule of Earnings Per Share	   (dollars in thousands)  For the three months ended For the nine months ended  September 30, September 30,  2016 2015 2016 2015  Net income $ 4,583 $ 3,761 $ 18,190 $ 11,910  Weighted average basic shares outstanding 51,426,104 51,161,348 51,388,058 51,137,650  Effect of dilutive securities attributable to stock-based awards 503,122 263,631 429,530 116,897  Weighted average diluted shares outstanding 51,929,226 51,424,979 51,817,588 51,254,547  Income per common share:  Basic $ 0.09 $ 0.07 $ 0.35 $ 0.23  Dilutive $ 0.09 $ 0.07 $ 0.35 $ 0.23  Anti-dilutive securities excluded from earnings per share calculation 347,699 769,778 409,599 1,021,033 

Other Accrued Liabilities (Tabl

Other Accrued Liabilities (Tables)	9 Months Ended
	Sep. 30, 2016
Other Accrued Liabilities [Abstract]
Schedule of Other Accrued Liabilities	   (in thousands)  September 30, December 31,  2016 2015  Customer deposits $ 7,565 $ 6,026  Accrued wages and salaries 5,629 4,336  Sales return reserve 3,003 2,781  Taxes (other than income taxes) 3,451 3,043  Other accrued liabilities 3,116 3,141  Total other accrued liabilities $ 22,764 $ 19,327 

Long-term Debt (Tables)

Long-term Debt (Tables)	9 Months Ended
	Sep. 30, 2016
Long-term Debt [Abstract]
Schedule of Principal Payments on Term Loans	   Period  December 31, 2016 to June 30, 2017 $ 1,250  September 30, 2017 to June 30, 2018 1,875  September 30, 2018 to March 31, 2020 2,500 
Schedule of Long-Term Debt	   September 30, December 31,  2016 2015  Term note payable - interest at 2.03% and 2.18% at September 30, 2016 and December 31, 2015, respectively $ 23,264 $ 47,022  Commercial bank credit facility - 8,000  Variable interest rate bonds ( 0.35% at both September 30, 2016 and December 31, 2015), which mature April 1, 2023, collateralized by buildings and equipment 805 900  Total debt obligations 24,069 55,922  Less: current portion 5,600 4,744  Debt obligations, net of current portion $ 18,469 $ 51,178 

Background (Narrative) (Details

Background (Narrative) (Details) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2016USD ($)storestate	Sep. 30, 2016USD ($)storestate	Sep. 30, 2015USD ($)	Dec. 31, 2015USD ($)
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Number of stores | store	120	120
Number of states in which entity operates | state	31	31
Other current assets, net	$ 3,890	$ 3,890		$ 3,557
Other assets	1,723	1,723		1,793
Current portion of long-term debt	5,600	5,600		4,744
Long-term debt, net	18,469	18,469		51,178
Additional paid-in-capital	184,893	184,893		180,192
Stock based compensation		3,394	$ 4,226
Accounting Standards Update 2016-09 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cumulative-effect adjustment				(700)
Adjustment For ASU 2016-09 [Member] | Accounting Standards Update 2015-03 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Other current assets, net				(100)
Other assets				(300)
Current portion of long-term debt				(300)
Long-term debt, net				$ (100)
Adjustment For ASU 2016-09 [Member] | Accounting Standards Update 2016-09 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Additional paid-in-capital	(100)	$ (100)
Stock based compensation	$ (100)

Inventories (Schedule of Invent

Inventories (Schedule of Inventories) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Inventories [Abstract]
Finished goods	$ 52,896	$ 59,503
Raw materials	2,506	2,681
Finished goods in transit	10,977	7,694
Total	$ 66,379	$ 69,878

Income Taxes (Narrative) (Detai

Income Taxes (Narrative) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Income Taxes [Abstract]
Effective income tax rate	38.60%	39.30%	39.30%	41.30%
Provision for income taxes	$ 2,886,000	$ 2,436,000	$ 11,793,000	$ 8,385,000
Liability for uncertain tax positions	$ 0	$ 0	0	0
Income tax interest and penalties related to uncertain tax positions			$ 0	$ 0

Earnings Per Share (Schedule of

Earnings Per Share (Schedule of Earnings Per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Earnings Per Share [Abstract]
Net income	$ 4,583	$ 3,761	$ 18,190	$ 11,910	$ 15,696
Weighted average basic shares outstanding	51,426,104	51,161,348	51,388,058	51,137,650
Effect of dilutive securities attributable to stock-based awards	503,122	263,631	429,530	116,897
Weighted average diluted shares outstanding	51,929,226	51,424,979	51,817,588	51,254,547
Basic	$ 0.09	$ 0.07	$ 0.35	$ 0.23
Dilutive (per share)	$ 0.09	$ 0.07	$ 0.35	$ 0.23
Anti-dilutive securities excluded from earnings per share calculation	347,699	769,778	409,599	1,021,033

Other Accrued Liabilities (Sche

Other Accrued Liabilities (Schedule of Other Accrued Liabilities) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Other Accrued Liabilities [Abstract]
Customer deposits	$ 7,565	$ 6,026
Accrued wages and salaries	5,629	4,336
Sales return reserve	3,003	2,781
Taxes (other than income taxes)	3,451	3,043
Other accrued liabilities	3,116	3,141
Total other accrued liabilities	$ 22,764	$ 19,327

Long-term Debt (Narrative) (Det

Long-term Debt (Narrative) (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2016	Dec. 31, 2015	Jun. 02, 2015
Minimum [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument [Line Items]
Credit facility effective interest rate	1.50%
Maximum [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument [Line Items]
Credit facility effective interest rate	2.00%
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Credit facility, maximum borrowing capacity	$ 75
Term Loan [Member]
Debt Instrument [Line Items]
Credit facility effective interest rate	2.03%	2.18%
Credit Agreement [Member]
Debt Instrument [Line Items]
Credit facility, maximum borrowing capacity	$ 125
Debt issuance costs			$ 1
Credit Agreement [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument [Line Items]
Credit facility effective interest rate	2.03%
Credit Agreement [Member] | Federal Funds Rate [Member]
Debt Instrument [Line Items]
Credit facility, spread on variable interst rate	0.50%
Credit Agreement [Member] | Eurodollar [Member]
Debt Instrument [Line Items]
Credit facility, spread on variable interst rate	1.00%
Credit Agreement [Member] | Base Rate [Member]
Debt Instrument [Line Items]
Credit facility effective interest rate	4.00%
Credit Agreement [Member] | Minimum [Member]
Debt Instrument [Line Items]
Credit facility, interest rate based on leverage ratio	0.50%
Credit Agreement [Member] | Maximum [Member]
Debt Instrument [Line Items]
Credit facility, interest rate based on leverage ratio	1.00%
Credit Agreement [Member] | Term Loan [Member]
Debt Instrument [Line Items]
Credit facility, maximum borrowing capacity	$ 50
Credit facility term	5 years
Loan payable	$ 23.4

Long-term Debt (Schedule of Pri

Long-term Debt (Schedule of Principal Payments on Term Loans) (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2016USD ($)
December 31, 2016 to June 30, 2017 [Member]
Debt Instrument [Line Items]
Quarterly principal payments	$ 1,250
September 30, 2017 to June 30, 2018 [Member]
Debt Instrument [Line Items]
Quarterly principal payments	1,875
September 30, 2018 to March 31, 2020 [Member]
Debt Instrument [Line Items]
Quarterly principal payments	$ 2,500

Long-term Debt (Schedule of Lon

Long-term Debt (Schedule of Long-Term Debt) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
Principal, Total debt obligations	$ 24,069	$ 55,922
Principal, Less: current portion	5,600	4,744
Principal, Debt obligations, net of current poriton	18,469	51,178
Term Loan [Member]
Debt Instrument [Line Items]
Principal, Total debt obligations	$ 23,264	$ 47,022
Effective interest rate	2.03%	2.18%
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Principal, Total debt obligations		$ 8,000
Variable Rate Debt [Member]
Debt Instrument [Line Items]
Principal, Total debt obligations	$ 805	$ 900
Effective interest rate	0.35%	0.35%

Equity Incentive Plans (Narrati

Equity Incentive Plans (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 0.6	$ 1.1	$ 2.6	$ 2.7
Stock options outstanding	2,348,777		2,348,777
Stock options outstanding, weighted average exercise price	$ 13.69		$ 13.69
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 0.3	$ 0.5	$ 0.8	$ 1.5
Restricted stock outstanding	98,384		98,384

New Market Tax Credit (Narrativ

New Market Tax Credit (Narrative) (Details) - USD ($) $ in Millions	1 Months Ended	9 Months Ended
	Jul. 31, 2013	Sep. 30, 2016
Chase and US Bank [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan receivable	$ 19.1
Proceeds from contributed capital	5.6
Contributed capital net proceeds	4.4
Contribution liability compliance period		7 years
Contribution liability		$ 2.6
Tile Shop Lending [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Proceeds from lines of credit	$ 13.5
Interest rate	1.35%

Commitments and Contingencies (

Commitments and Contingencies (Narrative) (Details)	9 Months Ended
	Sep. 30, 2016plaintiffdefendantlawsuit
Beaver County Employees' Retirement Fund, et al v. Tile Shop Holdings, Inc. [Member]
Loss Contingencies [Line Items]
Number of plaintiffs | plaintiff	3
Beaver County Employees' Retirement Fund, et al v. Tile Shop Holdings, Inc. [Member] | Executive Officers [Member]
Loss Contingencies [Line Items]
Number of defendants	2
Beaver County Employees' Retirement Fund, et al v. Tile Shop Holdings, Inc. [Member] | Directors [Member]
Loss Contingencies [Line Items]
Number of defendants	5
Beaver County Employees' Retirement Fund, et al v. Tile Shop Holdings, Inc. [Member] | Underwriting Firms [Member]
Loss Contingencies [Line Items]
Number of defendants	6
Tile Shop Holdings, Inc. Stockholder Derivative Litigation [Member]
Loss Contingencies [Line Items]
Number of plaintiffs | plaintiff	3
Number of actions | lawsuit	3
Tile Shop Holdings, Inc. Stockholder Derivative Litigation, 2015 [Member]
Loss Contingencies [Line Items]
Number of actions consolidated | lawsuit	2
Tile Shop Holdings, Inc. Stockholder Derivative Litigation, 2015 [Member] | Directors [Member]
Loss Contingencies [Line Items]
Number of defendants	6
Tile Shop Holdings, Inc. Stockholder Derivative Litigation, 2016 [Member] | Executive Officers [Member]
Loss Contingencies [Line Items]
Number of defendants	1
Tile Shop Holdings, Inc. Stockholder Derivative Litigation, 2016 [Member] | Directors [Member]
Loss Contingencies [Line Items]
Number of defendants	7
Number of committee members	2
Tile Shop Holdings, Inc. Stockholder Derivative Litigation, 2016 [Member] | Former Employee [Member]
Loss Contingencies [Line Items]
Number of defendants	1