Tile Shop (TTSH) 10-Q 6 May 22 2022 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2022	May 02, 2022
Document And Entity Information
Document Type	10-Q
Document Quarterly Report	true
Current Fiscal Year End Date	--12-31
Document Period End Date	Mar. 31, 2022
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
Security 12b Title	Common Stock, $0.0001 par value
Trading Symbol	TTSH
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		52,101,412
Document Fiscal Year Focus	2022
Amendment Flag	false
Document Fiscal Period Focus	Q1
Entity Central Index Key	0001552800

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 13,455	$ 9,358
Restricted cash	655	655
Receivables, net	3,512	3,202
Inventories	104,701	97,175
Income tax receivable	6,238	6,923
Other current assets, net	8,786	9,769
Total Current Assets	137,347	127,082
Property, plant and equipment, net	79,188	82,285
Right of use asset	117,337	123,101
Deferred tax assets	6,906	6,953
Other assets	2,025	1,337
Total Assets	342,803	340,758
Current liabilities:
Accounts payable	28,561	30,884
Income tax payable	616	390
Current portion of lease liability	28,678	28,190
Other accrued liabilities	46,531	38,249
Total Current Liabilities	104,386	97,713
Long-term debt	5,000	5,000
Long-term lease liability, net	103,331	110,261
Other long-term liabilities	4,461	5,560
Total Liabilities	217,178	218,534
Stockholders’ Equity:
Common stock, par value $0.0001; authorized: 100,000,000 shares; issued and outstanding: 52,112,567 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	126,805	126,920
Accumulated deficit	(1,200)	(4,713)
Accumulated other comprehensive loss	15	12
Total Stockholders' Equity	125,625	122,224
Total Liabilities and Stockholders' Equity	$ 342,803	$ 340,758

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2022	Dec. 31, 2021
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	52,112,567	51,963,377
Common stock, shares outstanding	52,112,567	51,963,377
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
	Mar. 31, 2022	Mar. 31, 2021
Consolidated Statements of Operations [Abstract]
Net sales	$ 102,471	$ 92,084
Cost of sales	35,626	27,898
Gross profit	66,845	64,186
Selling, general and administrative expenses	62,109	57,278
Income from operations	4,736	6,908
Interest expense	(266)	(168)
Income before income taxes	4,470	6,740
Provision for income taxes	(957)	(1,443)
Net income	$ 3,513	$ 5,297
Income per common share:
Basic	$ 0.07	$ 0.11
Diluted	$ 0.07	$ 0.10
Weighted average shares outstanding:
Basic	50,713,809	50,105,825
Diluted	51,162,891	51,056,798

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Consolidated Statements of Comprehensive Income [Abstract]
Net income	$ 3,513	$ 5,297
Currency translation adjustment	3	8
Other comprehensive income	3	8
Comprehensive income	$ 3,516	$ 5,305

Consolidated Statements of Stoc

Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Total
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
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
Beginning balance at Dec. 31, 2021	$ 5	126,920	(4,713)	12	$ 122,224
Beginning balance (in shares) at Dec. 31, 2021	51,963,377				51,963,377
Issuance of restricted shares (in shares)	419,967
Cancellation of restricted shares (in shares)	(177,828)
Stock based compensation		492			$ 492
Tax withholdings related to net share settlements of stock based compensation awards		(607)			(607)
Tax withholdings related to net share settlements of stock based compensation awards (in shares)	(92,949)
Foreign currency translation adjustments				3	3
Net income			3,513		3,513
Balance at Mar. 31, 2022	$ 5	$ 126,805	$ (1,200)	$ 15	$ 125,625
Balance (in shares) at Mar. 31, 2022	52,112,567				52,112,567

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Cash Flows From Operating Activities
Net income	$ 3,513	$ 5,297
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	6,439	7,194
Amortization of debt issuance costs	79	76
Non-cash lease expense	6,437	6,155
Stock based compensation	492	592
Deferred income taxes	47	(113)
Changes in operating assets and liabilities:
Receivables	(310)	(40)
Inventories	(7,526)	3,324
Other current assets, net	217	1,064
Accounts payable	(2,845)	1,580
Income tax receivable / payable	910	1,558
Accrued expenses and other liabilities	181	3,427
Net cash provided by operating activities	7,634	30,114
Cash Flows From Investing Activities
Purchases of property, plant and equipment	(2,933)	(3,202)
Net cash used in investing activities	(2,933)	(3,202)
Cash Flows From Financing Activities
Payments of long-term debt and financing lease obligations	(10,000)
Advances on line of credit	10,000
Employee taxes paid for shares withheld	(607)	(603)
Net cash used in financing activities	(607)	(603)
Effect of exchange rate changes on cash	3	7
Net change in cash, cash equivalents and restricted cash	4,097	26,316
Cash, cash equivalents and restricted cash beginning of period	10,013	10,272
Cash, cash equivalents and restricted cash end of period	14,110	36,588
Cash and cash equivalents	13,455	35,933
Restricted cash	655	655
Cash, cash equivalents and restricted cash end of period	14,110	36,588
Supplemental disclosure of cash flow information
Purchases of property, plant and equipment included in accounts payable and accrued expenses	566	161
Cash paid for interest	$ 339	$ 238

Background

Background	3 Months Ended
	Mar. 31, 2022
Background [Abstract]
Background	No te 1: Background Tile Shop Holdings, Inc. (“Holdings,” and together with its wholly owned subsidiaries, the “Company”) was incorporated in Delaware in June 2012. 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, 2022, 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. 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, 2022 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31 , 2022. 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, 2021. 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. 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.

Revenues

Revenues	3 Months Ended
	Mar. 31, 2022
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, 2022 2021 Man-made tiles 49 % 46 % Natural stone tiles 25 29 Setting and maintenance materials 16 15 Accessories 8 8 Delivery service 2 2 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 $ 19.2 million and $ 13.8 million as of March 31, 2022 and December 31, 2021, respectively. Revenues recognized during the three months ended March 31, 2022 that were included in the customer deposit balance as of the beginning of the period were $ 11.5 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 $ 3.5 million and $ 3.2 million at March 31, 2022 and December 31, 2021, respectively. 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 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 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 Sheets as of March 31, 2022 and December 31, 2021 were as follows: (in thousands) March 31, December 31, 2022 2021 Other accrued liabilities $ 6,490 $ 5,202 Other current assets 2,209 1,658 Sales returns reserve, net $ 4,281 $ 3,544

Inventories

Inventories	3 Months Ended
	Mar. 31, 2022
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, 2022 and December 31, 2021: (in thousands) March 31, December 31, 2022 2021 Finished goods $ 103,393 $ 95,869 Raw materials 1,308 1,306 Total $ 104,701 $ 97,175 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 $ 0.9 million and $ 0.5 million as of March 31, 2022 and December 31, 2021, respectively.

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2022
Income Taxes [Abstract]
Income Taxes	Note 4: Income Taxes The Company's effective tax rate on net income before taxes was 21.4 % for both the three months ended March 31, 2022 and 2021. The Company’s effective tax rate included a $ 0.3 million tax benefit associated with restricted stock award vestings during both the three months ended March 31, 2022 and March 31, 2021. The Company records interest and penalties relating to uncertain tax positions in income tax expense. As of both March 31, 2022 and 2021, the Company had no t recognized any liabilities for uncertain tax positions, no r had interest and penalties related to uncertain tax positions been accrued.

Earnings Per Share

Earnings Per Share	3 Months Ended
	Mar. 31, 2022
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, 2022 2021 Net income $ 3,513 $ 5,297 Weighted average shares outstanding - basic 50,713,809 50,105,825 Effect of dilutive securities attributable to stock based awards 449,082 950,973 Weighted average shares outstanding - diluted 51,162,891 51,056,798 Income per common share: Basic $ 0.07 $ 0.11 Diluted $ 0.07 $ 0.10 Anti-dilutive securities excluded from earnings per share calculation 970,727 1,192,885

Other Accrued Liabilities

Other Accrued Liabilities	3 Months Ended
	Mar. 31, 2022
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, 2022 2021 Customer deposits $ 19,192 $ 13,792 Sales returns reserve 6,490 5,202 Accrued wages and salaries 8,099 8,833 Payroll and sales taxes 5,484 3,796 Other current liabilities 7,266 6,626 Total other accrued liabilities $ 46,531 $ 38,249

Long-term Debt

Long-term Debt	3 Months Ended
	Mar. 31, 2022
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, which was amended November 16, 2021 (as amended, 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, 2022, the base interest rate was 4.25 % and the LIBOR-based interest rate was 2.20 %. The Company had $ 5.0 million of borrowings outstanding on its revolving line of credit as of March 31, 2022. 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, 2022 and December 31, 2021. There was $ 92.6 million available for borrowing on the revolving line of credit as of March 31, 2022, 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, 2022.

Leases

Leases	3 Months Ended
	Mar. 31, 2022
Leases [Abstract]
Leases	Note 8: Leases The Company leases its retail stores, certain distribution space, and office space. Leases generally have an initial 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. Leasehold improvements are amortized using the straight-line method over the shorter of the original lease term, the renewal term if the lease renewal is reasonably certain or the useful life of the improvement. Leases (in thousands) Classification March 31, 2022 December 31, 2021 Assets Operating lease assets Right of use asset $ 117,337 $ 123,101 Total leased assets $ 117,337 $ 123,101 Liabilities Current Operating Current portion of lease liability $ 28,678 $ 28,190 Noncurrent Operating Long-term lease liability, net 103,331 110,261 Total lease liabilities $ 132,009 $ 138,451 Three Months Ended Lease cost (in thousands) Classification March 31, 2022 March 31, 2021 Operating lease cost SG&A expenses $ 8,671 $ 8,478 Variable lease cost (1) SG&A expenses 3,403 3,708 Short term lease cost SG&A expenses 132 124 Net lease cost $ 12,206 $ 12,310 (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, 2022 March 31, 2021 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 9,350 $ 8,482 Lease right-of-use assets obtained or modified in exchange for lease obligations $ 673 $ -

Fair Value of Financial Instrum

Fair Value of Financial Instruments	3 Months Ended
	Mar. 31, 2022
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, 2022 and December 31, 2021 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, 2022 December 31, 2021 Assets (in thousands) Cash and cash equivalents Level 1 $ 13,455 $ 9,358 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. The Company did not record any impairment losses during the three months ended March 31, 2022 and 2021.

Equity Incentive Plans

Equity Incentive Plans	3 Months Ended
	Mar. 31, 2022
Equity Incentive Plans [Abstract]
Equity Incentive Plans	Note 10: Equity Incentive Plans On July 20, 2021, the Company’s stockholders approved the 2021 Omnibus Equity Compensation Plan (the “2021 Plan”). The 2021 Plan replaced the 2012 Omnibus Award Plan (the “Prior Plan”). Awards granted under the Prior Plan that were outstanding on the date of stockholder approval remained outstanding in accordance with their terms. The maximum number of shares that may be delivered with respect to awards under the 2021 Plan is 3,500,000 shares, subject to adjustment in certain circumstances. Shares tendered or withheld to pay the exercise price of a stock option or to cover tax withholding will not be added back to the number of shares available under the 2021 Plan. To the extent that any award under the 2021 Plan, or any award granted under the Prior Plan prior to stockholder approval of the 2021 Plan, is forfeited, canceled, surrendered or otherwise terminated without the issuance of shares or an award is settled only in cash, the shares subject to such awards granted but not delivered will be added to the number of shares available for awards under the 2021 Plan. 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, 2022 and 2021 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 less than $ 0.1 million for both the three months ended March 31, 2022 and 202 1, respectively. Stock based compensation expense pertaining to stock options is included in selling, general and administrative expenses in the accompanying Consolidated Statements of Operations. As of March 31, 2022, the Company had outstanding stock options to purchase 886,445 shares of common stock at a weighted average exercise price of $ 11.01 per share. 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, 2022 and 2021. Stock based compensation expense pertaining to restricted stock awards is included in selling, general and administrative expenses in the accompanying Consolidated Statements of Operations. As of March 31, 2022, the Company had 1,253,344 outstanding restricted common shares.

New Markets Tax Credit

New Markets Tax Credit	3 Months Ended
	Mar. 31, 2022
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 contributed $ 3.2 million, net of syndication fees, to the Investment Fund. The Company incurred $ 1.3 million of syndication fees in connection with this transaction. 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, 2022, the balance of the contribution liability for this arrangement was $ 0.8 million, of which $ 0.5 million was classified as other accrued liabilities on the Consolidated Balance Sheet and $ 0.3 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, 2022, the remaining balance in the Investment Fund available for reimbursement to the Company was $ 0.7 million.

Related Party Transactions

Related Party Transactions	3 Months Ended
	Mar. 31, 2022
Related Party Transactions [Abstract]
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 former holder of more than 5 % of the Company’s common stock as of March 31, 2022, 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. During the three months ended March 31, 2022 and 2021, the Company purchased $ 3.3 million and $ 1.9 million of products from Nanyang, respectively. As of March 31, 2022 and 2021, the accounts payable due to Nanyang was $ 0.1 million and $ 0.2 million, respectively. During the three months ended March 31, 2022 and 2021, the Company purchased $ 1.2 million and $ 0.5 million of products from Tile Style, respectively. As of March 31, 2022, there were no amounts payable due to 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.

Background (Policy)

Background (Policy)	3 Months Ended
	Mar. 31, 2022
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, 2022, 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, 2022 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31 , 2022. 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, 2021. 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.
Accounting Pronouncements Not Yet Adopted	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.

Revenues (Tables)

Revenues (Tables)	3 Months Ended
	Mar. 31, 2022
Revenues [Abstract]
Schedule of Revenues Disaggregated by Product Category	For the three months ended March 31, 2022 2021 Man-made tiles 49 % 46 % Natural stone tiles 25 29 Setting and maintenance materials 16 15 Accessories 8 8 Delivery service 2 2 Total 100 % 100 %
Schedule of Components of Returns Reserve	(in thousands) March 31, December 31, 2022 2021 Other accrued liabilities $ 6,490 $ 5,202 Other current assets 2,209 1,658 Sales returns reserve, net $ 4,281 $ 3,544

Inventories (Tables)

Inventories (Tables)	3 Months Ended
	Mar. 31, 2022
Inventories [Abstract]
Schedule of Inventories	(in thousands) March 31, December 31, 2022 2021 Finished goods $ 103,393 $ 95,869 Raw materials 1,308 1,306 Total $ 104,701 $ 97,175

Earnings Per Share (Tables)

Earnings Per Share (Tables)	3 Months Ended
	Mar. 31, 2022
Earnings Per Share [Abstract]
Schedule of Basic and Diluted Earnings Per Share	(dollars in thousands, except per share data) For the three months ended March 31, 2022 2021 Net income $ 3,513 $ 5,297 Weighted average shares outstanding - basic 50,713,809 50,105,825 Effect of dilutive securities attributable to stock based awards 449,082 950,973 Weighted average shares outstanding - diluted 51,162,891 51,056,798 Income per common share: Basic $ 0.07 $ 0.11 Diluted $ 0.07 $ 0.10 Anti-dilutive securities excluded from earnings per share calculation 970,727 1,192,885

Other Accrued Liabilities (Tabl

Other Accrued Liabilities (Tables)	3 Months Ended
	Mar. 31, 2022
Other Accrued Liabilities [Abstract]
Schedule of Other Accrued Liabilities	(in thousands) March 31, December 31, 2022 2021 Customer deposits $ 19,192 $ 13,792 Sales returns reserve 6,490 5,202 Accrued wages and salaries 8,099 8,833 Payroll and sales taxes 5,484 3,796 Other current liabilities 7,266 6,626 Total other accrued liabilities $ 46,531 $ 38,249

Leases (Tables)

Leases (Tables)	3 Months Ended
	Mar. 31, 2022
Leases [Abstract]
Schedule of Lease Assets and Liabilities	Leases (in thousands) Classification March 31, 2022 December 31, 2021 Assets Operating lease assets Right of use asset $ 117,337 $ 123,101 Total leased assets $ 117,337 $ 123,101 Liabilities Current Operating Current portion of lease liability $ 28,678 $ 28,190 Noncurrent Operating Long-term lease liability, net 103,331 110,261 Total lease liabilities $ 132,009 $ 138,451
Summary of Lease Cost	Three Months Ended Lease cost (in thousands) Classification March 31, 2022 March 31, 2021 Operating lease cost SG&A expenses $ 8,671 $ 8,478 Variable lease cost (1) SG&A expenses 3,403 3,708 Short term lease cost SG&A expenses 132 124 Net lease cost $ 12,206 $ 12,310 (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, 2022 March 31, 2021 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 9,350 $ 8,482 Lease right-of-use assets obtained or modified in exchange for lease obligations $ 673 $ -

Fair Value of Financial Instr_2

Fair Value of Financial Instruments (Tables)	3 Months Ended
	Mar. 31, 2022
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, 2022 December 31, 2021 Assets (in thousands) Cash and cash equivalents Level 1 $ 13,455 $ 9,358 Restricted cash Level 1 655 655

Background (Narrative) (Details

Background (Narrative) (Details)	Mar. 31, 2022ft²storestate
Background [Abstract]
Number of stores | store	143
Number of states in which entity operates | state	31
Area of stores | ft²	20,000

Revenues (Narrative) (Details)

Revenues (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
Revenues [Abstract]
Customer deposit balance	$ 19,192	$ 13,792
Customer deposit balance, revenues recognized	11,500
Accounts receivable	$ 3,512	$ 3,202

Revenues (Schedule of Revenues

Revenues (Schedule of Revenues Disaggregated by Product Category) (Details)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Disaggregation of Revenue [Line Items]
Total revenue	100.00%	100.00%
Man-Made Tiles [Member]
Disaggregation of Revenue [Line Items]
Total revenue	49.00%	46.00%
Natural Stone Tiles [Member]
Disaggregation of Revenue [Line Items]
Total revenue	25.00%	29.00%
Setting And Maintenance Materials [Member]
Disaggregation of Revenue [Line Items]
Total revenue	16.00%	15.00%
Accessories [Member]
Disaggregation of Revenue [Line Items]
Total revenue	8.00%	8.00%
Delivery Service [Member]
Disaggregation of Revenue [Line Items]
Total revenue	2.00%	2.00%

Revenues (Schedule of Component

Revenues (Schedule of Components of Returns Reserve) (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Revenues [Abstract]
Other accrued liabilities	$ 6,490	$ 5,202
Other current assets	2,209	1,658
Sales returns reserve, net	$ 4,281	$ 3,544

Inventories (Narrative) (Detail

Inventories (Narrative) (Details) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Inventories [Abstract]
Inventory, provision for shrinkage and other	$ 0.9	$ 0.5

Inventories (Schedule of Invent

Inventories (Schedule of Inventories) (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Inventories [Abstract]
Finished goods	$ 103,393	$ 95,869
Raw materials	1,308	1,306
Total	$ 104,701	$ 97,175

Income Taxes (Narrative) (Detai

Income Taxes (Narrative) (Details) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Income Taxes [Abstract]
Effective income tax rate	21.40%	21.40%
Income tax benefit associated with restricted stock award vestings	$ 300,000	$ 300,000
Liability for uncertain tax positions	0	0
Income tax interest and penalties related to uncertain tax positions	$ 0	$ 0

Earnings Per Share (Schedule of

Earnings Per Share (Schedule of Basic and Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Earnings Per Share [Abstract]
Net income	$ 3,513	$ 5,297
Weighted average shares outstanding - basic	50,713,809	50,105,825
Effect of dilutive securities attributable to stock based awards	449,082	950,973
Weighted average shares outstanding - diluted	51,162,891	51,056,798
Basic income per common share	$ 0.07	$ 0.11
Diluted income per common share	$ 0.07	$ 0.10
Anti-dilutive securities excluded from earnings per share calculation	970,727	1,192,885

Other Accrued Liabilities (Sche

Other Accrued Liabilities (Schedule of Other Accrued Liabilities) (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Other Accrued Liabilities [Abstract]
Customer deposits	$ 19,192	$ 13,792
Sales returns reserve	6,490	5,202
Accrued wages and salaries	8,099	8,833
Payroll and sales taxes	5,484	3,796
Other current liabilities	7,266	6,626
Total other accrued liabilities	$ 46,531	$ 38,249

Long-term Debt (Narrative) (Det

Long-term Debt (Narrative) (Details) - Credit Agreement [Member] - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
Debt Instrument [Line Items]
Credit facility, initiation date	Sep. 18, 2018
Credit facility, maximum borrowing capacity	$ 100
Credit facility, expiration date	Sep. 18, 2023
Credit facility, amount outstanding	$ 5
Credit facility, available borrowing capacity	$ 92.6
London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument [Line Items]
Credit facility effective interest rate	2.20%
London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member]
Debt Instrument [Line Items]
Credit facility, spread on variable interest rate	1.50%
London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member]
Debt Instrument [Line Items]
Credit facility, spread on variable interest rate	2.25%
Base Rate [Member]
Debt Instrument [Line Items]
Credit facility effective interest rate	4.25%
Base Rate [Member] | Minimum [Member]
Debt Instrument [Line Items]
Credit facility, spread on variable interest rate	0.50%
Base Rate [Member] | Maximum [Member]
Debt Instrument [Line Items]
Credit facility, spread on variable interest rate	1.25%
Base Rate - Federal Funds [Member]
Debt Instrument [Line Items]
Credit facility, spread on variable interest rate	0.50%
Base Rate - Eurodollar [Member]
Debt Instrument [Line Items]
Credit facility, spread on variable interest rate	1.00%
Letter of Credit [Member]
Debt Instrument [Line Items]
Credit facility, amount outstanding	$ 2.4	$ 2.4

Leases (Narrative) (Details)

Leases (Narrative) (Details)	3 Months Ended
	Mar. 31, 2022
Minimum [Member]
Lessee, Lease, Description [Line Items]
Lease term	10 years
Maximum [Member]
Lessee, Lease, Description [Line Items]
Lease term	15 years

Leases (Schedule of Lease Asset

Leases (Schedule of Lease Assets and Liabilities) (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Leases [Abstract]
Operating lease assets	$ 117,337	$ 123,101
Total leased assets	117,337	123,101
Current operating lease liabilities	28,678	28,190
Noncurrent operating lease liabilities	103,331	110,261
Total lease liabilities	$ 132,009	$ 138,451

Leases (Summary of Lease Cost)

Leases (Summary of Lease Cost) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Leases [Abstract]
Operating lease cost	$ 8,671	$ 8,478
Variable lease cost	3,403	3,708
Short term lease cost	132	124
Net lease cost	$ 12,206	$ 12,310

Leases (Summary of Other Lease

Leases (Summary of Other Lease Information) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Leases [Abstract]
Operating cash flows from operating leases	$ 9,350	$ 8,482
Lease right-of-use assets obtained or modified in exchange for lease obligations	$ 673

Fair Value of Financial Instr_3

Fair Value of Financial Instruments (Narrative) (Details) - USD ($)	Mar. 31, 2022	Dec. 31, 2021
Fair Value of Financial Instruments [Abstract]
Fair value transfers	$ 0	$ 0

Fair Value of Financial Instr_4

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, 2022	Dec. 31, 2021
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	$ 13,455	$ 9,358
Restricted cash	$ 655	$ 655

Equity Incentive Plans (Narrati

Equity Incentive Plans (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
2021 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized	3,500,000
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	886,445
Stock options outstanding, weighted average exercise price	$ 11.01
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	1,253,344

New Markets Tax Credit (Narrati

New Markets Tax Credit (Narrative) (Details) - USD ($) $ in Millions	1 Months Ended	3 Months Ended	12 Months Ended
	Dec. 31, 2016	Mar. 31, 2022	Dec. 31, 2016
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		$ 0.8
Contribution liability, current		0.5
Contribution liability, noncurrent		$ 0.3
Twain Investment Fund 192 [Member] | Tile Shop Holdings [Member]
New Market Tax Credit Disclosure [Line Items]
Syndicate costs	1.3		$ 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%
Loan maturity date		Dec. 31, 2046
Oklahoma [Member] | U.S. Bank Community [Member]
New Market Tax Credit Disclosure [Line Items]
Financing agreement project cost	$ 9.2		9.2
U.S. Bank Community [Member] | Twain Investment Fund 192 [Member]
New Market Tax Credit Disclosure [Line Items]
Contribution to affiliate	$ 3.2		$ 3.2

Related Party Transactions (Nar

Related Party Transactions (Narrative) (Details) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Nanyang Helin Stone Company [Member]
Related Party Transaction [Line Items]
Payments to related party	$ 3,300,000	$ 1,900,000
Related party payables due	100,000	200,000
Tile Style [Member]
Related Party Transaction [Line Items]
Payments to related party	1,200,000	500,000
Related party payables due	$ 0	$ 100,000
Robert Rucker [Member] | Tile Shop Holdings [Member]
Related Party Transaction [Line Items]
Ownership interest	5.00%