Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 27, 2023 | Jun. 30, 2022 | |
Document And Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Current Fiscal Year End Date | --12-31 | ||
Document Period End Date | Dec. 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 Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 111,232,323 | ||
Entity Common Stock, Shares Outstanding | 44,363,205 | ||
Documents Incorporated By Reference | DOCUMENTS INCORPORATED BY REFERENCE Certain information required by Part III is incorporated by reference from the Company’s definitive Proxy Statement for the Annual Meeting of Stockholders, or an amendment to this Form 10-K, which the Company intends to file with the SEC within 120 days after the fiscal year end covered by this report. | ||
Auditor Name | Ernst & Young LLP | ||
Auditor Location | Minneapolis, Minnesota | ||
Auditor Firm ID | 42 | ||
Document Fiscal Year Focus | 2022 | ||
Amendment Flag | false | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001552800 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 5,948 | $ 9,358 |
Restricted cash | 1,811 | 655 |
Receivables, net | 3,411 | 3,202 |
Inventories | 120,952 | 97,175 |
Income tax receivable | 3,859 | 6,923 |
Other current assets, net | 10,422 | 9,769 |
Total Current Assets | 146,403 | 127,082 |
Property, plant and equipment, net | 71,095 | 82,285 |
Right of use asset | 118,501 | 123,101 |
Deferred tax assets | 6,536 | 6,953 |
Other assets | 3,287 | 1,337 |
Total Assets | 345,822 | 340,758 |
Current liabilities: | ||
Accounts payable | 23,506 | 30,884 |
Income tax payable | 3 | 390 |
Current portion of lease liability | 27,866 | 28,190 |
Other accrued liabilities | 31,916 | 38,249 |
Total Current Liabilities | 83,291 | 97,713 |
Long-term debt, net | 45,400 | 5,000 |
Long-term lease liability, net | 103,353 | 110,261 |
Other long-term liabilities | 5,009 | 5,560 |
Total Liabilities | 237,053 | 218,534 |
Stockholders’ Equity: | ||
Common stock, par value $0.0001; authorized: 100,000,000 shares; issued and outstanding: 44,377,445 and 51,963,377 shares, respectively | 4 | 5 |
Preferred stock, par value $0.0001; authorized: 10,000,000 shares; issued and outstanding: 0 shares | ||
Additional paid-in-capital | 127,997 | 126,920 |
Accumulated deficit | (19,180) | (4,713) |
Accumulated other comprehensive (loss) income | (52) | 12 |
Total Stockholders' Equity | 108,769 | 122,224 |
Total Liabilities and Stockholders' Equity | $ 345,822 | $ 340,758 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 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 | 44,377,445 | 51,963,377 |
Common stock, shares outstanding | 44,377,445 | 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 | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Consolidated Statements of Operations [Abstract] | |||
Net sales | $ 394,702 | $ 370,700 | $ 325,057 |
Cost of sales | 135,765 | 117,570 | 103,532 |
Gross profit | 258,937 | 253,130 | 221,525 |
Selling, general and administrative expenses | 236,328 | 232,520 | 215,149 |
Income from operations | 22,609 | 20,610 | 6,376 |
Interest expense | (1,579) | (656) | (1,874) |
Income before income taxes | 21,030 | 19,954 | 4,502 |
(Provision) benefit for income taxes | (5,327) | (5,180) | 1,529 |
Net income | $ 15,703 | $ 14,774 | $ 6,031 |
Income per common share: | |||
Basic | $ 0.32 | $ 0.29 | $ 0.12 |
Diluted | $ 0.32 | $ 0.29 | $ 0.12 |
Weighted average shares outstanding: | |||
Basic | 48,855,701 | 50,393,980 | 49,957,356 |
Diluted | 49,247,047 | 51,085,463 | 50,583,742 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Consolidated Statements of Comprehensive Income [Abstract] | |||
Net income | $ 15,703 | $ 14,774 | $ 6,031 |
Currency translation adjustment | (64) | 24 | 58 |
Other comprehensive (loss) income | (64) | 24 | 58 |
Comprehensive income | $ 15,639 | $ 14,798 | $ 6,089 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings (Accumulated Deficit) [Member] | Accumulated Other Comprehensive (Loss) Income [Member] | Total |
Beginning balance at Dec. 31, 2019 | $ 5 | $ 156,482 | $ (25,518) | $ (70) | $ 130,899 |
Beginning balance (in shares) at Dec. 31, 2019 | 50,806,674 | ||||
Issuance of restricted shares (in shares) | 1,090,759 | ||||
Cancellation of restricted shares (in shares) | (116,594) | ||||
Stock based compensation | 2,241 | 2,241 | |||
Tax withholdings related to net share settlements of stock based compensation awards | (167) | (167) | |||
Tax withholdings related to net share settlements of stock based compensation awards (in shares) | (79,759) | ||||
Foreign currency translation adjustments | 58 | 58 | |||
Net income | 6,031 | 6,031 | |||
Balance at Dec. 31, 2020 | $ 5 | 158,556 | (19,487) | (12) | 139,062 |
Balance (in shares) at Dec. 31, 2020 | 51,701,080 | ||||
Issuance of restricted shares (in shares) | 421,547 | ||||
Cancellation of restricted shares (in shares) | (24,018) | ||||
Stock based compensation | 2,266 | 2,266 | |||
Tax withholdings related to net share settlements of stock based compensation awards | (953) | (953) | |||
Tax withholdings related to net share settlements of stock based compensation awards (in shares) | (135,232) | ||||
Dividends paid | (32,949) | (32,949) | |||
Foreign currency translation adjustments | 24 | 24 | |||
Net income | 14,774 | 14,774 | |||
Balance at Dec. 31, 2021 | $ 5 | 126,920 | (4,713) | 12 | $ 122,224 |
Balance (in shares) at Dec. 31, 2021 | 51,963,377 | 51,963,377 | |||
Issuance of restricted shares (in shares) | 610,480 | ||||
Cancellation of restricted shares (in shares) | (264,513) | ||||
Stock based compensation | 1,832 | $ 1,832 | |||
Tax withholdings related to net share settlements of stock based compensation awards | (755) | (755) | |||
Tax withholdings related to net share settlements of stock based compensation awards (in shares) | (126,673) | ||||
Repurchase of common stock | $ (1) | (30,170) | (30,171) | ||
Repurchase of common stock (in shares) | (7,805,226) | ||||
Foreign currency translation adjustments | (64) | (64) | |||
Net income | 15,703 | 15,703 | |||
Balance at Dec. 31, 2022 | $ 4 | $ 127,997 | $ (19,180) | $ (52) | $ 108,769 |
Balance (in shares) at Dec. 31, 2022 | 44,377,445 | 44,377,445 |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Parenthetical) | 12 Months Ended |
Dec. 31, 2021 $ / shares | |
Consolidated Statements of Stockholders' Equity [Abstract] | |
Dividends declared per share | $ 0.65 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Cash Flows From Operating Activities | |||
Net income | $ 15,703 | $ 14,774 | $ 6,031 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 25,142 | 27,379 | 31,336 |
Amortization of debt issuance costs | 427 | 304 | 473 |
Loss on disposals of property, plant and equipment | 82 | ||
Impairment charges | 423 | 720 | 2,155 |
Non-cash lease expense | 25,779 | 24,832 | 24,025 |
Stock based compensation | 1,832 | 2,266 | 2,241 |
Deferred income taxes | 417 | (1,612) | 1,855 |
Changes in operating assets and liabilities: | |||
Receivables | (209) | (226) | 394 |
Inventories | (23,777) | (22,879) | 23,323 |
Other current assets, net | (2,676) | (1,128) | (327) |
Accounts payable | (8,057) | 15,873 | (3,207) |
Income tax receivable / payable | 2,677 | 1,491 | (5,020) |
Accrued expenses and other liabilities | (34,966) | (22,185) | (17,683) |
Net cash provided by operating activities | 2,715 | 39,691 | 65,596 |
Cash Flows From Investing Activities | |||
Purchases of property, plant and equipment | (14,027) | (11,070) | (1,968) |
Net cash used in investing activities | (14,027) | (11,070) | (1,968) |
Cash Flows From Financing Activities | |||
Payments of long-term debt and financing lease obligations | (50,000) | (5,000) | (127,262) |
Advances on line of credit | 90,400 | 10,000 | 64,100 |
Dividends paid | (32,949) | ||
Repurchases of common stock | (30,171) | ||
Employee taxes paid for shares withheld | (755) | (953) | (167) |
Debt issuance costs | (360) | ||
Net cash provided by (used) in financing activities | 9,114 | (28,902) | (63,329) |
Effect of exchange rate changes on cash | (56) | 22 | 54 |
Net change in cash, cash equivalents and restricted cash | (2,254) | (259) | 353 |
Cash, cash equivalents and restricted cash beginning of period | 10,013 | 10,272 | 9,919 |
Cash, cash equivalents and restricted cash end of period | 7,759 | 10,013 | 10,272 |
Cash and cash equivalents | 5,948 | 9,358 | 9,617 |
Restricted cash | 1,811 | 655 | 655 |
Cash, cash equivalents and restricted cash end of period | 7,759 | 10,013 | 10,272 |
Supplemental disclosure of cash flow information | |||
Purchases of property, plant and equipment included in accounts payable and accrued expenses | 714 | 34 | 407 |
Cash paid for interest | 1,257 | 632 | 1,976 |
Cash paid for income taxes, net of refunds | $ 2,231 | $ 5,298 | $ 1,608 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 1: Summary of Significant Accounting Policies Nature of Business Tile Shop Holdings, Inc. (“Holdings”, and together with its wholly owned subsidiaries, the “Company”) was incorporated in Delaware in June 2012. On August 21, 2012, Holdings consummated the transactions contemplated pursuant to that certain Contribution and Merger Agreement dated as of June 27, 2012, among Holdings, JWC Acquisition Corp., a publicly-held Delaware corporation (“JWCAC”), The Tile Shop, LLC, a privately-held Delaware limited liability company (“The Tile Shop”), and certain other parties. Through a series of transactions, The Tile Shop was contributed to and became a subsidiary of Holdings and Holdings effected a business combination with and became a successor issuer to JWCAC. The Company is a specialty retailer of natural stone and man-made tiles, setting and maintenance materials, and related accessories in the United States. Natural stone products include marble, travertine, granite, quartz, sandstone, slate, and onyx tiles. Man-made products include ceramic, porcelain, glass, cement, wood look, metal and luxury vinyl tile. The majority of the tile products are sold under the Company's proprietary Rush River and Fired Earth brand names. The Company purchases tile products, accessories and tools directly from its network of suppliers. The Company manufactures its own setting and maintenance materials, such as thinset, grout and sealer, under the Superior brand name. As of December 31, 2022, the Company operated 142 stores in 31 states and the District of Columbia, with an average size of approximately 20,000 square feet. The Company also has a sourcing office located in China. Basis of Presentation The consolidated financial statements of Holdings include the accounts of its wholly owned subsidiaries and variable interest entities for which the Company is the primary beneficiary. See Note 12, “New Markets Tax Credit,” for the discussion of financing arrangements involving certain entities that are variable interest entities that are included in these consolidated financial statements. All significant intercompany transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements. The Company’s estimates and judgments are based on historical experience and various other assumptions that it believes are reasonable under the circumstances. The Company considered the COVID-19 related impacts on its estimates, as appropriate, within its consolidated financial statements and there may be changes to those estimates in future periods. The Company believes that the accounting estimates are appropriate after giving consideration to the increased uncertainties surrounding the severity and duration of the COVID-19 pandemic. The amount of assets and liabilities reported on the Company's balance sheets and the amounts of income and expenses reported for each of the periods presented are affected by estimates and assumptions, which are used for, but not limited to, the accounting for revenue recognition and related reserves for sales returns, useful lives of property, plant and equipment, determining impairment of property, plant and equipment and right of use assets, accounting for leases, valuation of inventory, and income taxes. Actual results may differ from these estimates. Cash and Cash Equivalents The Company had cash and cash equivalents of $ 5.9 million and $ 9.4 million at December 31, 2022 and 2021, respectively. The Company considers all highly liquid investments with an original maturity date of three months or less when purchased to be cash equivalents. The payments due from banks for debit and credit card transactions are generally received, or settled, within 24 to 48 hours of the transmission date. The Company considers all debit and credit card transactions that settle in less than seven days to be cash and cash equivalents. Amounts due from the banks for these transactions classified as cash and cash equivalents totaled $ 1.6 million and $ 1.7 million at December 31, 2022 and 2021, respectively. Restricted Cash Cash and cash equivalents that are restricted as to withdrawal or are under the terms of use for current operations are included in the restricted balance on the balance sheet. Trade Receivables Trade receivables are carried at original invoice amount less an estimate made for doubtful accounts. Management determines the allowance for doubtful accounts on a specific identification basis and by leveraging information on historical losses, current conditions, and reasonable and supportable forecasts of future conditions . Trade receivables are written off when deemed uncollectible. Recoveries of trade receivables previously written off are recorded when received. The allowance for doubtful accounts was $ 0.3 million and $ 0.2 million as of December 31, 2022 and 2021, respectively. The Company does not accrue interest on accounts receivable. Inventories The Company’s inventory consists of manufactured items and purchased merchandise held for resale. Inventories are stated at the lower of cost (determined using the moving average cost method) or net realizable value. The Company capitalizes the cost of inbound freight, duties, and receiving and handling costs to bring purchased materials into its distribution network. The labor and overhead costs incurred in connection with the production process are included in the value of manufactured finished goods. Inventories were comprised of the following as of December 31: 2022 2021 (in thousands) Finished goods $ 119,517 $ 95,869 Raw materials 1,435 1,306 Total $ 120,952 $ 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. These estimates have calculations that require management to make assumptions based on the current rate of sales, age, salability and profitability of inventory, historical percentages that can be affected by changes in our merchandising mix, customer preferences, rates of sell through and changes in actual shrinkage trends. The provision for losses related to shrinkage and other amounts was $ 0.7 million and $ 0.5 million as of December 31, 2022 and 2021, respectively. Income Taxes The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax liabilities and assets are determined based on the difference between the financial statement basis and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company estimates the degree to which tax assets and credit carryforwards will result in a benefit based on expected profitability by tax jurisdiction. A valuation allowance for such tax assets and loss carryforwards is provided when it is determined to be more likely than not that the benefit of such deferred tax asset will not be realized in future periods. If it becomes more likely than not that a tax asset will be used, the related valuation allowance on such assets would be reduced. The Company records interest and penalties relating to uncertain tax positions in income tax expense. As of December 31, 2022 and 2021, the Company has no t recognized any liabilities for uncertain tax positions no r has the Company accrued interest and penalties related to uncertain tax positions. Revenue Recognition 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. The Company recognizes service revenue, which consists primarily of freight charges for home delivery, when the service has been rendered. The Company is required to charge and collect sales and other taxes on sales to the Company's customers and remit these taxes back to government authorities. Total revenues do not include sales tax because the Company is a pass-through conduit for collecting and remitting sales tax. Sales are reduced by an allowance for anticipated sales returns that the Company estimates based on historical returns. The Company generally requires customers to pay a deposit when purchasing inventory that is not regularly carried at the store location, or not currently in stock. These deposits are included in other current accrued liabilities until the customer takes possession of the merchandise. Sales Return Reserve Customers may return purchased items for an exchange or refund. The process to establish a sales return reserve contains uncertainties because it requires management to make assumptions and to apply judgment to estimate future returns and exchanges. The customer may receive a refund or exchange the original product for a replacement of equal or similar quality for a period of three months from the time of original purchase. Products received back under this policy are reconditioned pursuant to state laws and resold. The Company records a reserve for estimated product returns, based on historical return trends together with current product sales performance. Cost of Sales and Selling, General and Administrative Expenses The primary costs classified in each major expense category are: Cost of Sales Materials cost; Shipping and transportation expenses to bring products into the Company's distribution centers; Customs and duty expenses; Customer shipping and handling expenses; Physical inventory losses; Costs incurred at distribution centers in connection with the receiving process; and Labor and overhe ad costs incurred to manufacture inventory Selling, General & Administrative (sometimes referred to as “SG&A”) Expenses All c ompensation costs for store, corporate and distribution employees; Occupancy, utilities and maintenance costs of store and corporate facilities; Shipping and transportation expenses to move inventory from the Company's distribution centers to the Company's stores; Depreciation and amortization; and Advertising c osts Stock Based Compensation The Company recognizes expense for its stock based compensation based on the fair value of the awards on the grant date. The Company may issue incentive awards in the form of stock options, restricted stock awards and other equity awards to employees and non-employee directors. Compensation expense is recognized on a straight-line basis over the requisite service period, net of actual forfeitures. Certain awards are also subject to forfeiture if the Company fails to attain its Adjusted EBITDA or Pretax Return on Capital Employed targets. The Company adjusts the cumulative expense recognized on awards with performance conditions based on a probability of achieving the performance condition. Concentration of Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and bank deposits. By their nature, all such instruments involve risks, including credit risks of non-performance by counterparties. A substantial portion of the Company's cash and cash equivalents and bank deposits are invested with banks with high investment grade credit ratings. Segments The Company’s operations consist primarily of retail sales of natural stone and man-made tiles, setting and maintenance materials, and related accessories in stores located in the United States. The Company’s chief operating decision maker only reviews the consolidated results of the Company and accordingly, the Company has concluded it has one reportable segment. Advertising Costs Advertising costs were $ 8.1 million, $ 6.1 million and $ 4.6 million for the years ended December 31, 2022, 2021 and 2020, respectively, and are included in selling, general and administrative expenses in the consolidated statements of operations. The Company’s advertising consists primarily of digital media, direct marketing, events, traditional print media and mobile advertisements and is expensed at the time the media is distributed. Pre-opening Costs The Company’s pre-opening costs are those typically associated with the opening of a new store and generally include rent expense, compensation costs and promotional costs. The Company expenses pre-opening costs as incurred which are recorded in selling, general and administrative expenses. During the year ended December 31, 2022, the Company did not record any pre-opening costs. During both the years ended December 31, 2021 and 2020, the Company recorded pre-opening costs of $ 0.1 million. Property, Plant and Equipment Property, plant and equipment and leasehold improvements are recorded at cost. Improvements are capitalized while repairs and maintenance costs are charged to selling, general and administrative expenses when incurred. Property, plant and equipment are depreciated or amortized using the straight-line method over each asset’s estimated useful life. Leasehold improvements and fixtures at leased locations are amortized using the straight-line method over the shorter of the lease term or the estimated useful life of the asset. The cost and accumulated depreciation of assets sold or otherwise disposed of are removed from the accounts and any gain or loss thereon is included in other income and expense. Asset life (in years) Buildings and building improvements 40 Leasehold improvements 5 – 20 Furniture and fixtures 2 – 7 Machinery and equipment 5 – 10 Computer equipment and software 3 – 7 Vehicles 5 The Company evaluates potential impairment losses on long-lived assets used in operations at the individual retail store level, which is the lowest level at which cash flows can be identified, when events and circumstances indicate that the assets may be impaired, and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amounts of those assets. If impairment exists and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amount of those assets, an impairment loss is recorded based on the excess of the carrying value of the asset group over its fair value. Fair value is measured using discounted cash flows or independent opinions of value, as appropriate. During the fiscal years ended December 31, 2022, 2021 and 2020, the Company recorded asset impairment charges of $ 0.4 million, $ 0.7 million and $ 2.2 million, respectively, which were classified in selling, general and administrative expenses. Internal Use Software The Company capitalizes software development costs incurred during the application development stage related to new software or major enhancements to the functionality of existing software that is developed solely to meet the Company’s internal operational needs and when there are no plans to market the software externally. Costs capitalized include external direct costs of materials and services and internal compensation costs. Any costs during the preliminary project stage or related to training or maintenance are expensed as incurred. Capitalization ceases when the software project is substantially complete and ready for its intended use. The capitalization and ongoing assessment of recoverability of development costs requires judgment by management with respect to certain external factors, including, but not limited to, technological and economic feasibility, and estimated economic life. As of December 31, 2022 and 2021, $ 3.8 million and $ 5.0 million was included in computer equipment and software, respectively. The internal use software costs are amortized over estimated useful lives of three to seven years . There was $ 2.0 million, $ 1.5 million and $ 1.5 million of amortization expense related to capitalized software during the years ended December 31, 2022, 2021 and 2020, respectively. Leases The Company determines if an arrangement is a lease at inception. Operating leases are included in right of use assets and lease liabilities on the consolidated balance sheets. The right of use assets and lease liabilities are recognized as the present value of the future minimum lease payments over the lease term at commencement date. As most of the leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The right of use asset is also adjusted for any lease payments made and lease incentives. The Company’s lease terms may include options to extend or terminate the lease typically at its own discretion. The Company regularly evaluates the renewal options and when such options are reasonably certain of exercise, the Company includes the renewal period in its lease term. The Company does not separate non-lease components from lease components by class of underlying assets and does not apply the recognition requirements to short term leases. Certain lease arrangements contain provisions requiring the Company to restore the leased property to its original condition at the end of the lease. The fair values of these obligations are recorded as liabilities on a discounted basis, which occurs at the time the Company enters into the lease arrangement. In the estimation of fair value, the Company uses assumptions and judgements regarding such factors as the existence of a legal obligation for an asset retirement obligation, estimated amounts and timing of settlements, discount rates and inflation rates. The costs associated with these liabilities are capitalized and depreciated over the lease term and the liabilities are accreted over the same period. Asset retirement obligations were $ 2.7 million and $ 2.9 million as of December 31, 2022 and 2021, respectively, and are included in other long-term liabilities. Self-Insurance The Company is self-insured for certain employee health and workers’ compensation claims. The Company estimates a liability for aggregate losses below stop-loss coverage limits based on estimates of the ultimate costs to be incurred to settle known claims and claims not reported as of the balance sheet date. The estimated liability is not discounted and is based on a number of assumptions and factors including historical trends, and economic conditions. As of December 31, 2022 and 2021, an accrual of $ 1.1 million and $ 0.8 million related to estimated employee health claims was included in other accrued liabilities, respectively. As of December 31, 2022 and 2021, an accrual of $ 2.0 million and $ 2.2 million related to estimated workers’ compensation claims was included in other accrued liabilities, respectively. The Company has standby letters of credit outstanding related to the Company's workers’ compensation and employee health insurance policies. As of both December 31, 2022 and 2021, the standby letters of credit totaled $ 2.4 million. |
Revenues
Revenues | 12 Months Ended |
Dec. 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 revenue. The following table presents revenues disaggregated by product category: Years Ended December 31, 2022 2021 Man-made tiles 51 % 48 % Natural stone tiles 25 28 Setting and maintenance materials 15 14 Accessories 7 8 Delivery service 2 2 100 % 100 % The Company generates revenues by selling tile products, setting and maintenance materials, accessories, and delivery services to its customers through its store locations. 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 ava ilabl e, 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 prepare s 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 $ 11.3 million and $ 13.8 million as of December 31, 2022 and 2021, respectively. Revenues recognized during the year ended December 31, 2022 that were included in the customer deposit balance as of the beginning of the period were $ 13.7 million. The Company extends financing to qualified professional customers who apply for credit. The accounts receivable balance was $ 3.4 million and $ 3.2 million as of December 31, 2022 and 2021, respectively. Customers who qualify for an account receive 30-day payment terms. 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 qualifies for the practical expedient outlined in ASC 606-10-32-18 and 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 current 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 Sheet as of December 31, 2022 and 2021 are as follows: December 31, December 31, 2022 2021 (in thousands) Other current accrued liabilities $ 4,993 $ 5,202 Other current assets 1,687 1,658 Sales returns reserve, net $ 3,306 $ 3,544 |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Note 3: Property, Plant and Equipment Property, plant and equipment consisted of the following at December 31: 2022 2021 (in thousands) Land $ 904 $ 904 Building and building improvements 25,835 24,755 Leasehold improvements 99,949 98,529 Furniture and fixtures 148,298 142,161 Machinery and equipment 31,261 30,461 Computer equipment and software 49,313 47,003 Vehicles 8,064 6,105 Construction in progress 1,648 684 Total property, plant and equipment 365,272 350,602 Less accumulated depreciation ( 294,177 ) ( 268,317 ) Total property, plant and equipment, net $ 71,095 $ 82,285 Depreciation expense on property and equipment, including financing leases, was $ 25.1 million, $ 27.4 million and $ 31.3 million for the years ended December 31, 2022, 2021 and 2020, respectively. Property, plant and equipment is measured at fair value when an impairment is recognized and the related assets are written down to fair value. During the years ended December 31, 2022, 2021 and 2020, the Company recorded asset impairment charges of $ 0.4 million, $ 0.7 million and $ 2.2 million , respectively. |
Other Accrued Liabilities
Other Accrued Liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Other Accrued Liabilities [Abstract] | |
Other Accrued Liabilities | Note 4: Other Accrued Liabilities Other accrued liabilities consisted of the following at December 31: 2022 2021 (in thousands) Customer deposits $ 11,315 $ 13,792 Sales returns reserve 4,993 5,202 Accrued wages and salaries 6,040 8,833 Payroll and sales taxes 2,286 3,796 Other current liabilities 7,282 6,626 Total other accrued liabilities $ 31,916 $ 38,249 |
Long-term Debt
Long-term Debt | 12 Months Ended |
Dec. 31, 2022 | |
Long-term Debt [Abstract] | |
Long-term Debt | Note 5: Long-term Debt Long-term debt, net of debt issuance costs, consisted of the following at December 31: 2022 2021 (in thousands) Total debt obligations $ 45,400 $ 5,000 Less: current portion - - Debt obligations, net of current portion $ 45,400 $ 5,000 On September 30, 2022 , Holdings and its operating subsidiary, The Tile Shop, LLC, and certain subsidiaries of each entered into a Credit Agreement with JPMorgan Chase Bank, N.A. and the lenders party thereto, including Fifth Third Bank (the “Credit Agreement”). The Credit Agreement provides the Company with a senior credit facility consisting of a $ 75.0 million revolving line of credit through September 30, 2027. Borrowings pursuant to the Credit Agreement initially bear interest at a rate per annum equal to: (i) Adjusted Term SOFR Rate (as defined in the Credit Agreement), plus a margin ranging from 1.25 % to 1.75 %; (ii) Adjusted Daily Simple SOFR (as defined in the Credit Agreement), plus a margin ranging from 1.25 % to 1.75 %; or (iii) the Alternate Base Rate (as defined in the Credit Agreement), plus a margin ranging from 0.25 % to 0.75 %. The margin is determined based on The Tile Shop, LLC’s Rent Adjusted Leverage Ratio (as defined in the Credit Agreement). Borrowings outstanding as of December 31, 2022 were SOFR-based interest rate loans. The SOFR-based interest rate was 5.8 % on December 31, 2022. The Credit Agreement is secured by virtually all of the assets of the Company, including, but not limited to, inventory, accounts receivable, equipment and general intangibles. The Credit Agreement contains customary events of default, conditions to borrowing and restrictive covenants, including restrictions on the Company’s ability to dispose of assets, engage in acquisitions or mergers, make distributions on or repurchases of capital stock, incur additional debt, incur liens or make investments. The Credit Agreement also includes financial and other covenants, including covenants to maintain a Fixed Charge Coverage Ratio (as defined in the Credit Agreement) of no less than 1.20 to 1.00 and a Rent Adjusted Leverage Ratio (as defined in the Credit Agreement) of no greater than 3.50 to 1.00. The Company was in compliance with the covenants as of December 31, 2022. The Credit Agreement superseded and replaced in its entirety the Company’s prior senior credit facility with Bank of America, N.A. dated September 18, 2018. The Company drew on the revolving line of credit pursuant to the Credit Agreement to refinance all of the existing revolving line of credit and interest outstanding under the Company’s prior credit facility, as well as pay $ 0.4 million in debt issuance costs in connection with the Credit Agreement. Debt issuance costs are classified as other current assets and other assets in the Consolidated Balance Sheet and amortized on a straight line basis over the life of the Credit Agreement. The Company recorded a $ 0.1 million charge in interest expense to write-off certain unamortized deferred financing fees associated with the September 18, 2018 credit facility as of the date of the payoff. Borrowings outstanding consisted of $ 45.4 million on the revolving line of credit as of December 31, 2022. As of December 31, 2022, there was $ 28.3 million available for borrowing on the revolving line of credit, which may be used for purchasing additional merchandise inventory, maintaining the Company’s stores, and general corporate purposes. 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 December 31, 2022. As of December 31, 2022, $ 1.3 million of the standby letter of credit balance was secured by the Company’s September 30, 2022 credit facility. The Company pledged $ 1.2 million of cash as collateral to secure the remaining $ 1.1 million standby letters of credit as of December 31, 2022, which has been classified as restricted cash in the Consolidated Balance Sheet. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | Note 6: Leases The Company leases its retail stores, certain distribution space, and office space. Leases generally have a 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. The depreciable life of assets and leasehold improvements is limited by the expected lease term. Leases (in thousands) Classification December 31, 2022 December 31, 2021 Assets Operating lease assets Right of use asset $ 118,501 $ 123,101 Total leased assets $ 118,501 $ 123,101 Liabilities Current Operating Current portion of lease liability $ 27,866 $ 28,190 Noncurrent Operating Long-term lease liability, net 103,353 110,261 Total lease liabilities $ 131,219 $ 138,451 Year Ended December 31, Lease cost (in thousands) Classification 2022 2021 Operating lease cost SG&A expenses $ 33,286 $ 34,047 Variable lease cost (1) SG&A expenses 14,052 14,325 Short term lease cost SG&A expenses 424 447 Net lease cost $ 47,762 $ 48,819 (1) Variable lease costs consist primarily of taxes, insurance, and common area or other maintenance costs for the Company’s leased facilities. Maturity of Lease Liabilities (in thousands) Operating Leases 2023 $ 37,848 2024 34,059 2025 28,131 2026 23,188 2027 16,863 Thereafter 21,996 Total lease payments 162,085 Less: interest ( 30,866 ) Present value of lease liabilities $ 131,219 Year Ended December 31, Other Information (in thousands) 2022 2021 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ ( 37,587 ) $ ( 37,011 ) Lease right-of-use assets obtained or modified in exchange for lease obligations $ 21,302 $ 15,681 Lease Term and Discount Rate December 31, 2022 December 31, 2021 Weighted average remaining term (years) Operating leases 5.1 5.4 Weighted average discount rate Operating leases 7.67 % 6.64 % In July 2022, the Company entered into an agreement to modify one of its store leases. The terms of the agreement required the Company to vacate the store during the fourth quarter of 2022 in exchange for a $ 1.4 million lease incentive payment from the landlord. During the fourth quarter, the Company fulfilled its obligation to close the store and received the $ 1.4 million lease incentive payment from the landlord. The Company recognized the $ 1.4 million benefit associated with the modified lease during the year ended December 31, 2022. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value of Financial Instruments [Abstract] | |
Fair Value of Financial Instruments | Note 7: 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: Quot ed 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 December 31, 2022 and 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 December 31, 2022 December 31, 2021 Assets (in thousands) Cash and cash equivalents Level 1 $ 5,948 $ 9,358 Restricted cash Level 1 1,811 655 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 o n 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. Th e value was measured using quoted market prices in active markets. The carrying amount approximates fair value. The carrying value of accounts receivable and accounts payable approximates their estimated fair values due to the short maturities of these instruments. 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. During the years ended December 31, 2022, 2021 and 2020, the Company recognized charges in selling, general, and administrative expenses to write-down property, plant, and equipment and right of use assets to their estimated fair values of $ 0.4 million, $ 0.7 million and $ 2.2 million, respectively. The Company measured the fair value of these assets based on projected cash flows, an estimated risk-adjusted rate of return, and market rental rates for comparable properties. Projected cash flows are considered Level 3 inputs. Market rental rates for comparable properties are considered Level 2 inputs. During the twelve months ended December 31, 202 1 , the Company recorded a $ 1.1 million adjustment to reflect an increase in the fair value to restore leased property to its original condition at the end of the lease. The change in the estimated value of the Company’s asset retirement obligation resulted in a $ 1.1 million increase in property, plant and equipment, a $ 0.1 million increase in other current liabilities, and a $ 1.0 million increase in other long-term liabilities. The Company measured the fair value of its asset retirement obligation based on the estimated amounts and timing of settlements, an estimated risk adjusted rate of return, and expected inflation rates, which are considered Level 2 inputs. The Company did not adjust its estimate of the fair value to restore leased property to its original condition during the twelve months ended December 31, 2022. The carrying value of the Company’s borrowings under its Credit Agreement approximates fair value based upon Level 2 inputs of the market interest rates available to the Company for debt obligations with similar risks and maturities. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 8: 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, 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. The Company paid $ 9.2 million, $ 9.3 million, and $ 7.6 million to Nanyang in connection with purchases made during the years ended December 31, 2022, 2021 and 2020, respectively. As of December 31, 2022, the accounts payable due to Nanyang was $ 0.4 million. As of December 31, 2021, there were no amounts payable due to Nanyang. The Company paid $ 3.1 million, $ 3.5 million and $ 0.7 million to Tile Style in connection with purchases made during the years ended December 31, 2022, 2021 and 2020, respectively. As of December 31, 2022, the accounts payable balance due to Tile Style was $ 0.2 million. As of December 31, 2021, there were no amounts payable due to Tile Style. 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 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. |
Income Per Common Share
Income Per Common Share | 12 Months Ended |
Dec. 31, 2022 | |
Income Per Common Share [Abstract] | |
Income Per Common Share | Note 9: Income per common share Basic earnings per share is calculated by dividing net income by the weighted average number of 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 common shares outstanding during the period. Basic and diluted net income per share was calculated as follows: 2022 2021 2020 (in thousands, except share and per share data) Net income $ 15,703 $ 14,774 $ 6,031 Weighted average shares outstanding - basic 48,855,701 50,393,980 49,957,356 Effect of dilutive securities attributable to stock based awards 391,346 691,483 626,386 Weighted average shares outstanding - diluted 49,247,047 51,085,463 50,583,742 Basic net income per share $ 0.32 $ 0.29 $ 0.12 Diluted net income per share $ 0.32 $ 0.29 $ 0.12 Anti-dilutive securities excluded from earnings per share calculation 640,993 884,610 1,482,552 |
Equity Incentive Plans
Equity Incentive Plans | 12 Months Ended |
Dec. 31, 2022 | |
Equity Incentive Plans [Abstract] | |
Equity Incentive Plans | Note 10: Equity Incentive Plans Equity Plans: On July 20, 2021, the stockholders of the Company approved the Tile Shop Holdings, Inc. 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: During the years ended December 31, 2022, 2021 and 2020, the Company did no t grant any stock options to its employees. Prior to 2020, the Company granted stock options to its employees that included service condition requirements. The options provide for certain acceleration of vesting and cancellation of options under different circumstances, such as a change in control, death, disability and termination of service. The Company recognizes compensation expense on a straight-line basis over the requisite service period, net of actual forfeitures. Stock based compensation related to options for the years ended December 31, 2022, 2021 and 2020 was $ 0.1 million, $ 0.3 million, and $ 0.4 million, respectively, and was included in selling, general and administrative expenses in the consolidated statements of operations. As of December 31, 2022, the total future compensation cost related to non-vested options not yet recognized in the consolidated statement of operations was less than $ 0.1 million and is expected to be recognized over a weighted average period of 0.1 years. The following table summarizes stock option activity during the years ended December 31, 2022, 2021 and 2020: Shares Weighted Average Exercise Price Weighted Avg. Grant Date Fair Value Weighted Avg. Remaining Contractual Term (Years) Aggregate Intrinsic Value (in thousands) Balance, January 1, 2020 1,253,994 $ 11.34 $ 5.31 4.7 $ - Granted - $ - $ - Exercised - $ - $ - Cancelled/Forfeited ( 243,547 ) $ 12.91 $ 5.91 Balance, December 31, 2020 1,010,447 $ 10.96 $ 5.16 4.6 $ - Granted - $ - $ - Exercised - $ - $ - Cancelled/Forfeited ( 104,502 ) $ 11.03 $ 4.90 Balance, December 31, 2021 905,945 $ 10.96 $ 5.19 3.7 $ 238 Granted - $ - $ - Exercised - $ - $ - Cancelled/Forfeited ( 347,878 ) $ 10.53 $ 5.45 Balance, December 31, 2022 558,067 $ 11.22 $ 4.82 4.2 $ - Exercisable at December 31, 2022 515,050 $ 11.63 $ 5.01 4.1 $ - Vested and expected to vest, December 31, 2022 558,067 $ 11.22 $ 4.82 4.2 $ - The aggregate intrinsic value is the difference between the exercise price and the closing price of the Company’s stock on December 31. No stock options were exercised during fiscal year 2022. Options outstanding as of December 31, 2022 were as follows: Range of Exercise Price Weighted Average Options Exercise Price Remaining Contractual Life-Years $ 5.00 to $ 10.00 363,567 $ 7.03 5.61 $ 10.01 to $ 15.00 25,000 $ 12.79 3.11 $ 15.01 to $ 20.00 110,500 $ 17.83 1.77 $ 20.01 to $ 25.00 51,000 $ 23.17 0.76 $ 25.01 to $ 30.00 8,000 $ 29.44 0.56 Restricted Stock: The Company awards restricted common shares to selected employees and 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 its Adjusted EBITDA or Pretax Return on Capital Employed performance targets. The restricted common 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. The following table summarizes restricted stock activity during the years ended December 31, 2022, 2021 and 2020: Shares Weighted Avg. Grant Date Fair Value Nonvested, January 1, 2020 997,658 $ 5.23 Granted 1,090,759 $ 1.12 Vested ( 329,326 ) $ 5.34 Forfeited ( 116,594 ) $ 5.22 Nonvested, December 31, 2020 1,642,497 $ 2.48 Granted 421,547 $ 7.05 Vested ( 742,392 ) $ 2.61 Forfeited ( 24,018 ) $ 6.99 Nonvested, December 31, 2021 1,297,634 $ 3.81 Granted 610,478 $ 5.57 Vested ( 466,298 ) $ 3.99 Forfeited ( 264,912 ) $ 4.63 Nonvested, December 31, 2022 1,176,902 $ 4.46 The total expense associated with restricted stock for the years ended December 31, 2022, 2021, and 2020 was $ 1.7 million, $ 2.0 million, and $ 1.8 million, respectively. During 2021, the Company granted restricted share awards subject to forfeiture on the date the Company files its annual report on Form 10-K for each of the 2021, 2022 and 2023 fiscal years if the Company fails to attain certain Adjusted EBITDA margin performance targets in 2021, 2022 and 2023. In 2022, the Company granted restricted share awards subject to forfeiture on the date the Company files its annual report on Form 10-K for each of the 2022, 2023 and 2024 fiscal years if the Company fails to attain certain Pretax Return on Capital Employed performance targets in 2022, 2023 and 2024. The Company did not attain the Adjusted EBITDA or Pretax Return on Capital Employed performance measures in 2022, and accordingly, did not record any expense in connection with the performance share awards in 2022. The Company anticipates cancelling 144,590 restricted shares date this Form 10-K is filed. As of December 31, 2022, there was $ 3.2 million of total unrecognized expense related to unvested restricted stock awards, which are expected to vest, and will be expensed over a weighted average period of 1.5 years. The fair value of restricted stock granted in fiscal years 2022 and 2021 was $ 3.4 million and $ 3.0 million, respectively. The total fair value of restricted stock that vested in fiscal years 2022 and 2021 was $ 1.9 million and $ 5.4 million, respectively. Using the closing stock price of $ 4.38 on December 30, 2022 (the last trading day of fiscal 2022), the 1,032,312 restricted shares outstanding and expected to vest as of December 31, 2022 had an intrinsic value of $ 4.5 million. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Taxes [Abstract] | |
Income Taxes | Note 11: Income Taxes The components of the provision for income taxes consisted of the following: Years Ended December 31, 2022 2021 2020 (in thousands) Current Federal $ ( 3,870 ) $ ( 5,397 ) $ 3,632 State ( 1,040 ) ( 1,390 ) ( 190 ) International - ( 4 ) ( 31 ) Total Current ( 4,910 ) ( 6,791 ) 3,411 Deferred Federal ( 91 ) 1,698 ( 1,522 ) State ( 281 ) ( 131 ) ( 377 ) International ( 45 ) 44 17 Total Deferred ( 417 ) 1,611 ( 1,882 ) Total (Provision) Benefit for Income Taxes $ ( 5,327 ) $ ( 5,180 ) $ 1,529 A majority of the Company's pretax income is from domestic operations. On March 27, 2020, the CARES Act was signed into law. As a result of the CARES Act tax law changes, for the year ended December 31, 2020, the Company recognized a $ 3.4 million tax benefit related to its ability to carryback net operating losses to prior years that had higher tax rates. The Company filed its carryback claim with the IRS in 2020. The Company collected $ 4.9 million of the carryback claim from the IRS during the year ending December 31, 2022. In January 2023, the Company received the remaining $ 4.2 million balance of the carryback claim. As of December 31, 2022, the $ 4.2 million refund due from the IRS related to the carryback claim was presented as an Income Tax Receivable in the Consolidated Balance Sheet. The following table reflects the effective income tax rate reconciliation for the years ended December 31, 2022, 2021 and 2020: 2022 2021 2020 Federal statutory rate 21.0 % 21.0 % 21.0 % State income taxes, net of the federal tax benefit 5.5 6.1 7.6 Stock based compensation ( 0.5 ) ( 1.3 ) 12.6 Remeasurement of deferred tax assets - - ( 0.1 ) Tax credits ( 0.5 ) ( 0.2 ) ( 0.9 ) Impact of CARES Act - - ( 76.1 ) Other ( 0.2 ) 0.4 1.9 Effective tax rate 25.3 % 26.0 % ( 34.0 ) % The Company’s effective tax rate was 25.3 %, 26.0 % and ( 34.0 )% during the years ended December 31, 2022, 2021 and 2020, respectively. The decrease in the effective tax rate in 2022 when compared to 2021 was primarily due to a decrease in the Company’s state taxes. The increase in the effective tax rate in 2021 when compared to 2020 was due to the tax benefit recognized during 2020 following the enactment of the CARES Act, which gave the Company the ability to carry back federal net operating losses to years with a federal statutory tax rate of 35 %. Components of net deferred income taxes were as follows at December 31: 2022 2021 (in thousands) Deferred income tax assets: Section 743 carryforward $ 7,764 $ 9,509 Inventory 2,031 1,624 Operating lease liabilities 33,901 36,004 Other 4,034 4,624 Total deferred income tax assets $ 47,730 $ 51,761 Deferred income tax liabilities Depreciation 6,692 9,168 Operating lease right-of-use assets 32,693 34,104 Other 1,809 1,536 Total deferred income tax liabilities 41,194 44,808 Net deferred income tax assets $ 6,536 $ 6,953 The Company has recognized the tax consequences of all foreign unremitted earnings and management has no specific plans to indefinitely reinvest the unremitted earnings of its foreign subsidiary as of December 31, 2022. As of December 31, 2022, the total undistributed earnings of the Company's non-U.S. subsidiary was approximately $ 0.3 million. The Company has provided no deferred taxes on withholding taxes, state taxes, and foreign currency gains and losses due on the repatriation of those earnings. The Company records interest and penalties through income tax expense relating to uncertain tax positions. As of December 31, 2022, 2021 and 2020, the Company has no t recognized any liabilities for uncertain tax positions nor has the Company accrued interest and penalties related to uncertain tax positions. The Company's federal income tax returns for the 2019 through 2021 tax years are still subject to examination in the U.S. Various state and foreign jurisdiction tax years remain open to examination. |
New Markets Tax Credit
New Markets Tax Credit | 12 Months Ended |
Dec. 31, 2022 | |
New Markets Tax Credit [Abstract] | |
New Markets Tax Credit | Note 12: 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 December 31, 2022, the balance of the contribution liability for this arrangement was $ 0.5 million, which was classified as other accrued 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 December 31, 2022, the remaining balance in the Investment Fund available for reimbursement to the Company was $ 0.6 million. |
Retirement Savings Plan
Retirement Savings Plan | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Savings Plan [Abstract] | |
Retirement Savings Plan | Note 13: Retirement Savings Plan The Company has a 401(k) profit sharing plan covering substantially all full-time employees. Employee contributions are limited to the maximum amount allowable by the Internal Revenue Code. The Company matched $ 1.6 million, $ 1.8 million, and $ 1.5 million of employee contributions in 2022, 2021, and 2020 , respectively, and made no discretionary contributions for any of the years presented. |
Quarterly Financial Data
Quarterly Financial Data | 12 Months Ended |
Dec. 31, 2022 | |
Quarterly Financial Data [Abstract] | |
Quarterly Financial Data | Note 14: Quarterly Financial Data (Unaudited) Quarterly results of operations for the years ended December 31, 2022 and 2021 are summarized below (in thousands, except per share amounts): First Quarter Second Quarter Third Quarter Fourth Quarter 2022 Net sales $ 102,471 107,604 97,154 87,473 Gross profit 66,845 71,018 64,612 56,462 Income from operations 4,736 9,778 5,503 2,592 Net income 3,513 6,914 3,823 1,453 Basic earnings per share 0.07 0.14 0.08 0.03 Diluted earnings per share 0.07 0.13 0.08 0.03 2021 Net sales $ 92,084 96,193 92,240 90,183 Gross profit 64,186 66,425 62,949 59,570 Income (loss) from operations 6,908 7,614 3,158 2,930 Net income (loss) 5,297 5,494 2,175 1,808 Basic earnings (loss) per share 0.11 0.11 0.04 0.04 Diluted earnings (loss) per share 0.10 0.11 0.04 0.04 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policy) | 12 Months Ended |
Dec. 31, 2022 | |
Background [Abstract] | |
Nature of Business | Nature of Business Tile Shop Holdings, Inc. (“Holdings”, and together with its wholly owned subsidiaries, the “Company”) was incorporated in Delaware in June 2012. On August 21, 2012, Holdings consummated the transactions contemplated pursuant to that certain Contribution and Merger Agreement dated as of June 27, 2012, among Holdings, JWC Acquisition Corp., a publicly-held Delaware corporation (“JWCAC”), The Tile Shop, LLC, a privately-held Delaware limited liability company (“The Tile Shop”), and certain other parties. Through a series of transactions, The Tile Shop was contributed to and became a subsidiary of Holdings and Holdings effected a business combination with and became a successor issuer to JWCAC. The Company is a specialty retailer of natural stone and man-made tiles, setting and maintenance materials, and related accessories in the United States. Natural stone products include marble, travertine, granite, quartz, sandstone, slate, and onyx tiles. Man-made products include ceramic, porcelain, glass, cement, wood look, metal and luxury vinyl tile. The majority of the tile products are sold under the Company's proprietary Rush River and Fired Earth brand names. The Company purchases tile products, accessories and tools directly from its network of suppliers. The Company manufactures its own setting and maintenance materials, such as thinset, grout and sealer, under the Superior brand name. As of December 31, 2022, the Company operated 142 stores in 31 states and the District of Columbia, with an average size of approximately 20,000 square feet. The Company also has a sourcing office located in China. |
Basis of Presentation | Basis of Presentation The consolidated financial statements of Holdings include the accounts of its wholly owned subsidiaries and variable interest entities for which the Company is the primary beneficiary. See Note 12, “New Markets Tax Credit,” for the discussion of financing arrangements involving certain entities that are variable interest entities that are included in these consolidated financial statements. All significant intercompany transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements. The Company’s estimates and judgments are based on historical experience and various other assumptions that it believes are reasonable under the circumstances. The Company considered the COVID-19 related impacts on its estimates, as appropriate, within its consolidated financial statements and there may be changes to those estimates in future periods. The Company believes that the accounting estimates are appropriate after giving consideration to the increased uncertainties surrounding the severity and duration of the COVID-19 pandemic. The amount of assets and liabilities reported on the Company's balance sheets and the amounts of income and expenses reported for each of the periods presented are affected by estimates and assumptions, which are used for, but not limited to, the accounting for revenue recognition and related reserves for sales returns, useful lives of property, plant and equipment, determining impairment of property, plant and equipment and right of use assets, accounting for leases, valuation of inventory, and income taxes. Actual results may differ from these estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company had cash and cash equivalents of $ 5.9 million and $ 9.4 million at December 31, 2022 and 2021, respectively. The Company considers all highly liquid investments with an original maturity date of three months or less when purchased to be cash equivalents. The payments due from banks for debit and credit card transactions are generally received, or settled, within 24 to 48 hours of the transmission date. The Company considers all debit and credit card transactions that settle in less than seven days to be cash and cash equivalents. Amounts due from the banks for these transactions classified as cash and cash equivalents totaled $ 1.6 million and $ 1.7 million at December 31, 2022 and 2021, respectively. |
Restricted Cash | Restricted Cash Cash and cash equivalents that are restricted as to withdrawal or are under the terms of use for current operations are included in the restricted balance on the balance sheet. |
Trade Receivables | Trade Receivables Trade receivables are carried at original invoice amount less an estimate made for doubtful accounts. Management determines the allowance for doubtful accounts on a specific identification basis and by leveraging information on historical losses, current conditions, and reasonable and supportable forecasts of future conditions . Trade receivables are written off when deemed uncollectible. Recoveries of trade receivables previously written off are recorded when received. The allowance for doubtful accounts was $ 0.3 million and $ 0.2 million as of December 31, 2022 and 2021, respectively. The Company does not accrue interest on accounts receivable. |
Inventories | Inventories The Company’s inventory consists of manufactured items and purchased merchandise held for resale. Inventories are stated at the lower of cost (determined using the moving average cost method) or net realizable value. The Company capitalizes the cost of inbound freight, duties, and receiving and handling costs to bring purchased materials into its distribution network. The labor and overhead costs incurred in connection with the production process are included in the value of manufactured finished goods. Inventories were comprised of the following as of December 31: 2022 2021 (in thousands) Finished goods $ 119,517 $ 95,869 Raw materials 1,435 1,306 Total $ 120,952 $ 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. These estimates have calculations that require management to make assumptions based on the current rate of sales, age, salability and profitability of inventory, historical percentages that can be affected by changes in our merchandising mix, customer preferences, rates of sell through and changes in actual shrinkage trends. The provision for losses related to shrinkage and other amounts was $ 0.7 million and $ 0.5 million as of December 31, 2022 and 2021, respectively. |
Income Taxes | Income Taxes The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax liabilities and assets are determined based on the difference between the financial statement basis and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company estimates the degree to which tax assets and credit carryforwards will result in a benefit based on expected profitability by tax jurisdiction. A valuation allowance for such tax assets and loss carryforwards is provided when it is determined to be more likely than not that the benefit of such deferred tax asset will not be realized in future periods. If it becomes more likely than not that a tax asset will be used, the related valuation allowance on such assets would be reduced. The Company records interest and penalties relating to uncertain tax positions in income tax expense. As of December 31, 2022 and 2021, the Company has no t recognized any liabilities for uncertain tax positions no r has the Company accrued interest and penalties related to uncertain tax positions. |
Revenue Recognition | Revenue Recognition 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. The Company recognizes service revenue, which consists primarily of freight charges for home delivery, when the service has been rendered. The Company is required to charge and collect sales and other taxes on sales to the Company's customers and remit these taxes back to government authorities. Total revenues do not include sales tax because the Company is a pass-through conduit for collecting and remitting sales tax. Sales are reduced by an allowance for anticipated sales returns that the Company estimates based on historical returns. The Company generally requires customers to pay a deposit when purchasing inventory that is not regularly carried at the store location, or not currently in stock. These deposits are included in other current accrued liabilities until the customer takes possession of the merchandise. |
Sales Return Reserve | Sales Return Reserve Customers may return purchased items for an exchange or refund. The process to establish a sales return reserve contains uncertainties because it requires management to make assumptions and to apply judgment to estimate future returns and exchanges. The customer may receive a refund or exchange the original product for a replacement of equal or similar quality for a period of three months from the time of original purchase. Products received back under this policy are reconditioned pursuant to state laws and resold. The Company records a reserve for estimated product returns, based on historical return trends together with current product sales performance. |
Cost of Sales and Selling, General and Administrative Expenses | Cost of Sales and Selling, General and Administrative Expenses The primary costs classified in each major expense category are: Cost of Sales Materials cost; Shipping and transportation expenses to bring products into the Company's distribution centers; Customs and duty expenses; Customer shipping and handling expenses; Physical inventory losses; Costs incurred at distribution centers in connection with the receiving process; and Labor and overhe ad costs incurred to manufacture inventory Selling, General & Administrative (sometimes referred to as “SG&A”) Expenses All c ompensation costs for store, corporate and distribution employees; Occupancy, utilities and maintenance costs of store and corporate facilities; Shipping and transportation expenses to move inventory from the Company's distribution centers to the Company's stores; Depreciation and amortization; and Advertising c osts |
Stock Based Compensation | Stock Based Compensation |
Concentration of Risk | Concentration of Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and bank deposits. By their nature, all such instruments involve risks, including credit risks of non-performance by counterparties. A substantial portion of the Company's cash and cash equivalents and bank deposits are invested with banks with high investment grade credit ratings. |
Segments | Segments The Company’s operations consist primarily of retail sales of natural stone and man-made tiles, setting and maintenance materials, and related accessories in stores located in the United States. The Company’s chief operating decision maker only reviews the consolidated results of the Company and accordingly, the Company has concluded it has one reportable segment. |
Advertising Costs | Advertising Costs Advertising costs were $ 8.1 million, $ 6.1 million and $ 4.6 million for the years ended December 31, 2022, 2021 and 2020, respectively, and are included in selling, general and administrative expenses in the consolidated statements of operations. The Company’s advertising consists primarily of digital media, direct marketing, events, traditional print media and mobile advertisements and is expensed at the time the media is distributed. |
Pre-opening Costs | Pre-opening Costs The Company’s pre-opening costs are those typically associated with the opening of a new store and generally include rent expense, compensation costs and promotional costs. The Company expenses pre-opening costs as incurred which are recorded in selling, general and administrative expenses. During the year ended December 31, 2022, the Company did not record any pre-opening costs. During both the years ended December 31, 2021 and 2020, the Company recorded pre-opening costs of $ 0.1 million. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment and leasehold improvements are recorded at cost. Improvements are capitalized while repairs and maintenance costs are charged to selling, general and administrative expenses when incurred. Property, plant and equipment are depreciated or amortized using the straight-line method over each asset’s estimated useful life. Leasehold improvements and fixtures at leased locations are amortized using the straight-line method over the shorter of the lease term or the estimated useful life of the asset. The cost and accumulated depreciation of assets sold or otherwise disposed of are removed from the accounts and any gain or loss thereon is included in other income and expense. Asset life (in years) Buildings and building improvements 40 Leasehold improvements 5 – 20 Furniture and fixtures 2 – 7 Machinery and equipment 5 – 10 Computer equipment and software 3 – 7 Vehicles 5 The Company evaluates potential impairment losses on long-lived assets used in operations at the individual retail store level, which is the lowest level at which cash flows can be identified, when events and circumstances indicate that the assets may be impaired, and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amounts of those assets. If impairment exists and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amount of those assets, an impairment loss is recorded based on the excess of the carrying value of the asset group over its fair value. Fair value is measured using discounted cash flows or independent opinions of value, as appropriate. During the fiscal years ended December 31, 2022, 2021 and 2020, the Company recorded asset impairment charges of $ 0.4 million, $ 0.7 million and $ 2.2 million, respectively, which were classified in selling, general and administrative expenses. |
Internal Use Software | Internal Use Software The Company capitalizes software development costs incurred during the application development stage related to new software or major enhancements to the functionality of existing software that is developed solely to meet the Company’s internal operational needs and when there are no plans to market the software externally. Costs capitalized include external direct costs of materials and services and internal compensation costs. Any costs during the preliminary project stage or related to training or maintenance are expensed as incurred. Capitalization ceases when the software project is substantially complete and ready for its intended use. The capitalization and ongoing assessment of recoverability of development costs requires judgment by management with respect to certain external factors, including, but not limited to, technological and economic feasibility, and estimated economic life. As of December 31, 2022 and 2021, $ 3.8 million and $ 5.0 million was included in computer equipment and software, respectively. The internal use software costs are amortized over estimated useful lives of three to seven years . There was $ 2.0 million, $ 1.5 million and $ 1.5 million of amortization expense related to capitalized software during the years ended December 31, 2022, 2021 and 2020, respectively. |
Leases | Leases The Company determines if an arrangement is a lease at inception. Operating leases are included in right of use assets and lease liabilities on the consolidated balance sheets. The right of use assets and lease liabilities are recognized as the present value of the future minimum lease payments over the lease term at commencement date. As most of the leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The right of use asset is also adjusted for any lease payments made and lease incentives. The Company’s lease terms may include options to extend or terminate the lease typically at its own discretion. The Company regularly evaluates the renewal options and when such options are reasonably certain of exercise, the Company includes the renewal period in its lease term. The Company does not separate non-lease components from lease components by class of underlying assets and does not apply the recognition requirements to short term leases. Certain lease arrangements contain provisions requiring the Company to restore the leased property to its original condition at the end of the lease. The fair values of these obligations are recorded as liabilities on a discounted basis, which occurs at the time the Company enters into the lease arrangement. In the estimation of fair value, the Company uses assumptions and judgements regarding such factors as the existence of a legal obligation for an asset retirement obligation, estimated amounts and timing of settlements, discount rates and inflation rates. The costs associated with these liabilities are capitalized and depreciated over the lease term and the liabilities are accreted over the same period. Asset retirement obligations were $ 2.7 million and $ 2.9 million as of December 31, 2022 and 2021, respectively, and are included in other long-term liabilities. |
Self-Insurance | Self-Insurance The Company is self-insured for certain employee health and workers’ compensation claims. The Company estimates a liability for aggregate losses below stop-loss coverage limits based on estimates of the ultimate costs to be incurred to settle known claims and claims not reported as of the balance sheet date. The estimated liability is not discounted and is based on a number of assumptions and factors including historical trends, and economic conditions. As of December 31, 2022 and 2021, an accrual of $ 1.1 million and $ 0.8 million related to estimated employee health claims was included in other accrued liabilities, respectively. As of December 31, 2022 and 2021, an accrual of $ 2.0 million and $ 2.2 million related to estimated workers’ compensation claims was included in other accrued liabilities, respectively. The Company has standby letters of credit outstanding related to the Company's workers’ compensation and employee health insurance policies. As of both December 31, 2022 and 2021, the standby letters of credit totaled $ 2.4 million. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Summary of Significant Accounting Policies [Abstract] | |
Schedule of Inventories | 2022 2021 (in thousands) Finished goods $ 119,517 $ 95,869 Raw materials 1,435 1,306 Total $ 120,952 $ 97,175 |
Summary of Estimated Useful Lives of Property, Plant and Equipment | Asset life (in years) Buildings and building improvements 40 Leasehold improvements 5 – 20 Furniture and fixtures 2 – 7 Machinery and equipment 5 – 10 Computer equipment and software 3 – 7 Vehicles 5 |
Revenues (Tables)
Revenues (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenues [Abstract] | |
Schedule of Revenues Disaggregated by Product Category | Years Ended December 31, 2022 2021 Man-made tiles 51 % 48 % Natural stone tiles 25 28 Setting and maintenance materials 15 14 Accessories 7 8 Delivery service 2 2 100 % 100 % |
Schedule of Components of Returns Reserve | December 31, December 31, 2022 2021 (in thousands) Other current accrued liabilities $ 4,993 $ 5,202 Other current assets 1,687 1,658 Sales returns reserve, net $ 3,306 $ 3,544 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property, Plant and Equipment | 2022 2021 (in thousands) Land $ 904 $ 904 Building and building improvements 25,835 24,755 Leasehold improvements 99,949 98,529 Furniture and fixtures 148,298 142,161 Machinery and equipment 31,261 30,461 Computer equipment and software 49,313 47,003 Vehicles 8,064 6,105 Construction in progress 1,648 684 Total property, plant and equipment 365,272 350,602 Less accumulated depreciation ( 294,177 ) ( 268,317 ) Total property, plant and equipment, net $ 71,095 $ 82,285 |
Other Accrued Liabilities (Tabl
Other Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Other Accrued Liabilities [Abstract] | |
Schedule of Other Accrued Liabilities | 2022 2021 (in thousands) Customer deposits $ 11,315 $ 13,792 Sales returns reserve 4,993 5,202 Accrued wages and salaries 6,040 8,833 Payroll and sales taxes 2,286 3,796 Other current liabilities 7,282 6,626 Total other accrued liabilities $ 31,916 $ 38,249 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Long-term Debt [Abstract] | |
Schedule of Long-Term Debt | 2022 2021 (in thousands) Total debt obligations $ 45,400 $ 5,000 Less: current portion - - Debt obligations, net of current portion $ 45,400 $ 5,000 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Schedule of Lease Assets and Liabilities | Leases (in thousands) Classification December 31, 2022 December 31, 2021 Assets Operating lease assets Right of use asset $ 118,501 $ 123,101 Total leased assets $ 118,501 $ 123,101 Liabilities Current Operating Current portion of lease liability $ 27,866 $ 28,190 Noncurrent Operating Long-term lease liability, net 103,353 110,261 Total lease liabilities $ 131,219 $ 138,451 |
Summary of Lease Cost | Year Ended December 31, Lease cost (in thousands) Classification 2022 2021 Operating lease cost SG&A expenses $ 33,286 $ 34,047 Variable lease cost (1) SG&A expenses 14,052 14,325 Short term lease cost SG&A expenses 424 447 Net lease cost $ 47,762 $ 48,819 (1) Variable lease costs consist primarily of taxes, insurance, and common area or other maintenance costs for the Company’s leased facilities. |
Maturity of Lease Liabilities | Maturity of Lease Liabilities (in thousands) Operating Leases 2023 $ 37,848 2024 34,059 2025 28,131 2026 23,188 2027 16,863 Thereafter 21,996 Total lease payments 162,085 Less: interest ( 30,866 ) Present value of lease liabilities $ 131,219 |
Summary of Other Lease Information | Year Ended December 31, Other Information (in thousands) 2022 2021 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ ( 37,587 ) $ ( 37,011 ) Lease right-of-use assets obtained or modified in exchange for lease obligations $ 21,302 $ 15,681 |
Lease Term and Discount Rate | Lease Term and Discount Rate December 31, 2022 December 31, 2021 Weighted average remaining term (years) Operating leases 5.1 5.4 Weighted average discount rate Operating leases 7.67 % 6.64 % |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 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 December 31, 2022 December 31, 2021 Assets (in thousands) Cash and cash equivalents Level 1 $ 5,948 $ 9,358 Restricted cash Level 1 1,811 655 |
Income Per Common Share (Tables
Income Per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Per Common Share [Abstract] | |
Schedule of Basic and Diluted Income Per Share | 2022 2021 2020 (in thousands, except share and per share data) Net income $ 15,703 $ 14,774 $ 6,031 Weighted average shares outstanding - basic 48,855,701 50,393,980 49,957,356 Effect of dilutive securities attributable to stock based awards 391,346 691,483 626,386 Weighted average shares outstanding - diluted 49,247,047 51,085,463 50,583,742 Basic net income per share $ 0.32 $ 0.29 $ 0.12 Diluted net income per share $ 0.32 $ 0.29 $ 0.12 Anti-dilutive securities excluded from earnings per share calculation 640,993 884,610 1,482,552 |
Equity Incentive Plans (Tables)
Equity Incentive Plans (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity Incentive Plans [Abstract] | |
Summary of Stock Option Activity | Shares Weighted Average Exercise Price Weighted Avg. Grant Date Fair Value Weighted Avg. Remaining Contractual Term (Years) Aggregate Intrinsic Value (in thousands) Balance, January 1, 2020 1,253,994 $ 11.34 $ 5.31 4.7 $ - Granted - $ - $ - Exercised - $ - $ - Cancelled/Forfeited ( 243,547 ) $ 12.91 $ 5.91 Balance, December 31, 2020 1,010,447 $ 10.96 $ 5.16 4.6 $ - Granted - $ - $ - Exercised - $ - $ - Cancelled/Forfeited ( 104,502 ) $ 11.03 $ 4.90 Balance, December 31, 2021 905,945 $ 10.96 $ 5.19 3.7 $ 238 Granted - $ - $ - Exercised - $ - $ - Cancelled/Forfeited ( 347,878 ) $ 10.53 $ 5.45 Balance, December 31, 2022 558,067 $ 11.22 $ 4.82 4.2 $ - Exercisable at December 31, 2022 515,050 $ 11.63 $ 5.01 4.1 $ - Vested and expected to vest, December 31, 2022 558,067 $ 11.22 $ 4.82 4.2 $ - |
Summary of Stock Options Outstanding | Range of Exercise Price Weighted Average Options Exercise Price Remaining Contractual Life-Years $ 5.00 to $ 10.00 363,567 $ 7.03 5.61 $ 10.01 to $ 15.00 25,000 $ 12.79 3.11 $ 15.01 to $ 20.00 110,500 $ 17.83 1.77 $ 20.01 to $ 25.00 51,000 $ 23.17 0.76 $ 25.01 to $ 30.00 8,000 $ 29.44 0.56 |
Summary of Restricted Stock Activity | Shares Weighted Avg. Grant Date Fair Value Nonvested, January 1, 2020 997,658 $ 5.23 Granted 1,090,759 $ 1.12 Vested ( 329,326 ) $ 5.34 Forfeited ( 116,594 ) $ 5.22 Nonvested, December 31, 2020 1,642,497 $ 2.48 Granted 421,547 $ 7.05 Vested ( 742,392 ) $ 2.61 Forfeited ( 24,018 ) $ 6.99 Nonvested, December 31, 2021 1,297,634 $ 3.81 Granted 610,478 $ 5.57 Vested ( 466,298 ) $ 3.99 Forfeited ( 264,912 ) $ 4.63 Nonvested, December 31, 2022 1,176,902 $ 4.46 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Taxes [Abstract] | |
Schedule of Components of Provision for Income Taxes | Years Ended December 31, 2022 2021 2020 (in thousands) Current Federal $ ( 3,870 ) $ ( 5,397 ) $ 3,632 State ( 1,040 ) ( 1,390 ) ( 190 ) International - ( 4 ) ( 31 ) Total Current ( 4,910 ) ( 6,791 ) 3,411 Deferred Federal ( 91 ) 1,698 ( 1,522 ) State ( 281 ) ( 131 ) ( 377 ) International ( 45 ) 44 17 Total Deferred ( 417 ) 1,611 ( 1,882 ) Total (Provision) Benefit for Income Taxes $ ( 5,327 ) $ ( 5,180 ) $ 1,529 |
Schedule of Effective Income Tax Rate Reconciliation | 2022 2021 2020 Federal statutory rate 21.0 % 21.0 % 21.0 % State income taxes, net of the federal tax benefit 5.5 6.1 7.6 Stock based compensation ( 0.5 ) ( 1.3 ) 12.6 Remeasurement of deferred tax assets - - ( 0.1 ) Tax credits ( 0.5 ) ( 0.2 ) ( 0.9 ) Impact of CARES Act - - ( 76.1 ) Other ( 0.2 ) 0.4 1.9 Effective tax rate 25.3 % 26.0 % ( 34.0 ) % |
Schedule of Components of Net Deferred Income Taxes | 2022 2021 (in thousands) Deferred income tax assets: Section 743 carryforward $ 7,764 $ 9,509 Inventory 2,031 1,624 Operating lease liabilities 33,901 36,004 Other 4,034 4,624 Total deferred income tax assets $ 47,730 $ 51,761 Deferred income tax liabilities Depreciation 6,692 9,168 Operating lease right-of-use assets 32,693 34,104 Other 1,809 1,536 Total deferred income tax liabilities 41,194 44,808 Net deferred income tax assets $ 6,536 $ 6,953 |
Quarterly Financial Data (Table
Quarterly Financial Data (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Quarterly Financial Data [Abstract] | |
Schedule of Quarterly Results of Operations | First Quarter Second Quarter Third Quarter Fourth Quarter 2022 Net sales $ 102,471 107,604 97,154 87,473 Gross profit 66,845 71,018 64,612 56,462 Income from operations 4,736 9,778 5,503 2,592 Net income 3,513 6,914 3,823 1,453 Basic earnings per share 0.07 0.14 0.08 0.03 Diluted earnings per share 0.07 0.13 0.08 0.03 2021 Net sales $ 92,084 96,193 92,240 90,183 Gross profit 64,186 66,425 62,949 59,570 Income (loss) from operations 6,908 7,614 3,158 2,930 Net income (loss) 5,297 5,494 2,175 1,808 Basic earnings (loss) per share 0.11 0.11 0.04 0.04 Diluted earnings (loss) per share 0.10 0.11 0.04 0.04 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Narrative) (Details) | 12 Months Ended | 24 Months Ended | ||
Dec. 31, 2022 USD ($) ft² state store segment | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2021 USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | ||||
Number of stores | store | 142 | |||
Number of states in which entity operates | state | 31 | |||
Cash and cash equivalents | $ 5,948,000 | $ 9,358,000 | $ 9,617,000 | $ 9,358,000 |
Due from banks | 1,600,000 | 1,700,000 | 1,700,000 | |
Allowance for doubtful accounts | 300,000 | 200,000 | 200,000 | |
Inventory, provision for shrinkage and other | 700,000 | 500,000 | 500,000 | |
Liability for uncertain tax positions | 0 | 0 | 0 | |
Income tax interest and penalties related to uncertain tax positions | $ 0 | 0 | 0 | |
Sales return period | 3 months | |||
Advertising costs | $ 8,100,000 | 6,100,000 | 4,600,000 | |
Pre-opening costs | 100,000 | |||
Asset impairment charges | 423,000 | 720,000 | 2,155,000 | |
Capitalized software | 3,800,000 | 5,000,000 | 5,000,000 | |
Capitalized software, depreciation expense | 2,000,000 | 1,500,000 | $ 1,500,000 | |
Asset retirement obligations | 2,700,000 | 2,900,000 | 2,900,000 | |
Self-insurance liability, current | 1,100,000 | 800,000 | 800,000 | |
Workers' compensation liability, current | 2,000,000 | 2,200,000 | 2,200,000 | |
Accumulated deficit | (19,180,000) | (4,713,000) | (4,713,000) | |
Property, plant and equipment, net | 71,095,000 | 82,285,000 | 82,285,000 | |
Deferred tax assets | $ 6,536,000 | $ 6,953,000 | $ 6,953,000 | |
Number of reportable segment | segment | 1 | |||
Average [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Area of stores | ft² | 20,000 | |||
Minimum [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Capitalized software, estimated useful life | 3 years | |||
Maximum [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Capitalized software, estimated useful life | 7 years | |||
Credit Agreement [Member] | Letter of Credit [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Credit facility, amount outstanding | $ 2,400,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Schedule of Inventories) (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Inventories [Abstract] | ||
Finished goods | $ 119,517 | $ 95,869 |
Raw materials | 1,435 | 1,306 |
Total | $ 120,952 | $ 97,175 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Summary of Estimated Useful Lives of Property, Plant and Equipment) (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Buildings and Building Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Asset life (in years) | 40 years |
Vehicles [Member] | |
Property, Plant and Equipment [Line Items] | |
Asset life (in years) | 5 years |
Minimum [Member] | Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Asset life (in years) | 5 years |
Minimum [Member] | Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Asset life (in years) | 2 years |
Minimum [Member] | Machinery and Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Asset life (in years) | 5 years |
Minimum [Member] | Computer Equipment and Software [Member] | |
Property, Plant and Equipment [Line Items] | |
Asset life (in years) | 3 years |
Maximum [Member] | Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Asset life (in years) | 20 years |
Maximum [Member] | Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Asset life (in years) | 7 years |
Maximum [Member] | Machinery and Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Asset life (in years) | 10 years |
Maximum [Member] | Computer Equipment and Software [Member] | |
Property, Plant and Equipment [Line Items] | |
Asset life (in years) | 7 years |
Revenues (Narrative) (Details)
Revenues (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenues [Abstract] | ||
Customer deposit balance | $ 11,315 | $ 13,792 |
Customer deposit balance, revenues recognized | 13,700 | |
Accounts receivable | $ 3,411 | $ 3,202 |
Revenues (Schedule of Revenues
Revenues (Schedule of Revenues Disaggregated by Product Category) (Details) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | 100% | 100% |
Man-Made Tiles [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 51% | 48% |
Natural Stone Tiles [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 25% | 28% |
Setting And Maintenance Materials [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 15% | 14% |
Accessories [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 7% | 8% |
Delivery Service [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 2% | 2% |
Revenues (Schedule of Component
Revenues (Schedule of Components of Returns Reserve) (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Revenues [Abstract] | ||
Other accrued liabilities | $ 4,993 | $ 5,202 |
Other current assets | 1,687 | 1,658 |
Sales returns reserve, net | $ 3,306 | $ 3,544 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation | $ 25,142 | $ 27,379 | $ 31,336 |
Asset impairment charges | $ 423 | $ 720 | $ 2,155 |
Property, Plant and Equipment_3
Property, Plant and Equipment (Summary of Property, Plant and Equipment) (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | $ 365,272 | $ 350,602 |
Less accumulated depreciation | (294,177) | (268,317) |
Total property, plant and equipment, net | 71,095 | 82,285 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | 904 | 904 |
Buildings and Building Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | 25,835 | 24,755 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | 99,949 | 98,529 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | 148,298 | 142,161 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | 31,261 | 30,461 |
Computer Equipment and Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | 49,313 | 47,003 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | 8,064 | 6,105 |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | $ 1,648 | $ 684 |
Other Accrued Liabilities (Sche
Other Accrued Liabilities (Schedule of Other Accrued Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Other Accrued Liabilities [Abstract] | ||
Customer deposits | $ 11,315 | $ 13,792 |
Sales returns reserve | 4,993 | 5,202 |
Accrued wages and salaries | 6,040 | 8,833 |
Payroll and sales taxes | 2,286 | 3,796 |
Other current liabilities | 7,282 | 6,626 |
Total other accrued liabilities | $ 31,916 | $ 38,249 |
Long-term Debt (Narrative) (Det
Long-term Debt (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Debt Instrument [Line Items] | ||||
Interest expense | $ 1,579 | $ 656 | $ 1,874 | |
Debt issuance costs | 360 | |||
Standby Letters of Credit [Member] | ||||
Debt Instrument [Line Items] | ||||
Standby letters of credit | 2,400 | |||
Credit facility, available borrowing capacity | 1,100 | |||
Cash collateral for standby letters of credit | $ 1,200 | |||
Credit Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Fixed charge coverage ratio | 120% | |||
Rent adjusted leverage ratio | 350% | |||
Credit Agreement [Member] | Revolving Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Credit facility, initiation date | Sep. 30, 2022 | |||
Borrowings outstanding | $ 75,000 | |||
Credit facility, amount outstanding | $ 45,400 | |||
Interest expense | 100 | |||
Credit facility, available borrowing capacity | 28,300 | |||
Cash collateral for standby letters of credit | $ 1,300 | |||
Debt issuance costs | $ 400 | |||
Credit Agreement [Member] | SOFR Rate [Member] | Revolving Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Credit facility effective interest rate | 5.80% | |||
Credit Agreement [Member] | SOFR Rate [Member] | Minimum [Member] | Revolving Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Credit facility, spread on variable interest rate | 1.25% | |||
Credit Agreement [Member] | SOFR Rate [Member] | Maximum [Member] | Revolving Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Credit facility, spread on variable interest rate | 1.75% | |||
Credit Agreement [Member] | Alternate Base Rate [Member] | Minimum [Member] | Revolving Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Credit facility, spread on variable interest rate | 0.25% | |||
Credit Agreement [Member] | Alternate Base Rate [Member] | Maximum [Member] | Revolving Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Credit facility, spread on variable interest rate | 0.75% | |||
Credit Agreement [Member] | Letter of Credit [Member] | ||||
Debt Instrument [Line Items] | ||||
Credit facility, amount outstanding | $ 2,400 |
Long-term Debt (Schedule of Lon
Long-term Debt (Schedule of Long-Term Debt) (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Long-term Debt [Abstract] | ||
Total debt obligations | $ 45,400 | $ 5,000 |
Debt obligations, net of current portion | $ 45,400 | $ 5,000 |
Leases (Narrative) (Details)
Leases (Narrative) (Details) $ in Millions | 3 Months Ended | 12 Months Ended |
Dec. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Lessee, Lease, Description [Line Items] | ||
Lease incentive payment | $ 1.4 | |
Lease modification benefit | $ 1.4 | |
Minimum [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease term | 10 years | 10 years |
Maximum [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease term | 15 years | 15 years |
Leases (Schedule of Lease Asset
Leases (Schedule of Lease Assets and Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
Operating lease assets | $ 118,501 | $ 123,101 |
Total leased assets | 118,501 | 123,101 |
Current operating lease liabilities | 27,866 | 28,190 |
Noncurrent operating lease liabilities | 103,353 | 110,261 |
Total lease liabilities | $ 131,219 | $ 138,451 |
Leases (Summary of Lease Cost)
Leases (Summary of Lease Cost) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | ||
Operating lease cost | $ 33,286 | $ 34,047 |
Variable lease cost | 14,052 | 14,325 |
Short term lease cost | 424 | 447 |
Net lease cost | $ 47,762 | $ 48,819 |
Leases (Maturity of Lease Liabi
Leases (Maturity of Lease Liabilities) (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Leases [Abstract] | |
2023 | $ 37,848 |
2024 | 34,059 |
2025 | 28,131 |
2026 | 23,188 |
2027 | 16,863 |
Thereafter | 21,996 |
Total lease payments | 162,085 |
Less: interest | (30,866) |
Present value of lease liabilities | $ 131,219 |
Leases (Summary of Other Lease
Leases (Summary of Other Lease Information) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | ||
Operating cash flows from operating leases | $ (37,587) | $ (37,011) |
Lease right-of-use assets obtained or modified in exchange for lease obligations | $ 21,302 | $ 15,681 |
Leases (Lease Term and Discount
Leases (Lease Term and Discount Rate) (Details) | Dec. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
Weighted-average remaining term (years), Operating leases | 5 years 1 month 6 days | 5 years 4 months 24 days |
Weighted-average discount rate, Operating leases | 7.67% | 6.64% |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Asset impairment charges | $ 423 | $ 720 | $ 2,155 |
Fair value adjustment | 1,100 | ||
Other Current Liabilities [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair value adjustment | 100 | ||
Other Noncurrent Liabilities [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair value adjustment | 1,000 | ||
Property, Plant and Equipment [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair value adjustment | $ 1,100 |
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 | Dec. 31, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | $ 5,948 | $ 9,358 |
Restricted cash | $ 1,811 | $ 655 |
Related Party Transactions (Nar
Related Party Transactions (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Nanyang Helin Stone Company [Member] | |||
Related Party Transaction [Line Items] | |||
Payments to related party | $ 9,200 | $ 9,300 | $ 7,600 |
Related party payables due | 400 | ||
Tile Style [Member] | |||
Related Party Transaction [Line Items] | |||
Payments to related party | 3,100 | 3,500 | $ 700 |
Related party payables due | $ 200 | $ 0 | |
Robert Rucker [Member] | Tile Shop Holdings [Member] | |||
Related Party Transaction [Line Items] | |||
Ownership interest | 5% |
Income Per Common Share (Schedu
Income Per Common Share (Schedule of Basic and Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Per Common Share [Abstract] | |||||||||||
Net income | $ 1,453 | $ 3,823 | $ 6,914 | $ 3,513 | $ 1,808 | $ 2,175 | $ 5,494 | $ 5,297 | $ 15,703 | $ 14,774 | $ 6,031 |
Weighted average shares outstanding - basic | 48,855,701 | 50,393,980 | 49,957,356 | ||||||||
Effect of dilutive securities attributable to stock based awards | 391,346 | 691,483 | 626,386 | ||||||||
Weighted average shares outstanding - diluted | 49,247,047 | 51,085,463 | 50,583,742 | ||||||||
Basic net income per share | $ 0.03 | $ 0.08 | $ 0.14 | $ 0.07 | $ 0.04 | $ 0.04 | $ 0.11 | $ 0.11 | $ 0.32 | $ 0.29 | $ 0.12 |
Diluted net income per share | $ 0.03 | $ 0.08 | $ 0.13 | $ 0.07 | $ 0.04 | $ 0.04 | $ 0.11 | $ 0.10 | $ 0.32 | $ 0.29 | $ 0.12 |
Anti-dilutive securities excluded from earnings per share calculation | 640,993 | 884,610 | 1,482,552 |
Equity Incentive Plans (Narrati
Equity Incentive Plans (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
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 | $ 0.3 | $ 0.4 |
Compensation cost not yet recognized | $ 0.1 | ||
Compensation cost not yet recognized, weighted average period for recognition | 1 month 6 days | ||
Shares granted | 0 | 0 | 0 |
Stock option exercises (in shares) | 0 | ||
Restricted Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 1.7 | $ 2 | $ 1.8 |
Compensation cost not yet recognized | $ 3.2 | ||
Compensation cost not yet recognized, weighted average period for recognition | 1 year 6 months | ||
Total fair value of shares vested | $ 1.9 | 5.4 | |
Fair value of restricted stock granted | $ 3.4 | $ 3 | |
Share price | $ 4.38 | ||
Restricted stock outstanding | 1,032,312 | ||
Intrinsic value of outstanding shares expected to vest | $ 4.5 | ||
Shares, Cancelled | 264,912 | 24,018 | 116,594 |
Performance Shares [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares, Cancelled | 144,590 |
Equity Incentive Plans (Summary
Equity Incentive Plans (Summary of Stock Option Activity) (Details) - Stock Options [Member] - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares, Beginning Balance | 905,945 | 1,010,447 | 1,253,994 | |
Shares, Granted | 0 | 0 | 0 | |
Shares, Exercised | 0 | |||
Shares, Cancelled/Forfeited | (347,878) | (104,502) | (243,547) | |
Shares, Ending Balance | 558,067 | 905,945 | 1,010,447 | 1,253,994 |
Shares, Exercisable | 515,050 | |||
Shares, Vested and expected to vest | 558,067 | |||
Weighted Average Exercise Price, Beginning Balance | $ 10.96 | $ 10.96 | $ 11.34 | |
Weighted Average Exercise Price, Cancelled/Forfeited | 10.53 | 11.03 | 12.91 | |
Weighted Average Exercise Price, Ending Balance | 11.22 | 10.96 | 10.96 | $ 11.34 |
Weighted Average Exercise Price, Exercisable | 11.63 | |||
Weighted Average Exercise Price, Vested and expected to vest | 11.22 | |||
Weighted Avg Grant Date Fair Value, Beginning Balance | 5.19 | 5.16 | 5.31 | |
Weighted Avg Grant Date Fair Value, Cancelled/Forfeited | 5.45 | 4.90 | 5.91 | |
Weighted Avg Grant Date Fair Value, Ending Balance | $ 4.82 | $ 5.19 | $ 5.16 | $ 5.31 |
Weighted Avg Grant Date Fair Value, Exercisable | 5.01 | |||
Weighted Avg Grant Date Fair Value, Vested and expected to vest | $ 4.82 | |||
Weighted Avg Remaining Contractual Term (Years), Options Outstanding | 4 years 2 months 12 days | 3 years 8 months 12 days | 4 years 7 months 6 days | 4 years 8 months 12 days |
Weighted Avg Remaining Contractual Term (Years), Exercisable | 4 years 1 month 6 days | |||
Weighted Avg Remaining Contractual Term (Years), Vested and expected to vest | 4 years 2 months 12 days | |||
Aggregate Intrinsic Value, Outstanding | $ 238 |
Equity Incentive Plans (Summa_2
Equity Incentive Plans (Summary of Stock Options Outstanding) (Details) - Stock Options [Member] - $ / shares | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Options | 558,067 | 905,945 | 1,010,447 | 1,253,994 |
Exercise Price | $ 11.22 | $ 10.96 | $ 10.96 | $ 11.34 |
Remaining Contractual Life-Years | 4 years 2 months 12 days | 3 years 8 months 12 days | 4 years 7 months 6 days | 4 years 8 months 12 days |
$5.00 to $10.00 [Member] | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Range of Exercise Price, Lower Limit | $ 5 | |||
Range of Exercise Price, Upper Limit | $ 10 | |||
Options | 363,567 | |||
Exercise Price | $ 7.03 | |||
Remaining Contractual Life-Years | 5 years 7 months 9 days | |||
$10.01 to $15.00 [Member] | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Range of Exercise Price, Lower Limit | $ 10.01 | |||
Range of Exercise Price, Upper Limit | $ 15 | |||
Options | 25,000 | |||
Exercise Price | $ 12.79 | |||
Remaining Contractual Life-Years | 3 years 1 month 9 days | |||
$15.01 to $20.00 [Member] | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Range of Exercise Price, Lower Limit | $ 15.01 | |||
Range of Exercise Price, Upper Limit | $ 20 | |||
Options | 110,500 | |||
Exercise Price | $ 17.83 | |||
Remaining Contractual Life-Years | 1 year 9 months 7 days | |||
$20.01 to $25.00 [Member] | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Range of Exercise Price, Lower Limit | $ 20.01 | |||
Range of Exercise Price, Upper Limit | $ 25 | |||
Options | 51,000 | |||
Exercise Price | $ 23.17 | |||
Remaining Contractual Life-Years | 9 months 3 days | |||
$25.01 to $30.00 [Member] | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Range of Exercise Price, Lower Limit | $ 25.01 | |||
Range of Exercise Price, Upper Limit | $ 30 | |||
Options | 8,000 | |||
Exercise Price | $ 29.44 | |||
Remaining Contractual Life-Years | 6 months 21 days |
Equity Incentive Plans (Summa_3
Equity Incentive Plans (Summary of Restricted Stock Activity) (Details) - Restricted Stock [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares, Nonvested, Beginning Balance | 1,297,634 | 1,642,497 | 997,658 |
Shares, Granted | 610,478 | 421,547 | 1,090,759 |
Shares, Vested | (466,298) | (742,392) | (329,326) |
Shares, Forfeited | (264,912) | (24,018) | (116,594) |
Shares, Nonvested, Ending Balance | 1,176,902 | 1,297,634 | 1,642,497 |
Weighted Avg Grant Date Fair Value, Nonvested, Beginning Balance | $ 3.81 | $ 2.48 | $ 5.23 |
Weighted Avg Grant Date Fair Value, Granted | 5.57 | 7.05 | 1.12 |
Weighted Avg Grant Date Fair Value, Vested | 3.99 | 2.61 | 5.34 |
Weighted Avg Grant Date Fair Value, Forfeited | 4.63 | 6.99 | 5.22 |
Weighted Avg Grant Date Fair Value, Nonvested, Ending Balance | $ 4.46 | $ 3.81 | $ 2.48 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Jan. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2017 | |
Income Taxes Disclosure [Line Items] | |||||
Effective income tax rate | 25.30% | 26% | (34.00%) | ||
Provision for income taxes | $ 5,327,000 | $ 5,180,000 | $ (1,529,000) | ||
Federal statutory rate | 21% | 21% | 21% | 35% | |
Stock based compensation | (0.50%) | (1.30%) | 12.60% | ||
Undistributed foreign earnings | $ 300,000 | ||||
CARES Act Law, tax benefit recognized | $ 3,400,000 | ||||
Collected carryback claims from IRS | 4,900,000 | ||||
Liability for uncertain tax positions | $ 0 | 0 | |||
Income tax interest and penalties related to uncertain tax positions | 0 | $ 0 | $ 0 | ||
Income tax receivable | $ 4,200,000 | ||||
Subsequent Event [Member] | |||||
Income Taxes Disclosure [Line Items] | |||||
Collected carryback claims from IRS | $ 4,200,000 |
Income Taxes (Schedule of Compo
Income Taxes (Schedule of Components of Provision for Income Taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Taxes [Abstract] | |||
Current, Federal | $ (3,870) | $ (5,397) | $ 3,632 |
Current, State | (1,040) | (1,390) | (190) |
Current, International | (4) | (31) | |
Total Current | (4,910) | (6,791) | 3,411 |
Deferred, Federal | (91) | 1,698 | (1,522) |
Deferred, State | (281) | (131) | (377) |
Deferred, International | (45) | 44 | 17 |
Total Deferred | (417) | 1,611 | (1,882) |
Total (Benefit) Provision for Income Taxes | $ (5,327) | $ (5,180) | $ 1,529 |
Income Taxes (Schedule of Effec
Income Taxes (Schedule of Effective Income Tax Rate Reconciliation) (Details) | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2017 | |
Income Taxes [Abstract] | ||||
Federal statutory rate | 21% | 21% | 21% | 35% |
State income taxes, net of the federal tax benefit | 5.50% | 6.10% | 7.60% | |
Stock based compensation | (0.50%) | (1.30%) | 12.60% | |
Remeasurement of deferred tax assets | (0.10%) | |||
Tax credits | (0.50%) | (0.20%) | (0.90%) | |
Impact of CARES Act | (76.10%) | |||
Other | (0.20%) | 0.40% | 1.90% | |
Effective tax rate | 25.30% | 26% | (34.00%) |
Income Taxes (Schedule of Com_2
Income Taxes (Schedule of Components of Net Deferred Income Taxes) (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Income Taxes [Abstract] | ||
Section 743 carryforward | $ 7,764 | $ 9,509 |
Inventory | 2,031 | 1,624 |
Operating lease liabilities | 33,901 | 36,004 |
Other | 4,034 | 4,624 |
Total deferred income tax assets | 47,730 | 51,761 |
Depreciation | 6,692 | 9,168 |
Operating lease right-of-use assets | 32,693 | 34,104 |
Other | 1,809 | 1,536 |
Total deferred income tax liabilities | 41,194 | 44,808 |
Net deferred income tax assets | $ 6,536 | $ 6,953 |
New Markets Tax Credit (Narrati
New Markets Tax Credit (Narrative) (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2022 | Dec. 31, 2016 | |
New Market Tax Credit Disclosure [Line Items] | |||
Investment fund cash | $ 600 | ||
Twain Investment Fund 192 [Member] | |||
New Market Tax Credit Disclosure [Line Items] | |||
Net proceeds from contribution | $ 1,900 | ||
Contribution liability compliance period | 7 years | ||
Contribution liability | $ 500 | ||
Twain Investment Fund 192 [Member] | Tile Shop Holdings [Member] | |||
New Market Tax Credit Disclosure [Line Items] | |||
Syndicate costs | $ 1,300 | $ 1,300 | |
Twain Investment Fund 192 [Member] | Tile Shop Lending [Member] | |||
New Market Tax Credit Disclosure [Line Items] | |||
Loan interest rate | 1.37% | ||
Loan maturity date | Dec. 31, 2046 | ||
Tile Shop Investment Fund [Member] | Tile Shop Lending [Member] | |||
New Market Tax Credit Disclosure [Line Items] | |||
Loan amount | $ 6,700 | ||
Oklahoma [Member] | U.S. Bank Community [Member] | |||
New Market Tax Credit Disclosure [Line Items] | |||
Financing agreement project cost | 9,200 | 9,200 | |
U.S. Bank Community [Member] | Twain Investment Fund 192 [Member] | |||
New Market Tax Credit Disclosure [Line Items] | |||
Contribution to affiliate | $ 3,200 | $ 3,200 | |
U.S. Bank Community [Member] | Oklahoma [Member] | Maximum [Member] | |||
New Market Tax Credit Disclosure [Line Items] | |||
Percent of qualified investments that can be claimed | 39% |
Retirement Savings Plan (Narrat
Retirement Savings Plan (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Retirement Savings Plan [Abstract] | |||
Matching contribution amount | $ 1,600,000 | $ 1,800,000 | $ 1,500,000 |
Discretionary contribution amount | $ 0 | $ 0 | $ 0 |
Quarterly Financial Data (Sched
Quarterly Financial Data (Schedule of Quarterly Results of Operations) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Quarterly Financial Data [Abstract] | |||||||||||
Net sales | $ 87,473 | $ 97,154 | $ 107,604 | $ 102,471 | $ 90,183 | $ 92,240 | $ 96,193 | $ 92,084 | $ 394,702 | $ 370,700 | $ 325,057 |
Gross profit | 56,462 | 64,612 | 71,018 | 66,845 | 59,570 | 62,949 | 66,425 | 64,186 | 258,937 | 253,130 | 221,525 |
Income (loss) from operations | 2,592 | 5,503 | 9,778 | 4,736 | 2,930 | 3,158 | 7,614 | 6,908 | 22,609 | 20,610 | 6,376 |
Net income (loss) | $ 1,453 | $ 3,823 | $ 6,914 | $ 3,513 | $ 1,808 | $ 2,175 | $ 5,494 | $ 5,297 | $ 15,703 | $ 14,774 | $ 6,031 |
Basic earnings (loss) per share | $ 0.03 | $ 0.08 | $ 0.14 | $ 0.07 | $ 0.04 | $ 0.04 | $ 0.11 | $ 0.11 | $ 0.32 | $ 0.29 | $ 0.12 |
Diluted earnings (loss) per share | $ 0.03 | $ 0.08 | $ 0.13 | $ 0.07 | $ 0.04 | $ 0.04 | $ 0.11 | $ 0.10 | $ 0.32 | $ 0.29 | $ 0.12 |