The Tile Shop Reports Third Quarter 2015 Results
9.7% Comparable Store Sales Growth79.8% Operating Income Growth
19.3% Adjusted EBITDA Margin, 40.0% Adjusted EBITDA GrowthDiluted Earnings per Share of $0.07, growth of 133.3%Non-GAAP Diluted Earnings per Share of $0.08, growth of 166.7%MINNEAPOLIS, Oct. 20, 2015 (GLOBE NEWSWIRE) — Tile Shop Holdings, Inc. (NASDAQ:TTS) (the “Company”), a specialty retailer of manufactured and natural stone tiles, setting and maintenance materials, and related accessories, today announced results for its third quarter ended September 30, 2015. Net sales grew 15.3% to $72.4 million for the quarter ended September 30, 2015 compared with $62.8 million for the third quarter of 2014. The $9.6 million increase in sales was due to a comparable store sales increase of 9.7%, or $6.1 million in the quarter and incremental net sales of $3.5 million from stores not included in the comparable store base.“We are pleased to report a very strong third quarter,” said Chris Homeister, CEO. “The progress made on our key initiatives continues to yield positive returns, and our third quarter represented an important milestone in delivering improved operating leverage and significant earnings growth versus last year. Meaningful sequential improvements in both comparable store sales growth and gross margin were key to our results.” Gross margin was 70.0% for the quarter compared with 69.2% for the third quarter of 2014. The gross margin rate improvement in the third quarter was primarily driven by reduced discounting and improved margin on customer delivery revenue. Gross margin for the nine months ended September 30, 2015 was 69.2%.Selling, general and administrative costs for the third quarter were $44.0 million compared with $39.8 million for the third quarter of 2014. The $4.2 million increase was primarily driven by the costs associated with opening and operating new stores and variable expenses associated with revenue growth.The Company opened one new store in the third quarter of 2015 in Haltom City, Texas, in the existing Dallas, Texas market. As of the end of the quarter, the Company operates 111 stores in 31 states.For the nine months ended September 30, 2015, net sales grew 14.0% from $193.9 million in 2014 to $221.1 million in 2015. Comparable store sales for the nine month period increased 6.6%.Non-GAAP InformationThe Company presents non-GAAP net income and Adjusted EBITDA to provide useful information to investors regarding the Company’s normalized operating performance. On a non-GAAP basis, net income for the quarter was $3.9 million, compared to $1.6 million in the comparable prior year period. Non-GAAP diluted earnings per share for the quarter ended September 30, 2015 were $0.08. Non-GAAP diluted earnings per share for the quarter ended September 30, 2014 were $0.03. See the “Non-GAAP Net Income” table and the “Non-GAAP Financial Measures” section below for a reconciliation of non-GAAP to GAAP net income.
For the third quarter of 2015, Adjusted EBITDA was $13.9 million compared with $10.0 million for the third quarter of 2014, representing 40.0% growth. See the “Adjusted EBITDA” table and the “Non-GAAP Financial Measures” section below for a reconciliation of net income to Adjusted EBITDA.
Financial Guidance The Company is providing updated expectations for full year 2015 based on past performance, anticipated new store openings and current economic conditions.For the full year ending December 31, 2015 the Company expects: