10-K: Tile Shop Holdings Delists, Goes Private Amid Losses

Tile Shop Holdings, Inc. has completed its delisting from Nasdaq and deregistration with the SEC, transitioning to a private company after a reverse-forward stock split.

Summary

• Tile Shop Holdings, Inc. delisted its common stock from Nasdaq on December 27, 2025, and is now quoted on The OTC Markets Pink Limited under the symbol TTSH.
• The company filed a Form 15 on January 2, 2026, to terminate SEC registration and suspend its duty to file reports, effectively becoming a private company.
• A reverse stock split of 1-for-3,000, immediately followed by a 3,000-for-1 forward stock split, was effected on December 15, 2025, to reduce the number of record holders below 300.
• Approximately $32.2 million was paid to stockholders owning fewer than 3,000 shares prior to the reverse split, effectively cashing them out.
• Net sales decreased by 3.0% to $336.8 million for the year ended December 31, 2025, compared to $347.1 million in 2024.
• The company reported a loss from operations of $5.8 million in 2025, a significant decline from income from operations of $3.5 million in 2024.
• A net loss of $4.5 million was recorded in 2025, contrasting with a net income of $2.3 million in 2024.
• The gross margin rate decreased by 190 basis points, from 65.7% in 2024 to 63.8% in 2025, primarily due to increased product costs, tariffs, and higher discounting.
• Comparable store sales declined by 2.8% in 2025, driven by lower traffic.
• Cash and cash equivalents decreased by $10.9 million, from $21.0 million at December 31, 2024, to $10.1 million at December 31, 2025.
• The company had $25.0 million in borrowings outstanding on its revolving line of credit as of December 31, 2025, compared to no borrowings in 2024.
• Executive officers did not achieve performance conditions for cash incentive payments or performance-based restricted stock awards for 2025, resulting in forfeiture of these awards.
• The company closed its distribution center in Spring Valley, Wisconsin, and two store locations in 2025, and reduced corporate staffing levels.
• The Wisconsin distribution center was sold in February 2026 for $1.2 million, expected to result in a $0.8 million gain in the first quarter of 2026.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a negative development due to declining financial performance, including a net loss and reduced sales, coupled with the strategic decision to delist and go private, which limits future public market access and transparency for investors.

Positives

• Successfully completed the Transaction (delisting and deregistration) to reduce public company costs and regulatory burdens.
• Received a waiver from lenders for non-compliance with credit facility covenants as of December 31, 2025, maintaining access to its revolving line of credit.
• The sale of the Wisconsin distribution center in February 2026 for $1.2 million is expected to generate a $0.8 million gain in the first quarter of 2026.
• Maintains a broad product assortment, strong customer service, and global sourcing capabilities as competitive strengths.

Negatives

• Net sales decreased by 3.0% to $336.8 million in 2025 compared to $347.1 million in 2024.
• The company shifted from an operating income of $3.5 million in 2024 to an operating loss of $5.8 million in 2025.
• A net loss of $4.5 million was reported in 2025, a significant deterioration from the net income of $2.3 million in 2024.
• Gross margin rate declined by 190 basis points, from 65.7% in 2024 to 63.8% in 2025, due to increased product costs, tariffs, and higher discounting.
• Comparable store sales decreased by 2.8% in 2025 due to lower customer traffic.
• Cash and cash equivalents decreased by $10.9 million to $10.1 million at December 31, 2025.
• Incurred $1.1 million in costs related to the delisting process.
• Executive officers did not achieve performance conditions for cash incentive payments or performance-based restricted stock awards for 2025, leading to forfeiture of these awards.
• The company was not in compliance with its credit facility covenants as of December 31, 2025, requiring a waiver from its lenders.
• Closed two store locations and reduced staffing levels at its corporate office in 2025.

Risks

• Ability to grow and remain profitable may be limited by direct or indirect competition in the highly-competitive retail tile industry.
• Failure to successfully anticipate consumer trends may lead to loss of consumer acceptance of products and reduced revenues.
• Inability to effectively manage online sales could harm reputation and operating results.
• Effectiveness of marketing strategy is crucial; failure or increased costs could lead to declines in net sales and operating results.
• Negative commentary on social media platforms could adversely affect reputation or business.
• Numerous economic factors, including inflation, trade policy, exposure to the U.S. housing industry, and an economic recession or downturn, could adversely affect the company.
• Comparable store sales fluctuate due to a variety of economic, operating, industry, and environmental factors and may not be a fair indicator of overall performance.
• If customers are unable to obtain third-party financing at satisfactory rates, sales of products could be materially adversely affected.
• The burden of incurring debt under the existing credit facility could adversely affect the company and make it more vulnerable to adverse economic or industry conditions.
• Inability to renew or replace current store leases, or enter into leases for additional stores on favorable terms, could negatively impact growth and profitability.
• Natural disasters, changes in climate, geopolitical, and other catastrophic events could adversely affect operating results by disrupting supply chains, increasing costs, or damaging properties.
• As a holding company, the company has no business operations of its own and depends on cash flow from The Tile Shop to meet its obligations.
• Failure or inability to protect intellectual property rights could diminish the value of the brand and weaken competitive position.
• Sustainability policies and practices could result in additional costs, and could adversely impact reputation, consumer perception, employee retention, and willingness of third parties to do business.
• Failure to identify and maintain relationships with a sufficient number of suppliers could adversely affect the ability to obtain high-quality products at attractive prices.
• Reliance on foreign suppliers increases risks related to long lead times, work stoppages, shipping delays, product quality issues, political instability, tariffs, and currency fluctuations.
• Ability to offer compelling products, particularly unique stone, depends on the continued availability of sufficient suitable natural products.
• Success is highly dependent on the ability to provide timely delivery to customers; any disruption in delivery capabilities or related planning and control processes may adversely affect operating results.
• Dependence on a few key employees; loss of their services may prevent effective business operation.
• Failure to hire, train, and retain qualified store managers, sales associates, and other employees could compromise enhanced customer service and lead to lost sales.
• Ability to control labor costs is limited, which may negatively affect the business.
• Insurance coverage and self-insurance reserves may not cover future claims.
• Compliance with laws or changes in existing or new laws and regulations or regulatory enforcement priorities could adversely affect the business.
• If suppliers do not use ethical business practices or comply with applicable laws and regulations, reputation could be harmed due to negative publicity and legal risk.
• Involvement in legal proceedings from time to time could adversely affect business, financial condition, and results of operations.
• Business operations could be disrupted if unable to protect the integrity and security of customer and other personal and/or confidential information due to cybersecurity threats.
• If management information systems experience disruptions, it could disrupt business and reduce net sales.
• The selection and implementation of information technology initiatives may impact operational efficiency and productivity.
• Common stock is no longer listed on Nasdaq and registration terminated, which may have an adverse effect on the liquidity of common stock and the availability of information about the company.
• No ability to access the public capital markets or to use public securities in attracting and retaining executives and other employees, and decreased ability to use stock to acquire other companies.
• No quarterly dividends or stock repurchase program; appreciation in stock price may be the only method to realize a return on investment.
• Concentration of ownership (directors and executive officers beneficially hold approximately 73%) may have the effect of delaying or preventing a change in control.
• Anti-takeover provisions contained in the certificate of incorporation and bylaws and provisions of Delaware law could impair a takeover attempt.
• The certificate of incorporation provides that the Court of Chancery of the State of Delaware will be the exclusive forum for certain types of lawsuits, which could increase costs to bring a claim, discourage claims, or limit stockholders' ability to bring a claim in a judicial forum viewed as more favorable.

Future Outlook

The company expects to use cash for maintaining existing stores, purchasing additional merchandise inventory, and general corporate purposes in 2026. It believes its cash, operating cash flows, and credit facility access will be adequate to meet ongoing operating requirements over the next twelve months and long-term liquidity requirements. The company continues to monitor macroeconomic factors such as inflationary pressure, changes in monetary policy, decreasing consumer confidence and spending, tariffs, and employment rates, expecting these factors to moderate in the future, though the timing and precise outlook for these improvements remain uncertain. The company cannot predict the ultimate impact such factors will have on its business, financial condition, results of operation, and cash flows, which will depend largely on future developments.

Management Comments

• "We are committed to carrying an outstanding assortment, offering unsurpassed customer service, and showcasing excellence within our industry. These principles have always been core to our strategy and will continue to be as we move into 2026."
• "We pride ourselves on offering the best service in our industry, and our employees are the key to our success. We are committed to continuing to invest in training and development programs to enhance the skill sets of all employees."
• "We believe profitable growth is tied to our ability to leverage best practices and technology to improve productivity in each of our store locations."
• "We strive to increase efficiencies within our distribution channels and transparency of product availability throughout our distribution center and store locations."
• "We curate an industry leading assortment, which is a foundational aspect of our strategy. Our assortment includes good, better, and best options for our customers within each of the product categories we carry in our stores and online."
• "While our risk expectation is that these different factors will moderate in the future, the timing and precise outlook for these improvements is uncertain, and we cannot predict the ultimate impact such factors will have on the Company's business, financial condition, results of operation and cash flows, which will depend largely on future developments."

Industry Context

StockSavvy.ai notes that the company's delisting and transition to a private entity is a significant strategic move, potentially allowing it to navigate challenging macroeconomic conditions and industry-specific pressures (such as the highly fragmented retail tile market, fluctuating housing demand, and tariff impacts) with less public scrutiny and reporting burden. The decline in comparable store sales and gross margin rate reflects broader industry headwinds, particularly in the home improvement sector, which is sensitive to interest rates and consumer confidence. The company's continued focus on proprietary brands, global sourcing, and customer service aligns with strategies seen in specialty retail to differentiate from larger national chains and online competitors.

Comparison to Industry Standards

• The filing does not provide specific comparable company data or industry benchmarks to assess performance against global standards.
• The company operates in a highly fragmented retail tile market, competing directly with regional and local specialty retailers, factory-direct stores, privately-owned single-site stores, and online-only competitors.
• Indirect competition comes from large national home improvement centers and companies selling other types of floor coverings (wood, carpet, vinyl).
• Key competitive factors in the retail tile industry include product assortment, product presentation, customer service, store location, availability of inventory, and price. The company believes it competes favorably on these factors by offering a diverse selection at attractive value, in appealing locations, with exceptional customer service and on-site instructional opportunities.
• The company differentiates itself by purchasing tile and accessories directly from producers and manufacturing its own setting and maintenance materials, which it believes helps maintain competitive prices.

Management Changes

Corporate Governance

Legal Proceedings

• The company is involved in legal proceedings from time to time, including stockholder, consumer, employment, and tort litigation, arising in the normal course of business.
• Management assesses liabilities and contingencies, recording a liability when a loss is probable and estimable, but does not expect ultimate liability to have a material adverse effect on results of operations, financial position, or cash flows.
• Legal proceedings are inherently uncertain, and the outcome of a particular matter or combination of matters may be material to results of operations for a particular period.
• During 2020, the company and certain current and former directors entered into a Stipulation of Settlement for litigation brought by K-Bar Holdings LLC and Wynnefield Capital, Inc. in the Delaware Court of Chancery.

Related Party Transactions

• The Board has a written related person transaction policy, administered by the Audit Committee, for transactions exceeding $120,000 involving a related person.
• The Audit Committee considers relevant facts and circumstances, including comparability to arms-length dealings, extent of interest, conflicts of interest, and impact on director independence.
• From time to time, the company employs related persons and other family members of officers and directors; employment arrangements involving amounts exceeding $120,000 are reviewed by the Audit Committee.
• The company may sell products to related persons, and related persons may purchase products or services from suppliers for individual use, subject to Audit Committee review if falling within policy terms.
• No specific related party transactions exceeding the threshold, other than compensation arrangements with named executive officers and directors, were disclosed for the 2024 fiscal year onwards.

Stakeholder Impact

• Shareholders: Cashed-out stockholders received $6.60 per share. Continuing stockholders face reduced liquidity, limited public information, and potential stock price volatility due to delisting and deregistration. The concentration of ownership (73% by directors/executives) may limit the influence of other shareholders.
• Employees: Reductions in staffing levels at corporate offices and store closures occurred in 2025. Executive officers faced forfeiture of performance-based equity awards due to unmet targets. The company states a commitment to investing in employee training and development.
• Customers: The company continues to focus on offering a broad product assortment, competitive pricing, and exceptional customer service. Delivery service is provided through third-party freight providers.
• Suppliers: The company maintains long-standing relationships with a global network of approximately 200 suppliers. Increased product costs and tariffs impacted gross margin, and reliance on foreign suppliers introduces various risks.
• Creditors: The company was not in compliance with credit facility covenants as of December 31, 2025, but received a waiver, maintaining its credit facility. It had $25.0 million in borrowings outstanding on its revolving line of credit.

Next Steps

• Cease filing annual, quarterly, current, and other reports with the SEC following this Annual Report on Form 10-K.
• Continue to hold stockholder meetings as required under Delaware law, including annual meetings.
• Voluntarily make financial information available to stockholders, though there is no assurance this will continue.
• Monitor developments around the U.S. Supreme Court decision on tariffs and evaluate its potential impact on future financial results and business.
• Continue to evaluate actions to minimize the impact of tariffs on financial position and results of operations.
• Invest in training and development programs to enhance employee skill sets in 2026.
• Leverage best practices and technology to improve productivity in each store location in 2026.
• Increase efficiencies within distribution channels and transparency of product availability in 2026.
• Maintain an industry-leading assortment that differentiates the brand in 2026.
• Joseph Kinder will transition to a non-executive Purchasing Advisor role effective January 1, 2027, through December 31, 2028.
• Recognize a $0.8 million gain from the sale of the Wisconsin distribution center in the first quarter of 2026.

Key Dates

Recommendation

The company's delisting from Nasdaq and deregistration with the SEC fundamentally alters its investment profile, significantly reducing transparency and liquidity for public investors. This transition, coupled with declining financial performance (net sales decrease, shift to operating loss, reduced gross margin), makes the stock unsuitable for most public portfolios. While the move aims to reduce public company costs, the lack of public reporting and market access, combined with existing financial headwinds, warrants a 'sell' recommendation for investors seeking publicly traded, liquid assets with transparent financial reporting.

Keywords

Tile Shop Holdings, TTSH, SEC Filing, 10-K, Retail Tile, Natural Stone, Man-made Tile, Luxury Vinyl Tile, Home Improvement, Delisting, Deregistration, Reverse Stock Split, Financial Performance, Operating Loss, Gross Margin, Comparable Store Sales, Supply Chain, Tariffs, Corporate Governance, Liquidity, Debt, Share Repurchase, Executive Compensation, Risk Factors, Cybersecurity