Tile Shop's fourth quarter hurt by bad weather
- Article by: Neal St. Anthony
- Star Tribune
- February 20, 2014 - 8:39 PM
Tile Shop Holdings Inc. said Thursday its fourth-quarter adjusted earnings fell 22 percent and its sales growth was hurt by bad weather.
Executives for the fast-growing seller of tiles and other construction materials said they expect that investments made by the 90-store chain last year will pay off this year with a “return to the historical levels of profitability.”
Tile Shop said its adjusted earnings before taxes and other items amounted to $9.4 million in the three months ended Dec. 31, down from $12 million in the same period a year ago. Including all charges and gains, Tile Shop’s net income amounted to $1.4 million, a turnaround from a net loss of $35.8 million a year earlier that was driven by a nonoperating charge.
Revenue was $57.8 million, up 25 percent from $46.2 million a year ago. Sales at stores open at least a year were up 10 percent.
The Plymouth-based company since November has been battling accusations by short sellers of questionable accounting and inadequate disclosure of risks. In the days after those allegations surfaced, Tile Shop shares lost nearly 50 percent in value.
Following an independent investigation, Tile Shop earlier this month announced that the brother-in-law of CEO Robert Rucker had been fired for “multiple violations’’ of the company’s business ethics policy. The brother-in-law, Fumitake Nishi, the owner of a Chinese export-promotion firm, had been found to have taken $1.1 million in illicit “consulting fees” from Chinese manufacturers who sell to Tile Shop.
In a statement on Thursday, Rucker also noted that Tile Shop in 2013 opened 20 stores and a distribution and manufacturing facility.
“While we made progress in strengthening the Tile Shop brand and infrastructure this past year, we recognize that we have more work in 2014 and beyond,” he said.
Neal St. Anthony • 612-673-7144
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