Tile Shop : Non-Reliance on Previously Issued Financial Report - Form 8-K
November 03, 2023 at 04:26 pm EDT
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Item 4.02
Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.
Restatement of Historical Financial Results
On November 3, 2023, the Audit Committee of the Board of Directors (the "Audit Committee") of Tile Shop Holdings, Inc. (the "Company"), based upon the recommendation of the Company's management, concluded that the Company's previously issued interim unaudited consolidated financial statements included in the Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 should no longer be relied upon for the reasons summarized below. Similarly, investors should no longer rely upon earnings releases and other communications relating to such financial statements.
In connection with preparation of the Company's financial statements for the third quarter of 2023, the Company identified an error related to operating lease agreements that were extended prior to the end of the second quarter of 2023, but not reflected in the unaudited financial statements for the quarter ended June 30, 2023. The Company assessed the materiality of the error identified in accordance with the Securities and Exchange Commission's Staff Accounting Bulletin No. 99 and concluded that the changes were material and that certain of the unaudited interim consolidated financial statements should be restated.
The impact of this change on the unaudited Consolidated Balance Sheet presented as of June 30, 2023 is as follows:
(in thousands)
As reported
Adjustment
As restated
Right of use asset
$
114,616
$
2,152
$
116,768
Total Assets
325,439
2,152
327,591
Long-term lease liability, net
98,845
2,152
100,997
Total Liabilities
208,850
2,152
211,002
Total Liabilities and Stockholders' Equity
325,439
2,152
327,591
The impact of the error was immaterial to the unaudited Consolidated Statements of Income, Consolidated Statements of Stockholders' Equity and the Consolidated Statement of Cash Flows for the period ended June 30, 2023 and do not require restatement.
As a result of the error, the Company intends to disclose the restatement of the impacted line items in the unaudited Consolidated Balance Sheet as of June 30, 2023, as described above, in its Form 10-Q for the quarter ended September 30, 2023, which will be filed with the Securities and Exchange Commission concurrently with the filing of this Current Report on Form 8-K.
In addition, the Company's management has concluded that, in light of the error described above, a material weakness exists in the Company's internal control over financial reporting attributable to the breakdown in the operating effectiveness of the Company's controls designed to identify and ensure timely recognition of new and modified leases and that, because of this material weakness, the Company's disclosure controls and procedures were not effective as of September 30, 2023. The Company's remediation plan with respect to such material weakness will be described in more detail in the Quarterly Report on Form 10-Q for the quarter ended September 30, 2023.
The Company's management and Audit Committee discussed the matters disclosed in this Item 4.02 with RSM US LLP.
Tile Shop Holdings Inc. published this content on 03 November 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 November 2023 20:25:09 UTC.
Tile Shop Holdings, Inc. is a specialty retailer of natural stone and man-made tiles, setting and maintenance materials, and related accessories in the United States. The Company offers an assortment of natural stone and man-made tile products. Its natural stone products include marble, travertine, granite, quartz, sandstone, slate, and onyx tiles. The Company's man-made products include ceramic, porcelain, glass, cement, wood look, metal and luxury vinyl tile. The Companyâs assortment of accessories, including mosaics, pencils, listellos, and other products. It also offers a range of setting and maintenance materials, such as thinset, grout, sealers, and accessories, including installation tools, shower and bath shelves, drains, and similar products. The Company also offers customers delivery service through third-party freight providers. The Company sells its products under brand names, including Superior Adhesives & Chemicals, Superior Tools & Supplies, Rush River, and Fired Earth.
TILE SHOP HOLDINGS, INC. 
