Boston, MA 02/21/2014 (wallstreetpr) – Tile Shop Hldgs, Inc. (NASDAQ:TTS) recently reported earnings and revealed a few things about what it is doing to avoid falling into unnecessary accusations or troubling financial position. And in such revelations, some interesting details emerged.
Those who have been following the stock must have heard about the accusations from short sellers about inadequate risks disclosure and questionable accounting. Such acquisitions surfaced around November last year. In the days that followed the allegations, almost 50 percent of the stock’s value was wiped off.
Given that such accusations can lead to some undesirable end, independent investigation was launched and this month Tile Shop Hldgs, Inc. (NASDAQ:TTS) acted. The company announced the firing of its CEO’s brother-in-law for what were described as multiple violations. The CEO is Robert Rucker and the brother-in-law is Fumitake Nishi, who owns an export promotion company based in China.
The illicit deal that fired brother-in-law
Tile Shop Hldgs, Inc. (NASDAQ:TTS) announced alongside other details that upon the independent investigation, Nishi was found to have irregularly pocketed $1.1 million as consulting fee from Chinese companies that sell to TTS.
So far, thanks to the investigation that resulted in the firing of Nishi, the issues that short sellers raised regarding insufficient risks disclosure and accounting issues have been addressed and now the company has its full focus on improving shareholder value.
Financial performance
In the latest quarter, Tile Shop Hldgs, Inc. (NASDAQ:TTS) announced that its revenue soared by 25 percent, thanks to the new stores it has opened and the jump in comp sales. However, the results were hurt by unfriendly weather.
But even in the face of bad weather or any other market challenges, the management of Tile Shop Hldgs, Inc. (NASDAQ:TTS) has faith in what they are doing and say that investment to open stores which started last year will pay off in 2014 onwards. Thus, they are looking to the company returning to its historical profit levels.
For the three months trading duration ending December, the company generated $9.4 million in adjusted earnings without taxes or other items. That figures was down from the $12 million realized over the same duration in the previous year. The net income for the quarter was $1.4 million, staging a turnaround from $35.8 million net loss suffered in the prior year.
As for revenue, Tile Shop Hldgs, Inc. (NASDAQ:TTS) garnered $57.8 million, an increase of 25 percent on the $46.2 million realized in the previous year. These gains were credited to the impressive performance in stores open for a year.
