Tile Shop(US:TTSH)2024-05-09 20:31Financial Performance - Net sales for the first quarter of 2024 were $91.7 million, a decrease of $10.3 million, or 10.1%, compared to the first quarter of 2023 [79]. - Net income for Q1 2024 was $1.7 million, representing 1.8% of sales, down from $2.5 million (2.5% of sales) in Q1 2023 [88]. - Adjusted EBITDA for Q1 2024 was $7.4 million (8.1% of sales), compared to $10.3 million (10.1% of sales) in Q1 2023 [88]. - Comparable store sales decreased by 10.2% during the three months ended March 31, 2024, attributed to lower traffic levels [69]. Profitability and Margins - Gross profit decreased by $5.2 million, or 8.0%, in the first quarter of 2024, with a gross margin rate of 65.8% compared to 64.2% in the first quarter of 2023 [80]. - Gross margin rate improved by 160 basis points from the first quarter of 2023 to 65.8% for the three months ended March 31, 2024 [71]. - Pretax return on capital employed decreased to 11.3% in Q1 2024 from 15.2% in Q1 2023 [89]. Expenses and Cash Flow - Selling, general and administrative expenses decreased by $3.4 million, or 5.5%, from $61.4 million in the first quarter of 2023 to $58.0 million in the first quarter of 2024 [81]. - Operating cash flow generated during the three months ended March 31, 2024, was $18.6 million, with cash and cash equivalents increasing to $24.0 million [73]. - Net cash provided by operating activities was $18.6 million in Q1 2024, a decrease from $25.8 million in Q1 2023, mainly due to a prior year tax refund [99]. Assets and Capital Expenditures - Total assets as of March 31, 2024, were $322.7 million, down from $346.7 million in 2023 [89]. - Capital expenditures for Q1 2024 were $2.7 million, down from $3.4 million in Q1 2023, primarily for new stores and technology investments [96]. - Working capital increased to $39.0 million as of March 31, 2024, compared to $35.8 million at December 31, 2023 [102]. Debt and Liquidity - The company had no borrowings outstanding on its line of credit as of March 31, 2024 [73]. - The company had no borrowings outstanding on its line of credit as of March 31, 2024, with $73.6 million available for borrowing [94]. - The company expects to use its liquidity for maintaining existing stores and purchasing additional merchandise inventory [90]. Tax and Interest - Interest expense decreased from $0.8 million in the first quarter of 2023 to $0.2 million in the first quarter of 2024 [82]. - The effective tax rate decreased to 20.2% in the first quarter of 2024 from 24.5% in the first quarter of 2023 [83]. Store Operations - The company operated 142 stores across 31 states and the District of Columbia as of March 31, 2024 [67].