Tile Shop Holdings, Inc. (TTSH) confirmed that its stockholders approved a 1‑for‑3,000 reverse stock split, to be immediately followed by a 3,000‑for‑1 forward split. The combined transaction will reduce the number of shares outstanding while preserving the market value per share for remaining shareholders. The reverse split will take effect after the special meeting held on December 3, 2025, and the forward split will be executed once regulatory approvals are obtained.
The company also announced its intention to delist from the Nasdaq Stock Market and to deregister its common stock under Section 12(g) of the Securities Exchange Act of 1934. The delisting is expected to save TTSH more than $2.4 million annually in public‑company costs, allowing management to focus resources on core operations and long‑term growth initiatives. The reverse split is designed to reduce the number of record holders to below 300, the threshold that triggers SEC public‑reporting obligations, and to simplify the shareholder base. Shareholders holding fewer than 3,000 shares will receive $6.60 in cash per whole share, a premium above the October 2 closing price, and will cease to be shareholders after the split.
Financially, TTSH has been under pressure for 12 consecutive quarters, with declining sales and negative profitability. Revenue has grown at a sluggish 0.3% per year over the past five years, while earnings have fallen at an average of 21.3% annually. Gross margin has slipped to 64.4% in Q2 2025, reflecting pricing pressure and cost inflation in key segments. The company’s cash‑out of small shareholders and the cost savings from delisting are part of a broader strategy to streamline operations and reduce the burden of public‑company reporting.
Management emphasized that the delisting and split are not driven by a desire to raise capital or pursue a strategic transaction, but rather to eliminate the substantial costs and administrative overhead associated with being a Nasdaq‑listed, SEC‑reporting company. “We have undertaken a thorough review of our cost structure, including costs associated with being a Nasdaq‑listed and SEC reporting company,” said former CEO Cabell Lolmaugh. “After careful consideration, the Board decided to voluntarily delist and deregister, believing the savings will benefit shareholders.”
The move signals a shift toward a more private, less scrutinized operating environment, allowing TTSH to allocate the $2.4 million in annual savings toward core retail and product‑innovation initiatives. While the company’s financial performance remains weak, the cost‑saving measure and simplified shareholder structure are intended to provide a clearer path to operational turnaround and potential future growth.
The reverse and forward splits, combined with the delisting, represent a significant change in TTSH’s capital structure and regulatory status, marking a pivotal moment in the company’s ongoing efforts to address long‑standing financial challenges.
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