hear-8k_20211104.htm
false 0001493761 0001493761 2021-11-04 2021-11-04

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report: November 4, 2021

(Date of earliest event reported)

 

Turtle Beach Corporation

(Exact name of registrant as specified in its charter)

 

001-35465

(Commission File Number)

 

 

 

 

Nevada

27-2767540

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification Number)

 

 

44 South Broadway, 4th Floor

White Plains, New York

10601

(Address of principal executive offices)

(Zip Code)

 

(888) 496-8001

(Registrant’s telephone number, including area code)

       

 

Securities registered pursuant to Section 12(b) of the Act:

 

 

 

 

 

Title of each class

Trading Symbols

Name of each exchange on which registered

Common Stock, par value $0.001

HEAR

Nasdaq

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging Growth Company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.



 

Item 2.02 - Results of Operations and Financial Condition.

On November 4, 2021, Turtle Beach Corporation (the “Company”) issued a press release announcing its financial results for its quarter ended September 30, 2021. A copy of that press release and the attached financial schedules are attached as Exhibit 99.1 to this report and incorporated herein by reference.

The information in this report (including Exhibit 99.1) is being furnished pursuant to Item 2.02 and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act.

Item 9.01 — Financial Statements and Exhibits

(d) Exhibits

 

 

 

 

 

Exhibit

No.

Description

99.1

104

Press Release of the Company, dated November 4, 2021

Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

 

 

 

 

 

 

 

TURTLE BEACH CORPORATION

 

 

 

Date:

November 4, 2021

By:

/s/ JOHN T. HANSON

 

 

 

John T. Hanson

Chief Financial Officer, Treasurer and Secretary

 

 

 

 

hear-ex991_6.htm

Exhibit 99.1

 

TURTLE BEACH REPORTS SECOND HIGHEST THIRD QUARTER RESULTS IN COMPANY HISTORY

 

Remains on Track to Deliver Year-over-Year Revenue Growth Following Record 2020;

 

Updates 2021 Outlook Due to Impact from Supply and Logistics Constraints

 

White Plains, NY – November 4, 2021 – Leading gaming accessory maker Turtle Beach Corporation (Nasdaq: HEAR), reported financial results for the third quarter and nine months ended September 30, 2021.

 

Third Quarter 2021 Summary vs. Year-Ago Period:

 

Net revenue was $85.3 million compared to $112.5 million a year ago when the Company posted a historic 141% increase;

 

 

Net income was $2.6 million, or $0.14 per diluted share, compared to net income of $17.8 million, or $1.04 per diluted share;

 

 

Adjusted EBITDA was $6.7 million compared to $27.6 million;

 

 

Cash balance grew to $28.1 million compared to $27.3 million as of September 30, 2020.

 

 

Nine Months Ended September 30, 2021 Summary vs Year-Ago Period

 

Net revenue was $256.9 million compared to $227.2 million;

 

 

Net income was $13.2 million, or $0.72 per diluted share, compared to $22.4 million, or $1.41 per diluted share;

 

 

Non-GAAP net income was $16.7 million, or $0.92 per diluted share, compared to $21.4 million, or $1.34 per diluted share;

 

 

Adjusted EBITDA was $27.0 million compared to $37.8 million.

 

 

Management Commentary

“Our excellent third quarter results were the second highest third quarter in our history, only outdone by our extraordinary 140% year-over-year growth in Q3 last year, and we’re pleased to see our year-to-date revenues up 13% as we remain on track to grow from our record year in 2020,” said Juergen Stark, CEO, Turtle Beach Corporation. “These results reflect the continued strong demand for our products and successful expansion of our PC and other new categories, despite significant semiconductor constraints, particularly on our industry-leading wireless headsets, which we expect will hold back full year sales by an estimated $25 to 30 million.”

 

 

“Console headsets continue to perform well, despite the worsening impact of industry-wide component availability, shipping delays and freight cost increases. While our team has expertly


 

managed these dynamic supply chain issues, there are business impacts that remain out of our control. Still, our non-console headset categories in PC, microphones, game controllers, and flight simulation continue to track with our expectations and are offsetting some of the console headset revenue constraints. Our rapid portfolio expansion into new gaming categories has diversified our business and continues to drive growth. In fact, product line expansions beyond console headsets provided third quarter revenues approaching 20% of the business.

 

“Our expectations of the overall market during the holiday season are generally positive. While there are compelling AAA multiplayer games like Call of Duty, Battlefield, and Halo launching and new consoles performing well, we expect that the market, including sales of consoles, will continue to be constrained by supply chain impacts. Despite these challenges, we believe our strategy of leveraging the strong trends in the gaming market keep us well-positioned for future growth. We are anchored by our diversified portfolio and healthy balance sheet, leaving us poised to capitalize on our large addressable market and drive increased value for shareholders.”

 

Third Quarter 2021 Financial Results

Net revenue for the three months ended September 30, 2021 was $85.3 million compared to $112.5 million in the elevated comparable prior year period, which was driven by the surge in demand from stay-at-home orders and our execution-driven outperformance of the market.

 

Gross margin in the third quarter of 2021 was 34.3% versus 41.0% in the third quarter of 2020. The decrease was primarily due to changed business mix and increased logistics and freight costs. The Company continues to expect ongoing headwinds from higher logistic costs, shipping delays, and challenges with component availability.

 

Operating expenses in the third quarter of 2021 were $27.8 million compared to $21.9 million in the same 2020 period reflecting the larger size of the business, entry into three major new product categories, selling and marketing support of the new products, and increased R&D for the expanded portfolio.

 

Net income in the third quarter of 2021 was $2.6 million, or $0.14 per diluted share (on 18.3 million weighted average diluted shares), compared to net income of $17.8 million, or $1.04 per diluted share (on 17.2 million weighted average diluted shares) in the year-ago quarter reflecting the above factors.

 

Adjusted EBITDA (as defined below in “Non-GAAP Financial Measures”) in the third quarter of 2021 was $6.7 million compared to $27.6 million in the year-ago quarter reflecting the above


 

factors.

Balance Sheet Overview

At September 30, 2021, the Company had $28.1 million of cash and cash equivalents with no outstanding debt and no borrowings on its revolving credit facility. This compares to $27.3 million of cash and cash equivalents at September 30, 2020. Inventories increased to $113.3 million as the Company intentionally manages higher levels of inventory to prioritize product availability amidst global supply chain and logistical challenges.

 

During the third quarter of 2021, the Company repurchased approximately 169,000 shares for $4.9 million at an average purchase price of $28.87.

 

Revised 2021 Outlook

For the full year 2021, the Company expects revenue to be in the range of $365 million to $380 million, up from $360 million in 2020 despite global supply challenges, logistics constraints and semiconductor shortages that the Company estimates will impact full year revenues by $25 million to $30 million. This anticipated growth remains above the Company’s original 2021 outlook at the midpoint and is driven by continued strong sell through of the Company’s core products, the expansion of its PC accessories business, and additional revenues from new market entries. The Company expects adjusted EBITDA to be in the range of $36 million to $44 million, reflecting significant incremental logistics costs including the need to use more air freight due to supply chain constraints. Adjusted net income per diluted share is expected to be in the range of $1.10 to $1.45. For the full year, the Company expects the effective tax rate to be approximately 13%, a reduction from the approximately 20% estimate last quarter. Per share figures for the full year 2021 assume approximately 18 million diluted shares outstanding.

 

For the second half of 2021, the Company expects revenue to be in the range of $193 million to $208 million and adjusted EBITDA to be in the range of $16 million to $24 million. Adjusted net income per diluted share is expected to be in the range of $0.42 and $0.79.

 

With respect to the Company's adjusted EBITDA outlook for the full year and second half of 2021, a reconciliation to its net income (loss) outlook for the same periods has not been provided because of the variability, complexity, and lack of visibility with respect to certain reconciling items between adjusted EBITDA and net income (loss), including other income (expense), provision for income taxes and stock-based compensation. These items cannot be reasonably and accurately predicted without the investment of undue time, cost and other resources and, accordingly, a reconciliation of the Company’s adjusted EBITDA outlook to its net income (loss) outlook for such periods is not provided. These reconciling items could be material to the Company’s actual results for such periods.


 

Conference Call Details

Turtle Beach Corporation will hold a conference call today, November 4, 2021, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) to discuss its third quarter 2021 results.

 

Chairman and CEO Juergen Stark and CFO John Hanson will host the call, followed by a question and answer session.

Conference Call Details:

Date: Thursday, November 4, 2021

Time: 5:00 p.m. ET / 2:00 p.m. PT

Toll-Free Dial-in Number: (877) 303-9855

International Dial-in Number: (408) 337-0154

Conference ID: 5754117

 

For the conference call, please dial-in 5-10 minutes prior to the start time and an operator will register your name and organization. If you have any difficulty with the conference call, please contact Gateway Investor Relations at (949) 574-3860.

 

The conference call will be broadcast live and available for replay here and via the investor relations section of the Company’s website at www.turtlebeachcorp.com.

 

Non-GAAP Financial Measures

In addition to its reported results, the Company has included in this earnings release certain financial results, including adjusted EBITDA, and adjusted net income that the Securities and Exchange Commission defines as “non-GAAP financial measures.” Management believes that such non-GAAP financial measures, when read in conjunction with the Company's reported results, can provide useful supplemental information for investors analyzing period-to-period comparisons of the Company's results. “Non-GAAP Earnings” is defined as net income excluding (i) integration and transaction costs related to acquisitions, (ii) the effect of the mark-to-market requirement of the financial instrument obligation, (iii) any change in fair value of contingent consideration and (iv) the release of valuation allowances on deferred tax assets. “Adjusted EBITDAis defined by the Company as net income (loss) before interest, taxes, depreciation and amortization, stock-based compensation (non-cash), and certain special items that we believe are not representative of core operations (e.g., the integration and transaction costs related to acquisitions, the mark-to-market adjustment for the financial instrument obligation and the change in fair value of contingent consideration). These non-GAAP financial measures are presented because management uses non-GAAP financial measures to evaluate the Company’s operating performance, to perform financial planning, and to determine incentive compensation. Therefore, the Company believes that the presentation of non-GAAP financial measures provides useful


 

supplementary information to, and facilitates additional analysis by, investors.  The presented non-GAAP financial measures exclude items that management does not believe reflect the Company’s core operating performance because such items are inherently unusual, non-operating, unpredictable, non-recurring, or non-cash. See a reconciliation of GAAP results to Adjusted Net Income and Adjusted EBITDA included below for each of the three months and nine months ended September 30, 2021 and 2020.

 

About Turtle Beach Corporation

Turtle Beach Corporation (https://corp.turtlebeach.com) is one of the world’s leading gaming accessory providers. The Turtle Beach brand (www.turtlebeach.com) is known for pioneering first-to-market features and patented innovations in high-quality, comfort-driven headsets for all levels of gamer, making it a fan-favorite brand and the market leader in console gaming audio for the last decade. Turtle Beach’s ROCCAT brand (www.roccat.com) combines detail-loving German innovation with a genuine passion for designing the best PC gaming products. Under the ROCCAT brand, Turtle Beach creates award-winning keyboards, mice, headsets, mousepads, and other PC accessories. Turtle Beach’s Neat Microphones brand (www.neatmic.com) creates high-quality USB and analog microphones for gamers, streamers, and professionals that embrace cutting-edge technology and design. Turtle Beach’s shares are traded on the Nasdaq Exchange under the symbol: HEAR.

 

Cautionary Note on Forward-Looking Statements

This press release includes forward-looking information and statements within the meaning of the federal securities laws. Except for historical information contained in this release, statements in this release may constitute forward-looking statements regarding assumptions, projections, expectations, targets, intentions or beliefs about future events. Statements containing the words “may”, “could”, “would”, “should”, “believe”, “expect”, “anticipate”, “plan”, “estimate”, “target”, “goal”, “project”, “intend” and similar expressions, or the negatives thereof, constitute forward-looking statements. Forward-looking statements involve known and unknown risks and uncertainties, which could cause actual results to differ materially from those contained in any forward-looking statement. Forward-looking statements are based on management’s current belief and expectations, as well as assumptions made by, and information currently available to, management.

 

While the Company believes that its expectations are based upon reasonable assumptions, there can be no assurances that its goals and strategy will be realized. Numerous factors, including risks and uncertainties, may affect actual results and may cause results to differ materially from those expressed in forward-looking statements made by the Company or on its behalf. Some of these factors include, but are not limited to, risks related to logistic and supply chain challenges, risks related to capital markets activities, the substantial uncertainties inherent in the acceptance of existing and future products, the difficulty of commercializing and protecting new technology, the impact of competitive products and pricing, the impact of the coronavirus (COVID-19) pandemic on consumer demands and manufacturing capabilities; delays or disruptions in the supply of components for our products; risks relating to, and uncertainty caused by or resulting from, the COVID-19 pandemic, general business and economic conditions, risks associated with the expansion of our business including acquisitions, the integration of any businesses we acquire and the integration of such businesses within our internal control over financial reporting and operations, our indebtedness, the Company’s liquidity, and other factors discussed in our public filings, including the risk factors included in the Company’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, and the Company’s other periodic reports. Except as required by applicable law, including the securities laws of the United States and the rules and regulations of the Securities and Exchange Commission, the Company is under no obligation to publicly update or revise any forward-looking statement after the date of this release whether as a result of new information, future developments or otherwise.

 

All trademarks are the property of their respective owners.

 


 

 

 

 

 

For Investor Information, Contact:

 

For Media Information, Contact:

Cody Slach or Alex Thompson

 

MacLean Marshall

Gateway Investor Relations

 

Sr. Director –PR/Communications

On Behalf of Turtle Beach

 

Turtle Beach Corp.

949.574.3860

 

858.914.5093

HEAR@gatewayir.com

 

maclean.marshall@turtlebeach.com

 

 

 


 

 

Turtle Beach Corporation

Condensed Consolidated Statements of Operations

(in thousands, except per-share data)

(unaudited)

Table 1.

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

September 30,

 

 

September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Net revenue

 

$

85,307

 

 

$

112,494

 

 

$

256,924

 

 

$

227,181

 

Cost of revenue

 

 

56,034

 

 

 

66,358

 

 

 

164,086

 

 

 

141,033

 

Gross profit

 

 

29,273

 

 

 

46,136

 

 

 

92,838

 

 

 

86,148

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling and marketing

 

 

14,301

 

 

 

11,857

 

 

 

41,524

 

 

 

29,064

 

Research and development

 

 

4,520

 

 

 

3,260

 

 

 

12,929

 

 

 

8,688

 

General and administrative

 

 

8,962

 

 

 

6,799

 

 

 

24,172

 

 

 

19,232

 

Total operating expenses

 

 

27,783

 

 

 

21,916

 

 

 

78,625

 

 

 

56,984

 

Operating income

 

 

1,490

 

 

 

24,220

 

 

 

14,213

 

 

 

29,164

 

Interest expense

 

 

101

 

 

 

103

 

 

 

271

 

 

 

355

 

Other non-operating expense (income), net

 

 

585

 

 

 

(101

)

 

 

1,099

 

 

 

(1,520

)

Income before income tax

 

 

804

 

 

 

24,218

 

 

 

12,843

 

 

 

30,329

 

Income tax expense (benefit)

 

 

(1,819

)

 

 

6,424

 

 

 

(339

)

 

 

7,886

 

Net income

 

$

2,623

 

 

$

17,794

 

 

$

13,182

 

 

$

22,443

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.16

 

 

$

1.20

 

 

$

0.83

 

 

$

1.53

 

Diluted

 

$

0.14

 

 

$

1.04

 

 

$

0.72

 

 

$

1.41

 

Weighted average number of shares:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

16,079

 

 

 

14,845

 

 

 

15,852

 

 

 

14,642

 

Diluted

 

 

18,335

 

 

 

17,154

 

 

 

18,248

 

 

 

15,961

 

 


 

 

Turtle Beach Corporation

Condensed Consolidated Balance Sheets

(in thousands, except par value and share amounts)

 

Table 2.

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

 

December 31,

 

 

 

2021

 

 

2020

 

 

 

(unaudited)

 

 

 

 

 

ASSETS

 

(in thousands, except par value and share amounts)

 

Current Assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

28,058

 

 

$

46,681

 

Accounts receivable, net

 

 

36,989

 

 

 

43,867

 

Inventories

 

 

113,288

 

 

 

71,301

 

Prepaid expenses and other current assets

 

 

16,605

 

 

 

8,127

 

Total Current Assets

 

 

194,940

 

 

 

169,976

 

Property and equipment, net

 

 

7,276

 

 

 

6,575

 

Deferred income taxes

 

 

8,638

 

 

 

6,946

 

Goodwill

 

 

10,686

 

 

 

8,178

 

Intangible assets, net

 

 

6,107

 

 

 

5,138

 

Other assets

 

 

8,631

 

 

 

6,640

 

Total Assets

 

$

236,278

 

 

$

203,453

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

Revolving credit facility

 

$

 

 

$

 

Accounts payable

 

 

55,526

 

 

 

42,529

 

Other current liabilities

 

 

36,015

 

 

 

36,122

 

Total Current Liabilities

 

 

91,541

 

 

 

78,651

 

Income tax payable

 

 

3,798

 

 

 

3,146

 

Other liabilities

 

 

7,322

 

 

 

5,257

 

Total Liabilities

 

 

102,661

 

 

 

87,054

 

Commitments and Contingencies

 

 

 

 

 

 

 

 

Stockholders’ Equity

 

 

 

 

 

 

 

 

Common stock, $0.001 par value - 25,000,000 shares authorized; 16,043,808 and 15,475,504 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively

 

 

16

 

 

 

15

 

Additional paid-in capital

 

 

194,969

 

 

 

190,568

 

Accumulated deficit

 

 

(61,591

)

 

 

(74,773

)

Accumulated other comprehensive income

 

 

223

 

 

 

589

 

Total Stockholders’ Equity

 

 

133,617

 

 

 

116,399

 

Total Liabilities and Stockholders’ Equity

 

$

236,278

 

 

$

203,453

 

 

 


 

 

Turtle Beach Corporation

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

Table 3.

 

 

Nine Months Ended

 

 

 

September 30, 2021

 

 

September 30, 2020

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

$

(10,279

)

 

$

32,638

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

(7,045

)

 

 

(3,918

)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Borrowings on revolving credit facilities

 

 

120,858

 

 

 

185,486

 

Repayment of revolving credit facilities

 

 

(120,858

)

 

 

(201,141

)

Proceeds from sale of equity securities

 

 

-

 

 

 

4,372

 

Proceeds from exercise of stock options and warrants

 

 

4,408

 

 

 

2,155

 

Repurchase of common stock to satisfy employee tax withholding obligations

 

 

(463

)

 

 

(215

)

Repurchase of common stock

 

 

(4,882

)

 

 

-

 

Net cash used for financing activities

 

 

(937

)

 

 

(9,343

)

Effect of exchange rate changes on cash and cash equivalents

 

 

(362

)

 

 

(361

)

Net increase (decrease) in cash and cash equivalents

 

 

(18,623

)

 

 

19,016

 

Cash and cash equivalents - beginning of period

 

 

46,681

 

 

 

8,249

 

Cash and cash equivalents - end of period

 

$

28,058

 

 

$

27,265

 


 

 

Turtle Beach Corporation

Reconciliation of GAAP and Non-GAAP Measures

(in thousands, except per-share data)

(unaudited)

Table 4.

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30, 2021

 

 

September 30, 2020

 

 

September 30, 2021

 

 

September 30, 2020

 

Net Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Net Income

 

$

2,623

 

 

$

17,794

 

 

$

13,182

 

 

$

22,443

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments, net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-recurring business costs

 

 

2,113

 

 

 

 

 

 

3,322

 

 

 

 

Gain on acquisition-related settlement

 

 

 

 

 

 

 

 

 

 

 

(1,702

)

Change in fair value consideration

 

 

 

 

 

126

 

 

 

 

 

 

366

 

Acquisition integration costs

 

 

29

 

 

 

26

 

 

 

215

 

 

 

273

 

Non-GAAP Earnings

 

$

4,765

 

 

$

17,946

 

 

$

16,719

 

 

$

21,380

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings Per Share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP- Diluted

 

 

0.14

 

 

$

1.04

 

 

$

0.72

 

 

$

1.41

 

Non-recurring business costs

 

 

0.12

 

 

 

 

 

 

0.18

 

 

 

 

Gain on acquisition-related settlement

 

 

 

 

 

 

 

 

 

 

 

(0.11

)

Change in fair value consideration

 

 

 

 

 

0.01

 

 

 

 

 

 

0.02

 

Acquisition integration costs

 

 

0.00

 

 

 

 

 

 

0.01

 

 

 

0.02

 

Non-GAAP- Diluted

 

$

0.26

 

 

$

1.05

 

 

$

0.92

 

 

$

1.34

 

 

 


 

 

Turtle Beach Corporation

GAAP to Adjusted EBITDA Reconciliation

(in thousands)

(unaudited)

Table 5.

 

 

Three Months Ended

 

 

 

September 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

Adj

 

 

 

 

 

 

 

 

 

As

 

Adj

 

Adj

 

Stock

 

 

 

 

Adj

 

 

 

Reported

 

Depreciation

 

Amortization

 

Compensation

 

Other (1)

 

EBITDA

 

Net revenue

 

$

85,307

 

$

-

 

$

-

 

$

-

 

$

-

 

$

85,307

 

Cost of revenue

 

 

56,034

 

 

(458

)

 

-

 

 

105

 

 

-

 

 

55,681

 

Gross Profit

 

 

29,273

 

 

458

 

 

-

 

 

(105

)

 

-

 

 

29,626

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

27,783

 

 

(614

)

 

(321

)

 

(1,603

)

 

(2,881

)

 

22,364

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

1,490

 

 

1,072

 

 

321

 

 

1,498

 

 

2,881

 

 

7,262

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

101

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other non-operating expense (income), net

 

 

585

 

 

 

 

 

 

 

 

 

 

 

-

 

 

585

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income tax

 

 

804

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax benefit

 

 

(1,819

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

2,623

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

6,677

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended

 

 

 

September 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

Adj

 

 

 

 

 

 

 

 

 

As

 

Adj

 

Adj

 

Stock

 

 

 

 

Adj

 

 

 

Reported

 

Depreciation

 

Amortization

 

Compensation

 

Other (1)

 

EBITDA

 

Net revenue

 

$

256,924

 

$

-

 

$

-

 

$

-

 

$

-

 

$

256,924

 

Cost of revenue

 

 

164,086

 

 

(1,105

)

 

-

 

 

(382

)

 

-

 

 

162,599

 

Gross Profit

 

 

92,838

 

 

1,105

 

 

-

 

 

382

 

 

-

 

 

94,325

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

78,625

 

 

(1,814

)

 

(946

)

 

(4,843

)

 

(4,757

)

 

66,265

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

14,213

 

 

2,919

 

 

946

 

 

5,225

 

 

4,757

 

 

28,060

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

271

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other non-operating expense (income), net

 

 

1,099

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,099

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income tax

 

 

12,843

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax benefit

 

 

(339

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

13,182

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

26,961

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Other includes certain non-recurring business costs.

 


 

 

Turtle Beach Corporation

GAAP to Adjusted EBITDA Reconciliation

(in thousands)

(unaudited)

Table 5. (continued)

 

 

Three Months Ended

 

 

 

September 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

Adj

 

 

 

 

 

 

 

 

 

As

 

Adj

 

Adj

 

Stock

 

 

 

 

Adj

 

 

 

Reported

 

Depreciation

 

Amortization

 

Compensation

 

Other (2)

 

EBITDA

 

Net revenue

 

$

112,494

 

$

-

 

$

-

 

$

-

 

$

-

 

$

112,494

 

Cost of revenue

 

 

66,358

 

 

(645

)

 

-

 

 

(284

)

 

-

 

 

65,429

 

Gross Profit

 

 

46,136

 

 

645

 

 

-

 

 

284

 

 

-

 

 

47,065

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

21,916

 

 

(596

)

 

(223

)

 

(1,288

)

 

(37

)

 

19,772

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

24,220

 

 

1,241

 

 

223

 

 

1,572

 

 

37

 

 

27,293

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

103

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other non-operating expense (income), net

 

 

(101

)

 

 

 

 

 

 

 

 

 

 

(175

)

 

(276

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income tax

 

 

24,218

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

 

6,424

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

17,794

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

27,569

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended

 

 

 

September 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

Adj

 

 

 

 

 

 

 

 

 

As

 

Adj

 

Adj

 

Stock

 

 

 

 

Adj

 

 

 

Reported

 

Depreciation

 

Amortization

 

Compensation

 

Other (2)

 

EBITDA

 

Net revenue

 

$

227,181

 

$

-

 

$

-

 

$

-

 

$

-

 

$

227,181