UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
or
For the transition period from to
Commission File Number:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
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(Address of principal executive offices) |
(Zip Code) |
(
(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 |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
☐ |
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Non-accelerated filer |
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Smaller reporting company |
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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. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes
The number of shares of the registrant’s Common Stock, par value $0.001 per share, outstanding on October 31, 2023 was
INDEX
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Item 1. |
2 |
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2 |
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3 |
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Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022 |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
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Item 4. |
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Item 1. |
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Item 1A. |
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Item 2. |
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Item 5. |
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Item 6. |
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1
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
Turtle Beach Corporation
Condensed Consolidated Statements of Operations
(unaudited)
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Three Months Ended |
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Nine Months Ended |
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September 30, |
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September 30, |
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September 30, |
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September 30, |
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2023 |
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2022 |
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2023 |
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2022 |
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(in thousands, except per-share data) |
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Net revenue |
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$ |
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$ |
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$ |
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$ |
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Cost of revenue |
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Gross profit |
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Operating expenses: |
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Selling and marketing |
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Research and development |
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General and administrative |
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Total operating expenses |
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Operating loss |
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Interest expense |
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Other non-operating expense, net |
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Loss before income tax |
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Income tax expense (benefit) |
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Net loss |
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$ |
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$ |
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$ |
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$ |
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Net loss per share |
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Basic |
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$ |
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$ |
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$ |
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Diluted |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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Weighted average number of shares: |
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Basic |
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Diluted |
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See accompanying Notes to the Condensed Consolidated Financial Statements (unaudited)
2
Turtle Beach Corporation
Condensed Consolidated Statements of Comprehensive Income (Loss)
(unaudited)
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Three Months Ended |
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Nine Months Ended |
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September 30, |
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September 30, |
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September 30, |
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September 30, |
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(in thousands) |
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Net loss |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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Other comprehensive income (loss): |
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Foreign currency translation adjustment |
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( |
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( |
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( |
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Other comprehensive income (loss) |
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( |
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( |
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( |
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Comprehensive loss |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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See accompanying Notes to the Condensed Consolidated Financial Statements (unaudited)
3
Turtle Beach Corporation
Condensed Consolidated Balance Sheets
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September 30, |
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December 31, |
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2023 |
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2022 |
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(unaudited) |
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ASSETS |
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(in thousands, except par value and share amounts) |
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Current Assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Accounts receivable, net |
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Inventories |
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Prepaid expenses and other current assets |
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Total Current Assets |
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Property and equipment, net |
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Goodwill |
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Intangible assets, net |
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Other assets |
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Total Assets |
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$ |
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$ |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current Liabilities: |
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Revolving credit facility |
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$ |
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$ |
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Accounts payable |
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Other current liabilities |
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Total Current Liabilities |
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Income tax payable |
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Other liabilities |
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Total Liabilities |
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Stockholders’ Equity |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
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( |
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( |
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Accumulated other comprehensive income (loss) |
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( |
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( |
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Total Stockholders’ Equity |
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Total Liabilities and Stockholders’ Equity |
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$ |
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$ |
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See accompanying Notes to the Condensed Consolidated Financial Statements (unaudited)
4
Turtle Beach Corporation
Condensed Consolidated Statements of Cash Flows
(unaudited)
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Nine Months Ended |
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September 30, 2023 |
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September 30, 2022 |
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(in thousands) |
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CASH FLOWS FROM OPERATING ACTIVITIES |
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Net loss |
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$ |
( |
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$ |
( |
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Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities: |
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Depreciation and amortization |
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Amortization of intangible assets |
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Amortization of debt financing costs |
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Stock-based compensation |
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Deferred income taxes |
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( |
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( |
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Change in sales returns reserve |
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( |
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( |
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Provision for obsolete inventory |
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Changes in operating assets and liabilities, net of acquisitions: |
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Accounts receivable |
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Inventories |
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( |
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( |
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Accounts payable |
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( |
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Prepaid expenses and other assets |
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Income taxes payable |
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Other liabilities |
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( |
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( |
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Net cash provided by (used for) operating activities |
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( |
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CASH FLOWS FROM INVESTING ACTIVITIES |
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Purchases of property and equipment |
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( |
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( |
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Net cash used for investing activities |
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( |
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( |
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CASH FLOWS FROM FINANCING ACTIVITIES |
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Borrowings on revolving credit facilities |
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Repayment of revolving credit facilities |
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( |
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( |
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Proceeds from exercise of stock options and warrants |
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Repurchase of common stock |
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( |
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— |
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Debt issuance costs |
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( |
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— |
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Net cash provided by (used for) financing activities |
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( |
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Effect of exchange rate changes on cash and cash equivalents |
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( |
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Net increase (decrease) in cash and cash equivalents |
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( |
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Cash and cash equivalents - beginning of period |
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Cash and cash equivalents - end of period |
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$ |
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$ |
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SUPPLEMENTAL DISCLOSURE OF INFORMATION |
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Cash paid for interest |
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$ |
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$ |
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Cash paid (received) for income taxes |
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$ |
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$ |
( |
) |
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See accompanying Notes to the Condensed Consolidated Financial Statements (unaudited)
5
Turtle Beach Corporation
Condensed Consolidated Statement of Stockholders’ Equity
(unaudited)
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Common Stock |
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Additional |
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Accumulated |
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Accumulated |
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Shares |
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Amount |
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Capital |
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Deficit |
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Income (Loss) |
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Total |
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(in thousands) |
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Balance at December 31, 2022 |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
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$ |
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Net loss |
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— |
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— |
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— |
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( |
) |
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— |
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( |
) |
Other comprehensive income, net of tax |
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— |
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— |
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— |
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— |
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Issuance of restricted stock |
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— |
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— |
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— |
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— |
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- |
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Stock options exercised |
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— |
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— |
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— |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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Balance at March 31, 2023 |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
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$ |
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Net loss |
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— |
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— |
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— |
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( |
) |
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— |
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( |
) |
Other comprehensive loss, net of tax |
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— |
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— |
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— |
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— |
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( |
) |
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( |
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Issuance of restricted stock |
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— |
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— |
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— |
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— |
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- |
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Stock options exercised |
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— |
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— |
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— |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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Repurchase of common stock |
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( |
) |
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— |
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( |
) |
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— |
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— |
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( |
) |
Balance at June 30, 2023 |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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$ |
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||||
Net loss |
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— |
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— |
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— |
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( |
) |
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— |
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( |
) |
Other comprehensive loss, net of tax |
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— |
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— |
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— |
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— |
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( |
) |
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( |
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Issuance of restricted stock |
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— |
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— |
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— |
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— |
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- |
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Stock options exercised |
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— |
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— |
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— |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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||
Balance at September 30, 2023 |
|
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|
$ |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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$ |
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Common Stock |
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Additional |
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Accumulated |
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Accumulated |
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Shares |
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Amount |
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Capital |
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Deficit |
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Income (Loss) |
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Total |
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(in thousands) |
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Balance at December 31, 2021 |
|
|
|
|
$ |
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|
$ |
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|
$ |
( |
) |
|
$ |
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$ |
|
|||||
Net loss |
|
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— |
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|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
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( |
) |
Other comprehensive loss, net of tax |
|
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— |
|
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— |
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— |
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— |
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( |
) |
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( |
) |
Issuance of restricted stock |
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— |
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— |
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— |
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— |
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— |
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|
Stock options exercised |
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— |
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— |
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— |
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|||
Stock-based compensation |
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— |
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|
— |
|
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|
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|
|
— |
|
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|
— |
|
|
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|
||
Balance at March 31, 2022 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||
Net income |
|
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— |
|
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— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
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|
( |
) |
Other comprehensive income, net of tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
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( |
) |
Issuance of restricted stock |
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— |
|
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— |
|
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— |
|
|
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— |
|
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— |
|
|
Stock options exercised |
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— |
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— |
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||||
Stock-based compensation |
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— |
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— |
|
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— |
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— |
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||
Balance at June 30, 2022 |
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$ |
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$ |
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$ |
( |
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$ |
( |
) |
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$ |
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