WHITE PLAINS, N.Y.,
Nov. 5, 2020 /PRNewswire/
-- Turtle Beach Corporation (Nasdaq: HEAR), a
leading gaming audio and accessory provider, reported record
financial results for the third quarter ended September 30, 2020.
Third Quarter Summary vs. Year-Ago Quarter:
- Net revenue increased 141% to $112.5
million ($111.5 million in
constant currency);
- Gross margin increased 880 basis points to 41.0%;
- Net income increased significantly to $17.8 million, or $1.04 per diluted share, compared to a net loss
of $3.1 million, or $(0.22) per diluted share; and
- Adjusted EBITDA increased to $27.6
million compared to $0.3
million.
Management Commentary
"Our blistering sales momentum continued in the third quarter,
as a combination of strong consumer demand for headsets, further
market share gains driven by our leading products and brand,
superior execution, and our ability to leverage operating expenses
drove results that were by far the best third quarter results we
have ever achieved," said Juergen
Stark, CEO of Turtle Beach. "We are extremely proud of what
our team has accomplished in recent months under challenging
conditions. What is most encouraging is that we believe the strong
underlying demand continues to be driven by greater overall
engagement of existing gamers as well as new and lapsed gamers
joining the market as new gaming headset users. In addition,
non-gamers continue to buy headsets for at-home work, school and
socializing. All of this sets us up nicely for the holiday season
and for 2021."
Stark added, "The increase in demand is not limited to console
gaming, as we saw strong increases in our award-winning ROCCAT line
of PC mice, keyboards and headsets in the quarter. We expect this
demand will continue, especially with the investments we are making
in our PC portfolio as evidenced by the new products we've launched
the past few months.
"As a result of the performance in the third quarter and our
belief that demand will remain at elevated levels through the end
of the year, and with the launch of the next generation Xbox and
PlayStation consoles later this month, we are confident that our
results this year will exceed our previous forecasts for both
revenue and EBITDA. We've stepped-up our investments to capitalize
on new opportunities and, with the integration of the ROCCAT
acquisition going well, the excellent team we have here, and our
strong continued execution, we will continue to take actions to
enable and drive further expansion and growth."
Third Quarter 2020 Financial Results
Net revenue in the third quarter of 2020 increased 140.8% to
$112.5 million compared to
$46.7 million in the year-ago
quarter. The Company's strong performance in the third quarter was
due to increased demand from a continued surge in gaming activity,
resulting from stay-at-home orders which increased gaming among
existing gamers and caused an influx of new and lapsed gamers. In
addition, the Company's ability to significantly increase its
production and delivery capacity and execute well at retail allowed
the Company to gain further market share and achieve the
significantly higher revenues. On a constant currency basis,
revenue in the third quarter of 2020 was $111.5 million.
Gross margin in the third quarter of 2020 increased 880 basis
points to 41.0% compared to 32.2% in the third quarter of 2019.
This significant increase was due to volume-driven fixed cost
leverage, lower than normal promotional spending given increased
demand, and favorable business mix, partially offset by
$2.0 million in incremental air
freight to enable retail supply.
Operating expenses in the third quarter of 2020 were
$21.9 million compared to
$17.6 million in the 2019 period,
with the increase driven primarily by higher volume-related selling
costs and additional investments to expand the PC gaming product
portfolio and ROCCAT brand.
Net income in the third quarter of 2020 improved significantly
to $17.8 million compared to a net
loss of $3.1 million in the year-ago
quarter. The increase was due to the strong revenue performance,
higher gross margin as described above and operating expense
leverage.
Net income per share in the third quarter of 2020 was
$1.04 on 17.2 million weighted
average diluted shares outstanding, compared to a net loss per
share of $0.22 on 14.5 million
weighted average diluted shares outstanding in the year-ago
quarter. (Note: per accounting rules, in periods when the Company
reports positive net income, the diluted share count is higher than
in periods when there is a net loss.)
Adjusted EBITDA (as defined below in "Non-GAAP Financial
Measures") in the third quarter of 2020 increased significantly to
$27.6 million, compared to
$0.3 million in the year ago quarter.
This is the highest level of adjusted EBITDA of any quarter in the
Company's history.
Balance Sheet & Cash Flow Highlights
At September 30, 2020, the Company
had $27.3 million of cash and cash
equivalents with no debt, including no outstanding debt under its
revolving line of credit. This compares to $7.0 million of cash and cash equivalents with
$26.6 million of outstanding debt
under its revolving line of credit at September 30, 2019. Cash flows from operating
activities were $32.6 million for the
nine months ended September 30, 2020
compared to $27.3 million in the
corresponding period in 2019.
Increased 2020 Outlook
For the full year 2020, the Company now expects revenue to be
approximately $330 million, which is
10% higher than its previous guidance of approximately $300 million. The annual revenue forecast
reflects continued strong consumer demand for gaming accessories
driven by new and existing gamers, as well as increased use of
headsets for non-gaming uses, followed by an anticipated further
increase in demand spurred by next generation console launches
around the holiday season.
Adjusted EBITDA is now expected to be approximately $50 million, or more than 50% above the prior
guidance of approximately $30
million, reflecting the higher expected revenue for the
year, higher gross margin, partially offset by expected air freight
of approximately $10.0 million to
enable supply and increased revenue, and planned marketing and new
product-related investments of approximately $12.0 million to expand the Company's position in
the PC accessories market and drive future growth.
Net income per diluted share is now expected to approximate
$1.80 compared to prior guidance of
approximately $0.85, and adjusted net
income per diluted share is expected to be approximately
$1.75 compared to prior guidance of
approximately $0.80, both reflecting
the aforementioned revenue and EBITDA forecasts. Per share figures
for the full year 2020 assume approximately 16.3 million diluted
shares outstanding.
Second Half Outlook
For the second half of 2020, the Company expects revenue to be
approximately $215 million, 16%
higher than its previous guidance of approximately $185 million. The updated revenue forecast
reflects a shift in the timing of shipments into the third quarter
as many retailers have started holiday purchasing earlier than
normal this year.
Adjusted EBITDA for the second half is now expected to be
approximately $40 million, or double
the prior guidance of approximately $20 million. The updated guidance reflects a
shift of some expenses expected in the third quarter to the fourth
quarter. Net income per diluted share and adjusted net income per
diluted share in the second half are now both expected to
approximate $1.45 compared to prior
guidance of approximately $0.50.
With respect to the Company's adjusted EBITDA outlook for the
full year 2020, 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 5, 2020, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) to discuss its third
quarter 2020 results.
CEO Juergen Stark and CFO
John Hanson will host the call,
followed by a question and answer session.
Conference Call Details:
Date: Thursday, November 5, 2020
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: 8798099
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 corp.turtlebeach.com.
A replay of the conference call will be available after
8:00 p.m. ET on the same day through
November 12, 2020.
Toll-Free Replay Number: (855)
859-2056
International Replay Number: (404) 537-3406
Replay ID: 8798099
Non-GAAP Financial Measures
In addition to its reported results, the Company has included in this earnings release
certain financial results, including adjusted EBITDA,
adjusted net income, and constant currency revenue,
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. "Adjusted Net Income"
is defined as net income excluding (i) integration and transaction
costs related to the acquisition of the business and assets related
to the ROCCAT brand, (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 EBITDA" is defined by the
Company as net income (loss) before interest, taxes, depreciation and amortization, stock-based compensation (non-cash),
and certain non-recurring
items that we believe are not
representative of core operations (e.g., the
integration and transaction costs related to the acquisition of the
business and assets related to the ROCCAT brand, the mark-to-market
adjustment for the financial instrument obligation and the change
in fair value of contingent consideration). "Constant currency
revenue" is defined by the Company as revenue excluding the impacts
of fluctuations in exchange rates from prior periods. 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
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 the three- and
nine-month periods ended September 30, 2020 and
2019.
About Turtle Beach Corporation
Turtle Beach Corporation (www.corp.turtlebeach.com) is one of
the world's leading gaming audio and 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.org)
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 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," "forecast" 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.
These 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: 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; risks relating to,
and uncertainty caused by or resulting from, the COVID-19 pandemic;
risks associated with the expansion of our business including the
integration of any businesses we acquire and the integration of
such businesses within our internal control over financial
reporting and operations; and our liquidity. These risks may be in
addition to the other factors and matters discussed 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 filed
with the Securities and Exchange Commission. Except as required by
the securities laws of the United
States, the Company does not intend to publicly update or
revise these forward-looking statements 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.
Turtle Beach
Corporation
Condensed
Consolidated Balance Sheets
(in thousands, except
par value and share amounts)
|
|
Table
1.
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
|
December 31,
|
|
|
|
2020
|
|
|
2019
|
|
|
|
(unaudited)
|
|
ASSETS
|
|
(in thousands, except par value and share amounts)
|
|
Current
Assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
27,265
|
|
|
$
|
8,249
|
|
Accounts receivable,
net
|
|
|
53,825
|
|
|
|
44,530
|
|
Inventories
|
|
|
79,453
|
|
|
|
45,711
|
|
Prepaid expenses and
other current assets
|
|
|
8,451
|
|
|
|
4,057
|
|
Total Current
Assets
|
|
|
168,994
|
|
|
|
102,547
|
|
Property and
equipment, net
|
|
|
5,004
|
|
|
|
3,962
|
|
Deferred income
taxes
|
|
|
7,800
|
|
|
|
7,439
|
|
Goodwill
|
|
|
8,178
|
|
|
|
8,515
|
|
Intangible assets,
net
|
|
|
5,325
|
|
|
|
6,011
|
|
Other
assets
|
|
|
6,230
|
|
|
|
2,877
|
|
Total
Assets
|
|
$
|
201,531
|
|
|
$
|
131,351
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
|
|
|
|
Revolving credit
facility
|
|
$
|
—
|
|
|
$
|
15,655
|
|
Accounts
payable
|
|
|
63,699
|
|
|
|
22,511
|
|
Other current
liabilities
|
|
|
34,432
|
|
|
|
26,422
|
|
Total Current
Liabilities
|
|
|
98,131
|
|
|
|
64,588
|
|
Deferred income
taxes
|
|
|
140
|
|
|
|
153
|
|
Other
liabilities
|
|
|
7,524
|
|
|
|
3,223
|
|
Total
Liabilities
|
|
|
105,795
|
|
|
|
67,964
|
|
Commitments and
Contingencies
|
|
|
|
|
|
|
|
|
Stockholders' Equity
|
|
|
|
|
|
|
|
|
Common stock, $0.001
par value - 25,000,000 shares authorized; 15,186,990 and 14,488,182
shares issued and outstanding as of September 30, 2020 and December
31, 2019, respectively
|
|
|
15
|
|
|
|
14
|
|
Additional paid-in
capital
|
|
|
187,065
|
|
|
|
176,776
|
|
Accumulated
deficit
|
|
|
(91,076)
|
|
|
|
(113,519)
|
|
Accumulated other
comprehensive income (loss)
|
|
|
(268)
|
|
|
|
116
|
|
Total
Stockholders' Equity
|
|
|
95,736
|
|
|
|
63,387
|
|
Total Liabilities and
Stockholders' Equity
|
|
$
|
201,531
|
|
|
$
|
131,351
|
|
Turtle Beach
Corporation
Condensed
Consolidated Statements of Operations
(in thousands, except
per-share data)
(unaudited)
|
|
Table
2.
|
|
|
|
Three Months
Ended
|
|
|
Nine Months
Ended
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
Net
revenue
|
|
$
|
112,494
|
|
|
$
|
46,723
|
|
|
$
|
227,181
|
|
|
$
|
132,899
|
|
Cost of
revenue
|
|
|
66,358
|
|
|
|
31,680
|
|
|
|
141,033
|
|
|
|
89,898
|
|
Gross
profit
|
|
|
46,136
|
|
|
|
15,043
|
|
|
|
86,148
|
|
|
|
43,001
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and
marketing
|
|
|
11,857
|
|
|
|
10,150
|
|
|
|
29,064
|
|
|
|
24,581
|
|
Research and
development
|
|
|
3,260
|
|
|
|
2,198
|
|
|
|
8,688
|
|
|
|
5,388
|
|
General and
administrative
|
|
|
6,799
|
|
|
|
5,214
|
|
|
|
19,232
|
|
|
|
16,057
|
|
Total operating
expenses
|
|
|
21,916
|
|
|
|
17,562
|
|
|
|
56,984
|
|
|
|
46,026
|
|
Operating income
(loss)
|
|
|
24,220
|
|
|
|
(2,519)
|
|
|
|
29,164
|
|
|
|
(3,025)
|
|
Interest
expense
|
|
|
103
|
|
|
|
240
|
|
|
|
355
|
|
|
|
595
|
|
Other non-operating
expense (income), net
|
|
|
(101)
|
|
|
|
302
|
|
|
|
(1,520)
|
|
|
|
(1,430)
|
|
Income (loss) before
income tax
|
|
|
24,218
|
|
|
|
(3,061)
|
|
|
|
30,329
|
|
|
|
(2,190)
|
|
Income tax
expense
|
|
|
6,424
|
|
|
|
63
|
|
|
|
7,886
|
|
|
|
252
|
|
Net income
(loss)
|
|
$
|
17,794
|
|
|
$
|
(3,124)
|
|
|
$
|
22,443
|
|
|
$
|
(2,442)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.20
|
|
|
$
|
(0.22)
|
|
|
$
|
1.53
|
|
|
$
|
(0.17)
|
|
Diluted
|
|
$
|
1.04
|
|
|
$
|
(0.22)
|
|
|
$
|
1.41
|
|
|
$
|
(0.17)
|
|
Weighted average
number of shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
14,845
|
|
|
|
14,506
|
|
|
|
14,642
|
|
|
|
14,477
|
|
Diluted
|
|
|
17,154
|
|
|
|
14,506
|
|
|
|
15,961
|
|
|
|
14,477
|
|
Turtle Beach
Corporation
Condensed
Consolidated Statements of Cash Flows
(in
thousands)
(unaudited)
|
|
Table
3.
|
|
|
|
Nine Months
Ended
|
|
|
|
September 30,
2020
|
|
|
September 30,
2019
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
$
|
32,638
|
|
|
$
|
27,304
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
(3,918)
|
|
|
|
(14,295)
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
Borrowings on
revolving credit facilities
|
|
|
185,486
|
|
|
|
148,087
|
|
Repayment of revolving
credit facilities
|
|
|
(201,141)
|
|
|
|
(158,911)
|
|
Proceeds from sale of
equity securities
|
|
|
4,372
|
|
|
|
-
|
|
Proceeds from exercise
of stock options and warrants
|
|
|
2,155
|
|
|
|
214
|
|
Repurchase of common
stock
|
|
|
-
|
|
|
|
(1,941)
|
|
Repurchase of common
stock to satisfy employee tax withholding obligations
|
|
|
(215)
|
|
|
|
(201)
|
|
Net cash used for
financing activities
|
|
|
(9,343)
|
|
|
|
(12,752)
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
|
(361)
|
|
|
|
(298)
|
|
Net increase
(decrease) in cash and cash equivalents
|
|
|
19,016
|
|
|
|
(41)
|
|
Cash and cash
equivalents - beginning of period
|
|
|
8,249
|
|
|
|
7,078
|
|
Cash and cash
equivalents - end of period
|
|
$
|
27,265
|
|
|
$
|
7,037
|
|
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,
2020
|
|
|
September 30,
2019
|
|
|
September 30,
2020
|
|
|
September 30,
2019
|
|
Net Income
(Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Net Income
(Loss)
|
|
$
|
17,794
|
|
|
$
|
(3,124)
|
|
|
$
|
22,443
|
|
|
$
|
(2,442)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments, net of
tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on financial
instrument obligation
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,601)
|
|
Gain on
acquisition-related settlement
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,702)
|
|
|
|
—
|
|
Change in fair value
of contingent consideration
|
|
|
126
|
|
|
|
—
|
|
|
|
366
|
|
|
|
—
|
|
Acquisition
integration costs
|
|
|
26
|
|
|
|
543
|
|
|
|
273
|
|
|
|
2,603
|
|
Non-GAAP
Earnings
|
|
$
|
17,946
|
|
|
$
|
(2,581)
|
|
|
$
|
21,380
|
|
|
$
|
(1,440)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per
Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP-
Diluted
|
|
$
|
1.04
|
|
|
$
|
(0.22)
|
|
|
$
|
1.41
|
|
|
$
|
(0.17)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on financial
instrument obligation
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
Gain on
acquisition-related settlement
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.11)
|
|
|
|
(0.11)
|
|
Change in fair value
of contingent consideration
|
|
|
0.01
|
|
|
|
—
|
|
|
|
0.02
|
|
|
|
—
|
|
Acquisition
integration costs
|
|
|
—
|
|
|
|
0.04
|
|
|
|
0.02
|
|
|
|
0.18
|
|
Non-GAAP-
Diluted
|
|
$
|
1.05
|
|
|
$
|
(0.18)
|
|
|
$
|
1.34
|
|
|
$
|
(0.10)
|
|
Turtle Beach
Corporation
GAAP to Adjusted
EBITDA Reconciliation
(in
thousands)
(unaudited)
|
|
Table
5.
|
|
|
|
Three Months
Ended
|
|
|
|
September 30,
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
Adj
|
|
|
|
|
|
|
|
|
|
As
|
|
Adj
|
|
Adj
|
|
Stock
|
|
|
|
|
Adj
|
|
|
|
Reported
|
|
Depreciation
|
|
Amortization
|
|
Compensation
|
|
Other
(1)
|
|
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
(1)
|
|
EBITDA
|
|
Net
revenue
|
|
$
|
227,181
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
227,181
|
|
Cost of
revenue
|
|
|
141,033
|
|
|
(1,828)
|
|
|
-
|
|
|
(623)
|
|
|
-
|
|
|
138,582
|
|
Gross
Profit
|
|
|
86,148
|
|
|
1,828
|
|
|
-
|
|
|
623
|
|
|
-
|
|
|
88,599
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
56,984
|
|
|
(1,474)
|
|
|
(665)
|
|
|
(3,354)
|
|
|
(381)
|
|
|
51,110
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
|
29,164
|
|
|
3,302
|
|
|
665
|
|
|
3,977
|
|
|
381
|
|
|
37,489
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
355
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other non-operating
expense (income), net
|
|
|
(1,520)
|
|
|
|
|
|
|
|
|
|
|
|
1,192
|
|
|
(328)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
tax
|
|
|
30,329
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
|
7,886
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
|
22,443
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
|
37,817
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Other includes
certain business acquisition costs, gain on an acquisition-related
settlement and change in fair value of contingent
consideration.
|
Turtle Beach
Corporation
GAAP to Adjusted
EBITDA Reconciliation
(in
thousands)
(unaudited)
|
|
Table 5.
(continued)
|
|
|
|
Three Months
Ended
|
|
|
|
September 30,
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
Adj
|
|
|
|
|
|
|
|
|
|
As
|
|
Adj
|
|
Adj
|
|
Stock
|
|
|
|
|
Adj
|
|
|
|
Reported
|
|
Depreciation
|
|
Amortization
|
|
Compensation
|
|
Other
(2)
|
|
EBITDA
|
|
Net
revenue
|
|
$
|
46,723
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
46,723
|
|
Cost of
revenue
|
|
|
31,680
|
|
|
(570)
|
|
|
-
|
|
|
(108)
|
|
|
-
|
|
|
31,002
|
|
Gross
Profit
|
|
|
15,043
|
|
|
570
|
|
|
-
|
|
|
108
|
|
|
-
|
|
|
15,721
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
17,562
|
|
|
(728)
|
|
|
(192)
|
|
|
(922)
|
|
|
(618)
|
|
|
15,102
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
|
(2,519)
|
|
|
1,298
|
|
|
192
|
|
|
1,030
|
|
|
618
|
|
|
618
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
240
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other non-operating
expense (income), net
|
|
|
302
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
302
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
income tax
|
|
|
(3,061)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
|
63
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(3,124)
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
|
316
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months
Ended
|
|
|
|
September 30,
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
Adj
|
|
|
|
|
|
|
|
|
|
As
|
|
Adj
|
|
Adj
|
|
Stock
|
|
|
|
|
Adj
|
|
|
|
Reported
|
|
Depreciation
|
|
Amortization
|
|
Compensation
|
|
Other
(2)
|
|
EBITDA
|
|
Net
revenue
|
|
$
|
132,899
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
132,899
|
|
Cost of
revenue
|
|
|
89,898
|
|
|
(1,349)
|
|
|
-
|
|
|
(76)
|
|
|
-
|
|
|
88,473
|
|
Gross
Profit
|
|
|
43,001
|
|
|
1,349
|
|
|
-
|
|
|
76
|
|
|
-
|
|
|
44,426
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
46,026
|
|
|
(2,129)
|
|
|
(413)
|
|
|
(2,479)
|
|
|
(2,961)
|
|
|
38,044
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
|
(3,025)
|
|
|
3,477
|
|
|
413
|
|
|
2,555
|
|
|
2,961
|
|
|
6,382
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
595
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other non-operating
expense (income), net
|
|
|
(1,429)
|
|
|
|
|
|
|
|
|
|
|
|
1,601
|
|
|
172
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
income tax
|
|
|
(2,190)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
|
252
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(2,442)
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
|
6,210
|
|
|
|
(2)
|
Other includes
certain business acquisition costs and a gain (loss) on financial
instrument obligation.
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/turtle-beach-reports-record-third-quarter-2020-results-and-raises-full-year-outlook-301167485.html
SOURCE Turtle Beach Corporation