SAN DIEGO, Feb. 10, 2021 /PRNewswire/ -- Turtle
Beach Corporation (Nasdaq: HEAR), a leading gaming accessory
business, is providing selected preliminary unaudited fourth
quarter and full-year 2020 results.
Based on preliminary unaudited information, Turtle Beach expects
to report full year 2020 sales between $358
million and $360 million
compared to $234.7 million in 2019
reflecting an increase of over 52%. Fourth quarter 2020 sales are
expected to be between $130 million
and $132 million compared to
$101.8 million reported in the fourth
quarter of 2019 reflecting an increase of over 27%. Sales in the
second half of 2020 are expected to total between $243 million and $245
million, an increase of over 64% compared to the second half
of 2019.
"Driven by our exceptionally strong operational execution in a
robust market for gaming accessories, our sales and adjusted EBITDA
reached record levels in 2020," said Juergen Stark, CEO, Turtle Beach. "We worked
very closely with our retail partners and were able to quickly
adjust supply to address the rapid market growth which allowed us
to significantly outpace the rest of the market. We added to our
already dominant position in console headsets, with eight of the
top ten best selling models coming from Turtle Beach.1
In addition, we more than doubled our sales of ROCCAT PC
accessories. We ended the year with $46
million in cash, no debt and a strong platform for expanding
into new product categories and continuing to grow the
business."
Preliminary diluted earnings per share for the full year 2020,
are expected to be between $2.26 and
$2.35 compared to $1.04 in 2019, which included a valuation
allowance benefit of $0.47 per
diluted share in 2020. Excluding the valuation allowance as well as
other adjustments, full year 2020 preliminary adjusted diluted
earnings per share are expected to be between $2.11 and $2.20
compared to $0.74 in 2019. Full year
share count is approximately 16.4 million for 2020 vs. 15.7 million
in 2019, reflecting significantly higher average share price.
For the fourth quarter of 2020, preliminary diluted earnings per
share are expected to be between $0.82 and $0.91
compared to $1.29 in the fourth
quarter of 2019, which included the $0.47 per diluted share benefit from the release
of a valuation allowance for income taxes. Preliminary adjusted
diluted earnings per share for the fourth quarter of 2020 are
expected to be between $0.73 and
$0.82 compared to $0.83 in the fourth quarter of 2019. Fourth
quarter share count is approximately 17.6 million in 2020 vs. 15.7
million in 2019.
The preliminary earnings per share estimate ranges assume an
effective tax rate of approximately 26% to 28% and exclude
potentially material positive or negative impacts from finalization
of the tax provision and other potential adjustments.
Adjusted EBITDA for the full year 2020 is expected to be between
$59 million and $61 million compared to $22.8 million in 2019. Adjusted EBITDA in the
fourth quarter is expected to be between $21
million and $23 million
compared to $16.6 million in the
fourth quarter of 2019.
Mr. Stark added, "Over the past five years, we have delivered a
CAGR of over 17% for sales and over 30% for adjusted EBITDA. The
strong levels of sales, profit and cash flow we have achieved in
recent years have given us ample resources to pursue new avenues of
growth, and we intend to maintain the momentum. There has been a
dramatic influx of new gamers into the market in recent years, as
well as renewed interest on the part of existing gamers. The new
Xbox Series X|S and PS5™ consoles from Microsoft and Sony,
respectively, have seen extremely strong consumer demand but
limited supply, which should fuel continued robust sales of
consoles and console accessories in 2021. On top of that, our
continued strong progress with an expanded portfolio of ROCCAT PC
gaming accessories demonstrates our ability to drive growth in new
categories. And we plan to offer several additional new product
categories for 2021, the first of which is microphones, with the
recently announced acquisition of Neat Microphones.
"As a result, even with record 2020 sales that reflected more
than 50% growth over 2019, we expect to guide to sales growth in
2021 when we discuss our outlook on our earnings call in March. We
plan to continue making investments to drive long term growth,
including offering new gaming hardware categories and accelerated
expansion into select geographic regions. We will be providing a
more detailed outlook when we report our fourth quarter and full
year 2020 results in March."
Important Note on 2020 Preliminary Estimates:
The financial information included herein for the fourth quarter
and full year 2020 are preliminary, unaudited estimates and may
change materially, including as a result of the finalization of
financial statements for the Company's fourth quarter and full year
ended December 31, 2020, review of
inventory levels that could require additional reserves, review of
sales-related reserves, review of the provision for income taxes,
including an assessment of any valuation allowance, completion of
the annual goodwill assessment, finalization of the audit by the
Company's independent registered public accounting firm, and other
factors and adjustments related to the Company's financial
reporting process. The preliminary, unaudited estimates are based
on the Company's internal estimates and information available as of
the date hereof. There can be no assurance that our final results
for the year will not differ from these estimates and that such
changes will not be material; accordingly, these statements should
not be viewed or relied upon as a substitute for complete audited
financial statements prepared in accordance with generally accepted
accounting principles (GAAP) or as a measure of our actual
performance. The Company's final audited results for fourth quarter
and full year 2020 are expected to be released by mid-March 2021 as part of the report on form 10-K
for 2020.
The Company has included in this release of preliminary results
adjusted EBITDA and adjusted earnings per share, which the
Securities and Exchange Commission defines as "non-GAAP financial
measures." Management believes that adjusted EBITDA and adjusted
earnings per share, when read in conjunction with the Company's
GAAP financial measures, can provide useful supplemental
information for investors analyzing period-to-period comparisons of
the Company's results. "Adjusted EBITDA" is 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, including but not limited to the integration and
transaction costs related to acquisitions. "Adjusted earnings per
share" is defined by the Company as net income (loss) excluding
integration and transaction costs related to acquisitions and
excluding the effect of the mark-to-market requirement of the
financial instrument obligation, and certain special items that we
believe are not representative of core operations, divided by the
weighted average diluted number of shares. The Company will provide
a reconciliation of non-GAAP measures to the related GAAP measure
in its fourth quarter and full year 2020 earnings release by
mid-March 2021.
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.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 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.
1Source: The NPD Group/Retail Tracking
Service/Video Games/Dollars/U.S. and Canada/Jan- Dec
2020 update
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, 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, general business and economic conditions, 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, 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.
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SOURCE Turtle Beach Corporation