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United States securities and exchange commission logo
August 23, 2023
John Hanson
Chief Financial Officer
Turtle Beach Corp
44 South Broadway
4th Floor
White Plains, NY 10601
Re: Turtle Beach Corp
Form 10-K for
Fiscal Year Ended December 31, 2022
Filed March 29,
2023
Form 8-K Filed
August 7, 2023
File No. 001-35465
Dear John Hanson:
We have limited our review of your filing to the financial
statements and related
disclosures and have the following comments. In some of our comments, we
may ask you to
provide us with information so we may better understand your disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 10-K for Fiscal Year Ended December 31, 2022
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
Key Performance Indicators and Non-GAAP Measures, page 27
1. We note that you
present and discuss your non-GAAP measures, including Adjusted
EBITDA, prior to
discussing your GAAP results of operations. Your presentation appears
to give greater
prominence to the non-GAAP measures and does not comply with Item
10(e)(1)(i)(A) of
Regulation S-K and Question 102.10 of the Division's Compliance
& Disclosure
Interpretations on Non-GAAP Financial Measures. Please revise your
presentations and
discussions in future filings to comply. This comment also applies to
your Forms 10-Q for the
quarterly periods ended March 31, 2023 and June 30, 2023,
respectively.
John Hanson
FirstName LastNameJohn Hanson
Turtle Beach Corp
Comapany
August 23, NameTurtle
2023 Beach Corp
August
Page 2 23, 2023 Page 2
FirstName LastName
2. In future filings, please revise your presentation to clearly describe
each of the
adjustments you make when calculating your non-GAAP measures. Clearly
describe the
specific nature of the costs included in the adjustment and explain
management's reasons
for excluding these costs from the non-GAAP measure. Refer to Item
10(e)(1)(i) of
Regulation S-K.
3. In this regard, we note that your presentation of Adjusted EBITDA
includes adjustments
for "Inventory and component related reserves" and "Proxy contest and
other."
Additionally, we note that your Adjusted EBITDA reconciliation in your
Form 10-Q for
the six months ended June 30, 2023 includes an adjustment for "CEO
transition related
costs." Please describe to us, in greater detail, the specific nature
of each of these
adjustments reflected in your Adjusted EBITDA measures presented in
fiscal years 2023,
2022 and 2021. Identify and describe the amounts included in "other."
Tell us how you
determined that these adjustments are appropriate based on the
guidance in Question
100.01 of the Division s Compliance & Disclosure Interpretations on
Non-GAAP
Financial Measures.
Form 8-K Filed August 7, 2023
Exhibit 99.1
4. In the header to your earnings release you present the percentage
change in Adjusted
EBITDA in the first bullet without disclosing the percentage change in
the most directly
comparable GAAP measure. Your presentation appears to give greater
prominence to the
non-GAAP measure and does not comply with Item 10(e)(1)(i)(A) of
Regulation S-K and
Question 102.10 of the Division's Compliance & Disclosure
Interpretations on Non-
GAAP Financial Measures which requires you to present the most
directly comparable
GAAP measure with equal or greater prominence. Please revise your
future presentations
to comply.
5. Refer to Table 4. We note from your reconciliation of Adjusted
Earnings that
each adjustment is presented net of tax. In future filings, please
revise to present all
adjustments gross of tax with the related income tax effect shown as a
separate adjustment
and clearly explained, as required by Question 102.11 of the Division
s Compliance and
Disclosure Interpretations on Non-GAAP Financial Measures.
6. In a related matter, please clearly describe to us in detail the
adjustments
labelled "valuation allowance" reflected in your Adjusted Earnings and
Non-GAAP
Earnings (Loss) measures presented for the reported periods in fiscal
years 2023
and 2022. Clarify whether the adjustments relate to a tax valuation
allowance. Explain to
us your reasons for excluding these valuation allowances from the
Adjusted Earnings and
Non-GAAP Earnings (Loss) measures and why management believes the
adjustments are
appropriate.
7. We note that you present Adjusted EBITDA as a non-GAAP performance
measure.
However, the reconciliation included in Table 5 does not reconcile
Adjusted EBITDA to
John Hanson
Turtle Beach Corp
August 23, 2023
Page 3
the most directly comparable GAAP measure, net income (loss), as
required by Item
10(e)(1)(i)(B) of Regulation S-K. Please revise your presentations in
future filings to
comply. Further, in future filings, please revise the format of the
non-GAAP
reconciliation provided in Table 5 to eliminate the non-GAAP income
statement currently
presented. Refer to the guidance in Question 102.10 of the Division's
Compliance
& Disclosure Interpretations on Non-GAAP Financial Measures.
8. Please revise the Non-GAAP Financial Measures discussion to clearly
describe each of
the adjustments made in calculating your non-GAAP measures. Clearly
describe the
specific nature of the costs included in the adjustment and explain
management's reasons
for excluding these costs from the non-GAAP measure. For example,
separately describe
to investors the specific nature of the costs you exclude from your
Adjusted Earnings and
Adjusted EBITDA relating to (i) certain non-recurring business costs,
(ii) acquisition
integration costs, (iii) CEO separation related costs, and (iv)
certain valuation allowances.
9. In this regard, we note the adjustments reflected in Table 4 and Table
5 in your earnings
releases for fiscal years 2023 and 2022 relating to (i) CEO separation
related costs,
(ii) CEO transition related costs, (iii) Inventory and component
related reserves, (iv)
Certain business acquisition costs and (v) Non-recurring business
costs. Table 5 also
reflects an "Other" adjustments category. Please describe to us the
specific nature of the
costs reflected in each of these adjustments and explain to us how you
determined that
these adjustments are appropriate based on the guidance in Question
100.01 of the
Division's Compliance & Disclosure Interpretations on Non-GAAP
Financial Measures.
In closing, we remind you that the company and its management are
responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review,
comments, action or
absence of action by the staff.
You may contact Mindy Hooker at (202) 551-3732 or Martin James at (202)
551-
3671 with any questions.
FirstName LastNameJohn Hanson Sincerely,
Comapany NameTurtle Beach Corp
Division of
Corporation Finance
August 23, 2023 Page 3 Office of
Manufacturing
FirstName LastName