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 21, 2016
(Date of earliest event reported)
Turtle Beach Corporation
(Exact name of registrant as specified in its charter)
Nevada | 001-35465 | 27-2767540 |
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification Number) |
12220 Scripps Summit Drive, Suite 100
San Diego, California 92131
(Address of principal executive offices)
(888) 496-8001
(Registrant’s telephone number, including area code)
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))
Item 7.01. Regulation FD Disclosure
Investor Presentation
Certain information concerning our business and financial results can be currently accessed on our website, http://corp.turtlebeach.com/investor-relations under the heading “Investor Presentations.” Representatives of the Company expect to use this presentation, in whole or in part, and possibly with modifications, periodically in connection with conferences and presentations to investors, analysts and others. Portions of the presentation are attached hereto as Exhibit 99.1.
The investor presentation includes financial information not prepared in accordance with generally accepted accounting principles (“Non-GAAP Financial Measures”). A reconciliation of the Non-GAAP Financial Measures included in the presentation to financial information prepared in accordance with generally accepted accounting principles (“GAAP”), as required by Regulation G, appears in Appendix A to the presentation. The information contained in the presentation is summary information that is intended to be considered in the context of the Company’s Securities and Exchange Commission (“SEC”) filings and other public announcements that it may make, by press release or otherwise, from time to time. The Company undertakes no duty or obligation to publicly update or revise the information contained in the presentation or this report, although it may do so from time to time as its management believes is warranted. Any such updating may be made through the filing of other reports or documents with the SEC, through press releases or through other public disclosure.
The information in this report is being furnished pursuant to Item 7.01 and shall not be deemed to be “filed” for purposes of Section 17 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 | Turtle Beach Corporation Investor Presentation |
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 21, 2016 | By: | /S/ JOHN T. HANSON |
John T. Hanson Chief Financial Officer, Treasurer and Secretary | |||
N A S D A Q : H E A R
Safe Harbor Statement
Forward-Looking Information
This presentation includes “forward-looking statements” within the meaning of the federal securities laws. These forward-looking statements are statements that are not historical
facts including statements about our beliefs and expectations and statements, and may contain the words “may,” “could,” “would,” “should,” “believe,” “expect,” “anticipate,” “plan,”
“estimate,” “target,” “project,” “intend,” “foresee,” and similar expressions. There are a number of risks and uncertainties that could cause actual results to differ materially from the
forward-looking statements made herein, including but not limited to, the application of quarter-end and year-end accounting procedures and adjustments, risks related to the
Company’s liquidity and financial position, 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
implementation of any businesses we acquire, our indebtedness, the outcome of our previously announced HyperSound strategic review process, and the other factors discussed in our
public filings, including the section entitled “Risk Factors” in our most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q and other periodic reports filed with the
Securities and Exchange Commission (the “SEC”) and available on the SEC’s website, www.sec.gov. Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this presentation. Except as required by law, Turtle Beach Corporation (the “Company”) undertakes no obligation to publicly release any
revision to its forward-looking statements to reflect events or circumstances after the date of this presentation. All of the forward-looking statements in this presentation are qualified
by such cautionary statements, and subject to the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. This
presentation also contains trademarks and trade names that are property of their respective owners.
Non-GAAP Financial Measures
This presentation contains certain financial measures, including adjusted EBITDA and non-GAAP earnings per share (“EPS”), that are not calculated under the standards or rules of U.S.
GAAP, which are referred to as "non-GAAP financial measures." These non-GAAP financial measures, as calculated by the Company, are not necessarily comparable to similarly titled
measures reported by other companies. Additionally, these non-GAAP financial measures ire not measurements of financial performance or liquidity under GAAP and should not be
considered an alternative to the Company’s other financial information determined under GAAP. Management believes that these 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
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. Non-GAAP EPS is defined as EPS less $1.45 per diluted share in year-to-date goodwill impairment charges and inventory reserves
associated with the HyperSound restructuring. The Adjusted EBITDA outlook for the fourth quarter and full year 2016 has not been reconciled with the Company’s net loss outlook for
the same periods because of the variability, complexity and lack of visibility with respect to certain reconciling items between adjusted EBITDA and net 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 loss outlook for such periods is not available without unreasonable effort. These
reconciling items could be material to the Company’s actual results for such periods.
© 2016 Turtle Beach Corporation. All Rights Reserved.
1
N A S D A Q : H E A R
Who We Are
Turtle Beach is a premier audio innovation
company with a 40-year legacy of creating
new audio categories
Longstanding, #1 brand for gaming headsets
with 42% share of the U.S. market1
Positioned for renewed revenue and profit
growth as major industry product cycle
continues
We have created an entirely new audio
market for directional sound with
HyperSound Clear™ 500P and HyperSound
Glass
2 1) Based on U.S. NPD market data, revenue share for 2015.
N A S D A Q : H E A R
Headsets HyperSound
Overview
Market share leader with large, loyal
customer base
Breakthrough audio technology that allows
directed placement of sound
Markets
Catalysts
Leading product portfolio for new-gen
consoles
Evolving to a licensed model
Leading Gaming Headset Business & Transformational New
Directed Audio Technology
3
Console Gaming PC Gaming Healthcare Commercial Consumer Licensing Mobile
™
Virtual Reality
N A S D A Q : H E A R
Tracking Towards 2016 Management Objectives
Significantly improve profitability of headset business (~5X EBITDA improvement)
✓Drive overall growth, offsetting expected $20M+ YoY decline in old-gen revenues with new-gen increases
✓Continue to improve headset gross margins to achieve ~30% for the year
✓Improve international performance in spite of strong dollar impact
✓Manage OpEx to improve headset adjusted EBITDA to ~$12.5M+ (~5x increase)
Move HyperSound business towards cash flow breakeven
✓Continue to drive additional advancements in technology and HyperSound intellectual property
✓Manage costs carefully to have HyperSound adjusted EBITDA less than $(11)M
✓Strategic options process underway to explore business model modifications
Targeting positive consolidated adjusted EBITDA of $1-$3M for 2016
4
N A S D A Q : H E A R
1) Prior guidance as of Aug 8, 2016.
2) Guidance updated and effective on Nov 10, 2016.
3) Delta reflects midpoint of the outlook.
4) Excludes $1.30 for goodwill impairment and $0.15 for inventory reserve charges associated with the HyperSound restructuring.
2016 Outlook
5
($ in millions) Prior¹ Revised² % ∆³ Management Commentary
Revenue:
New-Gen $154-$161 $157-$163 7% 27-31% growth from 2015
Old-Gen $8-$10 $7-$9 (11)% 71-77% decline from 2015
Other $5 $5 - Opportunity for international growth
HyperSound $1-$2 $1 (83)% Slower than expected ramp, lower spend on sales & marketing
Total Revenue $168-$178 $170-$178 7% 4-9% growth from 2015
Headset Gross Margin ~30% ~30% - +400 basis points over 2015
EPS $(1.08)-$(1.12) $(1.87)-$(1.91) (72)% Based upon 48.6M shares
Non-GAAP EPS4 $(0.45)-$(0.49) $(0.42)-$(0.46) 7%
$(0.58) per share in 2015, excluding a tax valuation expense
and goodwill impairment
Adjusted EBITDA:
Headsets $12.5+ $11.5-$13.5 2% ~5X increase over 2015
HyperSound
Investment
<$12 <$11 (8)% Modest reduction from 2015 reflecting cost management
Consol. Adj. EBITDA $0.5-$2.5 $1-$3 100% $11M+ increase from 2015
N A S D A Q : H E A R
Gaming Headsets
N A S D A Q : H E A R
Dominant Gaming Audio Provider with Leading Market Share
#1 gaming headset provider for Xbox and PlayStation
Completely transitioned portfolio from old-gen (Xbox 360 & PlayStation
3) to new-gen (Xbox One & PlayStation 4) from 2013 to 2015
New-gen headset revenues up:
55% Q1-Q3 2016 YoY
35% Q3 2016 YoY
Xbox One (Q1-Q3 2016):
3 of the top 5 headsets
4 of the top five 3rd party headsets and the top selling 3rd party headset
PlayStation 4 (Q1-Q3 2016):
3 of the top 5 headsets
4 of the top five 3rd party headsets and the top selling 3rd party headset
7
1) Video Games POS Monthly Update, The NPD Group, Inc. (US data measured by revenue share).
2) Gfk/Gfk Chart-Track.
42%
2015 U.S. Gaming Headset Market Share1
N A S D A Q : H E A R
3.0
10.9
20.0
28.7
36.7
44.0
4.6
18.0
34.6
51.5
67.1
82.4
0M
20M
40M
60M
80M
100M
120M
2013 2014 2015 2016E 2017E 2018E
Xbox One PS4
0M
10M
20M
30M
40M
50M
60M
70M
80M
90M
2013 2014 2015 2016E 2017E 2018E
(# of consoles)
New-Gen Console Growth
35M 82M
20M 44M
Sources: DFC Intelligence Forecasts: Worldwide Console Forecast, October 2016.
Cumulative Sales
(Current 2018 est.)
Platform
Cumulative Console Sales (in millions)
Cumulative new-gen console sales totaled 55M as of 12/31/15
New-gen console sales are up over 56% vs. old-gen at same
time in cycle
Over 25M new-gen consoles expected to be sold worldwide in
2016
New-gen cumulative console sales projected to exceed 125M
worldwide in 2018
New-Gen:
Xbox One, PS4
Old-Gen:
Xbox360, PS3
8
Active Installed Base of Consoles (in millions)
(# of consoles)
N A S D A Q : H E A R
Retail ASP <$50 $50 - $99 $100 - $200 >$200
Console PS4 Xbox One PS4 Xbox One PS4 Xbox One PS4 Xbox One TOTAL¹
Recon 60P
Recon 50P
P4c
Recon 50X
Recon 30X
Stealth 400
S350VR
PX24
XO4 Stealth
XO1
PX24
Stealth 520
Elite Pro
Stealth 420X+
XO7 Pro
Elite Pro
Elite 800 Elite 800X 18
Sony Gold Wireless Platinum Wireless 2
Microsoft XB1 Chat XB1 Stereo 2
Astro
A40+M80
A40 + MixAmp
A50
A40 + MixAmp
A50
5
PDP
LVL 3
LVL 1
Afterglow BT
LVL 3
LVL 1
AG 9+
LVL 5+
Sound of Justice
AG 9+
LVL 5+
Sound of Justice
11
Mad Catz
Kaiken
Headcomm pro
Kama
Kama ARK100 ARK 100 ARK300 ARK300 8
We Cover All Key Price Points – More Than Any Competitor
9 1) Table reflects competitive data as of November 2016.
N A S D A Q : H E A R
We Have Differentiated Technology…
Advanced Chat
Chat technology like noise gate,
chat boost, variable microphone monitor
Bluetooth
Dual-pairing Bluetooth in most
wireless headsets for chat, mobile gaming,
audio calls and music streaming
DTS Headphone:X
1st gaming headsets with DTS 7.1
surround sound to provide incredibly
accurate and immersive directional sound
Digital Signal Processing (DSP)
Game audio and chat presets that
can be customized using a new mobile app
Active Noise Cancellation
1st gaming headset to use noise
cancellation for both inbound audio and
outbound chat
Superhuman Hearing™
Provides a competitive advantage
by making important, quiet sounds louder
and easier to hear
10
N A S D A Q : H E A R
Strong Retail Presence Great Partnerships 12,000+ Interactive Displays
Sample retailers
…And Strong Distribution
11
Product sales in over 40
countries with over 266,000
points of distribution
Partnerships with industry
leading brands
Market leader in deploying
interactive gaming headset
displays
N A S D A Q : H E A R
International
Virtual Reality (VR) PC Gaming
Headset Growth Opportunities
12
VR market expected to reach $1B in 20161
$700M in hardware sales, remainder in content
According to SuperData Research, VR hardware market expected to reach
$15.9B by 2020 (40% CAGR)²
STEALTH 350VR, our first gaming headset designed for upcoming VR devices,
launched in Oct 2016
“If you’re buying a headset to use with your virtual reality hardware, you
won’t find another headset on the market (yet) designed to physically
accommodate the Rift, Vive and PSVR HMDs.” Tom’s Hardware review
(online reach of 20M)
“It’s nice to be able to have so much control over volume and bass on a per-
game basis, while having a band that’s easy to fit over the rather challenging
design of the PlayStation VR.” Polygon review (online reach of 13M)
1) Deloitte. “Virtual reality (VR): a billion dollar niche.”
2) VR Focus, March 10, 2016.
STEALTH 350VR
N A S D A Q : H E A R
International
Virtual Reality (VR) PC Gaming
Headset Growth Opportunities
13
PC gaming headsets market ~$400M market globally1
Launched eight new SKUs in 2014 and 2015
Launched PC gaming accessories via a partner in 2014
including:
Keyboards
Mice
Mouse pads
PC gaming more popular than console gaming in
markets like Germany, China and other parts of Asia2
Leveraging expanded portfolio as a growth platform in
Germany and China
Sample PC Products
1) The NPD Group, IDC and Company Estimates.
2) Newzoo 2015 Global Games Market Report Premium.
N A S D A Q : H E A R
International
Virtual Reality (VR) PC Gaming
Headset Growth Opportunities
14
China represents long-term growth opportunity for console and PC gaming
headsets
446M Chinese gamers2
China represents <2% of our annual revenues today
China has lifted video game console ban
Turtle Beach first-to-market with Xbox One gaming headsets, sales efforts
begin 2016-2017 when console sales ramp
Initiate modest investment in 2016 to begin China growth efforts
Future investment in eSports Planned for first half of 2017
Growth Plans and Expansion in LATAM
209M estimated gamers3
Turtle Beach in 10 countries and 1400 stores
$13.1B
$15.2B
$5.0B
$7.0B
2014 2015
Chinese Games Market Sales
Forecast¹
All Other Game Segments
Computer Games
$18.1B
$22.2B
1) Newzoo 2015 Global Games Market Report Premium.
2) CGA, Newzoo China vs. US report Aug 2015.
3) Newzoo 2016 Global Games Market Report Premium.
N A S D A Q : H E A R
HyperSound – A New Sound Delivery Mechanism
How does HyperSound technology work?
Thin panels produce directional audio within an
ultrasound beam, masking ambient noise
HyperSound Clear 500P™ TV audio solution
improves the listening experience and
speech intelligibility for individuals with
mild to severe hearing loss
HyperSound technology shown to be
effective in commercial markets requiring
directed sound (as demonstrated by
national kiosk rollout at Best Buy)
Future opportunities in consumer markets
and licensing agreements
16
How HyperSound Clear 500P Works
Traditional
Audio
HyperSound
Audio Beams
N A S D A Q : H E A R
Commercial Retail Audio
Commercial Markets and New Glass Technology
17
1) POPAI | HyperSound In-Store Research Report, Jun 2015.
2) BUNN Research, Jan 2014.
Pre-defined sound zones for in-store promotional,
informational, beaconing and way-finding messages
Deployed in Nov 2014 to ~1,000 Best Buy stores in
Activision Call of Duty® retail displays
HyperSound/Kiosk pairing has shown a 28% sales
increase in a retail environment1
HyperSound Glass
Fully working prototype of HyperSound Glass speakers
has been unveiled
Glass construction enables significant flexibility in size
Future applications across many segments
Fully working prototype of HyperSound Glass
integrated into desktop monitors also revealed
Creates immersive, surround sound audio Audio for interactive kiosks
and displays
20M digital signs currently in
North America2
2.5M self-service kiosks in
20152
Demos available at:
HyperSound Glass Demo
HyperSound Glass Integrated into Desktop Monitors
N A S D A Q : H E A R
Evolving HyperSound to a License Model
Potential licensing revenue streams include:
Retail sales of HyperSound Clear™ 500P
Test pilot at major consumer electronics retailer in Chicago area
is off to a positive start
Alleviating Tinnitus symptoms
FDA 510(k) clearance for HyperSound tinnitus feature received
Aug 2016
We are in discussions with multiple hearing healthcare providers
Commercial retail display sales
Continues to generate consistent monthly sales with a solid
pipeline of opportunities
Licensing HyperSound Glass technology and other
applications
We are in discussions with multiple potential licensees
18
HyperSound Clear 500P
N A S D A Q : H E A R
26 28 35
48
74 20
68
86
108
83
Jan 2013 Jan 2014 Jan 2015 Jan 2016 Nov 2016¹
Pending Issued
Headset innovations:
Audio processing
Gaming specific features
HyperSound innovations:
Emitter construction
Ultrasound and emitter electronics
Digital signal processing techniques
121
96
46
157
Strong & Growing Patent Portfolio
19 1) As of Nov 7, 2016.
156
N A S D A Q : H E A R
Financial Summary
N A S D A Q : H E A R
Balance Sheet Highlights
Revolver typically peaks in Q4
and lowest in Q1 after holiday
receipts
In Feb 2016, raised $6.2M in
net proceeds (over 50%
purchased by insiders),
stabilizing liquidity
$44.6M federal, $20.6M state
net operating losses @ Dec
31, 2015 offset taxable
income (not scheduled to
expire until 2029)
Key Stats
21
Sources: S&P Capital IQ, company filings.
1) As of September 30, 2016.
2) Includes SG VTB Holdings (Stripes Group LLC, a private equity fund and our largest shareholder) and trusts affiliated with Ron Doornink, the Company’s chairman of the board.
3) Non-callable, due in October 2030, and has 8% per annum PIK interest.
Trading Data (@ Nov 17, 2016)
Stock Price $1.61
Market Cap. (primary shares) $79.3M
52 Wk. Low/High $0.83/$2.59
Avg. Daily Vol. (3 mo) 316.3K
Public Float¹ 46.8%
Primary Shares¹ 49.2M
SG VTB Holdings & Affiliates¹ 21.5M
Retired Founders of Turtle Beach¹ 5.6M
Options/Restricted Stock¹ 6.9M
Warrants¹ 3.1M
Fully Diluted Shares¹ 59.2M
Capitalization
@ 9-30-15 @ 9-30-16
Cash & Equivalents $3.1M $3.3M
Debt
Revolver (asset-based loan) $20.6M $26.3M
Term Loans $21.4M $14.8M
Subordinated Notes² $14.3M $18.8M
Total Debt $56.3M $59.9M
Series B - Preferred Stock³ $15.8M $17.1M
N A S D A Q : H E A R
Headset Revenue Growth
Revenue Growth Profile
22
New-gen sales up 24%
from 2014 to 2015, up
41% in Q3-16 YoY
New-gen revenue
expected to increase
27-31% in 2016²
Old-gen revenue
expected to decline
71-77% in 2016²
Strong revenue growth
supporting further
gains in our #1 market
share
Note: Old-gen, new-gen revenue splits are approximations.
1) Strong dollar and rapid drop in old-gen significantly reduced revenues from 2014 to 2015.
2) Guidance updated and effective on Nov 10, 2016
2013 2014 2015¹ 2016E²
New Gen Old Gen Other HyperSound
$178M $186M
$163M
$170-178M
N A S D A Q : H E A R
Headset Net Revenue¹ Headset Gross Margin¹ Headset Adj. EBITDA¹ ²
23
$162M
$166M
$173M
$175M
$174M
Q4-15 Q1-16 Q2-16 Q3-16 Q4-16E³
26.5% 26.6%
27.7%
28.9%
30.0%
Q4-15 Q1-16 Q2-16 Q3-16 Q4-16E³
$2M
$6M
$8M
$11M
$12M
Q4-15 Q1-16 Q2-16 Q3-16 Q4-16E³
1) Excludes HyperSound allocation in Q4-16.
2) Please see appendix for a reconciliation of Adjusted EBITDA.
3) Guidance updated and effective on Nov 10, 2016. Midpoint of guidance where applicable.
Strong Headset Growth
Trailing 12-month data by quarter
N A S D A Q : H E A R
Q4 2016 Outlook
24
Q4-16¹ YoY ∆2 Management Commentary
Revenue $78-$86M 4% Holiday ‘16 units sold in somewhat earlier than in the past
Gross Margin >29.1% Up vs. last year
New-gen headsets carry higher gross margin, offset by HyperSound
amortization
Adj. EBITDA $13-15M 41% Prudent cost management in headsets and HyperSound
EPS $0.13-$0.17 Q4-15 = $(1.09) $0.08 in Q4-15 excluding a $1.17 goodwill impairment charge
1) Guidance updated and effective on Nov 10, 2016.
2) Delta reflects midpoint of the outlook.
N A S D A Q : H E A R
1) Prior guidance as of Aug 8, 2016.
2) Guidance updated and effective on Nov 10, 2016.
3) Delta reflects midpoint of the outlook.
4) Excludes $1.30 for goodwill impairment and $0.15 for inventory reserve charges associated with the HyperSound restructuring.
2016 Outlook
25
($ in millions) Prior¹ Revised² % ∆³ Management Commentary
Revenue:
New-Gen $154-$161 $157-$163 7% 27-31% growth from 2015
Old-Gen $8-$10 $7-$9 (11)% 71-77% decline from 2015
Other $5 $5 - Opportunity for international growth
HyperSound $1-$2 $1 (83)% Slower than expected ramp, lower spend on sales & marketing
Total Revenue $168-$178 $170-$178 7% 4-9% growth from 2015
Headset Gross Margin ~30% ~30% - +400 basis points over 2015
EPS $(1.08)-$(1.12) $(1.87)-$(1.91) (72)% Based upon 48.6M shares
Non-GAAP EPS4 $(0.45)-$(0.49) $(0.42)-$(0.46) 7%
$(0.58) per share in 2015, excluding a tax valuation expense
and goodwill impairment
Adjusted EBITDA:
Headsets $12.5+ $11.5-$13.5 2% ~5X increase over 2015
HyperSound
Investment
<$12 <$11 (8)% Modest reduction from 2015 reflecting cost management
Consol. Adj. EBITDA $0.5-$2.5 $1-$3 100% $11M+ increase from 2015
N A S D A Q : H E A R
Key Takeaways
Dominant market leader in console gaming
headset market with technologically
differentiated products
Console market growing strongly post new
platform launches late 2013
Company now completed successful portfolio
transition for new Xbox and PlayStation consoles
New-gen headset transition and HyperSound
licensing opportunity expected to meaningfully
improve margins, profitability and cash flows
VR, PC gaming and international expansion all
provide meaningful headset growth
opportunities
26
N A S D A Q : H E A R
Contact Information
Investor Relations: Media Contact:
Cody Slach Maclean Marshall
Liolios Turtle Beach Corporation
949.574.3860 858.914.5093
HEAR@Liolios.com Maclean.Marshall@turtlebeach.com
www.turtlebeach.com www.hypersound.com
C O M PA N Y W E B S I T E S
www.turtlebeachcorp.com
Contact Us
27
Appendix
N A S D A Q : H E A R
Experienced Management Team
Juergen Stark
CEO
• COO of Motorola Mobility’s mobile business
• 10 years as principal at McKinsey & Company
John Hanson
CFO
• EVP and CFO at Dialogic
• CFO at One Communications Corp
Richard Kuvalik
CTO
• 15+ years in consumer audio
• Led peripheral products for PlayStation at
Sony
Rob Andris
SVP, Global Supply Chain & Ops
• VP, Global Supply Chain Operations, Hewlett
Packard
• 20 year, supply chain management, IBM, Cisco,
HP
Cris Keirn
SVP, Global Sales
Andrew Lilien
VP of Marketing
Megan Wynne
General Counsel
Scott Steele
SVP of Product Development
• 20+ years of brand, consumer and retail
marketing experience
• Past experience at ESPN, Fleer Trading
Cards and National Media Group
• 5 years with I-Flow, a Kimberly-Clark Health
Care Company
• 13 years with Morris Polich & Purdy law
firm
• 23 years of experience in technology
product development
• Founded Green Edge Technologies and
served for 2 years as its CEO
29
• Led headset transition as VP of business planning &
strategy
• 17 years with Motorola in product management,
operations, quality and customer relations
N A S D A Q : H E A R
Experienced Board of Directors
Laureen DeBuono
Director
Ken Fox
Director
William Keitel
Director
Dr. Andrew Wolfe, PhD
Director
Ron Doornink
Chairman
• Partner at leading CFO consulting services firm FLG Partners, LLC
• Former President and CEO of Coapt Systems, Inc.
• Former COO and CFO of hearing aid manufacturer ReSound Corp.
• Managing partner of Stripes Group, LLC
• Former Managing Director and co-founder of Internet Capital Group (NASDAQ: ICGE)
• Co-founder of A-10 Capital and Sentinel Fund
• Former CFO of Qualcomm Incorporated (NASDAQ: QCOM)
• During his time at the company grew revenues from ~$800M to ~$25B
• Held senior financial roles at Nortel (OTC: NRTLQ) and Pepsico (NYSE: PEP)
• Founder and principal of Wolfe Consulting
• Former Chief Technology Officer for SONICblue, Inc.
• B.S.E.E. in Electrical Engineering and Computer Science, Johns Hopkins; Ph.D. in Computer
Engineering, Carnegie Mellon
• Former Chairman and CEO of Activision Publishing (NASDAQ: ATVI)
• Operating partner of Stripes Group, LLC
• Founder and principal of Erasmus Equity Investments
Juergen Stark
CEO and Director
• COO of Motorola Mobility’s mobile business
• 10 years as Principal at McKinsey & Company, Inc.
• MBA, Harvard Business School; B.S. Aerospace, University of Michigan
30
N A S D A Q : H E A R
Adjusted EBITDA Reconciliation (Trailing 12 months)
31
$ in thousands Q4-15 Q1-16 Q2-16 Q3-16
Net Loss $ (17,201) $ (17,440) $ (17,341) $ (5,630)
Interest 5,096 6,091 6,943 7,270
Depreciation & Amortization 6,374 5,865 5,443 4,959
Stock Compensation 5,347 5,197 4,228 3,982
Taxes 2,393 5,858 8,702 335
Restructuring Expense 399 280 96 269
Adjusted EBITDA $ 2,408 $ 5,851 $ 8,071 $ 11,185