hear-8k_20191107.htm

 

 

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 7, 2019

(Date of earliest event reported)

 

  Turtle Beach Corporation

(Exact name of registrant as specified in its charter)

 

   001-35465

(Commission File Number)

 

 

 

 

Nevada

27-2767540

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification Number)

 

 

11011 Via Frontera, Suite A/B

San Diego, California

92127

(Address of principal executive offices)

(Zip Code)

 

(888) 496-8001

(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

Common Stock, par value $0.001

HEAR

Nasdaq

 

 

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))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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.

 

 

 

 


 

 

Item 2.02 - Results of Operations and Financial Condition.

On November 7, 2019, Turtle Beach Corporation (the “Company”) issued a press release announcing its financial results for its quarter ended September 30, 2019. A copy of that press release and the attached financial schedules are attached as Exhibit 99.1 to this report and incorporated herein by reference.

The information in this report (including Exhibit 99.1) is being furnished pursuant to Item 2.02 and shall not be deemed to be “filed” for purposes of Section 18 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

Press Release of the Company, dated November 7, 2019

 

 

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 7, 2019

By:

/s/ JOHN T. HANSON

 

 

 

John T. Hanson

Chief Financial Officer, Treasurer and Secretary

 

 

 

 

hear-ex991_6.htm

Exhibit 99.1

 

TURTLE BEACH REPORTS THIRD QUARTER 2019 RESULTS

 

San Diego, CA – November 7, 2019 Turtle Beach Corporation (Nasdaq: HEAR), a leading gaming  accessory brand, reported financial results for the third quarter ended September 30, 2019.

 

Third Quarter Summary vs. Year-Ago Quarter:

 

Net revenue was $46.7 million ($47.1 million in constant currency) versus $74.4 million;

 

 

Net loss of $3.1 million, or $(0.22) per share, compared to net income of $14.9 million, or $0.91 per share; and

 

 

Adjusted EBITDA was $0.3 million compared to $17.6 million.

 

 

“As was the case in the first half of the year, our results for the third quarter tracked closely to our expectations, with revenue stronger than any other third quarter outside of last year,” said Juergen Stark, CEO, Turtle Beach Corporation. “This confirms that many new gamers remain in the market and are joining the headset replacement cycle. We are also pleased with the progress we are making in the PC accessories business, with ROCCAT’s gaming mice, keyboards and headsets supplementing our own Atlas line of PC headsets, which we began a year ago.

 

“Looking forward, we remain uniquely positioned to capitalize on the continued growth in video gaming around the globe, as consumers increasingly rely on our headsets and accessories to enhance their gameplay and improve the entertainment experience.”

 

Third Quarter 2019 Financial Results

Net revenue in the third quarter of 2019 was $46.7 million compared to $74.4 million in the year-ago quarter. While consumer demand remains above historic levels, this decrease was the result of the expected decline in demand from the record levels in the prior year driven by new headset users buying their first headset for Battle Royale games.  On a constant currency basis, revenue in the third quarter of 2019 was $47.1 million.

 

Gross margin in the third quarter of 2019 was 32.2% compared to 41.0% in the third quarter of 2018. This expected decrease was primarily due to a more normal level of promotional activity compared to 2018 when less promotional effort was necessary in the record-setting period, as well as product mix, a decline in volume-based fixed cost leverage as a result of the decrease in revenue, and the impact of purchase accounting inventory step-up costs from the ROCCAT acquisition.

 

 


Turtle Beach Reports Third Quarter 2019 Financial Results

 

Operating expenses in the third quarter of 2019 increased as planned to $17.6 million from $14.0 million in the 2018 period due primarily to incremental ROCCAT operating costs, ROCCAT transaction and integration costs, and digital marketing and sponsorship initiatives, partially offset by decreases in revenue-based compensation as compared to the 2018 period.

 

Net loss in the third quarter of 2019 was $3.1 million compared to net income of $14.9 million in the year-ago quarter. The loss was driven by lower gross profit because of the expected decline in revenue and the increase in operating expenses.  

 

Net loss per share in the third quarter of 2019 was $0.22 on 14.5 million weighted average diluted shares outstanding, compared to net income per share of $0.91 on 16.2 million weighted average diluted shares outstanding in the year-ago quarter.

 

Adjusted net loss (as defined below in “Non-GAAP Financial Measures”) in the third quarter of 2019, which excludes transaction and integration costs incurred related to the acquisition of the ROCCAT business, was $2.6 million, or $(0.18) per share, compared to net income of $14.7 million, or $0.91 per share, in the corresponding 2018 period.  

 

Adjusted EBITDA (as defined below in “Non-GAAP Financial Measures”) in the third quarter of 2019 was $0.3 million compared to $17.6 million in the year-ago quarter.

 

Balance Sheet Highlights

At September 30, 2019, the Company had $7.0 million of cash and cash equivalents with $26.6 million of outstanding debt under its revolving line of credit. This compares to $6.2 million of cash and cash equivalents and $31.4 million of outstanding debt at September 30, 2018, which consisted of $15.4 million in subordinated notes, $12.5 million in term loans and $3.5 million of revolving debt.

 

Since Turtle Beach’s share repurchase program was announced on April 10, 2019, the Company has repurchased approximately 206,000 shares for $1.9 million, or an average of $9.43 per share.

 


 


Turtle Beach Reports Third Quarter 2019 Financial Results

 

Updated 2019 Outlook

The Company expects revenue to range between $236 million and $242 million. Adjusted EBITDA is expected to range between $23 million and $25 million reflecting a $1 million to $1.5 million tariff impact and a decision to increase investments in the fourth quarter to market and promote our brand and products. Earnings per diluted share is expected to range between $0.50 and $0.60, and adjusted earnings per share is expected to range between $0.65 and $0.75, both reflecting the aforementioned revenue and EBITDA forecasts and a higher estimated tax rate.

 

With respect to the Company's adjusted EBITDA outlook for the full year 2019, 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 7, 2019, at 2:00 p.m. Pacific time (5:00 p.m. Eastern) to discuss its third quarter 2019 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 7, 2019

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: 3895117

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 www.turtlebeachcorp.com.

 


Turtle Beach Reports Third Quarter 2019 Financial Results

 

 

A replay of the conference call will be available after 8:00 p.m. ET on the same day through November 14, 2019.

 

Toll-Free Replay Number: (855) 859-2056

International Replay Number: (404) 537-3406

Replay ID: 3895117

 

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 integration and transaction costs related to the acquisition of the ROCCAT business and excluding the effect of the mark-to-market requirement of the financial instrument obligation. “Adjusted EBITDAis 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 (e.g., the integration and transaction costs related to the ROCCAT acquisition and the mark-to-market adjustment for the financial instrument obligation and). “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 supplementary 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 months ended September 30, 2019 and 2018.

 

About Turtle Beach Corporation

Turtle Beach (www.turtlebeach.com) is a leading gaming audio and accessory brand, offering a wide selection of cutting-edge, award-winning gaming headsets. Whether you’re a professional

 


Turtle Beach Reports Third Quarter 2019 Financial Results

 

esports athlete, hardcore gamer, casual player, or just starting out, Turtle Beach has the gaming headset to help you truly master your skills. Innovative and advanced technology, amazing high-quality gaming audio, crystal-clear communication, lightweight and comfortable designs, and ease-of-use are just a few features that make Turtle Beach a fan-favorite brand for gamers the world over. Designed for Xbox, PlayStation®, and Nintendo consoles as well as for PC, Mac®, and mobile/tablet devices, owning a Turtle Beach gaming headset gives you the competitive advantage. In 2019 Turtle Beach acquired ROCCAT, a leading PC accessories maker that combines detail-loving German innovation with a genuine passion for designing the best PC gaming products. 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” 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.

 

All trademarks are the property of their respective owners.

 

 


For Investor Information, Contact:

For Media Information, Contact:

Cody Slach or Sean McGowan

MacLean Marshall

Gateway Investor Relations

Sr. Director – Brand & PR/Communications

On Behalf of Turtle Beach

Turtle Beach Corp.

949.574.3860

858.914.5093

HEAR@gatewayir.com

maclean.marshall@turtlebeach.com

 

 


 

Turtle Beach Corporation

Condensed Consolidated Balance Sheets

(in thousands, except par value and share amounts)

 

Table 1.

 

 

September 30,

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

 

(unaudited)

 

 

 

 

 

ASSETS

 

 

 

Current Assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

7,037

 

 

$

7,078

 

Accounts receivable, net

 

 

28,468

 

 

 

52,797

 

Inventories

 

 

67,032

 

 

 

49,472

 

Prepaid expenses and other current assets

 

 

5,500

 

 

 

4,469

 

Total Current Assets

 

 

108,037

 

 

 

113,816

 

Property and equipment, net

 

 

4,909

 

 

 

5,856

 

Goodwill

 

 

9,096

 

 

 

 

Intangible assets, net

 

 

4,836

 

 

 

1,036

 

Other assets

 

 

3,719

 

 

 

1,212

 

Total Assets

 

$

130,597

 

 

$

121,920

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

Revolving credit facility

 

$

26,561

 

 

$

37,385

 

Accounts payable

 

 

37,490

 

 

 

17,724

 

Other current liabilities

 

 

20,489

 

 

 

18,488

 

Total Current Liabilities

 

 

84,540

 

 

 

73,597

 

Deferred income taxes

 

 

187

 

 

 

187

 

Financial instrument obligation

 

 

 

 

 

7,848

 

Other liabilities

 

 

4,264

 

 

 

2,792

 

Total Liabilities

 

 

88,991

 

 

 

84,424

 

Commitments and Contingencies

 

 

 

 

 

 

 

 

Stockholders’ Equity

 

 

 

 

 

 

 

 

Common stock, $0.001 par value - 100,000,000 shares authorized; 14,512,599 and 14,268,184 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively

 

 

15

 

 

 

14

 

Additional paid-in capital

 

 

176,295

 

 

 

169,421

 

Accumulated deficit

 

 

(133,905

)

 

 

(131,463

)

Accumulated other comprehensive loss

 

 

(799

)

 

 

(476

)

Total Stockholders’ Equity

 

 

41,606

 

 

 

37,496

 

Total Liabilities and Stockholders’ Equity

 

$

130,597

 

 

$

121,920

 

 

 


 

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,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Net revenue

 

$

46,723

 

 

$

74,427

 

 

$

132,899

 

 

$

176,118

 

Cost of revenue

 

 

31,680

 

 

 

43,925

 

 

 

89,898

 

 

 

110,310

 

Gross profit

 

 

15,043

 

 

 

30,502

 

 

 

43,001

 

 

 

65,808

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling and marketing

 

 

10,150

 

 

 

8,517

 

 

 

24,581

 

 

 

21,264

 

Research and development

 

 

2,198

 

 

 

1,400

 

 

 

5,388

 

 

 

4,056

 

General and administrative

 

 

5,214

 

 

 

4,063

 

 

 

16,057

 

 

 

11,911

 

Total operating expenses

 

 

17,562

 

 

 

13,980

 

 

 

46,026

 

 

 

37,231

 

Operating income (loss)

 

 

(2,519

)

 

 

16,522

 

 

 

(3,025

)

 

 

28,577

 

Interest expense

 

 

240

 

 

 

1,093

 

 

 

595

 

 

 

4,356

 

Other non-operating expense (income), net

 

 

302

 

 

 

99

 

 

 

(1,430

)

 

 

8,883

 

Income (loss) before income tax

 

 

(3,061

)

 

 

15,330

 

 

 

(2,190

)

 

 

15,338

 

Income tax expense

 

 

63

 

 

 

398

 

 

 

252

 

 

 

762

 

Net income (loss)

 

$

(3,124

)

 

$

14,932

 

 

$

(2,442

)

 

$

14,576

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.22

)

 

$

1.07

 

 

$

(0.17

)

 

$

1.10

 

Diluted

 

$

(0.22

)

 

$

0.91

 

 

$

(0.17

)

 

$

1.05

 

Weighted average number of shares:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

14,506

 

 

 

14,019

 

 

 

14,477

 

 

 

13,263

 

Diluted

 

 

14,506

 

 

 

16,229

 

 

 

14,477

 

 

 

13,828

 

 

 

 


 

Turtle Beach Corporation

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

Table 3.

 

 

Nine Months Ended

 

 

 

September 30, 2019

 

 

September 30, 2018

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

$

27,304

 

 

$

43,358

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

(14,295

)

 

 

(2,046

)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Borrowings on revolving credit facilities

 

 

148,087

 

 

 

205,810

 

Repayment of revolving credit facilities

 

 

(158,911

)

 

 

(240,753

)

Proceeds of term loan

 

 

-

 

 

 

3,265

 

Repayment of term loan

 

 

-

 

 

 

(2,485

)

Repayment of subordinated notes - related party

 

 

-

 

 

 

(8,265

)

Settlement of Series B Preferred Stock

 

 

-

 

 

 

(1,390

)

Proceeds from exercise of stock options and warrants

 

 

214

 

 

 

4,097

 

Repurchase of common stock

 

 

(1,941

)

 

 

-

 

Repurchase of common stock to satisfy employee tax withholding obligations

 

 

(201

)

 

 

(141

)

Debt financing costs

 

 

-

 

 

 

(405

)

Net cash used for financing activities

 

 

(12,752

)

 

 

(40,267

)

Effect of exchange rate changes on cash and cash equivalents

 

 

(298

)

 

 

(114

)

Net increase (decrease) in cash and cash equivalents

 

 

(41

)

 

 

931

 

Cash and cash equivalents - beginning of period

 

 

7,078

 

 

 

5,247

 

Cash and cash equivalents - end of period

 

$

7,037

 

 

$

6,178

 

 


 

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,

2019

 

 

September 30,

2018

 

 

September 30,

2019

 

 

September 30,

2018

 

Net Income (Loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Net Income (Loss)

 

$

(3,124

)

 

$

14,932

 

 

$

(2,442

)

 

$

14,576

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments, net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss (gain) on financial instrument obligation

 

 

-

 

 

 

(209

)

 

 

(1,601

)

 

 

8,410

 

Acquisition integration costs

 

 

543

 

 

 

-

 

 

 

2,603

 

 

 

-

 

Non-GAAP Earnings

 

$

(2,581

)

 

$

14,723

 

 

$

(1,440

)

 

$

22,986

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnigns Per Share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP- Diluted

 

$

(0.22

)

 

$

0.91

 

 

$

(0.17

)

 

$

1.05

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss (gain) on financial instrument obligation

 

 

-

 

 

 

-

 

 

 

(0.11

)

 

 

0.51

 

Acquisition integration costs

 

 

0.04

 

 

 

-

 

 

 

0.18

 

 

 

-

 

Non-GAAP- Diluted

 

$

(0.18

)

 

$

0.91

 

 

$

(0.10

)

 

$

1.56

 

 


 

Turtle Beach Corporation

GAAP to Adjusted EBITDA Reconciliation

(in thousands)

(unaudited)

Table 5.

 

 

Three Months Ended

 

 

 

September 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

Adj

 

 

 

 

 

 

 

 

 

As

 

Adj

 

Adj

 

Stock

 

 

 

 

Adj

 

 

 

Reported

 

Depreciation

 

Amortization

 

Compensation

 

Other (1)

 

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 (1)

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Other includes certain business acquisition costs and a gain (loss) on financial instrument obligation.

 

 


 

Turtle Beach Corporation

GAAP to Adjusted EBITDA Reconciliation

(in thousands)

(unaudited)

Table 5. (continued)

 

 

Three Months Ended

 

 

 

September 30, 2018

 

 

 

 

 

 

 

 

 

 

 

 

Adj

 

 

 

 

 

 

 

 

 

As

 

Adj

 

Adj

 

Stock

 

 

 

 

Adj

 

 

 

Reported

 

Depreciation

 

Amortization

 

Compensation

 

Other (2)

 

EBITDA

 

Net revenue

 

$

74,427

 

$

-

 

$

-

 

$

-

 

$

-

 

$

74,427

 

Cost of revenue

 

 

43,925

 

 

(137

)

 

-

 

 

(70

)

 

-

 

 

43,718

 

Gross Profit

 

 

30,502

 

 

137

 

 

-

 

 

70

 

 

-

 

 

30,709

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

13,980

 

 

(603

)

 

(74

)

 

(518

)

 

-

 

 

12,786

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

16,522

 

 

740

 

 

74

 

 

587

 

 

-

 

 

17,923

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

1,093

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other non-operating expense (income), net

 

 

99

 

 

 

 

 

 

 

 

 

 

 

209

 

308

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income tax

 

 

15,330

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

 

398

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

14,932

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

17,615

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended

 

 

 

September 30, 2018

 

 

 

 

 

 

 

 

 

 

 

 

Adj

 

 

 

 

 

 

 

 

 

As

 

Adj

 

Adj

 

Stock

 

 

 

 

Adj

 

 

 

Reported

 

Depreciation

 

Amortization

 

Compensation

 

Other (2)

 

EBITDA

 

Net revenue

 

$

176,118

 

$

-

 

$

-

 

$

-

 

$

-

 

$

176,118

 

Cost of revenue

 

 

110,310

 

 

(367

)

 

-

 

 

(400

)

 

-

 

 

109,543

 

Gross Profit

 

 

65,808

 

 

367

 

 

-

 

 

400

 

 

-

 

 

66,575