SAN DIEGO, Nov. 7, 2019 /PRNewswire/ -- Turtle Beach
Corporation (Nasdaq: HEAR), a leading gaming audio and
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.
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.
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 the Turtle Beach 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.
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
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 (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
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.
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 Earnings Per
Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP-
Diluted
|
|
$
|
(0.22)
|
|
|
$
|
0.91
|
|
|
$
|
(0.17)
|
|
|
$
|
1.05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
37,231
|
|
|
(2,577)
|
|
|
(230)
|
|
|
(1,009)
|
|
|
-
|
|
|
33,415
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
|
28,577
|
|
|
2,944
|
|
|
230
|
|
|
1,409
|
|
|
-
|
|
|
33,160
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
4,356
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other non-operating
expense (income), net
|
|
|
8,883
|
|
|
|
|
|
|
|
|
|
|
|
(8,410)
|
|
|
473
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
tax
|
|
|
15,338
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
|
762
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
|
14,576
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
|
32,687
|
|
|
|
(2)
|
Other includes a gain
(loss) on financial instrument obligation.
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/turtle-beach-reports-third-quarter-2019-results-300954303.html
SOURCE Turtle Beach Corporation