Video Game Industry Sales/Dollars/January 2025 Turtle Beach CorporationCondensed Consolidated Statements of Operations(in thousands, except per-share data)(unaudited)Table 1. Three Months Ended Twelve Months Ended December 31, December 31, December 31, December 31, 2024 2023 2024 2023 Net revenue $146,077 $99,538 $372,766 $258,122 Cost of revenue 92,088 67,734 243,784 182,618 Gross profit 53,989 31,804 128,982 75,504 Operating expenses: Selling and marketing 16,140 13,032 52,429 43,489 Research and development 4,502 4,467 17,304 17,137 General and administrative 8,899 5,946 28,388 31,321 Acquisition-related cost 1,018 - 10,832 - Total operating expenses 30,559 23,445 108,953 91,947 Operating income (loss) 23,430 8,359 20,029 (16,443)Interest expense 2,986 251 8,068 504 Other non-operating expense (income), net 315 (405) 1,289 394 Income (loss) before income tax 20,129 8,513 10,672 (17,341)Income tax expense benefit (10) (39) (5,511) 338 Net income (loss) $20,139 $8,552 $16,183 $(17,679) Net income (loss) per share Basic $1.01 $0.49 $0.81 $(1.03)Diluted $0.95 $0.47 $0.78 $(1.03)Weighted average number of shares: Basic 19,937 17,449 20,022 17,135 Diluted 21,136 18,383 20,832 17,135 Turtle Beach CorporationCondensed Consolidated Balance Sheets(in thousands, except par value and share amounts)Table 2. December 31, December 31, 2024 2023 (unaudited) ASSETS (in thousands, except par value and share amounts) Current Assets: Cash and cash equivalents $12,995 $18,726 Accounts receivable, net 93,118 54,390 Inventories 71,251 44,019 Prepaid expenses and other current assets 11,007 7,720 Total Current Assets 188,371 124,855 Property and equipment, net 5,844 4,824 Goodwill 52,942 10,686 Intangible assets, net 42,398 1,734 Other assets 9,306 7,868 Total Assets $298,861 $149,967 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities: Revolving credit facility $49,412 $— Accounts payable 34,839 26,908 Other current liabilities 39,421 29,424 Total Current Liabilities 123,672 56,332 Debt, non-current 45,620 — Income tax payable 1,362 1,546 Other liabilities 7,603 7,012 Total Liabilities 178,257 64,890 Commitments and Contingencies Stockholders’ Equity Stockholders’ Equity 20 18 Additional paid-in capital 239,983 220,185 Accumulated deficit (118,094) (134,277)Accumulated other comprehensive loss (1,305) (849)Total Stockholders’ Equity 120,604 85,077 Total Liabilities and Stockholders’ Equity $298,861 $149,967 Turtle Beach CorporationCondensed Consolidated Statements of Cash Flows(in thousands)(unaudited)Table 3. Year Ended December 31, 2024 December 31, 2023 CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) $16,183 $(17,679)Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 4,407 3,830 Costs recognized on sale of acquired inventory 2,085 — Amortization of intangible assets 6,984 1,009 Amortization of debt financing costs 902 141 Stock-based compensation 6,172 11,983 Deferred income taxes (6,859) (44)Change in sales returns reserve 784 632 Provision for doubtful accounts — (3)Inventory recorded to net realizable value 5,661 810 Loss on impairment of assets 753 — Changes in operating assets and liabilities, net of acquisitions: Accounts receivable (15,624) (5,757)Inventories (12,257) 27,336 Accounts payable (1,088) 1,772 Prepaid expenses and other assets (227) 1,437 Income taxes payable (159) (283)Other liabilities (1,956) 1,860 Net cash provided by operating activities 5,761 27,044 CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and equipment (4,914) (2,159)Acquisition of a business, net of cash acquired (77,294) — Net cash used for investing activities (82,208) (2,159)CASH FLOWS FROM FINANCING ACTIVITIES Borrowings on revolving credit facilities 346,906 210,210 Repayment of revolving credit facilities (297,494) (229,263)Proceeds of term loan 50,000 — Repayment of term loan (1,042) — Proceeds from exercise of stock options and warrants 3,356 2,261 Repurchase of common stock (27,778) (974)Debt issuance costs (2,897) (80)Net cash provided by (used for) financing activities 71,051 (17,846)Effect of exchange rate changes on cash and cash equivalents (335) 291 Net increase (decrease) in cash and cash equivalents (5,731) 7,330 Cash and cash equivalents - beginning of period 18,726 11,396 Cash and cash equivalents - end of period $12,995 $18,726 Turtle Beach CorporationGAAP to Adjusted EBITDA Reconciliation(in thousands)Table 4. Three Months Ended Year Ended December 31, December 31, 2024 2023 2024 2023 (in thousands) Net income (loss) $20,139 $8,552 $16,183 $(17,679)Interest expense 2,986 251 8,068 504 Depreciation and amortization 3,287 1,166 11,391 4,839 Stock-based compensation (1) 2,724 3,429 6,172 11,983 Income tax expense (benefit) (2) (10) (39) (5,511) 338 Restructuring expense (3) 310 (0) 1,967 1,061 CEO transition related costs (4) — — — 2,874 Acquisition-related cost (5) 1,018 653 10,832 653 Incremental costs on acquired inventory (6) — — 2,084 — Loss on inventory in transit (7) 3,398 — 3,398 — Proxy contest and other litigation (8) 1,803 (15) 1,833 1,921 Adjusted EBITDA $35,655 $13,954 $56,417 $6,494 (1)Increase in stock-based compensation in the year-ended December 31, 2023, primarily driven by $4.0 million charge related to the accelerated vesting of equities of the Company's former Chief Executive Officer. (2)An income tax benefit of $7.6 million was recorded as a result of the reversal of a portion of the Company’s deferred tax asset valuation allowance in 2024. (3)Restructuring charges are expenses that are paid in connection with reorganization of our operations.
– Fourth Quarter Net Revenue Reaches Quarterly Record of $146.1 million, up 47% Year-over-Year – – Fourth Quarter Net Income of $20.1 million compared to $8.6 million in prior year – – Fourth Quarter Adjusted EBITDA Reaches Quarterly Record of $35.7 million, up from $14.0 million in prior year – – Initiates Full Year 2025 Guidance, including Adjusted EBITDA of between $68 and $72 million representing year-over-year growth of between 21% and 28% – WHITE PLAINS, N.Y., March 13, 2025 (GLOBE NEWSWIRE) -- Turtle Beach Corporation (Nasdaq: TBCH), a leading gaming accessories brand, today reported financial results for the fourth quarter and full year ended December 31, 2024.
Such costs included severance, bonus, medical benefits and the tax impact of accelerated vesting of stock-based compensation. (5)Business transaction expense includes one-time costs we incurred in connection with acquisitions including warehouse lease impairment, professional fees such as legal and accounting along with other certain integration related costs. (6)Costs relate to the step up of acquired finished goods inventory to fair market value as required under purchase accounting. This step up in value over original cost is recorded as a charge to cost of revenue as such inventory is sold. (7)Reflects a loss of Turtle Beach inventory while in transit that impacted the three months ended December 31, 2024. (8)Proxy contest and other primarily includes (a) a $1.7 million judgement in an insolvency dispute in Germany recorded in 2024, and (b) one-time legal and other professional fee associated with proxy challenges presented by certain shareholder activists in 2023.
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