INVESTORS PRESENTATION NASDAQ: HEAR March 4, 2021
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Forward-Looking InformationThis presentation 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 constituteforward-looking statements regarding assumptions, projections, expectations, targets, intentions or beliefs about future events. Statements containing the words “may”, “could”, “continue”, “would”, “should”, “believe”,“expect”, “anticipate”, “plan”, “goal”, “estimate”, “accelerate”, “target”, “project”, “intend” and similar expressions constitute forward-looking statements. Forward-looking statements involve known and unknown risks anduncertainties, which could cause actual results to differ materially from those contained in any forward-looking statement. These statements are based on management’s current belief, as well as assumptions made by, andinformation 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. Numerousfactors, 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 thesefactors 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 ofcompetitive products and pricing; the impact of the coronavirus (COVID-19) pandemic on consumer demands and manufacturing capabilities; risks relating to, and uncertainty caused by or resulting from, the COVID-19pandemic; the Company's partnerships with influencers, athletes and esports teams; risks associated with the expansion of our business, including the implementation of any businesses we acquire, the integration of suchbusinesses within our internal control over financial reporting and operations; and our liquidity. These risks may be in addition to the other factors and matters discussed in the Company’s most recent Annual Report onForm 10-K, Quarterly Report on Form 10-Q and other periodic reports filed with the Securities and Exchange Commission. Except as required by the securities laws of the United States, the Company does not intend topublicly update or revise these forward-looking statements after the date of this release whether as a result of new information, future developments or otherwise. This presentation also contains trademarks and tradenames that are property of their respective owners.
Non-GAAP Financial MeasuresIn addition to its reported results, the Company has included in this presentation certain financial results, including adjusted EBITDA, adjusted net income, and constant currency revenue, that the Securities and ExchangeCommission 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 supplementalinformation for investors analyzing period-to-period comparisons of the Company's results. “Adjusted Net Income” is defined as net income excluding (i) integration and transaction costs related to the acquisition of thebusiness and assets related to the ROCCAT brand, (ii) the effect of the mark-to-market requirement of the financial instrument obligation, (iii) any change in fair value of contingent consideration and (iv) the release ofvaluation allowances on deferred tax assets. “Adjusted EBITDA” is defined by the Company as net income (loss) before interest, taxes, depreciation and amortization, stock-based compensation (non-cash), and certain non-recurring items that we believe are not representative of core operations (e.g., the integration and transaction costs related to the acquisition of the business and assets related to the ROCCAT brand, the mark-to-marketadjustment for the financial instrument obligation and the change in fair value of contingent consideration). “Constant currency revenue” is defined by the Company as revenue excluding the impacts of fluctuations inexchange 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 financialplanning, 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 analysisby, 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 in the appendix for the three and twelve months ended December 31, 2020 and 2019.
© 2021Turtle Beach Corporation. All Rights Reserved.
SAFE HARBOR STATEMENT
TURTLE BEACH IS A TOP 5 PLAYERIN THE $5.1 BILLION1 GAMING ACCESSORY MARKET
EXPANDING PORTFOLIOIN NEW CONSOLE AND PC ACCESSORY CATEGORIES
CLEAR LEADER IN CONSOLE GAMING HEADSETSFOR OVER 10 YEARS
RAPIDLY GROWING, AWARD-WINNING PC GAMINGKEYBOARDS, MICE, HEADSETS, AND MORE
NASDAQ: HEAR
$360 MILLION IN REVENUES5 Year CAGR of 17%
$61 MILLION IN EBITDA
$51 MILLION CASH FROM OPERATIONS
$2.37 EPS
STRONG BALANCE SHEET, NO DEBT
31. $5.1B Gaming Accessory Market includes gaming headsets for consoles and PC, PC gaming keyboards, and PC gaming mice.
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41. Newzoo 2020 Peripheral Market estimates – updated in September 2020.2. Activate Consulting report 20203. Newzoo 2020 esports market report
Americas & Europe are ~75% of the market
Global Market for Gaming Headsets, Mice, and Keyboards1
Console Headsets
$1.7 B
PC Headsets$1.5 B
Mice0.9 B
Keyboards$1.0 B
GLOBAL GAMING ACCESSORY
MARKET
$5.1B1
Why gaming has been such a strong market for years…
EntertainmentGaming has been a growing source of entertainment, capturing increasing share of leisure time since the 70’s• Gaming now leads share of daily time spent on technology and media at 41%2
• Gaming now surpasses box office movie revenue by 4x
SocializingSince the rise of online multiplayer gaming in the 2000’s, gaming has become a major platform to socialize with friends, a trend that's accelerated the past two years with the Battle Royale genre and COVID-19 driven stay-at-home orders• Xbox Live and PlayStation Network now have over 200M users• 12 million gamers recently attended a “live” concert in the game Fortnite
CompetitionProfessional esports gaming has taken off with viewership expected to exceed most other sports in the coming years• Global esports revenues are expected to cross $1.5B in 20233
• Esports viewership is expected to reach 800M by 20242
RealismStarting in 2020, enhanced power and VR is now making gaming environments and simulations extremely realistic• New consoles feature 8K graphics, 3D audio, and can mix local and cloud resources• Consumer VR market is expected to grow from $1.4B to $4.2 billion by 20242
GAMING IS THE MARKET TO BE A LEADER IN
Headsets Sold Since 201055 Million+ Award-Winning Design
and Build Quality
The Global Market Leader inConsole Gaming Headsets for Over 10 Years
IN GAMING AUDIO#1
Broad Portfolioof PC Gaming Accessories
Industry-Leading Innovation at Every Price Point with Over 280 Patents5
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Over 150 ISSUED PATENTS2
Gaming Headsets
280K+ POINTS OF DISTRIBUTION1
70+ Countries
STRONG BRAND & REPUTATIONAmong Gamers, Retailers, Gaming Industry
PRODUCT FOR EVERY GAMEREntry Level to Professional
PRODUCT INNOVATIONSAnd Unique Features – Many patented
STRONG PARTNERSHIPSWith Leading Esports Teams & Influencers
OVER 10 YEARS EXPERIENCEGaming Headsets & with Xbox & PlayStation
WHY & HOW
45.8%
Other54.2%
US, CANADA & MEXICO CONSOLE GAMING HEADSET REVENUE SHARE
2020
#1 GAMING HEADSET PROVIDER FOR XBOX, PLAYSTATION & NINTENDO
HIGHER REVENUE SHARE THAN NEXT FOUR PLAYERS COMBINED
13 OF TOP 20 SELLERSOVERALL ARE TURTLE BEACH
8 OF TOP 10 SELLERSOVERALL ARE TURTLE BEACH
Source: The NPD Group/Retail Tracking Service/Video Games/Dollars/U.S., Canada and Mexico/January-December 20201. Includes only Console gaming headsets2. Counts only patents related to headsets (not including additional patents from ROCCAT, Neat Microphones, and HyperSound)
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THE LEADER IN CONSOLE GAMING HEADSETS FOR OVER 10 YEARS RUNNING
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"A fantastically priced headset and worthy successor to the original."
- Games Radar
“A best gaming headset of 2020.”- Tom’s Guide
"This $40 headset is worth every penny."- Windows Central
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THE BROADEST SELECTION OF INDUSTRY-LEADING HEADSETS FOR EVERY CONSOLE GAMER
Turtle Beach delivers innovative, feature-driven headsets, and as gamers improve over time, they are willing to pay more for features that provide a competitive advantage.
XBOX SERIES X|S | XBOX ONEPS5™ | PS4™
NINTENDO SWITCH™ | MOBILE
Stereo
Removable Microphone
Inline Controls
Mobile Multifunction Button
10mm Drivers
XBOX SERIES X|S | XBOX ONEPS5™ | PS4™
NINTENDO SWITCH™ | MOBILE
Lightweight Design
40mm Drivers
High-Sensitivity Mic
Mono
XBOX SERIES X|S | XBOX ONEPS5™ | PS4™
NINTENDO SWITCH™ | MOBILE
Synthetic Leather Cushions
Stereo
Lightweight Design
40mm Drivers
High Sensitivity Mic
XBOX SERIES X|S | XBOX ONEPS5™ | PS4™
NINTENDO SWITCH™ | MOBILE
Flip-to-Mute Mic
Synthetic Leather Cushions
Stereo
Lightweight Design
40mm Drivers
High Sensitivity Mic
XBOX SERIES X|S | XBOX ONEPS5™ | PS4™
NINTENDO SWITCH™ | MOBILE
Memory Foam Cushions
Metal-Reinforced Headband
ProSpecs™
Flip-To-Mute Mic
Convenient Headset Controls
40mm Drivers
High-Sensitivity Mic
XBOX SERIES X|S | XBOX ONEPS5™ | PS4™
NINTENDO SWITCH™ | MOBILE
Amplified
Bass Boost
Variable Mic Monitoring
12+ Hour Battery
Memory Foam Cushions
Metal-Reinforced Headband
Flip-to-Mute Mic
40mm Drivers
XBOX SERIES X|S | XBOX ONE |PS5™* | PS4™
NINTENDO SWITCH™
Wireless
Gen 2 Flip-to-Mute Mic
Reinforced Hinge & Headband Design
15-Hour Battery
Refined Ear Cup Acoustics
Surround Sound
Superhuman Hearing®
ProSpecs™
50mm Drivers
EQ Modes
Amplified
Mic Monitoring
XBOX SERIES X|S | XBOX ONEPS5™ | PS4™
NINTENDO SWITCH™ | MOBILE
TruSpeak™ Pro Gaming Mic
Metal Headband
Floating Headpad
Swappable Deco Plates
Elite 2 Year Warranty
50mmNanoclear™ Drivers
CoolingAerofit™ Cushions
ProSpecs™
Inline Controls
Stereo
XBOX SERIES X|S | XBOX ONEPS5™ | PS4™ | MOBILE
Bluetooth® w/ App Control
LED & Preset Customization
Surround Sound
Superhuman Hearing®
Metal Headband
Floating Headpad
50mm Nanoclear™ Drivers
Cooling Aerofit™ Cushions
TruSpeak™ ProGaming Mic
ProSpecs™
Swappable Deco Plates
EQ Modes
Amplified
Mic Monitoring
XBOX SERIES X|S | XBOX ONEPS5™* | PS4™
NINTENDO SWITCH™
Bluetooth® w/ App Control
50mm Nanoclear™ Drivers
Cooling Aerofit™ Cushions
20-Hour Battery
Remappable Functions
Metal-ReinforcedHeadband
Wireless
Gen 2 Flip-To-Mute Mic
Superhuman Hearing®
ProSpecs™
Surround Sound
EQ Modes
Amplified
Mic Monitoring
Features listed in blue indicate a step-up from the prior model(s)
$29.95
$14.95
$24.95
$39.95
$49.95
$59.95
$129.95
$249.95$149.95
$99.95
Casual Gamers Esports/Hardcore Gamers8
THE MOST COMPLETE PORTFOLIOFROM ENTRY-LEVEL TO PRO ESPORTS ATHLETES
Enthusiast/Core GamersEntry-Level Gamers
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OVERVIEW
Acquired in 2019, ROCCAT is Turtle Beach's award-winning brand of gaming mice, keyboards, headsets, software, and more for PC gamers.
The brand is driven by former esports pro, Founder and Head of PC Products for Turtle Beach, Rene Korte, and his highly experienced product and engineering team in Turtle Beach's Hamburg, Germany studio.
ROCCAT has strong brand presence in Germany, good awareness across EU, and is expanding in NA & major Asian markets.
Investments to drive growth including expanding ROCCAT portfolio and further developing the brand more than doubled the business in 2020.
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"The ROCCAT Vulcan TKL Pro is a gorgeous optical gaming keyboard with supurb build
quality."- Rock Paper Shotgun
"Simple, affordable, stylish and comfortable, but also packing a mighty acoustic punch you just
won't find anywhere else for this kind of money."- eTeknix
"For gaming, this is the mouse to use."- Back to the Gaming
IT’S TIME TO EXPERIENCE PRECISION
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Vulcan ProMSRP: $199.99 Vulcan 120/121/122
MSRP: $159.99
Vulcan TKLMSRP: $129.99
Syva In-EarMSRP: $29.99
Juke 7.1 USB SoundcardMSRP: $19.99
Burst Pro | Burst CoreMSRP: $99.99 | $29.99
Kain 200/120/100MSRP: $99.99 | $69.99 | $49.99
Kone Pure UltraMSRP: $69.99
Vulcan TKL ProMSRP: $159.99
Elo 7.1 Air | Elo 7.1 USB | Elo X StereoMSRP: $99.99 | $69.99 | $49.99
Kone AIMO RemasteredMSRP: $79.99
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GROWING & AWARD-WINNING PC LINEUP
INTRODUCING NEAT!
"The Beecasteris a top performer and a
showstopper...versatility that is unmatched"
- Barking Drum
ABOUT NEAT MICROPHONES
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Acquired by Turtle Beach in January 2021, Neat is the next brand from the original founders of Blue Microphones and the collective minds behind many of today’s best-selling digital and analog microphones.
Neat Microphones is a lean, mean, product creation machine building consumer-friendly microphones for the next generation of use cases and customers with a new portfolio launching in 2021.
The Neat Microphones team brings a combined 100+ years of passion and experience for capturing and communicating great audio.
*Sources: CEA Market research data; Zion Market research report; Ample Microphone Market report; Market Intellica 2019 report and market forecasting;MI Salestrak; internal analysis; HTF Market Report; Amazon sales analytics.
Today's microphone market is $2.3B overall, with ~$700M in the Digital/USB category, which is Neat's primary focus. Gamers, streamers, influencers, as well as work/learn from home consumers are driving growth in digital microphone demand.
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Global Gaming Accessory Market: $5.1B (SEPTEMBER NEWZOO ESTIMATES)
Microphones$2.3B
Mice$0.9B
Keyboards$1.0B
PC Headsets$1.5B
Console Headsets$1.7B
Note: model counts above represent core models only, not all variants or SKUs.Source for market sizes: NewZoo 2020 Peripheral Market estimates – updated in September 2020.Additional Sources: CEA Market research data; Zion Market research report; Ample Microphone Market report, Market Intellica 2019 report and market forecasting; MI Salestrak; internal analysis; H T F Market Report; Amazon salesanalytics.
$1.7B Console Gaming Headsets• Turtle Beach leads this market by far
• Goal is to continue leadership
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$5.7B MARKETS TO FURTHER PENETRATE
INVESTING TO DRIVE GROWTH IN GLOBAL MICROPHONE AND PC MARKETS
$2.3B Global Microphone Market• 18% CAGR 2020-2023 in Digital/USB category
• Goal is to enter with upcoming Neat portfolio
$3.4B PC Accessories Market• 2020 growth investments of ~$12M Including in
ROCCAT portfolio expansion and brand development
• Goal is to build incremental $100M business
TURTLE BEACH HISTORICAL CORE BUSINESS
New Portfolio
Launching 2021
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Titles shown represent games played by our partner esports teams and influencers and do not indicate a partnership with the publisher1Newzoo 2020 Global Esports and Global Games Market Report QU October 2020
Official Audio Partner EA Sports FIFA 20 Champions Cup
Castro_1021(6M Reach)
Dr. Disrespect(8M Reach)
BenjyFishy(7M Reach)
Ali-A(30M Reach)
Mr Savage(8M Reach)
Kickstradomis(417k Reach)
NRG EsportsA leading collective of top
influencers and world champion esports teams
Josh Hart(New Orleans Pelicans,
1M Reach)
Kevin Porter Jr. (Cleveland Cavaliers,
401k Reach)
Kevin De Bruyne(Man City & Belgium,
17M Reach)
Over 862M Gamers and 202M esports fans in the Americas and Europe1
HECZ(3M Reach)
Clix(9M Reach)
OpTic ChicagoFranchise team in
Activision Blizzard’s CDL
Skyrroz(4M Reach)
Reece James(Chelsea & England,
1.1M Reach)
Scump(6M Reach)
Clare Siobhan(2M Reach) 14
WE PARTNER WITH LEADING TEAMSINFLUENCERS & EVENTS
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GEN 8 CONSOLE LAUNCH INFORMATION
Source: Microsoft and Sony
Xbox Series X|SRelease: November 10, 2020
Price: $499 for Xbox Series X | $299 for Xbox Series S
Disc & digital only console options
Backward compatibility
Major power increase/faster game access/reduced load times
Supports up to 8K resolution
3D Spatial Sound (headset required)
Project xCloud game streaming service
Xbox Games Pass subs get access to top Xbox One games
PlayStation 5/PlayStation 5 DigitalRelease: November 12, 2020
Price: $499 for PS5 | $399 for PS5 Digital Edition
Disc & digital only console options
Backward compatibility
Major power increase/faster game access/reduced load times
Supports up to 8K resolution
3D Spatial Sound (headset required)
PlayStation Now streaming/focus on AAA titles
PlayStation Plus subs get access to classic PS4 games at launch
Gen 7 Xbox (Nov. 2013) Gen 7 PlayStation (Nov. 2013) Gen 8 PlayStation (Nov. 2020)Gen 8 Xbox (Nov. 2020)
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XBOX AND PLAYSTATION UPDATED CONSOLE OUTLOOK1
1. COVID-19 related stay-at-home guidance and orders have led to significantly increased sales of gaming accessoriesSource: DFC Intelligence updated September 2020 Worldwide Video Game Market Forecasts
0
10
20
30
40
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
PlayStation and Xbox Console Unit Sales
Gen 7 Gen 8 Gen 9
Console transition has typically created a market decline prior to launch, an increase late in the year of new console launch, and then several years of accelerated growth post-launch.
Accessories typically follow same pattern with some lag as some users will wait on new accessory purchases, particularly at the high-end prior to launch and then upgrading accelerates post-launch.
However, due to stay-at-home orders, gaming engagement has increased significantly including accessories such as headsets, that have shown record sales the past quarters. Headsets being backward compatible, has kept the trend going even in a console transition year.
DFC predicts the combined XB and PS hardware unit sales for Gen 8 and Gen 9 in the first three years of launch to be higher than the combined sales of Gen 7 and Gen 8 in the first three years, setting another record.
Nintendo is not included; a new system core from Nintendo could substantially increase overall market potential.
“With the launch of new systems and continued sales for existing consoles, we forecast Microsoft and Sony combined hardware sales will set records in 2021 and 2022.”
David Cole, Head DFC Intelligence, Video games industry analyst
Hard
war
e U
nit S
ales
(in
mill
ions
)
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$ in millions (except per-share data) 2019 2020 Commentary
Revenue $234.7$360.1
($357.9 in constant currency)
Increased demand from new and existing gamers and returning lapsed gamers, as well as work/learn-from-home users. Superior supply and retail execution led to further market share gains. Doubling of ROCCAT business with new launches also added to growth.
Gross Margin 33.5% 37.2%Lower-than-normal promotional environment, favorable business mix, volume-driven fixed cost leverage, partially offset by roughly $9 million in higher air freight spend to facilitate sales.
Operating Expenses $68.3 $84.6Reflects revenue-related increases as well as full year of ROCCAT OpEx and investments to drive growth.
Adjusted EBITDA¹ $22.8 $61.4 Reflects above factors.
Net Income (Loss) $17.9 $38.7Net income in 2019 included a tax benefit of $7.4M from the release of a valuation allowance related to deferred tax assets.
Diluted EPS $1.04 $2.37 Reflects above factors.
Adjusted Diluted EPS¹ $0.74 $2.22 Reflects above factors.
Diluted Shares 15.7M 16.4M
FULL YEAR FINANCIAL OVERVIEW
1. See appendix for a reconciliation of non-GAAP measures. 17
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Balance Sheet Improvements
Cash and equivalents increased significantly due to record revenue, higher margins and fixed cost leverage.
Inventory increase driven by higher current demand, and anticipation of Q1 2021 sales.
First time in at least ten years that total debt has been zero at year-end. Highest level of net cash in the Company’s history.
BALANCE SHEET
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Balance Sheet Highlights
At December 31, 2019 At December 31, 2020
Cash & Equivalents $8.2M $46.7M
Inventories $45.7M $71.3M
Revolver (asset-based) $15.7M $0
Total Debt $15.7M $0
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2021 OUTLOOK1
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2021 2021 Outlook Commentary
Net Revenue ~$370MContinued strong consumer demand driving strong revenues in Q1. Continued strong share in console headsets and progress in PC gaming accessories and several other new categories expected to enable growth off record 2020.
Gross Margin Mid 30%s Margins expected to be more aligned with historical levels, returning to more normal promotional spending and business mix.
Adj. EBITDA ~$45M Targeting category leading 12% EBITDA while funding continued investments in new product launches and other growth initiatives.
Adj. EPS ~$1.35 Reflects above factors; anticipates full year effective tax rate of ~ 28%.
Diluted Shares ~17.5M
1. Guidance provided March 4, 2021.
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$149
$287
$235
$360 $370
2017 2018 2019 2020 2021E
Company RevenuesMillions
Battle Royale surge
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REVENUE PROFILE
Growth Drivers:
Continued leadership in the $1.7B console gaming headset market
Continued growth in $3.4B market for PC gaming headsets, keyboards, and mice with ROCCAT brand expansion
Entry into the $2.3B global microphone market with recent acquisition of Neat Microphones
Further expansion into additional new categories
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1. Guidance provided March 4, 2021.
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1. Guidance provided March 4, 2021.2. See appendix for a reconciliation of non-GAAP measures.
$11.6
$57.7
$22.8
$61.4
~$45
2017 2018 2019 2020 2021E
Adjusted EBITDA2
Millions
1
Battle Royale surge
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ADJUSTED EBITDA & CASH FLOW PROFILE
$3.4
$42.2$39.4
$51.0
2017 2018 2019 2020
Cash Flow From OperationsMillions
12% EBITDA Target
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Metric Target
Revenue $ 10-20% CAGR
Gross Margins % Mid 30’s
EBITDA $ 15-30% CAGR
Maintain leadership position in console gaming headsets
Drive growth in PC gaming headsets, keyboards, and mice (leveraging ROCCAT brand and portfolio)
Maintain category leading EBITDA while investing for growth
Leverage brand, skills, and global footprint to enter new categories over time (organic and M&A)
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LONG-TERM FINANCIAL TARGETS
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Juergen StarkChairman & CEO
- COO of Motorola Mobility’s mobile business- 10 years as Principal at McKinsey & Company, Inc.- MBA, Harvard Business School
William KeitelLead Independent Director
- Former CFO of Qualcomm Incorporated (NASDAQ: QCOM)- During his tenure, Qualcomm grew revenues from ~$800M to ~$25B- Held senior financial roles at Nortel (OTC: NRTLQ) & Pepsico (NYSE: PEP)
Dr. Andrew Wolfe, PhDDirector
- Founder & principal of Wolfe Consulting- Former Chief Technology Officer for SONICblue, Inc.- Expert in IP strategy and licensing
Gregory BallardDirector
- General partner with Eleven Ventures- Former senior VP for mobile & social games at Warner Bros.- Former CEO of Glu Mobile, former board member with DTS
Kelly ThompsonDirector
- Former SVP and COO, Samsclub.com- Former SVP Merchandising, Planning, and Marketplace for Walmart.com- 10 years in management positions at Gap, Inc.
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EXPERIENCED BOARD OF DIRECTORS
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Jose Rosado SVP, Global Operations- Former Sr. Director, Global Supply Chain Operations for
HP
- 22 years of supply chain management with Motorola, ON Semiconductor, HP, Cisco
Juergen Stark Chairman & CEO
John Hanson CFO
Cris Keirn SVP, Global Sales
Megan Wynne General Counsel
- COO Of Motorola Mobility’s Mobile Business
- 10 Years As Principal At Mckinsey & Company
Ryan Dell SVP, Marketing- 15 years of brand, consumer & digital marketing experience
- Formerly CMO at MVMT, VP of Marketing & Acquisitions at FTD Companies (Pro Flowers, Shari's Berries)
- EVP & CFO at Dialogic
- CFO at One Communications Corp
- Led headset transition as VP of business planning & strategy
- 17 years with Motorola in product management, operations, quality & customer relations
- 5 years with I-Flow, a Kimberly-Clark Health Care Company
- 13 years with Morris Polich & Purdy law firm
Joe Stachula CTO & SVP, Product Development
- 20+ years in consumer electronics
- 12 years at Plantronics engineering audio headsets
Matt Seymour SVP, Product Management- 20+ years in the Consumer Electronics industry
- Previously with Sony leading television portfolio planning & development, product marketing
- Founder of ROCCAT GmbH and CEO for 12 years
- VP Europe for RAZER
- Professional gamer and founder of MTW esports team
Rene Korte General Manager, PC Products
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Skipper Wise VP & Founder of Neat Microphones
- Co-founder & President, Blue Microphones
- Recording artist, engineer and entrepreneur with 40+ years creating microphones
David Angress VP & Head of Neat Microphones- Decades-long career in music products industry
- 15 years EVP at Guitar Center
- Former CEO, Adam Audio GmbH
EXPERIENCED MANAGEMENT TEAM
INVESTOR RELATIONS:
Sean McGowan/Cody SlachGateway Investor Relations
+1 (949) 574-3860
COMPANY WEBSITESwww.turtlebeachcorp.com | www.turtlebeach.com | www.roccat.org | www.neatmic.com
PR/MEDIA CONTACT:
Jordan SchmidtGateway Investor Relations
+1 (949) 386-6332
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TURTLE BEACH CONTACT:
MacLean MarshallSr. Director, Communications
Turtle Beach Corp.
+1 (310) 431-6215
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GAAP TO ADJUSTED EBITDA RECONCILIATION
27
Full years
December 31, 2020 December 31, 2019 December 31, 2018
Consolidated
Net Income (Loss) 38,746 17,944 39,190
Depreciation 4,359 4,556 3,954
Amortization of intangibles 889 642 303
Interest 467 929 5,335
Taxes 13,711 (6,237) 1,737
Stock Compensation 5,549 3,558 1,877
Acquisition-related settlement (1702) - -
Business Transaction Expense 550 3,516 -
Change in Fair Value of Contingent Consideration (1,121) (471) -
Unrealized loss (gain) on financial instrument obligation - (1,601) 5,291
Adj EBITDA 61,448 22,836 57,687
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GAAP NET INCOME TO ADJUSTED NET INCOME RECONCILIATION2020 COMPARED TO 2019
Three Months Ended Twelve Months EndedDecember 31,
2020December 31,
2019December 31,
2020December 31,
2019Net Income (Loss)GAAP Net Income (Loss) $ 16,303 $ 20,386 $ 38,746 $ 17,944
Adjustments, net of tax:Gain on financial instrument obligation — — — (1,601)Release of valuation allowance — (7,439) — (7,439)Gain on acquisition-related settlement — — (1,702) -Change in fair value of contingent consideration (1,631) (422) (1,121) (422)Acquisition integration costs 124 499 405 3,154
Non-GAAP Earnings $ 14,796 $ 13,024 $ 36,328 $ 11,636
Diluted Earnings Per ShareGAAP- Diluted $ 0.93 $ 1.29 $ 2.37 $ 1.04
Gain on financial instrument obligation — — — —Release of valuation allowance — (0.47) — (0.47)Gain on acquisition-related settlement — — (0.10) —Change in fair value of contingent consideration (0.09) (0.03) (0.07) (0.03)Acquisition integration costs 0.01 0.03 0.02 0.20
Non-GAAP- Diluted $ 0.84 $ 0.83 $ 2.22 $ 0.74
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291. Other includes certain business acquisition costs, gain on an acquisition-related settlement and change in fair value of contingent consideration.
GAAP TO ADJUSTED EBITDA RECONCILIATIONTHREE MONTHS ENDED DECEMBER 31, 2020
Three Months EndedDecember 31, 2020
AdjAs Adj Adj Stock Adj
Reported Depreciation Amortization Compensation Other (1) EBITDANet revenue $ 132,912 $ - $ - $ - $ - $ 132,912 Cost of revenue 85,272 (537) - (305) - 84,430
Gross Profit 47,640 537 - 305 - 48,482
Operating expenses 27,637 (520) (224) (1,268) (168) 25,457
Operating income 20,003 1,057 224 1,573 168 23,025
Interest expense 112 Other non-operating expense (income), net (2,237) 1,631 (606)
Income before income tax 22,128 Income tax expense 5,825
Net income $ 16,303 Adjusted EBITDA $ 23,631
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301. Other includes certain business acquisition costs, gain on an acquisition-related settlement and change in fair value of contingent consideration.
GAAP TO ADJUSTED EBITDA RECONCILIATIONTWELVE MONTHS ENDED DECEMBER 31, 2020
Year EndedDecember 31, 2020
AdjAs Adj Adj Stock Adj
Reported Depreciation Amortization Compensation Other (1) EBITDANet revenue $ 360,093 $ - $ - $ - $ - $ 360,093 Cost of revenue 226,305 (2,365) - (928) - 223,012
Gross Profit 133,788 2,365 - 928 - 137,081
Operating expenses 84,621 (1,994) (889) (4,621) (550) 76,567
Operating income 49,167 4,359 889 5,549 550 60,514
Interest expense 467 Other non-operating expense (income), net (3,757) 2,823 (934)
Income before income tax 52,457 Income tax expense 13,711
Net income $ 38,746 Adjusted EBITDA $ 61,448