crsr-8k_20211102.htm
false 0001743759 0001743759 2021-11-02 2021-11-02

 

 

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 (Date of earliest event reported): November 2, 2021

 

CORSAIR GAMING, INC.

(Exact name of Registrant as Specified in Its Charter)

 

 

Delaware

001-39533

82-2335306

(State or other jurisdiction

of incorporation)

(Commission File Number)

(IRS Employer

Identification Number)

47100 Bayside Pkwy

Fremont, California 94538

 

 (Address of principal executive offices, including Zip Code)

Registrant’s telephone number, including area code: (510) 657-8747

Not Applicable

(Former name or former address, if changed since last report)

 

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))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common Stock, $0.0001 par value per share

 

CRSR

 

The Nasdaq Global Select Market

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 2, 2021, Corsair Gaming, Inc. (“Corsair” or the “Company”) issued a press release announcing certain of its financial results for the quarter ended September 30, 2021. The full text of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K. Attached hereto as Exhibit 99.2 is a presentation regarding the Company's fiscal quarter ended September 30, 2021.

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit

Number

 

Description

99.1

 

Press Release dated November 2, 2021

99.2

 

Investor Presentation dated November 2, 2021

104

 

Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

The information in this Current Report on Form 8-K and the Exhibit 99.1 and Exhibit 99.2 attached hereto shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. The information contained herein and in the accompanying exhibit shall not be incorporated by reference into any filing with the U.S. Securities and Exchange Commission made by Corsair Gaming, Inc., whether made before or after the date hereof, regardless of any general incorporation language in such filing.

 

1


 

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

CORSAIR GAMING, INC.

 

 

 

 

Date: November 2, 2021

 

By:

/s/ Michael G. Potter

 

 

 

Michael G. Potter

 

 

 

Chief Financial Officer

(Principal Financial Officer)

 

2

crsr-ex991_7.htm

Exhibit 99.1

 

 

Corsair Gaming Reports Third Quarter 2021 Financial Results

Reports Third Quarter Revenue and Profit

 

FREMONT, CA, November 2, 2021Corsair Gaming, Inc. (NASDAQ:CRSR) (“Corsair”), a leading global provider and innovator of high-performance gear for gamers and content creators, today announced financial results for the third quarter ended September 30, 2021.

 

Year-to-Date 2021 Highlights

 

 

Net revenue for the nine months ended September 30, 2021 was $1,393 million, an increase of 21.6% year-over-year. Gamer and creator peripherals segment net revenue was $470.3 million, an increase of 35.3% year-over-year. Gaming components and systems segment net revenue was $923.1 million, an increase of 15.6% year-over-year.

 

Net income for the nine months ended September 30, 2021 was $76.2 million, or $0.76 per diluted share, compared to net income of $60.2 million in the same period last year, or $0.69 per diluted share.

 

Adjusted net income for the nine months ended September 30, 2021 was $110.2 million, or $1.10 per diluted share, compared to adjusted net income of $91.9 million in the same period last year, or $1.05 per diluted share.

 

Adjusted EBITDA for the nine months ended September 30, 2021 was $159.6 million, an increase of 13.6% year-over-year.

 

Third Quarter 2021 Highlights

 

 

Net revenue was $391.1 million, a decrease of 14.4% year-over-year. Gamer and creator peripherals segment net revenue was $139.3 million, a decrease of 13.8% year-over-year. Gaming components and systems segment net revenue was $251.9 million, a decrease of 14.8% year-over-year.

 

Net income was $1.8 million, or $0.02 per diluted share, compared to net income of $36.4 million in the same period last year, or $0.40 per diluted share.

 

Adjusted net income was $16.3 million, or $0.16 per diluted share, compared to adjusted net income of $48.5 million in the same period last year, or $0.54 per diluted share.

 

Adjusted EBITDA was $27.6 million, a decrease of 56.6% year-over-year.

 

Definitions of the non-GAAP financial measures used in this press release and reconciliations of such measures to their nearest GAAP equivalents are included below under the heading “Use and Reconciliation of Non-GAAP Financial Measures.”

 

“Corsair remains well positioned to capitalize on the underlying secular growth trends around gaming, esports and streaming, and we intend to continue to make investments to enhance our customer experience. During the third quarter, we were pleased to see our strong pace of innovation continued with the release of our new FaceCam 1080p streaming camera and Xeneon gaming monitor. These both represent an initial entry for us into large and growing markets. We just announced the first of our DDR5


products and believe we are well positioned to maintain our leadership position in the memory components category. Despite the headwinds caused by the current global logistics and supply chain environment, we believe that underlying consumer demand for gaming and streaming products remains strong,” stated Andy Paul, Chief Executive Officer of Corsair.

 

“We refinanced our long-term debt in the third quarter, substantially reducing the interest rate, doubled the available revolver to $100 million, increased the term, and reduced the total outstanding debt by $24 million to $250 million of face value. During the third quarter we experienced an increase in logistics costs over the already elevated rate in the second quarter, and costs and shipping times are expected to remain elevated for the remainder of 2021. Our strong financial position has allowed us to adjust to the current environment by increasing inventory and making longer term supply chain commitments where needed,” said Michael G. Potter, Chief Financial Officer of Corsair.

 

Financial Outlook

 

“We have responded to the difficult sourcing and shipping environment by building inventory in our hubs closer to our customers, but it has been difficult to pass costs on to our customers. We still expect good growth for 2021, but the various challenges are constraining it to closer to our initial expectations for the year. We believe that the actual demand environment remains good, and that once this difficult environment is behind us we can return to our targeted growth and profitability targets. We have adjusted our 2021 outlook based on the current conditions,“ concluded Andy Paul, Chief Executive Officer of Corsair.

For the full year 2021 we currently expect:

 

 

Net revenue to be in the range of $1.825 billion to $1.925 billion.

 

Adjusted operating income to be in the range of $180 million to $195 million.

 

Adjusted EBITDA to be in the range of $190 million to $205 million.

 

Certain non-GAAP measures included in our financial outlook were not reconciled to the comparable GAAP financial measures because the GAAP measures are not accessible on a forward-looking basis. We are unable to reconcile these forward-looking non-GAAP financial measures to the most directly comparable GAAP measures without unreasonable efforts because we are currently unable to predict with a reasonable degree of certainty the type and extent of certain items that would be expected to impact GAAP measures for these periods but would not impact the non-GAAP measures. Such items may include stock-based compensation charges, public offering related charges, depreciation and amortization, restructuring costs, and other items. The unavailable information could have a significant impact on our GAAP financial results.

 

The foregoing forward-looking statements reflect our expectations as of today's date. Given the number of risk factors, uncertainties and assumptions discussed below, actual results may differ materially. We do not intend to update our financial outlook until our next quarterly results announcement.

 

Please see “Use and Reconciliation of Non-GAAP Financial Measures” below for a discussion on how we calculate the non-GAAP measures presented herein and a reconciliation to the most directly comparable GAAP measure.

 

 


 

Recent Developments

 

 

On October 27th, 2021, Corsair announced two new series of DDR5 performance memory, DOMINATOR PLATINUM RGB DDR5 and VENGEANCE DDR5. The new DDR5 standard brings with it higher frequencies, on-board voltage regulation and improved performance, debuting with Intel’s new 12th generation Intel Core processors. DOMINATOR PLATINUM RGB DDR5 continues its legacy of unparalleled quality with forged aluminum construction and 12 ultra-bright individually addressable CAPELLIX LEDs per module, providing the most discerning PC enthusiasts with the very best in performance memory. VENGEANCE DDR5 offers the same massive benefits of DDR5 with an understated aesthetic and low-profile design for maximum compatibility.

 

On October 21, 2021, Corsair, under its Elgato streaming brand, announced a new partnership with Snap to bring popular Augmented Reality Snap Lenses to EpocCam, the iOS app that turns your phone into a high-definition webcam for use with PC or Mac. With 15 custom-themed lenses available, and more to be added in the future, Snap Lenses enrich the EpocCam experience with new ways for users to express themselves in a fun and creative way.

 

On October 19, 2021, Corsair announced the launch of its new range of iCUE ELITE LCD Display Liquid CPU Coolers. Combining cooling able to tame any modern consumer CPU with a vivid 2.1” LCD screen on the pump head to display anything from system vitals to animated GIFs, ELITE LCD coolers offer a unique window into both your PC’s performance and your own style and personality.

 

On September 30, 2021, Corsair announced its first ever monitor, the XENEON 32QHD165, a stunning new monitor built from the ground up for gamers and creators. Featuring an ultra-slim 32-inch QHD screen with a cutting-edge IPS LED panel to produce a beautiful 2560x1440 image. With up to a 165Hz refresh rate, along with AMD FreeSync™ Premium certification and NVIDIA® G-SYNC™ compatibility to keep up with every frame of the latest games, the XENEON 32QHD165 offers a terrific combination of powerful specs, smart features, and thoughtful design that power users need. Integrating seamlessly into the CORSAIR iCUE and Elgato Stream Deck software ecosystems for convenient, customized control, the XENEON 32QHD165 is uniquely positioned to take center stage in a modern gaming and streaming setup.

 

On September 16, 2021, Corsair announced the new SABRE RGB PRO WIRELESS gaming mouse, the latest addition to the CHAMPION SERIES family of products built for competition and tested by top esports professionals. SABRE RGB PRO WIRELESS combines an incredibly lightweight, ergonomic design and esports-ready performance with high-performance wireless speed via SLIPSTREAM WIRELESS technology. Delivering lightning-fast inputs and the extraordinary accuracy top players demand, SABRE RGB PRO WIRELESS weighs an ultra-light 79g, supporting the rapid movements and lightning-quick reflexes needed to prevail during competition.

 

On September 7, 2021, Corsair announced the continuation of its partnership with leading video game publisher Ubisoft®, bringing immersive in-game RGB lighting integration for all CORSAIR iCUE RGB devices to the latest installment of the popular Far Cry® franchise: Far Cry® 6. Players can experience exclusive dynamic lighting effects, from fiery explosions to blissful jungle, that convey the action not just through the screen, but across their entire iCUE setup.

 

On September 7, 2021, Corsair announced it completed the successful refinancing of its 2017 credit facilities with borrowings under a new $350 million credit facility, consisting of a $250 million term loan and $100 million revolving line-of-credit, both maturing in August 2026. The new term loan is provided by Bank of America and bears interest at a rate equal to a margin plus either a base rate or LIBOR rate. Based on Corsair’s net leverage ratio at the time of the new borrowing, the rate for a LIBOR borrowing under the new term loan is LIBOR plus 1.25%, compared to the retired term loan which carried a combined interest rate of 4.75% for a LIBOR borrowing, made up of LIBOR, with a 1.00% floor, plus a margin of 3.75%. Corsair repaid the full


 

$273.9 million outstanding under its 2017 credit facility using proceeds from this 2021 credit facility and cash on hand. The maturity date of the retired term loan was August, 2024 and of the retired revolving line-of-credit was August 2022.

 

On August 20, 2021, Corsair announced the launch of its new CORSAIR HS80 RGB WIRELESS Gaming Headset, offering gamers industry-leading SLIPSTREAM WIRELESS technology, an exceedingly comfortable new floating-headband design, durable construction, and refined style.

 

On August 17, 2021, Corsair, under its SCUF Gaming brand, announced the Designed for Xbox SCUF Instinct and Instinct Pro controllers, created specifically for the Xbox Series X|S. SCUF Instinct incorporates all of the innovative features gamers expect from SCUF – including the patented paddle control system that helped make SCUF controllers the premier choice of competitive players everywhere – with an evolved controller design to improve performance for Xbox fans. This refined ergonomic shape enables better control for a wide variety of hand sizes, with millions of cosmetic and physical customization options to suit all gamers including interchangeable faceplates, thumbsticks, and D-pads.

 

Conference Call and Webcast Information

 

We will host a conference call to discuss the third quarter 2021 financial results on November 2, 2021, at 5:30 a.m. PT. The conference call can be accessed live over the phone by dialing 1-855-327-6838, or for international callers 1-604-235-2082. A replay will be available from 8:30 a.m. PT on November 2, 2021 through November 9, 2021, by dialing 1-844-512-2921, or for international callers 1-412-317-6671. The replay passcode is 10016719.

 

The call will also be webcast live from our investor relations website at https://ir.corsair.com. Following completion of the call, a recorded replay of the webcast will be available on the website.

 

About Corsair Gaming, Inc.

 

Corsair Gaming, Inc. (NASDAQ:CRSR) is a leading global developer and manufacturer of high-performance gear and technology for gamers, content creators, and PC enthusiasts. From award-winning PC components and peripherals to premium streaming equipment, smart ambient lighting and esports coaching services, Corsair delivers a full ecosystem of products that work together to enable everyone, from casual gamers to committed professionals, to perform at their very best.

 

Corsair also sells gear under our Elgato brand, which provides premium studio equipment and accessories for content creators, SCUF Gaming brand, which builds custom-designed controllers for competitive gamers, ORIGIN PC brand, a builder of custom gaming and workstation desktop PCs and laptops and Gamer Sensei brand, an esports coaching platform.

 

Forward Looking Statements

 

Except for the historical information contained herein, the matters set forth in this press release are forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, our plan to continue to make investments to enhance our customer experience; our belief that we will be able to maintain our leadership position in the memory components category; whether underlying consumer demand for gaming and streaming products will remain strong; whether we will be able to return to our targeted growth and profitability targets; and our estimated full year 2021 net revenue, adjusted operating income and adjusted EBITDA. Forward-looking statements are based on our management’s beliefs, as well as assumptions made by,


and information currently available to them. Because such statements are based on expectations as to future financial and operating results and are not statements of fact, actual results may differ materially from those projected. Factors which may cause actual results to differ materially from current expectations include, but are not limited to: the impact the COVID-19 pandemic will have on demand for our products as well as its impact on our operations and the operations of our manufacturers, retailers and other partners, and its impact on the economy overall, including capital markets; our ability to build and maintain the strength of our brand among gaming and streaming enthusiasts and our ability to continuously develop and successfully market new gear and improvements to existing gear; the introduction and success of new third-party high-performance computer hardware, particularly graphics processing units and central processing units as well as sophisticated new video games; fluctuations in operating results; the risk that we are not able to compete with competitors and/or that the gaming industry, including streaming and esports, does not grow as expected or declines; the loss or inability to attract and retain key management; delays or disruptions at our or third-parties manufacturing and distribution facilities; currency exchange rate fluctuations or international trade disputes resulting in our gear becoming relatively more expensive to our overseas customers or resulting in an increase in our manufacturing costs; the impact of the coronavirus on our business; general economic conditions that adversely effect, among other things, the financial markets and consumer confidence and spending; and the other factors described under the heading “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 to be filed with the Securities and Exchange Commission (SEC) on or about the date hereof and our subsequent filings with the SEC. Copies of each filing may be obtained from us or the SEC. All forward-looking statements reflect our beliefs and assumptions only as of the date of this press release. We undertake no obligation to update forward-looking statements to reflect future events or circumstances. Our results for the quarter ended September 30, 2021 are not necessarily indicative of our operating results for any future periods.

 

Use and Reconciliation of Non-GAAP Financial Measures

 

To supplement the financial results presented in accordance with GAAP, this earnings release presents certain non-GAAP financial information, including Adjusted Operating Income, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income and Adjusted Net Income Per Share. These are important financial performance measures for us, but are not financial measures as defined by GAAP. The presentation of this non-GAAP financial information is not intended to be considered in isolation of or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

 

We use Adjusted Operating Income, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income and Adjusted Net Income Per Share to evaluate our operating performance and trends and make planning decisions. We believe that these non-GAAP measures help identify underlying trends in our business that could otherwise be masked by the effect of the expenses and other items that we exclude in such non-GAAP measures. Accordingly, we believe that Adjusted Operating Income, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income and Adjusted Net Income Per Share provide useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects, and allowing for greater transparency with respect to the key financial metrics used by our management in our financial and operational decision-making. We also present these non-GAAP financial performance measures because we believe investors, analysts and rating agencies consider them useful in measuring our ability to meet our debt service obligations.

 

Our use of these terms may vary from that of others in our industry. These non-GAAP financial measures should not be considered as an alternative to revenues, operating income, net income, cash provided by


operating activities, or any other measures derived in accordance with GAAP as measures of operating performance or liquidity. Reconciliations of these measures to the most directly comparable GAAP financial measures are presented in the attached schedules.

 

We calculate these non-GAAP financial measures as follows:

 

 

Adjusted operating income, non-GAAP, is determined by adding back to GAAP operating income the acquisition accounting impact related to recognizing acquired inventory at fair value, change in fair value of contingent consideration for business acquisitions, non-cash inventory impairment, stock-based compensation, intangible asset amortization, certain acquisition-related and integration-related expenses, restructuring costs, non-deferred costs associated with the IPO, secondary offering costs, and debt modification costs.

 

Adjusted net income, non-GAAP, is determined by adding back to GAAP net income the acquisition accounting impact related to recognizing acquired inventory at fair value, change in fair value of contingent consideration for business acquisitions, non-cash inventory impairment, stock-based compensation, intangible asset amortization, certain acquisition-related and integration-related expenses, restructuring costs, non-deferred costs associated with the IPO, secondary offering costs, debt modification costs, loss on extinguishment of debt, and the related tax effects of each of these adjustments.

 

Adjusted net income per diluted share, non-GAAP, is determined by dividing adjusted net income, non-GAAP by the respective weighted average shares outstanding, inclusive of the impact of other dilutive securities.

 

Adjusted EBITDA is determined by adding back to GAAP net income the acquisition accounting impact related to recognizing acquired inventory at fair value, change in fair value of contingent consideration for business acquisitions, non-cash inventory impairment, stock-based compensation, certain acquisition-related and integration-related expenses, restructuring costs, non-deferred costs associated with the IPO, secondary offering costs, debt modification costs, intangible asset amortization, depreciation and amortization, interest expense (including loss on extinguishment of debt) and tax expense.

 

Adjusted EBITDA margin is determined by dividing adjusted EBITDA by net revenue for the respective periods.

 

We encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure and to view these non-GAAP financial measures in conjunction with the related GAAP financial measures.

 

Source: Corsair Gaming, Inc.

 

Investor Relations Contact:

Ronald van Veen

ir@corsair.com

510-578-1407

 

Media Contact:

Adrian Bedggood

adrian.bedggood@corsair.com

510-657-8747

+44-7989-258827


Corsair Gaming, Inc.

Condensed Combined Consolidated Statements of Operations

(Unaudited, in thousands, except per share amounts)

 

 

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenue

 

$

391,121

 

 

$

457,103

 

 

$

1,393,438

 

 

$

1,146,028

 

Cost of revenue

 

 

289,759

 

 

 

329,159

 

 

 

1,001,397

 

 

 

834,398

 

Gross profit

 

 

101,362

 

 

 

127,944

 

 

 

392,041

 

 

 

311,630

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales, general and administrative

 

 

76,112

 

 

 

65,321

 

 

 

234,134

 

 

 

175,877

 

Product development

 

 

14,495

 

 

 

12,902

 

 

 

45,150

 

 

 

36,285

 

Total operating expenses

 

 

90,607

 

 

 

78,223

 

 

 

279,284

 

 

 

212,162

 

Operating income

 

 

10,755

 

 

 

49,721

 

 

 

112,757

 

 

 

99,468

 

Other (expense) income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(7,202

)

 

 

(10,170

)

 

 

(16,656

)

 

 

(29,116

)

Other (expense) income, net

 

 

(1,402

)

 

 

23

 

 

 

(4,002

)

 

 

(29

)

Total other expense, net

 

 

(8,604

)

 

 

(10,147

)

 

 

(20,658

)

 

 

(29,145

)

Income before income taxes

 

 

2,151

 

 

 

39,574

 

 

 

92,099

 

 

 

70,323

 

Income tax expense

 

 

(374

)

 

 

(3,217

)

 

 

(15,854

)

 

 

(10,149

)

Net income

 

$

1,777

 

 

$

36,357

 

 

$

76,245

 

 

$

60,174

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.02

 

 

$

0.43

 

 

$

0.82

 

 

$

0.71

 

Diluted

 

$

0.02

 

 

$

0.40

 

 

$

0.76

 

 

$

0.69

 

Weighted-average shares used to compute

    net income per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

93,918

 

 

 

84,871

 

 

 

92,894

 

 

 

84,352

 

Diluted

 

 

100,041

 

 

 

90,084

 

 

 

100,116

 

 

 

87,499

 

 


 

Corsair Gaming, Inc.

Segment Information

(Unaudited, in thousands, except percentages)

 

 

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

 

 

2021

2020

 

 

2021

 

 

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gamer and Creator Peripherals

 

$

139,260

 

 

$

161,555

 

 

$

470,329

 

 

$

347,531

 

Gaming Components and Systems

 

 

251,861

 

 

 

295,548

 

 

 

923,109

 

 

 

798,497

 

    Total Net Revenue

 

$

391,121

 

 

$

457,103

 

 

$

1,393,438

 

 

$

1,146,028

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gamer and Creator Peripherals

 

$

48,580

 

 

$

60,010

 

 

 

172,080

 

 

$

120,886

 

Gaming Components and Systems

 

 

52,782

 

 

 

67,934

 

 

 

219,961

 

 

 

190,744

 

    Total Gross Profit

 

$

101,362

 

 

$

127,944

 

 

$

392,041

 

 

$

311,630

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Margin:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gamer and Creator Peripherals

 

 

34.9

%

 

 

37.1

%

 

 

36.6

%

 

 

34.8

%

Gaming Components and Systems

 

 

21.0

%

 

 

23.0

%

 

 

23.8

%

 

 

23.9

%

    Total Gross Margin

 

 

25.9

%

 

 

28.0

%

 

 

28.1

%

 

 

27.2

%

 



 

Corsair Gaming, Inc.

Condensed Combined Consolidated Balance Sheets

(Unaudited, in thousands)

 

 

 

September 30,

2021

 

 

December 31,

2020

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and restricted cash

 

$

76,098

 

 

$

133,338

 

Accounts receivable, net

 

 

252,406

 

 

 

293,629

 

Inventories

 

 

331,938

 

 

 

226,007

 

Prepaid expenses and other current assets

 

 

47,682

 

 

 

37,997

 

Total current assets

 

 

708,124

 

 

 

690,971

 

Property and equipment, net

 

 

16,367

 

 

 

16,475

 

Goodwill

 

 

313,793

 

 

 

312,760

 

Intangible assets, net

 

 

234,141

 

 

 

259,317

 

Restricted cash, noncurrent

 

 

231

 

 

 

230

 

Other assets

 

 

69,033

 

 

 

34,362

 

TOTAL ASSETS

 

$

1,341,689

 

 

$

1,314,115

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

247,509

 

 

$

299,636

 

Debt maturing within one year, net

 

 

4,751

 

 

 

 

Other liabilities and accrued expenses

 

 

223,291

 

 

 

205,745

 

Total current liabilities

 

 

475,551

 

 

 

505,381

 

Long-term debt, net

 

 

244,087

 

 

 

321,393

 

Deferred tax liabilities

 

 

29,683

 

 

 

29,752

 

Other liabilities, noncurrent

 

 

55,353

 

 

 

20,199

 

TOTAL LIABILITIES

 

 

804,674

 

 

 

876,725

 

Stockholders’ Equity:

 

 

 

 

 

 

 

 

Common stock and additional paid-in capital

 

 

463,635

 

 

 

438,676

 

Retained earnings (accumulated deficit)

 

 

73,432

 

 

 

(2,813

)

Accumulated other comprehensive income (loss)

 

 

(52

)

 

 

1,527

 

Total Stockholders’ Equity

 

 

537,015

 

 

 

437,390

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 

$

1,341,689

 

 

$

1,314,115

 

 

 



 

Corsair Gaming, Inc.

Condensed Combined Consolidated Statements of Cash Flows

(Unaudited, in thousands)

 

 

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

1,777

 

 

$

36,357

 

 

$

76,245

 

 

$

60,174

 

Adjustments to reconcile net income to net cash

   provided by operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Stock-based compensation

 

 

5,812

 

 

 

1,631

 

 

 

13,656

 

 

 

4,286

 

   Depreciation

 

 

2,643

 

 

 

2,342

 

 

 

7,581

 

 

 

6,706

 

   Amortization of intangible assets

 

 

8,704

 

 

 

8,505

 

 

 

26,118

 

 

 

25,344

 

   Debt issuance costs amortization

 

 

320

 

 

 

708

 

 

 

1,372

 

 

 

1,990

 

   Loss on debt extinguishment

 

 

4,071

 

 

 

2,864

 

 

 

4,868

 

 

 

3,256

 

   Deferred income taxes

 

 

(1,368

)

 

 

(5,361

)

 

 

(6,556

)

 

 

(6,892

)

   Other

 

 

583

 

 

 

332

 

 

 

1,649

 

 

 

1,070

 

   Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Accounts receivable

 

 

6,048

 

 

 

(39,776

)

 

 

38,556

 

 

 

(58,067

)

      Inventories

 

 

(44,001

)

 

 

(61,957

)

 

 

(102,896

)

 

 

(60,886

)

      Prepaid expenses and other assets

 

 

1,855

 

 

 

(25,594

)

 

 

(7,790

)

 

 

(20,431

)

      Accounts payable

 

 

(14,180

)

 

 

77,544

 

 

 

(51,842

)

 

 

92,772

 

      Other liabilities and accrued expenses

 

 

(6,600

)

 

 

27,121

 

 

 

24,100

 

 

 

51,002

 

         Net cash (used in) provided by operating

            activities

 

 

(34,336

)

 

 

24,716

 

 

 

25,061

 

 

 

100,324

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Acquisition of business, net of cash acquired

 

 

 

 

 

(836

)

 

 

(1,684

)

 

 

(836

)

   Payment of deferred and contingent consideration

 

 

(325

)

 

 

 

 

 

(4,678

)

 

 

 

   Purchase of property and equipment

 

 

(2,783

)

 

 

(2,066

)

 

 

(7,677

)

 

 

(5,072

)

         Net cash used in investing activities

 

 

(3,108

)

 

 

(2,902

)

 

 

(14,039

)

 

 

(5,908

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Proceeds from issuance of debt, net

 

 

248,513

 

 

 

 

 

 

248,513

 

 

 

 

   Repayment of debt

 

 

(273,974

)

 

 

(126,574

)

 

 

(326,974

)

 

 

(140,394

)

   Payment of debt issuance costs

 

 

 

 

 

(194

)

 

 

 

 

 

(194

)

   Proceeds from initial public offering and private

      placement, net of underwriting discounts and

      commissions

 

 

 

 

 

118,575

 

 

 

 

 

 

118,575

 

   Payment of other offering costs

 

 

 

 

 

(5,313

)

 

 

 

 

 

(5,582

)

   Proceeds from issuance of shares through employee

      equity incentive plans

 

 

2,027

 

 

 

259

 

 

 

11,493

 

 

 

1,224

 

   Payment of taxes related to net share settlement of

      equity awards

 

 

(208

)

 

 

 

 

 

(215

)

 

 

 

         Net cash used in financing activities

 

 

(23,642

)

 

 

(13,247

)

 

 

(67,183

)

 

 

(26,371

)

Effect of exchange rate changes on cash

 

 

(1,136

)

 

 

259

 

 

 

(1,078

)

 

 

149

 

Net (decrease) increase in cash and restricted cash

 

 

(62,222

)

 

 

8,826

 

 

 

(57,239

)

 

 

68,194

 

Cash and restricted cash at the beginning of the period

 

 

138,551

 

 

 

111,315

 

 

 

133,568

 

 

 

51,947

 

Cash and restricted cash at the end of the period

 

$

76,329

 

 

$

120,141

 

 

$

76,329

 

 

$

120,141

 

 

  


 

Corsair Gaming, Inc.

GAAP to Non-GAAP Reconciliations

 

Non-GAAP Operating Income Reconciliations

(Unaudited, in thousands, except percentages)

 

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income - GAAP

 

$

10,755

 

 

$

49,721

 

 

$

112,757

 

 

$

99,468

 

Acquisition accounting impact related to recognizing acquired

   inventory at fair value

 

 

 

 

 

 

 

 

 

 

 

394

 

Change in fair value of contingent consideration for business

   acquisitions

 

 

(435

)

 

 

 

 

 

(342

)

 

 

 

Non-cash inventory impairment

 

 

485

 

 

 

 

 

 

1,003

 

 

 

 

Stock-based compensation

 

 

5,812

 

 

 

1,631

 

 

 

13,656

 

 

 

4,286

 

Intangible asset amortization

 

 

8,704

 

 

 

8,505

 

 

 

26,118

 

 

 

25,344

 

Acquisition-related and integration-related costs

 

 

381

 

 

 

726

 

 

 

1,127

 

 

 

2,476

 

Restructuring costs

 

 

699

 

 

 

 

 

 

699

 

 

 

 

Non-deferred IPO and secondary offering costs

 

 

 

 

 

451

 

 

 

1,031

 

 

 

1,205

 

Debt modification costs

 

 

 

 

 

335

 

 

 

 

 

 

623

 

Adjusted Operating Income - Non-GAAP

 

$

26,401

 

 

$

61,369

 

 

$

156,049

 

 

$

133,796

 

As a % of net revenue - GAAP

 

 

2.7

%

 

 

10.9

%

 

 

8.1

%

 

 

8.7

%

As a % of net revenue - Non-GAAP

 

 

6.8

%

 

 

13.4

%

 

 

11.2

%

 

 

11.7

%

 

Non-GAAP Net Income and Net Income Per Share Reconciliations

(Unaudited, in thousands, except per share amounts and percentages)

 

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income - GAAP

 

$

1,777

 

 

$

36,357

 

 

$

76,245

 

 

$

60,174

 

Acquisition accounting impact related to recognizing acquired

   inventory at fair value

 

 

 

 

 

 

 

 

 

 

 

394

 

Change in fair value of contingent consideration for business

   acquisitions

 

 

(435

)

 

 

 

 

 

(342

)

 

 

 

Non-cash inventory impairment

 

 

485

 

 

 

 

 

 

1,003

 

 

 

 

Stock-based compensation

 

 

5,812

 

 

 

1,631

 

 

 

13,656

 

 

 

4,286

 

Intangible asset amortization

 

 

8,704

 

 

 

8,505

 

 

 

26,118

 

 

 

25,344

 

Acquisition-related and integration-related costs

 

 

381

 

 

 

726

 

 

 

1,127

 

 

 

2,476

 

Restructuring costs

 

 

699

 

 

 

 

 

 

699

 

 

 

 

Non-deferred IPO and secondary offering costs

 

 

 

 

 

451

 

 

 

1,031

 

 

 

1,205

 

Debt modification costs

 

 

 

 

 

335

 

 

 

 

 

 

623

 

Loss on debt extinguishment

 

 

4,107

 

 

 

2,864

 

 

 

4,904

 

 

 

3,256

 

Non-GAAP income tax adjustment

 

 

(5,193

)

 

 

(2,386

)

 

 

(14,252

)

 

 

(5,818

)

Adjusted Net Income - Non-GAAP

 

$

16,337

 

 

$

48,483

 

 

$

110,189

 

 

$

91,940

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  GAAP

 

$

0.02

 

 

$

0.40

 

 

$

0.76

 

 

$

0.69

 

  Adjusted, Non-GAAP

 

$

0.16

 

 

$

0.54

 

 

$

1.10

 

 

$

1.05

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used to compute diluted net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  GAAP

 

 

100,041

 

 

 

90,084

 

 

 

100,116

 

 

 

87,499

 

  Adjusted, Non-GAAP

 

 

100,041

 

 

 

90,084

 

 

 

100,116

 

 

 

87,499

 


 

Corsair Gaming, Inc.

Adjusted EBITDA Reconciliations

(Unaudited, in thousands, except percentages)

 

 

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income - GAAP

 

$

1,777

 

 

$

36,357

 

 

$

76,245

 

 

$

60,174

 

Acquisition accounting impact related to recognizing acquired

   inventory at fair value

 

 

 

 

 

 

 

 

 

 

 

394

 

Change in fair value of contingent consideration for business

   acquisitions

 

 

(435

)

 

 

 

 

 

(342

)

 

 

 

Non-cash inventory impairment

 

 

485

 

 

 

 

 

 

1,003

 

 

 

 

Stock-based compensation

 

 

5,812