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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): February 8, 2022

 

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. ☐

 

 

 

 

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Item 2.02 Results of Operations and Financial Condition

 

On February 8, 2022, Corsair Gaming, Inc. (“Corsair” or the “Company”) issued a press release announcing certain of its financial results for the fiscal quarter and year ended December 31, 2021. The full text of the press release is furnished pursuant to Item 2.02 as Exhibit 99.1 to this Current Report on Form 8-K. A presentation regarding the Company's fiscal quarter and year ended December 31, 2021 is furnished pursuant to Item 2.02 as Exhibit 99.2 hereto.

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit Number		Description
99.1		Press Release dated February 8, 2022, titled “Corsair Gaming Reports Fourth Quarter and Full Year 2021 Financial Results”
99.2		Investor Presentation dated February 8, 2022
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

The information in this Current Report on Form 8-K and 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 exhibits 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.

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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: February 8, 2022		By:	/s/ Michael G. Potter
			Michael G. Potter
			Chief Financial Officer (Principal Financial Officer)

 

2

Exhibit 99.1

 

 

Corsair Gaming Reports Fourth Quarter and Full Year 2021 Financial Results

Reports record annual revenues of $1.9 billion for 2021; guides continued growth for 2022

 

FREMONT, CA, February 8, 2022 – Corsair 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 fourth quarter and full year ended December 31, 2021.

 

Full Year 2021 Highlights

 

 

Fourth Quarter 2021 Highlights

 

 

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.”

 

“After the extraordinary growth in 2020 caused by gamers spending more time at home gaming and the large growth in the creator economy, we are pleased to see that after lockdowns and shelter at home were lifted, our Q421 net revenues were within about 8% of Q420. Despite the ongoing logistical and supply chain challenges impacting markets, including the lack of availability of reasonably priced GPUs in the retail channel, we experienced healthy growth over 2020 in both our operating segments. Our gamer and creator peripherals segment grew 20% year-over-year, demonstrating the underlying secular growth

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trends in the overall gaming, esports, content creator and streaming hardware and services market. As we discussed during our recent Investor Day and with our record new product introductions of 141, including five new categories, we remain focused on expanding our presence in the market and are well positioned to continue to gain market share,” stated Andy Paul, Chief Executive Officer of Corsair.

 

“We are pleased with our strong financial performance to conclude 2021, with fourth quarter revenue and profitability metrics achieving the high end of our expectations. We remain focused on growth following the transformation of our debt levels and cost management efficiencies over the past few years. As we begin 2022, we expect to continue to experience elevated freight costs and ongoing supply chain issues, but we believe these circumstances will ease as the year progresses. As these macroeconomic conditions improve, we expect to increase our cash position, which should allow us to execute on M&A opportunities that fulfill our investment criteria or further reduce debt,” said Michael G. Potter, Chief Financial Officer of Corsair.

 

Financial Outlook

 

For the full year 2022 we currently expect:

 

 

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, non-cash asset impairment charges, 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.

 

Recent Developments

 

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Conference Call and Webcast Information

 

We will host a conference call to discuss the fourth quarter and full-year 2021 financial results on February 8, 2022, at 2:00 p.m. PT. The conference call can be accessed live over the phone by dialing 1-877-407-0784, or for international callers 1-201-689-8560. A replay will be available from 5:00 p.m. PT on February 8, 2022 through February 15, 2022, by dialing 1-844-512-2921, or for international callers 1-412-317-6671. The replay passcode is 13726356.

 

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

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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 includes subsidiary brands Elgato, which provides premium studio equipment and accessories for content creators, SCUF Gaming, which builds custom-designed controllers for competitive gamers, ORIGIN PC, 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 expectations regarding freight costs and supply chain issues, including if and when such issues may ease; whether demand for DIY PC builds will increase; our expectations regarding our cash position; whether we will be able to execute on M&A opportunities and or reduce our debt, as well as the timing of the foregoing; and our estimated full year 2022 net revenue, adjusted operating income and adjusted EBITDA; and our estimated 2026 net revenue target. 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, including the potential end of the pandemic and the cessation of pandemic-related restrictions, 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 filed with the Securities and Exchange Commission (“SEC”) on November 2, 2021, in our Annual Report on Form 10-K for the year ended December 31, 2021 to be filed with the SEC 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 and year ended December 31, 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 net income,

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adjusted net Income per diluted share and adjusted EBITDA. 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 net Income, adjusted net income per diluted share and adjusted EBITDA 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 net income, adjusted net income per diluted share and adjusted EBITDA 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:

 

 

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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

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Corsair Gaming, Inc.

Condensed Consolidated Statements of Operations

(Unaudited, in thousands, except per share amounts)

 

 

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Corsair Gaming, Inc.

Segment Information

(Unaudited, in thousands, except percentages)

 

 

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Corsair Gaming, Inc.

Condensed Consolidated Balance Sheets

(Unaudited, in thousands)

 

 

 

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Corsair Gaming, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited, in thousands)

 

  

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Corsair Gaming, Inc.

GAAP to Non-GAAP Reconciliations

 

Non-GAAP Operating Income Reconciliations

(Unaudited, in thousands, except percentages)

 

Non-GAAP Net Income and Net Income Per Share Reconciliations

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

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Corsair Gaming, Inc.

Adjusted EBITDA Reconciliations

(Unaudited, in thousands, except percentages)

 

Q4 & FISCAL YEAR 2021 FINANCIAL RESULTS February 8, 2022 Exhibit 99.2

DISCLAIMER Forward Looking Statements This presentation contains forward looking statements that involve risks, uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, the Company's results may differ materially from those expressed or implied by such forward-looking statements. All statements other than statements of historical fact could be deemed forward-looking statements, including, but not limited to: information or predictions concerning the Company's future financial performance, business plans and objectives, potential growth opportunities, potential pricing of products, potential market leadership, financing plans, competitive position, technological, industry or market trends and potential market opportunities; whether demand for DIY PC builds will increase; the Company’s plans to reduce its debt; and the Company’s financial guidance for 2022. These statements are based on estimates and information available to the Company at the time of this presentation and are not guarantees of future performance. Actual results could differ materially from the Company's current expectations as a result of many factors, including, but not limited to: the impact the COVID-19 pandemic, including the potential end of the pandemic and the cessation of pandemic-related restrictions, will have on demand for the Company’s products as well as its impact on its operations and the operations of its manufacturers, retailers and other partners, and its impact on the economy overall, including capital markets; the Company’s ability to build and maintain the strength of its brand among gaming and streaming enthusiasts and its 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 the Company is 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 manufacturing and distribution facilities of the Company or third parties; currency exchange rate fluctuations or international trade disputes resulting in the Company’s gear becoming relatively more expensive to its overseas customers or resulting in an increase in the Company’s manufacturing costs; the impact of the coronavirus on the Company’s business; and general economic conditions that adversely effect, among other things, the financial markets and consumer confidence and spending. The Company assumes no obligation, and does not intend, to update these forward-looking statements, except as required by law. Investors are urged to review in detail the risks and uncertainties outlined in Corsair’s Securities and Exchange Commission filings, including but not limited to Corsair’s Annual Report on Form 10-K for the year ended December 31, 2021 (once available) as well as the Risk Factors contained therein. You may get these documents for free by visiting EDGAR on the SEC website at http://www.sec.gov. Non-GAAP Financial Measures Included in this presentation are certain non-GAAP financial measures, such as adjusted operating income, adjusted net income, adjusted net income per share, adjusted EBITDA and adjusted EBITDA margin, which are not recognized under the generally accepted accounting principles (“GAAP”) in the United States and designed to complement the financial information presented in accordance with GAAP in the United States because management believes such measures are useful to investors. The non-GAAP measures have limitations as analytical tools and you should not consider them in isolation of, or as an alternative to, measures prepared in accordance with U.S. GAAP. The non-GAAP measures used by the Company may differ from the non-GAAP measures used by other companies. The Company urges you to review the reconciliation of its non-GAAP financial measures to the most directly comparable U.S. GAAP financial measures set forth in the Appendix to this presentation, and not to rely on any single financial measure to evaluate the Company's business. Market & Industry Data This presentation also contains estimates and other statistical data made by independent parties and by the Company relating to the Company’s industry, the Company’s business and the market for the Company’s products and its future growth. This data involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. In addition, projections, assumptions, and estimates of the Company’s future performance and the future performance of the market for its products are necessarily subject to a high degree of uncertainty and risk.

Q4 PRODUCT HIGHLIGHTS

NEW TECHNOLOGY – DDR5 MEMORY DDR5 Launched alongside Intel’s Z690 platform, for the biggest upgrade in performance memory in 7 years. Corsair DDR5 was trusted by over 100 leading media outlets and tech influencers to test the new platform and memory standard Consumer demand is extremely high and increased ASPs accompany a surge in upgrades alongside Intel’s new 12th Generation processors Corsair DDR5 is leading the way in performance, shipping kits up to 6,400MHz and overclockers pushing speeds even higher

NEW CATEGORY – CORSAIR COLLECTIONS Introducing Corsair Collections – custom & limited release, direct to consumer products Debuted with the new Flavor Rush Series of K65 RGB MINI keyboards Unique and deeper personalization for our most engaged customers

NEW CONTROLLER – PLAYSTATION 5 CONTROLLER SCUF controller made for PlayStation 5 – the SCUF Reflex Patented SCUF remappable paddles and adjustable controls give players the edge in the most competitive games Incredible customer demand saw our initial launch stock sell out in minutes. Three ways to win with Reflex, Reflex Pro and Reflex FPS

FINANCIAL RESULTS

REVENUE DATA BY SEGMENT +57% +104% +70% YoY -8% -8% -8% YoY +45% +83% +55% YoY +8% +20% +12% YoY Note: 2019 financials are not presented on a pro-forma basis for CORSAIR’s acquisitions of Origin and SCUF in 2019. $ in millions

GROSS MARGIN DATA BY SEGMENT Note: 2019 financials are not presented on a pro-forma basis for CORSAIR’s acquisitions of Origin and SCUF in 2019. +93% +133% +5% +19% +198% +79% -19% -23% +108% YoY +10% YoY +118% YoY -21% YoY Segment gross profit Segment gross margin $ in millions

EXPANDING ADJUSTED EBITDA WITH LOW CAPEX $ in millions 0.8% 0.5% 0.6% 6.5% 12.5% 10.5% 8.7% 13.0% 0.6% 0.7% 7.7% 0.6% Capex Spend (% of Revenue) Adjusted EBITDA Margin Note: See appendix on non-GAAP reconciliations; 2019 financials are not presented on a pro-forma basis for CORSAIR’s acquisitions Origin and SCUF in 2019.

2021 & Q4 RESULTS In 2021 Net Revenues grew at 11.8%, following extraordinary 55.2% growth the year prior as gamers spend more time at home gaming and started to invest in dedicated gaming and streaming hardware. This growth came despite being restrained by supply chain challenges, including the lack of availability in the retail channel of reasonably priced GPUs which curtailed the demand for new PC builds and its components. As in prior years the higher margin Gamer and Creator Peripherals segment growth outpaced the company’s and provided a favorable mix impact on overall gross margins. However, this was not enough to offset the adverse impact of higher logistics and supply chain costs including ocean and air freight particularly in the second half of 2021. We estimate these costs impacts on gross margin compared to 2020 to be approximately 1% for the year and approximately 2% for the quarter. Note: See appendix on non-GAAP reconciliations

GAMING COMPONENTS AND SYSTEMS 2021 RESULTS Net Revenue growth of 8.1% in 2021 despite the lack of availability in the retail channel for much of the year of reasonably priced GPUs which caused many enthusiasts to hold off building a performance gaming PC. We believe that as reasonably priced GPUs become more available there should be pent-up demand for building high performance gaming PCs. Corsair grew market share in both gaming memory and non-memory components. Gross margins were adversely impacted by higher logistics costs including ocean and air freight particularly in the second half of 2021, with ocean freight costs per container running as much as 4-5x above normal pre-pandemic levels

GAMER AND CREATOR PERIPHERALS 2021 RESULTS 2021 Net Revenue grew by 20.0%, led by our Elgato branded streaming and creator products, which outgrew the overall segment. 2021 Net Revenue grew significantly despite being impacted by IC shortages and a 4-6 weeks increase in transit times, which caused our premium high value products to be in tight supply. Q4 Segment Gross Profit Margins were adversely impacted by increased logistics and supply chain costs as well as a return towards a more normal level of promotional activity. Ocean freight costs per container ran as much as 4-5x higher than normal pre-pandemic levels.

FINANCIAL GUIDANCE FY2022 (1) Given the number of risk factors, uncertainties and assumptions, many of which are discussed in slide 2, actual results may differ materially. Estimates should not be viewed as a substitute for our full annual financial statement and are not necessarily indicative of the results to be expected for any future period. 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 into non-GAAP measures to the most directly comparable GAAP measures without unreasonable effort 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 this period but would not impact the non-GAAP measures. Such items may include stock-based compensation charges, public offering related charges, depreciation and amortization, and other items. The unavailable information could have a significant impact on our GAAP financial results.

DEBT SUMMARY In Q3 2021, refinanced long-term debt, substantially reducing the interest rate, doubled revolver to $100 million and reduced outstanding debt by $24 million to $250 million of face value. During 2021 we reduced the face value of our debt by $78.2 million and we estimate an interest expense savings of over $2 million per quarter at current balance. Based on our current net leverage ratio our interest rate on the long-term debt is LIBOR plus 1.50%. We expect to continue to reduce debt over time on a more opportunistic basis subject to business conditions and any need for growth capital.

APPENDIX

USE OF NON-GAAP FINANCIAL MEASURES To supplement the financial results presented in accordance with GAAP, this presentation includes certain non-GAAP financial information, including adjusted operating income, adjusted net income, adjusted net income per share, adjusted EBITDA and adjusted EBITDA margin. 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 net income, adjusted net income per share, adjusted EBITDA and adjusted EBITDA margin 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 net income, adjusted net income per share, adjusted EBITDA and adjusted EBITDA margin 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 appendix. 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.

GAAP TO NON-GAAP RECONCILIATIONS Non-GAAP Operating Income Reconciliations (Unaudited, in thousands, except percentages)

GAAP TO NON-GAAP RECONCILIATIONS Non-GAAP Net Income and Net Income Per Share Reconciliations (Unaudited, in thousands, except per share amounts and percentages)

GAAP TO NON-GAAP RECONCILIATIONS Adjusted EBITDA Reconciliations (Unaudited, in thousands, except percentages)

THANK YOU