crsr-8k_20220804.htm
false 0001743759 0001743759 2022-08-04 2022-08-04 0001743759 dei:FormerAddressMember 2022-08-04 2022-08-04

 

 

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): August 4, 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)

115 N. McCarthy Boulevard

Milpitas, California 95035

 

 (Address of principal executive offices, including Zip Code)

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

 

47100 Bayside Pkwy

Fremont, California 94538

 

(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 August 4, 2022, Corsair Gaming, Inc. (“Corsair” or the “Company”) issued a press release announcing certain of its financial results for the fiscal quarter ended June 30, 2022. 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 ended June 30, 2022 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 August 4, 2022, titled “Corsair Gaming Reports Second Quarter 2022 Financial Results”

99.2

 

Investor Presentation dated August 4, 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.

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: August 4, 2022

 

By:

/s/ Michael G. Potter

 

 

 

Michael G. Potter

 

 

 

Chief Financial Officer

(Principal Financial Officer)

 

2

crsr-ex991_6.htm

Exhibit 99.1

 

 

Corsair Gaming Reports Second Quarter 2022 Financial Results

 

Milpitas, CA, August 4, 2022Corsair Gaming, Inc. (Nasdaq: CRSR) (“Corsair” or the “Company”), a leading global provider and innovator of high-performance gear for gamers and content creators, today announced financial results for the quarter ended June 30, 2022.

Second Quarter 2022 Highlights

 

Net revenue was $283.9 million, in line with the Company’s preliminary revenue provided on July 21, 2022. Net revenue was $380.7 million in the first quarter of 2022 and $472.9 million in the second quarter of 2021. The sequential and year-over-year declines reflect the adverse impact of macro-economic headwinds affecting consumer spending on gaming gear, especially in Europe, and a channel inventory correction.

 

Gamer and creator peripherals segment revenue was $89.0 million compared to $134.1 million in the first quarter of 2022 and $155.2 million in the second quarter of 2021.

 

Gaming components and systems segment revenue was $194.9 million compared to $246.5 million in the first quarter of 2022, and $317.7 million in the second quarter of 2021.

 

Operating loss was $55.0 million compared to operating loss of $2.5 million in the first quarter of 2022 and operating income of $34.7 million in the second quarter of 2021.

 

Net loss per diluted share was $0.62 compared to net loss per diluted share of $0.05 in the first quarter of 2022 and net income per diluted share of $0.28 in the second quarter of 2021.

 

Adjusted EBITDA was a loss of $11.0 million compared to $15.4 million in the first quarter of 2022 and $51.6 million in the second quarter of 2021.

 

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.”

Andy Paul, Chief Executive Officer of Corsair, stated, “Headwinds from Q1 persisted through Q2, which is seasonally the lowest quarter for us, with macro-economic headwinds affecting consumer spending on gaming gear, especially in Europe combined with global inflation, the continued Russia and Ukraine conflict, and high freight costs. This resulted in a buildup of inventory both in our warehouses as well as in the retail channel, thus causing our channel partners to delay ordering while they clear this stock. Despite the challenging environment, we continue to see positive underlying growth trends in the gaming hardware sector, and we see spending levels significantly above pre -pandemic levels. We are also starting to see more enthusiasts building gaming PCs again as graphics cards are now more readily available at reasonable prices. We saw very positive signs during Amazon Prime week, with component activity significantly higher than in 2021, both in Europe as well as in the United States. While we are disappointed with the lower results in Q2, we are very pleased to see positive market activity recently and with our channel inventory moving back into line during Q2 and Q3 2022, we expect demand for our products to recover well as we finish the year and look forward to an exciting 2023.”


Michael G. Potter, Chief Financial Officer of Corsair, stated, “We have already taken actions to adjust to the lower revenue level in the first half of 2022 and our expectations for the remainder of the year. We have proactively taken actions to reduce operating expenses and we have adjusted product ordering and took a $19.5 million reserve against potential inventory overhangs. We believe our business fundamentals remain strong with a positive long-term outlook, and we continue to believe the self-built gaming PC market will begin to accelerate in the second half of 2022. Despite the headwinds we have been facing, we have continued to invest in product development and have and will continue to release innovative and what we believe to be industry leading products.

Financial Outlook

For the full year 2022, we currently expect:

 

Net revenue to be in the range of $1.35 billion to $1.45 billion.

 

Adjusted operating income to be in the range of $35 million to $50 million.

 

Adjusted EBITDA to be in the range of $50 million to $65 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, depreciation and amortization, inventory write-down charges 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

 

Unveiled Corsair’s innovative first gaming and streaming laptop, the CORSAIR VOYAGER a1600 AMD Advantage™ Edition. Combining a powerful AMD Ryzen™ 6000 Series processor, AMD Radeon™ RX 6800M mobile graphics with CORSAIR and Elgato’s vast ecosystem of exclusive software and technologies, the CORSAIR VOYAGER a1600 AMD Advantage™ Edition laptop was designed for aspiring content creators, avid gamers, full-time streamers and more.

 

Announced VENGEANCE RGB DDR5, the newest addition to Corsair’s lineup of cutting-edge DDR5 memory optimized for the latest gaming PCs and workstations to deliver sensational DDR5 performance with stunning RGB style.

 

Announced it is working with NVIDIA to integrate key features from NVIDIA Broadcast into CORSAIR iCUE, Elgato Wave Link, and Elgato Camera Hub software. For owners of NVIDIA GeForce RTX graphics cards, NVIDIA Broadcast AI effects enhance microphones and cameras in real-time to improve the gaming, streaming, and video conferencing experience, all controllable from CORSAIR and Elgato software interfaces.

 

Expanded its CORSAIR XENEON family of gaming monitors with two new additions: the CORSAIR XENEON 32UHD144 and XENEON 32QHD240, with stunning UHD 4K resolution gaming or QHD at an incredibly smooth 240Hz refresh rate, both monitors deliver the beautiful design, brilliant display, and innovative technologies.


 

 

Conference Call and Webcast Information

Corsair will host a conference call to discuss the second quarter 2022 financial results today at 2:00 p.m. Pacific Time. The conference call will be accessible on Corsair’s Investor Relations website at https://ir.corsair.com, or by dialing 1-877-407-0784 (USA) or 1-201-689-8560 (International) with conference ID 13730682. A replay will be available approximately 2 hours after the live call ends on Corsair's Investor Relations website, or through August 11, 2022 by dialing 1-844-512-2921 (USA) or 1-412-317-6671 (International), with passcode 13730682.

 

About Corsair Gaming, Inc.

Corsair 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 its 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, Corsair’s expectations regarding its  substantial progress during the quarter to reduce inventory levels, its belief there are positive underlying growth trends in the gaming hardware sector and that the self-built gaming PC market will begin to accelerate in the second half of 2022, its expectations regarding the end of the year 2022 and 2023, its ability to continue to release innovative and what it believes to be industry leading products, and its estimated full year 2022 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, 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; the impact of global instability, such as the war between Russia and Ukraine, and any sanctions or other geopolitical tensions that may result therefrom; 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; 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 June 30, 2022 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 June 30, 2022 are also 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, 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 share and adjusted   EBITDA to evaluate our operating performance and trends and make planning decisions. We believe that these non-GAAP financial 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 these non-GAAP financial measures 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 measures because we believe investors, analysts and rating agencies consider it 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 net revenue, operating income (loss), net income (loss), 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 (loss), non-GAAP, is determined by adding back to GAAP operating income (loss) the acquisition accounting impact related to recognizing acquired inventory at fair value, change in fair value of contingent consideration for business acquisitions, inventory impairment and related charges, stock-based compensation, amortization, certain acquisition-


 

related and integration-related expenses, restructuring costs, non-deferred secondary offering costs, and debt modification costs.

 

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

 

Adjusted net income (loss) per diluted share, non-GAAP, is determined by dividing adjusted net income (loss), 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 (loss) the acquisition accounting impact related to recognizing acquired inventory at fair value, change in fair value of contingent consideration for business acquisitions, inventory impairment and related charges, stock-based compensation, certain acquisition-related and integration-related expenses, restructuring costs, non-deferred secondary offering costs, debt modification costs, amortization, depreciation, interest expense (including loss on extinguishment of debt) and tax expense (benefit).

 

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.

Investor Relations Contact:

 

Ronald van Veen

ir@corsair.com

510-578-1407

Media Contact:

 

David Ross

david.ross@corsair.com

+4411 8208 0542

 

 

 


 

Corsair Gaming, Inc.

Condensed Consolidated Statements of Operations

(Unaudited, in thousands, except per share amounts)

 

 

 

Three Months Ended

June 30,

 

 

Six Months Ended

June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenue

 

$

283,908

 

 

$

472,903

 

 

$

664,599

 

 

$

1,002,317

 

Cost of revenue

 

 

247,449

 

 

 

342,552

 

 

 

537,384

 

 

 

711,638

 

Gross profit

 

 

36,459

 

 

 

130,351

 

 

 

127,215

 

 

 

290,679

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales, general and administrative

 

 

73,393

 

 

 

80,169

 

 

 

149,524

 

 

 

158,022

 

Product development

 

 

18,026

 

 

 

15,469

 

 

 

35,136

 

 

 

30,655

 

Total operating expenses

 

 

91,419

 

 

 

95,638

 

 

 

184,660

 

 

 

188,677

 

Operating income (loss)

 

 

(54,960

)

 

 

34,713

 

 

 

(57,445

)

 

 

102,002

 

Other (expense) income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(1,676

)

 

 

(4,508

)

 

 

(2,955

)

 

 

(9,454

)

Other income (expense), net

 

 

633

 

 

 

(175

)

 

 

134

 

 

 

(2,600

)

Total other expense, net

 

 

(1,043

)

 

 

(4,683

)

 

 

(2,821

)

 

 

(12,054

)

Income (loss) before income taxes

 

 

(56,003

)

 

 

30,030

 

 

 

(60,266

)

 

 

89,948

 

Income tax benefit (expense)

 

 

4,164

 

 

 

(2,285

)

 

 

5,147

 

 

 

(15,480

)

Net income (loss)

 

 

(51,839

)

 

 

27,745

 

 

 

(55,119

)

 

 

74,468

 

Less: Net income (loss) attributable to noncontrolling interests

 

 

174

 

 

 

 

 

 

(233

)

 

 

 

Net income (loss) attributable to Corsair Gaming, Inc.

 

$

(52,013

)

 

$

27,745

 

 

$

(54,886

)

 

$

74,468

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Calculation of net income (loss) per share attributable to common stockholders of Corsair Gaming, Inc.:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to Corsair Gaming, Inc.

 

$

(52,013

)

 

$

27,745

 

 

$

(54,886

)

 

$

74,468

 

Change in redemption value of redeemable noncontrolling interests

 

 

(7,379

)

 

 

 

 

 

(9,640

)

 

 

 

Net income (loss) attributable to common stockholders of Corsair Gaming, Inc.

 

$

(59,392

)

 

$

27,745

 

 

$

(64,526

)

 

$

74,468

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share attributable to common stockholders of Corsair Gaming, Inc.:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.62

)

 

$

0.30

 

 

$

(0.68

)

 

$

0.81

 

Diluted

 

$

(0.62

)

 

$

0.28

 

 

$

(0.68

)

 

$

0.74

 

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

95,467

 

 

 

92,792

 

 

 

95,372

 

 

 

92,374

 

Diluted

 

 

95,467

 

 

 

100,074

 

 

 

95,372

 

 

 

100,145

 

 

 

 

 



 

Corsair Gaming, Inc.

Segment Information

(Unaudited, in thousands, except percentages)

 

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gamer and Creator Peripherals

 

$

88,989

 

 

$

155,157

 

 

$

223,137

 

 

$

331,069

 

Gaming Components and Systems

 

 

194,919

 

 

 

317,746

 

 

 

441,462

 

 

 

671,248

 

Total Net revenue

 

$

283,908

 

 

$

472,903

 

 

$

664,599

 

 

$

1,002,317

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gamer and Creator Peripherals

 

$

10,558

 

 

$

54,634

 

 

$

53,615

 

 

$

123,500

 

Gaming Components and Systems

 

 

25,901

 

 

 

75,717

 

 

 

73,600

 

 

 

167,179

 

Total Gross Profit

 

$

36,459

 

 

$

130,351

 

 

$

127,215

 

 

$

290,679

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Margin:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gamer and Creator Peripherals

 

 

11.9

%

 

 

35.2

%

 

 

24.0

%

 

 

37.3

%

Gaming Components and Systems

 

 

13.3

%

 

 

23.8

%

 

 

16.7

%

 

 

24.9

%

Total Gross Margin

 

 

12.8

%

 

 

27.6

%

 

 

19.1

%

 

 

29.0

%

 



 

Corsair Gaming, Inc.

Condensed Consolidated Balance Sheets

(Unaudited, in thousands)

 

 

 

June 30,

2022

 

 

December 31,

2021

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and restricted cash

 

$

38,471

 

 

$

65,149

 

Accounts receivable, net

 

 

170,309

 

 

 

291,287

 

Inventories

 

 

292,586

 

 

 

298,315

 

Prepaid expenses and other current assets

 

 

53,331

 

 

 

51,024

 

Total current assets

 

 

554,697

 

 

 

705,775

 

Restricted cash, noncurrent

 

 

231

 

 

 

231

 

Property and equipment, net

 

 

22,598

 

 

 

16,819

 

Goodwill

 

 

347,907

 

 

 

317,054

 

Intangibles assets, net

 

 

236,481

 

 

 

225,709

 

Other assets

 

 

69,978

 

 

 

71,808

 

Total assets

 

$

1,231,892

 

 

$

1,337,396

 

Liabilities

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Debt maturing within one year, net

 

$

4,707

 

 

$

4,753

 

Accounts payable

 

 

193,530

 

 

 

236,120

 

Other liabilities and accrued expenses

 

 

158,296

 

 

 

205,874

 

Total current liabilities

 

 

356,533

 

 

 

446,747

 

Long-term debt, net

 

 

240,377

 

 

 

242,898

 

Deferred tax liabilities

 

 

23,247

 

 

 

25,700

 

Other liabilities, noncurrent

 

 

49,374

 

 

 

53,871

 

Total liabilities

 

 

669,531

 

 

 

769,216

 

Temporary equity

 

 

 

 

 

 

 

 

Redeemable noncontrolling interests

 

 

26,749

 

 

 

 

Permanent equity

 

 

 

 

 

 

 

 

Corsair Gaming, Inc. stockholders’ equity:

 

 

 

 

 

 

 

 

Common stock and additional paid-in capital

 

 

498,751

 

 

 

470,373

 

Retained earnings

 

 

33,621

 

 

 

98,147

 

Accumulated other comprehensive loss

 

 

(7,660

)

 

 

(340

)

Total Corsair Gaming, Inc. stockholders' equity

 

 

524,712

 

 

 

568,180

 

Nonredeemable noncontrolling interests

 

 

10,900

 

 

 

 

Total permanent equity

 

 

535,612

 

 

 

568,180

 

Total liabilities, temporary equity and permanent equity

 

$

1,231,892

 

 

$

1,337,396

 


 

Corsair Gaming, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited, in thousands)

 

 

 

Three Months Ended

June 30,

 

 

Six Months Ended

June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(51,839

)

 

$

27,745

 

 

$

(55,119

)

 

$

74,468

 

Adjustments to reconcile net income (loss) to

net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Stock-based compensation

 

 

6,087

 

 

 

4,768

 

 

 

11,234

 

 

 

7,844

 

   Depreciation

 

 

2,545

 

 

 

2,502

 

 

 

5,149

 

 

 

4,938

 

   Amortization

 

 

13,434

 

 

 

8,712

 

 

 

23,572

 

 

 

17,414

 

   Debt issuance costs amortization

 

 

86

 

 

 

515

 

 

 

172

 

 

 

1,052

 

   Loss on debt extinguishment

 

 

 

 

 

358

 

 

 

 

 

 

797

 

   Deferred income taxes

 

 

(6,742

)

 

 

(2,183

)

 

 

(10,820

)

 

 

(5,188

)

   Other

 

 

2,348

 

 

 

(250

)

 

 

2,915

 

 

 

1,066

 

   Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Accounts receivable

 

 

65,612

 

 

 

45,924

 

 

 

120,046

 

 

 

32,508

 

      Inventories

 

 

11,221

 

 

 

(45,387

)

 

 

10,559

 

 

 

(58,895

)

      Prepaid expenses and other assets

 

 

(1,334

)

 

 

(5,226

)

 

 

(9,481

)

 

 

(9,645

)

      Accounts payable

 

 

(8,188

)

 

 

(10,674

)

 

 

(43,496

)

 

 

(37,662

)

      Other liabilities and accrued expenses

 

 

(17,073

)

 

 

4,825

 

 

 

(44,680

)

 

 

30,700

 

         Net cash provided by operating activities

 

 

16,157

 

 

 

31,629

 

 

 

10,051

 

 

 

59,397

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Acquisition of business, net of cash acquired

 

 

 

 

 

 

 

 

(19,534

)

 

 

(1,684

)

   Payment of deferred consideration

 

 

(95

)

 

 

 

 

 

(95

)

 

 

(4,353

)

   Purchase of property and equipment

 

 

(7,556

)

 

 

(2,858

)

 

 

(11,921

)

 

 

(4,894

)

   Investment in available-for-sale convertible note

 

 

(1,000

)

 

 

 

 

 

(1,000

)

 

 

 

         Net cash used in investing activities

 

 

(8,651

)

 

 

(2,858

)

 

 

(32,550

)

 

 

(10,931

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Repayment of debt

 

 

(1,500

)

 

 

(25,000

)

 

 

(2,750

)

 

 

(53,000

)

   Borrowing from line of credit

 

 

110,000

 

 

 

 

 

 

403,000

 

 

 

 

   Repayment of line of credit

 

 

(110,000

)

 

 

 

 

 

(403,000

)

 

 

 

   Payment of contingent consideration

 

 

(146

)

 

 

 

 

 

(438

)

 

 

 

   Proceeds from issuance of shares through

    employee equity incentive plans

 

 

2,985

 

 

 

9,281

 

 

 

3,508

 

 

 

9,466

 

   Payment of taxes related to net share settlement

    of equity awards

 

 

(110

)

 

 

(7

)

 

 

(997

)

 

 

(7

)

         Net cash provided by (used in) financing activities

 

 

1,229

 

 

 

(15,726

)

 

 

(677

)

 

 

(43,541

)

Effect of exchange rate changes on cash

 

 

(2,018

)

 

 

(76

)

 

 

(3,502

)

 

 

58

 

Net increase (decrease) in cash and restricted cash

 

 

6,717

 

 

 

12,969

 

 

 

(26,678

)

 

 

4,983

 

Cash and restricted cash at the beginning of the period

 

 

31,985

 

 

 

125,582

 

 

 

65,380

 

 

 

133,568

 

Cash and restricted cash at the end of the period

 

$

38,702

 

 

$

138,551

 

 

$

38,702

 

 

$

138,551

 

 

 

 

 


 

Corsair Gaming, Inc.

GAAP to Non-GAAP Reconciliations

Non-GAAP Operating Income (Loss) Reconciliations

(Unaudited, in thousands, except percentages)

 

 

 

Three Months Ended

June 30,

 

 

Six Months Ended

June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income (Loss) - GAAP

 

$

(54,960

)

 

$

34,713

 

 

$

(57,445

)

 

$

102,002

 

Acquisition accounting impact related to recognizing acquired

   inventory at fair value

 

 

7

 

 

 

 

 

 

282

 

 

 

 

Change in fair value of contingent consideration for business

   acquisitions

 

 

 

 

 

21

 

 

 

 

 

 

93

 

Inventory reserve in excess of normal run rate to address

overhang in the channel

 

 

19,489

 

 

 

518

 

 

 

19,489

 

 

 

518

 

Stock-based compensation

 

 

6,087

 

 

 

4,768

 

 

 

11,234

 

 

 

7,844

 

Amortization

 

 

13,434

 

 

 

8,712

 

 

 

23,572

 

 

 

17,414

 

Acquisition-related and integration-related costs

 

 

227

 

 

 

538

 

 

 

470

 

 

 

746

 

Restructuring costs

 

 

1,488

 

 

 

 

 

 

1,488

 

 

 

 

Non-deferred secondary offering costs

 

 

 

 

 

 

 

 

 

 

 

1,031

 

Debt modification costs

 

 

27

 

 

 

 

 

 

27

 

 

 

 

Adjusted Operating Income (Loss) - Non-GAAP

 

$

(14,201

)

 

$

49,270

 

 

$

(883

)

 

$

129,648

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As a % of net revenue - GAAP

 

 

-19.4

%

 

 

7.3

%

 

 

-8.6

%

 

 

10.2

%

As a % of net revenue - Non-GAAP

 

 

-5.0

%

 

 

10.4

%

 

 

-0.1

%

 

 

12.9

%

 

Non-GAAP Net Income (Loss) and Net Income (Loss) Per Share Reconciliations

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

 

 

 

Three Months Ended

June 30,

 

 

Six Months Ended

June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss) - GAAP

 

$

(51,839

)

 

$

27,745

 

 

$

(55,119

)

 

$

74,468

 

Acquisition accounting impact related to recognizing acquired

   inventory at fair value

 

 

7

 

 

 

 

 

 

282

 

 

 

 

Change in fair value of contingent consideration for business

   acquisitions

 

 

 

 

 

21

 

 

 

 

 

 

93

 

Inventory reserve in excess of normal run rate to address

overhang in the channel

 

 

19,489

 

 

 

518

 

 

 

19,489

 

 

 

518

 

Stock-based compensation

 

 

6,087

 

 

 

4,768

 

 

 

11,234

 

 

 

7,844

 

Amortization

 

 

13,434

 

 

 

8,712

 

 

 

23,572

 

 

 

17,414

 

Acquisition-related and integration-related costs

 

 

227

 

 

 

538

 

 

 

470

 

 

 

746

 

Restructuring costs

 

 

1,488

 

 

 

 

 

 

1,488

 

 

 

 

Non-deferred secondary offering costs

 

 

 

 

 

 

 

 

 

 

 

1,031

 

Debt modification costs

 

 

27

 

 

 

 

 

 

27

 

 

 

 

Loss on debt extinguishment

 

 

 

 

 

358

 

 

 

 

 

 

797

 

Non-GAAP income tax adjustment

 

 

(7,923

)

 

 

(6,970

)

 

 

(11,272

)

 

 

(9,059

)

Adjusted Net Income (Loss) - Non-GAAP

 

$

(19,003

)

 

$

35,690

 

 

$

(9,829

)

 

$

93,852

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted net income (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Adjusted, Non-GAAP

 

$

(0.20

)

 

$

0.36

 

 

$

(0.10

)

 

$

0.94

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Adjusted, Non-GAAP

 

 

95,467