Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2024 | Apr. 30, 2024 | |
Document Information [Line Items] | ||
Entity Registrant Name | TURTLE BEACH CORPORATION | |
Entity Central Index Key | 0001493761 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2024 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 21,522,744 | |
Entity Shell Company | false | |
Entity Current Reporting Status | Yes | |
Entity File Number | 001-35465 | |
Entity Tax Identification Number | 27-2767540 | |
Entity Address, Address Line One | 44 South Broadway | |
Entity Address, Address Line Two | 4th Floor | |
Entity Address, City or Town | White Plains | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10601 | |
City Area Code | 888 | |
Local Phone Number | 496-8001 | |
Entity Incorporation, State or Country Code | NV | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes | |
Common Stock | ||
Document Information [Line Items] | ||
Trading Symbol | HEAR | |
Title of 12(b) Security | Common Stock, par value $0.001 | |
Security Exchange Name | NASDAQ | |
Preferred Stock Purchase Rights | ||
Document Information [Line Items] | ||
No Trading Symbol Flag | true | |
Title of 12(b) Security | Preferred Stock Purchase Rights | |
Security Exchange Name | NASDAQ |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Statement [Abstract] | ||
Net revenue | $ 55,848 | $ 51,444 |
Cost of revenue | 38,062 | 37,305 |
Gross profit | 17,786 | 14,139 |
Operating expenses: | ||
Selling and marketing | 9,013 | 9,523 |
Research and development | 3,902 | 4,101 |
General and administrative | 5,674 | 7,007 |
Acquisition-related costs | 4,910 | |
Total operating expenses | 23,499 | 20,631 |
Operating loss | (5,713) | (6,492) |
Interest expense | 150 | 163 |
Other non-operating expense, net | 370 | 120 |
Loss before income tax | (6,233) | (6,775) |
Income tax benefit | (6,388) | (70) |
Net income (loss) | $ 155 | $ (6,705) |
Net income (loss) per share | ||
Basic (in dollars per share) | $ 0.01 | $ (0.4) |
Diluted (in dollars per share) | $ 0.01 | $ (0.4) |
Weighted average number of shares: | ||
Basic (in shares) | 18,321 | 16,578 |
Diluted (in shares) | 19,389 | 16,578 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Statement of Comprehensive Income [Abstract] | ||
Net Income (Loss) | $ 155 | $ (6,705) |
Foreign currency translation adjustment | (418) | 445 |
Other comprehensive income (loss) | (418) | 445 |
Comprehensive loss | $ (263) | $ (6,260) |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Current Assets: | ||
Cash and cash equivalents | $ 17,816 | $ 18,726 |
Accounts receivable, net | 42,908 | 54,390 |
Inventories | 69,531 | 44,019 |
Prepaid expenses and other current assets | 10,322 | 7,720 |
Total Current Assets | 140,577 | 124,855 |
Property and equipment, net | 5,533 | 4,824 |
Goodwill | 52,907 | 10,686 |
Intangible assets, net | 48,704 | 1,734 |
Other assets | 10,668 | 7,868 |
Total Assets | 258,389 | 149,967 |
Current Liabilities: | ||
Accounts payable | 44,842 | 26,908 |
Other current liabilities | 31,947 | 29,424 |
Total Current Liabilities | 76,789 | 56,332 |
Debt, non-current | 45,954 | |
Income tax payable | 1,527 | 1,546 |
Other liabilities | 8,893 | 7,012 |
Total Liabilities | 133,163 | 64,890 |
Commitments and Contingencies | ||
Stockholders’ Equity | ||
Common stock, $0.001 par value - 25,000,000 shares authorized; 21,167,504 and 17,531,702 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively | 21 | 18 |
Additional paid-in capital | 260,594 | 220,185 |
Accumulated deficit | (134,122) | (134,277) |
Accumulated other comprehensive income (loss) | (1,267) | (849) |
Total Stockholders’ Equity | 125,226 | 85,077 |
Total Liabilities and Stockholders’ Equity | $ 258,389 | $ 149,967 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) - $ / shares | Mar. 31, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Common stock par value | $ 0.001 | $ 0.001 |
Common stock shares authorized | 25,000,000 | 25,000,000 |
Common stock shares issued | 21,167,504 | 17,531,702 |
Common stock shares outstanding | 21,167,504 | 17,531,702 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income (loss) | $ 155 | $ (6,705) |
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities: | ||
Depreciation and amortization | 916 | 978 |
Amortization of intangible assets | 560 | 264 |
Amortization of debt financing costs | 70 | 42 |
Stock-based compensation | 1,105 | 1,959 |
Deferred income taxes | (6,716) | (89) |
Change in sales returns reserve | (2,410) | (1,178) |
Provision for obsolete inventory | 794 | (561) |
Changes in operating assets and liabilities, net of acquisitions: | ||
Accounts receivable | 35,918 | 20,578 |
Inventories | (3,063) | 7,111 |
Accounts payable | 8,065 | 2,162 |
Prepaid expenses and other assets | (357) | 473 |
Income taxes payable | 2 | (271) |
Other liabilities | (7,782) | 4,226 |
Net cash provided by (used for) operating activities | 27,257 | 28,989 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchases of property and equipment | (731) | (887) |
Acquisition of a business, net of cash acquired | (75,494) | |
Net cash used for investing activities | (76,225) | (887) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Borrowings on revolving credit facilities | 80,288 | 53,892 |
Repayment of revolving credit facilities | (80,288) | (72,945) |
Proceeds of term loan | 50,000 | |
Repayment of term loan | (104) | |
Proceeds from exercise of stock options and warrants | 1,257 | 125 |
Debt issuance costs | (3,170) | (80) |
Net cash provided by (used for) financing activities | 47,983 | (19,008) |
Effect of exchange rate changes on cash and cash equivalents | 75 | 83 |
Net increase (decrease) in cash and cash equivalents | (910) | 9,177 |
Cash and cash equivalents - beginning of period | 18,726 | 11,396 |
Cash and cash equivalents - end of period | 17,816 | 20,573 |
SUPPLEMENTAL DISCLOSURE OF INFORMATION | ||
Cash paid for interest | $ 370 | $ 190 |
Condensed Consolidated Statem_4
Condensed Consolidated Statement of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) |
Beginning Balance at Dec. 31, 2022 | $ 88,941 | $ 17 | $ 206,916 | $ (116,598) | $ (1,394) |
Beginning Balance, shares at Dec. 31, 2022 | 16,569,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (6,705) | (6,705) | |||
Other comprehensive income (loss), net of tax | 445 | 445 | |||
Issuance of restricted stock, shares | 14,000 | ||||
Stock options exercised | 124 | 124 | |||
Stock options exercised, shares | 21,000 | ||||
Stock-based compensation | 1,959 | 1,959 | |||
Ending Balance at Mar. 31, 2023 | 84,764 | $ 17 | 208,999 | (123,303) | (949) |
Ending Balance, shares at Mar. 31, 2023 | 16,604,000 | ||||
Beginning Balance at Dec. 31, 2023 | 85,077 | $ 18 | 220,185 | (134,277) | (849) |
Beginning Balance, shares at Dec. 31, 2023 | 17,532,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 155 | 155 | |||
Other comprehensive income (loss), net of tax | (418) | (418) | |||
Issuance of acquisition-related stock | 38,050 | $ 3 | 38,047 | ||
Issuance of acquisition-related stock , Shares | 3,450,000 | ||||
Issuance of restricted stock, shares | 12,000 | ||||
Stock options exercised | $ 1,257 | 1,257 | |||
Stock options exercised, shares | 170,919 | 171,000 | |||
Stock-based compensation | $ 1,105 | 1,105 | |||
Ending Balance at Mar. 31, 2024 | $ 125,226 | $ 21 | $ 260,594 | $ (134,122) | $ (1,267) |
Ending Balance, shares at Mar. 31, 2024 | 21,165,000 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ 155 | $ (6,705) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Background and Basis of Present
Background and Basis of Presentation | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Background and Basis of Presentation | Note 1. Background and Basis of Presentation Organization Turtle Beach Corporation (“Turtle Beach” or the “Company”), headquartered in White Plains, New York and incorporated in the state of Nevada in 2010, is a premier audio and gaming technology company with expertise and experience in developing, commercializing, and marketing innovative products across a range of large addressable markets under the Turtle Beach®, PDP® and ROCCAT® brands. Turtle Beach is a worldwide leader of feature-rich headset solutions for use across multiple platforms, including video game and entertainment consoles, handheld consoles, personal computers (“PC”), tablets and mobile devices. ROCCAT is a gaming keyboards, mice and other accessories brand focused on the PC peripherals market. Acquired in March 2024, Performance Designed Products, LLC (“PDP”) is a gaming accessories leader that designs and distributes video game accessories, including controllers, headsets, power supplies, cases, and other accessories. VTB Holdings, Inc. (“VTBH”), a wholly-owned subsidiary of Turtle Beach Corporation and the owner of Voyetra Turtle Beach, Inc. (“VTB”), was incorporated in the state of Delaware in 2010. VTB, the owner of Turtle Beach Europe Limited (“TB Europe”), was incorporated in the state of Delaware in 1975 with operations principally located in White Plains, New York. Basis of Presentation The accompanying interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and, in the opinion of management, reflect all adjustments (which include normal recurring adjustments) considered necessary for a fair presentation of the financial position, results of operations, and cash flows for the periods presented. All intercompany accounts and transactions have been eliminated in consolidation. Certain information and footnote disclosures, normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), have been condensed or omitted pursuant to those rules and regulations. The Company believes that the disclosures made are adequate to make the information presented not misleading. The results of operations for the interim periods are not necessarily indicative of the results of operations for the entire fiscal year. The December 31, 2023 Condensed Consolidated Balance Sheet has been derived from the Company’s audited financial statements included in its Annual Report on Form 10-K filed with the SEC on March 13, 2024 (“Annual Report”). These financial statements should be read in conjunction with the annual financial statements and the notes thereto included in the Annual Report that contains information useful to understanding the Company’s businesses and financial statement presentations. Use of estimates : The preparation of financial statements in conformity with generally accepted accounting principles requires management to use estimates and assumptions that affect the reported amount of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. The significant estimates and assumptions used by management affect: sales return reserve, allowances for cash discounts, warranty reserve, valuation of inventory, valuation of long-lived assets, goodwill and other intangible assets, depreciation and amortization of long-lived assets, valuation of deferred tax assets, probability of performance shares vesting and forfeiture rates utilized in issuing stock-based compensation awards. The Company evaluates estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ from these estimates, and those differences could be material to the consolidated financial statements. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies The preparation of consolidated annual and quarterly financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the Company’s consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. The Company can give no assurance that actual results will not differ from those estimates. There have been no material changes to the significant accounting policies and estimates from the information provided in Note 1 of the notes to our consolidated financial statements in our Annual Report. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2024 | |
Business Combinations [Abstract] | |
Acquisitions | Note 3. Acquisitions On March 13, 2024, the Company acquired all the issued and outstanding equity of Performance Designed Products, LLC (“PDP”, collectively with FSAR, “PDP Group”) for consideration that included cash and common stock. PDP was a privately held gaming accessories leader that designs and distributes video game accessories, including controllers, headsets, power supplies, cases, and other accessories. As a result of the acquisition, the Company will strengthen its leadership position in hardware gaming accessories and expand its product portfolio. Consideration for the Transaction consisted of the issuance of 3.45 million shares of Company common stock and approximately $ 78.9 million in cash, subject to customary post-closing adjustments for working capital, closing cash, closing debt and closing third party expenses. On a fully-diluted basis, issued stock represented approximately 16.4 % of the total issued and outstanding shares of the Company as of the closing date. The fair value of the 3.45 million common shares issued as part of the consideration was determined on the basis of the closing market price of the Company’s common shares on the acquisition date, or $ 11.03 per share. As a result, the total preliminary purchase consideration was $ 116.9 million, partially funded by borrowing on the new term loan facility (see Note 8). Additionally, the Company recognized $ 4.9 million of acquisition-related costs that were expensed during the three months ended March 31, 2024, and are included as a component of general & administrative expenses in the Condensed Consolidated Statement of Operations. The following table summarizes preliminary allocation of the consideration transferred to the assets acquired and liabilities assumed at the acquisition date: (In thousands) Amount Cash 3,362 Accounts Receivable 22,026 Inventory 23,243 Prepaid and Other Current Assets 2,244 Property, Plant & Equipment 1,161 Other Assets 3,056 Intangible Assets 47,649 Accounts Payable ( 10,135 ) Accrued Liabilities ( 9,031 ) Lease Payable ( 1,890 ) Deferred Tax Liability ( 6,996 ) Total identifiable net assets 74,689 Goodwill 42,221 Total consideration paid $ 116,910 The fair values assigned to PDP’s assets and liabilities are provisional and were determined based on preliminary estimates and assumptions that management believes are reasonable. The preliminary purchase price allocation is subject to further refinement and may require significant adjustments to arrive at the final purchase price allocation. The final determination of the fair value of certain assets and liabilities will be completed as soon as the necessary information is available, but no later than one year from the acquisition date. The goodwill from the acquisition, which is fully deductible for tax purposes, consists largely of synergies and economies of scale expected from adding the operations of PDP's and the Company’s existing business and supply channels. The preliminary fair value of PDP’s identifiable intangible assets was determined primarily using the “income approach,” which requires a forecast of all expected future cash flows either through the use of the multi-period excess earnings method or the relief-from-royalty method. Such forecasts are based on inputs that are unobservable and significant to the overall fair value measurement, and as such, are classified as Level 3 inputs (see Note 4). Some of the more significant assumptions inherent in the development of intangible asset values include: the amount and timing of projected future cash flows, the discount rate selected to measure the risks inherent in the future cash flows, the assessment of the intangible asset’s life cycle, as well as other factors. The following table summarizes the preliminary allocation of purchase consideration to identifiable intangible assets: (In thousands) Life Amount Tradenames 7 Years $ 15,159 Customer relationships 6 Years 2,067 Developed technology 6 Years 30,423 Total $ 47,649 PDP's net revenue included in the Company’s consolidated results was $ 5.9 million for the three months ended March 31, 2024. PDP’s net income included in the Company’s consolidated results for the same period was not material. Pro Forma Financial Information (Unaudited) The following table reflects the unaudited pro forma operating results of the Company for the three months ended March 31, 2024 and 2023, which give effect to the acquisition of PDP as if it had occurred on January 1, 2023. Three Months Ended March 31, March 31, 2024 2023 (in thousands) Net revenue $ 77,832 $ 69,993 Net income (loss) $ ( 2,516 ) $ ( 20,814 ) The pro forma results are based on assumptions that the Company believes are reasonable under the circumstances. The pro forma results are not necessarily indicative of the operating results that would have occurred had the acquisition been effective January 1, 2023, nor are they intended to be indicative of results that may occur in the future. |
Fair Value Measurement
Fair Value Measurement | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | Note 4. Fair Value Measurement The Company follows a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: • Level 1 — Quoted prices in active markets for identical assets or liabilities. • Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for markets that are not active, or other inputs that are observable or can be corroborated by observable market data. • Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. Financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, debt instruments and certain warrants. As of March 31, 2024 and December 31, 2023 , the Company had not elected the fair value option for any financial assets and liabilities for which such an election would have been permitted. The following is a summary of the carrying amounts and estimated fair values of our financial instruments as of March 31, 2024 and December 31, 2023: March 31, 2024 December 31, 2023 Reported Fair Value Reported Fair Value (in thousands) Financial Assets and Liabilities: Cash and cash equivalents $ 17,816 $ 17,816 $ 18,726 $ 18,726 Term Loan $ 49,896 $ 49,896 $ — $ — Revolving credit facility $ — $ — $ — $ — Cash equivalents are stated at amortized cost, which approximates fair value as of the consolidated balance sheet dates, due to the short period of time to maturity; and accounts receivable and accounts payable are stated at their carrying value, which approximates fair value due to the short time to the expected receipt or payment. The carrying value of the Credit Facility and Term Loan Due 2027 equals fair value as the stated interest rate approximates market rates currently available to the Company. The carrying value of the Credit Facility approximates fair value, due to the variable rate nature of the debt, as of March 31, 2024 and December 31, 2023 . |
Allowance for Sales Returns
Allowance for Sales Returns | 3 Months Ended |
Mar. 31, 2024 | |
Allowance For Sales Returns [Abstract] | |
Allowance for Sales Returns | Note 5. Allowance for Sales Returns The following table provides the changes in our sales return reserve, which is classified as a reduction of accounts receivable: Three Months Ended March 31, 2024 2023 (in thousands) Balance, beginning of period $ 8,449 $ 7,817 Reserve accrual 2,741 3,594 Recoveries and deductions, net ( 5,151 ) ( 4,772 ) Balance, end of period $ 6,039 $ 6,639 |
Composition of Certain Financia
Composition of Certain Financial Statement Items | 3 Months Ended |
Mar. 31, 2024 | |
Condensed Consolidated Balance Sheet Components [Abstract] | |
Composition of Certain Financial Statement Items | Note 6. Composition of Certain Financial Statement Items Inventories Inventories consist of the following: March 31, December 31, (in thousands) Finished goods $ 66,328 $ 43,579 Raw materials 3,203 440 Total inventories $ 69,531 $ 44,019 Property and Equipment, net Property and equipment, net, consists of the following: March 31, December 31, (in thousands) Machinery and equipment $ 2,553 $ 2,597 Software and software development 2,437 2,438 Furniture and fixtures 1,684 1,700 Tooling 12,793 11,250 Leasehold improvements 2,008 1,988 Demonstration units and convention booths 15,765 15,767 Total property and equipment, gross 37,240 35,740 Less: accumulated depreciation and amortization ( 31,707 ) ( 30,916 ) Total property and equipment, net $ 5,533 $ 4,824 Other Current Liabilities Other current liabilities consist of the following: March 31, December 31, (in thousands) Accrued employee expenses $ 5,226 $ 3,944 Accrued royalty 4,490 5,275 Accrued tax-related payables 3,529 5,206 Accrued freight 2,472 2,917 Accrued marketing 1,187 3,335 Accrued expenses 15,043 8,747 Total other current liabilities $ 31,947 $ 29,424 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Note 7. Goodwill and Other Intangible Assets Acquired Intangible Assets Acquired identifiable intangible assets, and related accumulated amortization, as of March 31, 2024 and December 31, 2023 consisted of: March 31, 2024 Gross Accumulated Net Book (in thousands) Customer relationships $ 10,152 $ 7,336 $ 2,816 Tradenames 18,225 2,812 15,413 Developed technology 32,307 1,853 30,454 Foreign currency ( 1,121 ) ( 1,142 ) 21 Total Intangible Assets (1) $ 59,563 $ 10,859 $ 48,704 December 31, 2023 Gross Accumulated Net Book (in thousands) Customer relationships $ 8,085 $ 7,214 $ 871 Tradenames 3,066 2,607 459 Developed technology 1,884 1,613 271 Foreign currency ( 1,159 ) ( 1,292 ) 133 Total Intangible Assets (1) $ 11,876 $ 10,142 $ 1,734 (1) The accumulated amortization includes $ 1.9 million of accumulated impairment charges as of March 31, 2024 and December 31, 2023. In May 2019, the Company completed its acquisition of the business and assets of ROCCAT. The acquired intangible assets relating to developed technology, customer relationships, and trade name are subject to amortization. In January 2021, the Company completed its acquisition of the business and assets relating to the Neat Microphones business. The acquired intangible assets relating to developed technology, customer relationships, and trade name are subject to amortization. In March 2024, the Company completed its acquisition of the business and assets of PDP. The acquired intangible assets relating to developed technology, customer relationships, and trade name are subject to amortization. Refer to Note 3, “Acquisitions” for additional information related to PDP’s identifiable intangible assets. Amortization expense related to definite lived intangible assets of $ 0.6 million was recognized for the three months ended March 31, 2024, respectively, and $ 0.3 million was recognized for the three months ended March 31, 2023. As of March 31, 2024, estimated annual amortization expense related to definite lived intangible assets in future periods was as follows: (in thousands) 2024 $ 6,440 2025 8,006 2026 7,751 2027 7,581 Thereafter 18,905 Total $ 48,683 Changes in the carrying values of goodwill for the three months ended March 31, 2024 from the balance as of December 31, 2023. (in thousands) Balance as of January 1, 2024 $ 10,686 PDP acquisition 42,221 Balance as of March 31, 2024 $ 52,907 |
Revolving Credit Facility and L
Revolving Credit Facility and Long-Term Debt | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Revolving Credit Facility and Long-Term Debt | Note 8. Revolving Credit Facility and Long-Term Debt March 31, December 31, (in thousands) Revolving credit facility, maturing March 2027 $ — $ — Term loan Due 2027 $ 49,896 $ — Total interest expense, inclusive of amortization of deferred financing costs, on long-term debt obligations was $ 0.4 million for the three months ended March 31, 2024 and $ 0.2 million for the three months ended March 31, 2023. Amortization of deferred financing costs was $ 0.1 million for the three months ended March 31, 2024 and $ 42 thousand for the three months ended March 31, 2023. Revolving Credit Facility On March 5, 2018, Turtle Beach and certain of its subsidiaries entered into an amended and restated loan, guaranty and security agreement (the “Credit Facility”) with Bank of America, N.A. (“Bank of America”), as administrative agent, collateral agent and security trustee for Lenders (as defined therein), which replaced the then existing asset-based revolving loan agreement. The Credit Facility was amended on each of December 17, 2018, May 31, 2019, and March 10, 2023. The Credit Facility, as amended, expires on March 13, 2027 and provides for a line of credit of up to $ 50 million inclusive of a sub-facility limit of $ 10 million for TB Europe, a wholly-owned subsidiary of Turtle Beach. On March 13, 2024, the Company entered into a Fourth Amendment, dated as of March 13, 2024 (the “Fourth Amendment”), by and among the Company, VTB, TBC Holding Company LLC, TB Europe, VTBH, the financial institutions party thereto from time to time and Bank of America, as administrative agent, collateral agent and security trustee for the lenders. The Fourth Amendment provided for, among other things: (i) the acquisition of PDP; (ii) revised the calculation of the U.S. Borrowing Base to include certain acquired assets of PDP equal to the lesser of (a) the sum of the Project Tide Accounts Formula Amount and the Project Tide Inventory Formula Amount (each as defined in the Fourth Amendment), (b) $ 15,000,000 , and (c) 30 % of the aggregate Revolver Commitments; (iii) extending the maturity date of the Credit Facility from April 1, 2025 to March 13, 2027 ; and (iv) updated the interest rate and margin terms such that the loans will bear interest at a rate equal to (1) SOFR, (2) the U.S. Base Rate, (3) the Sterling Overnight Index Average Reference Rate (“SONIA”) for loans denominated in Sterling, and (4) the Euro Interbank Offered Rate (“EUIBOR”) for loans denominated in Euros, plus in each case, an applicable margin, which is between 0.50 % and 2.50 % for Base Rate Loans and 1.75 % and 3.50 % for Term SOFR Loans, SONIA Rate Loans and EUIBOR Loans. The maximum credit availability for loans and letters of credit under the Credit Facility is governed by a borrowing base determined by the application of specified percentages to certain eligible assets, primarily eligible trade accounts receivable and inventories, and is subject to discretionary reserves and revaluation adjustments. The Credit Facility may be used for working capital, the issuance of bank guarantees, letters of credit and other corporate purposes. Amounts outstanding under the Credit Facility bear interest at a rate equal to (i) a rate published by Bank of America or the U.S. Bloomberg Short-Term Bank Yield Index (“BSBY”) rate for loans denominated in U.S. Dollars, (ii) the Sterling Overnight Index Average Reference Rate (“SONIA”) for loans denominated in Sterling, (iii) and the Euro Interbank Offered Rate (“EUIBOR”) for loans denominated in Euros, plus in each case, an applicable margin, which is between 0.50 % to 2.50 % for base rate loans and UK base rate loans, and 1.75 % to 3.50 % for U.S. BSBY rate loans, U.S. BSBY daily floating rate loans and UK alternative currency loans. In addition, Turtle Beach is required to pay a commitment fee on the unused revolving loan commitment at a rate ranging from 0.375 % to 0.50 % and letter of credit fees and agent fees. As of March 31, 2024, interest rates for outstanding borrowings were 9.00 % for base rate loans and 8.90 % for LIBOR rate loans, which reference interest rates were still in effect prior to the Libor Transition Amendments. The Company is subject to quarterly financial covenant testing if certain availability thresholds are not met or certain other events occur (as set forth in the Credit Facility). At such times, the Credit Facility requires the Company and its restricted subsidiaries to maintain a fixed charge coverage ratio of at least 1.00 to 1.00 as of the last day of each fiscal quarter. The Credit Facility also contains affirmative and negative covenants that, subject to certain exceptions, limit our ability to take certain actions, including the Company’s ability to incur debt, pay dividends and repurchase stock, make certain investments and other payments, enter into certain mergers and consolidations, engage in sale leaseback transactions and transactions with affiliates, and encumber and dispose of assets. Obligations under the Credit Facility are secured by a security interest and lien upon substantially all of the Company’s assets. As of March 31, 2024, the Company was in compliance with all financial covenants under the Credit Facility, as amended, and excess borrowing availability was approximately $ 43.8 million. Term Loan On March 13, 2024, Turtle Beach and certain of its subsidiaries entered into a new financing agreement with Blue Torch Finance, LLC, (“Blue Torch”), pursuant to which Blue Torch for an aggregate amount of $ 50 million (the “Term Loan Facility”), the proceeds of which were used to (i) fund a portion of the PDP acquisition purchase price; (ii) repay certain existing indebtedness of the acquired business; (iii) to pay fees and expenses related to such transactions and (iv) for general corporate purposes. The Term Loan Facility will amortize in a monthly amount equal to 0.208333 % during the first two years and 0.416667 % during the third year and may be prepaid at any time subject to a prepayment premium during the first year of the interest payments payable during the first year plus 3.00 %. The Term Loan Facility is secured by substantially all of the assets of the Company and its subsidiaries which are party to the Term Loan Facility. The Term Loan Facility (a) matures on March 13, 2027 ; (b) bears interest at a rate equal to (i) a base rate plus 7.25 % per annum for Reference Rate Loans and Secured Overnight Financing Rate (“SOFR”) plus 8.25 % per annum for SOFR Loans if the total net leverage ratio is greater than or equal to 2.25 x and (ii) a base rate plus 6.75 % per annum for Reference Rate Loans and SOFR plus 7.75 % per annum for SOFR Loans if the total net leverage ratio is less than 2.25 x; and (c) is subject to certain affirmative, negative and financial covenants, including a minimum liquidity covenant and a quarterly total net leverage ratio covenant. As of March 31, 2024 , the Company was in compliance with all financial covenants under the Term Loan. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 9. Income Taxes Generally, in order to determine the quarterly provision for income taxes, the Company uses an estimated annual effective tax rate, which is based on expected annual income and statutory tax rates in the various jurisdictions. However, to the extent that application of the estimated annual effective tax rate is not representative of the quarterly portion of actual tax expense expected to be recorded for the year in a jurisdiction, the Company determines the provision for income taxes based on actual year-to-date income (loss) which it has done for certain jurisdictions for the quarter ended March 31, 2024. Certain significant or unusual items are separately recognized as discrete items in the period during which they occur and can be a source of variability in the effective tax rates from quarter to quarter. The following table presents the Company’s income tax expense and effective income tax rate: Three Months Ended March 31, 2024 2023 (in thousands) Income tax benefit $ ( 6,388 ) $ ( 70 ) Effective income tax rate 102.5 % 1.0 % The effective tax rate for the three months ended March 31, 2024 was primarily impacted by the change in U.S. valuation allowance related to the acquisition of PDP, foreign taxes, state tax and interest on uncertain tax positions. The Company recognizes only those tax positions that meet the more-likely-than-not recognition threshold and establishes tax reserves for uncertain tax positions that do not meet this threshold. Interest and penalties associated with income tax matters are included in the provision for income taxes in the condensed consolidated statements of operations. As of March 31, 2024, the Company had uncertain tax positions of $ 2.8 million , inclusive of $ 0.6 million of interest and penalties. As required by the authoritative guidance on accounting for income taxes, the Company evaluates the realizability of deferred tax assets on a jurisdictional basis at each reporting date. Accounting for income taxes requires that a valuation allowance be established when it is more likely than not that all or a portion of the deferred taxes will not be realized. The Company considers all positive and negative evidence in determining if, based on the weight of such evidence, a valuation allowance is required. In circumstances where there is sufficient negative evidence indicating that the deferred tax assets are not more likely than not realizable, the Company establishes a valuation allowance. Due to the significant 2022 pre-tax loss, coupled with cumulative book losses projected in early future years, the Company recorded a valuation allowance on its net U.S. deferred tax assets as of December 31, 2022. While the Company continues to maintain this valuation allowance for the three months ended March 31, 2024 , it did release $ 6.7 million of valuation allowance for PDP acquired net deferred tax liabilities. The Company is subject to income taxes domestically and in various foreign jurisdictions. The Company files U.S., state and foreign income tax returns in jurisdictions with various statutes of limitations. The federal tax years open under the statute of limitations are 2019 through 2021, and the state tax years open under the statute of limitations are 2019 through 2022. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Note 10. Stock-Based Compensation Total estimated stock-based compensation expense for employees and non-employees, related to all of the Company’s stock-based awards, was as follows: Three Months Ended March 31, 2024 2023 (in thousands) Cost of revenue $ 131 $ 175 Selling and marketing 487 490 Research and development 224 356 General and administrative 263 938 Total stock-based compensation $ 1,105 $ 1,959 The following table presents the stock activity and the total number of shares available for grant as of March 31, 2024: (in thousands) Balance at December 31, 2023 1,059 Restricted Stock Granted ( 2 ) Restricted Stock Forfeited 14 Balance at March 31, 2024 1,071 Stock Option Activity Options Outstanding Number of Weighted- Weighted- Aggregate (in years) Outstanding at December 31, 2023 1,041,452 $ 9.10 4.22 $ 3,137,285 Options Granted - - Options Exercised ( 170,919 ) 7.81 Options Forfeited ( 824 ) 60.87 Outstanding at March 31, 2024 869,709 $ 9.30 4.45 $ 7,234,873 Vested and expected to vest at March 31, 2024 871,245 $ 9.53 4.45 $ 7,234,613 Exercisable at March 31, 2024 848,910 $ 9.50 4.41 $ 7,077,588 Stock options are time-based and the majority are exercisable within 10 years of the date of grant, but only to the extent they have vested. The options generally vest as specified in the option agreements subject to acceleration in certain circumstances. In the event participants in the plan cease to be employed or engaged by the Company, all vested options would be forfeited if they are not exercised within 90 days. Forfeitures on option grants are estimated at 10 % for non-executives and 0 % for executives based on evaluation of historical and expected future turnover. Stock-based compensation expense was recorded net of estimated forfeitures, such that expense was recorded only for those stock-based awards expected to vest. The Company reviews this assumption periodically and will adjust it if it is not representative of future forfeiture data and trends within employee types (executive vs. non-executive). Aggregate intrinsic value represents the difference between the estimated fair value of the underlying common stock and the exercise price of outstanding, in-the-money options. The aggregate intrinsic value of options exercised was $ 1.2 million for the three months ended March 31, 2024. The Company uses the Black-Scholes option-pricing model to estimate the fair value of options granted as of the grant date. There were no new options granted during the three months ended March 31, 2024. The total estimated fair value of employee options vested during the three months ended March 31, 2024 was $ 1.1 million . As of March 31, 2024, total unrecognized compensation cost related to non-vested stock options granted to employees was $ 0.1 million , which is expected to be recognized over a remaining weighted average vesting period of 0.3 years. Restricted Stock Activity Shares Weighted Nonvested restricted stock at December 31, 2023 764,942 $ 14.76 Granted 1,850 12.12 Vested ( 12,066 ) 21.24 Shares forfeited ( 13,935 ) 9.10 Nonvested restricted stock at March 31, 2024 740,791 $ 14.75 As of March 31, 2024, total unrecognized compensation costs related to the nonvested restricted stock awards was $ 7.0 million , which will be recognized over a remaining weighted average vesting period of 3.4 years. Performance-Based Restricted Share Units As of March 31, 2024 , the Company had 162,672 performance-based restricted share units outstanding. The vesting of performance-based restricted share units is determined over a three-year period based on (i) the amount by which revenue growth exceeds a defined baseline market growth each year and (ii) the achievement of specified tiers of adjusted EBITDA as a percentage of net revenue each year, with the ability to earn and vest into such units ranging from 0 % to 200 %. As of March 31, 2024 , achievement of the performance conditions associated with the 2023, 2022 and 2021 performance shares was deemed not probable. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | Note 11. Net Income (Loss) Per Share The following table sets forth the computation of basic and diluted net income (loss) per share of common stock attributable to common stockholders: Three Months Ended March 31, 2024 2023 (in thousands, except per-share data) Net income (loss) $ 155 $ ( 6,705 ) Weighted average common shares outstanding — Basic 18,321 16,578 Plus incremental shares from assumed conversions: Dilutive effect of restricted stock 224 — Dilutive effect of stock options 294 — Dilutive effect of warrants 550 — Weighted average common shares outstanding — Diluted 19,389 16,578 Net income (loss) per share: Basic $ 0.01 $ ( 0.40 ) Diluted $ 0.01 $ ( 0.40 ) Incremental shares from stock options and restricted stock awards are computed using the treasury stock method. The weighted average shares listed below were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive for the periods presented or were otherwise excluded under the treasury stock method. The treasury stock method calculates dilution assuming the exercise of all in-the-money options and vesting of restricted stock, reduced by the repurchase of shares with the proceeds from the assumed exercises and unrecognized compensation expense for outstanding awards. Three Months Ended March 31, 2024 2023 (in thousands) Stock options 69 1,557 Unvested restricted stock awards 279 863 Warrants — 550 Total 348 2,970 |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting [Abstract] | |
Segment Information | Note 12. Segment Information The following table represents total net revenues based on where customers are physically located: Three Months Ended March 31, 2024 2023 (in thousands) North America $ 42,159 $ 40,712 Europe and Middle East 10,961 9,726 Asia Pacific 2,728 1,006 Total net revenues $ 55,848 $ 51,444 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 13. Commitments and Contingencies Litigation The Company is subject to various legal proceedings and claims that arise in the ordinary course of its business. Although the amount of any liability that could arise with respect to these actions cannot be determined with certainty, in the Company’s opinion, any such liability will not have a material adverse effect on its consolidated financial position, consolidated results of operations or liquidity. Shareholders Class Action : On August 5, 2013, VTB Holdings, Inc. (“VTBH”) and the Company (f/k/a Parametric Sound Corporation) announced that they had entered into the Merger Agreement pursuant to which VTBH would acquire an approximately 80 % ownership interest and existing shareholders would maintain an approximately 20 % ownership interest in the combined company (the “Merger”). Following the announcement, several shareholders filed class action lawsuits in California and Nevada seeking to enjoin the Merger. The plaintiffs in each case alleged that members of the Company’s Board of Directors breached their fiduciary duties to the shareholders by agreeing to a merger that allegedly undervalued the Company. VTBH and the Company were named as defendants in these lawsuits under the theory that they had aided and abetted the Company’s Board of Directors in allegedly violating their fiduciary duties. The plaintiffs in both cases sought a preliminary injunction seeking to enjoin closing of the Merger, which, by agreement, was heard by the Nevada court with the California plaintiffs invited to participate. On December 26, 2013, the court in the Nevada case denied the plaintiffs’ motion for a preliminary injunction. Following the closing of the Merger, the Nevada plaintiffs filed a second amended complaint, which made essentially the same allegations and sought monetary damages as well as an order rescinding the Merger. The California plaintiffs dismissed their action without prejudice, and sought to intervene in the Nevada action, which was granted. Subsequent to the intervention, the plaintiffs filed a third amended complaint, which made essentially the same allegations as prior complaints and sought monetary damages. On June 20, 2014, VTBH and the Company moved to dismiss the action, but that motion was denied on August 28, 2014. On September 14, 2017, a unanimous en banc panel of the Nevada Supreme Court granted defendants’ petition for writ of mandamus and ordered the trial court to dismiss the complaint but provided a limited basis upon which plaintiffs could seek to amend their complaint. Plaintiffs amended their complaint on December 1, 2017 to assert the same claims in a derivative capacity on behalf of the Company, as a well as in a direct capacity, against VTBH, Stripes Group, LLC, SG VTB Holdings, LLC, and the former members of the Company’s Board of Directors. All defendants moved to dismiss this amended complaint on January 2, 2018, and those motions were denied on March 13, 2018. Defendants petitioned the Nevada Supreme Court to reverse this ruling on April 18, 2018. On June 15, 2018, the Nevada Supreme Court denied defendants’ writ petition without prejudice. The district court subsequently entered a pretrial schedule and set trial for November 2019. On January 18, 2019, the district court certified a class of shareholders of the Company as of January 15, 2014. On October 11, 2019, the parties notified the district court that they had reached a settlement that would resolve the pending action if ultimately approved by the Court. On January 13, 2020, the district court preliminarily approved the settlement between the plaintiffs and all defendants. A final hearing was held on May 18, 2020, wherein the Court approved the settlement and entered final judgment. On May 22, 2020, PAMTP LLC, which purports to hold the claims of eight shareholders who opted out of the class settlement described above, brought suit against the Company, the Company’s former Chief Executive Officer, Juergen Stark, Stripes Group, LLC, SG VTB Holdings, LLC, Kenneth Fox, and former members of the Company’s Board of Directors in Nevada state court. This opt-out action asserts the same direct claims that were asserted by the class of shareholders described above. The defendants filed two motions to dismiss this complaint, which were heard on August 10, 2020. The Court denied those motions by order of August 20, 2020. The case was tried in August 2021 and all remaining defendants, including the Company, prevailed on all counts with final judgment entered in their favor on September 3, 2021. Plaintiff is appealing that judgment. Employment Litigation: On April 20, 2017, a former employee filed an action in the Superior Court for the County of San Diego, State of California. The complaint alleges claims including wrongful termination, retaliation and various other provisions of the California Labor Code. The complaint seeks unspecified economic and non-economic losses, as well as allegedly unpaid wages, unreimbursed business expenses statutory penalties, interest, punitive damages and attorneys’ fees. The Company filed a cross-complaint against the former employee on May 25, 2017 for certain activities related to his employment with the Company. The matter was tried between September 24 and October 7, 2021. On October 8, 2021 a jury rendered a unanimous verdict in favor of the Company on the employment claims. The Court granted a directed verdict to the Company on its cross-complaint against the former employee. Judgment was entered in favor of the Company on October 27, 2021. On December 20, 2021, the former employee filed a notice of appeal of the judgment. On November 14, 2023, the court of appeal issued its opinion affirming the judgment in favor of the Company. On the Company’s cross-complaint, the court of appeal directed the Company to elect either punitive or statutory treble damages, but otherwise affirmed. On March 8, 2024, the Superior Court entered an amended judgment in favor of the Company and awarding the Company monetary damages, injunctive relief, attorneys’ fees and costs. Insolvency Dispute in Germany: On February 15, 2024, TBC Holding Company LLC (“TBCH”), a wholly-owned subsidiary of Turtle Beach Corporation, was served with a lawsuit that was brought to the German Higher Regional Court in Stade by the insolvency administrator of KJE Europe GmbH, a company registered and existing under the laws of Germany. In his complaint, the insolvency administrator claims that TBCH is liable to reimburse any payments received by the TBCH under a certain settlement agreement with KJE Europe GmbH dated June 30, 2020. TBCH will file its statement of defense to the complaint on April 30, 2024. TBCH does not believe the claims have merit and intends to defend itself in this proceeding. The Company will continue to vigorously defend itself in the foregoing unresolved matters. However, litigation and investigations are inherently uncertain. Accordingly, the Company cannot predict the outcome of these matters. The Company has not recorded any accrual at March 31, 2024 for contingent losses associated with these matters based on its belief that losses, while possible, are not probable. Further, any possible range of loss cannot be reasonably estimated at this time. The unfavorable resolution of these matters could have a material adverse effect on the Company’s business, results of operations, financial condition, or cash flows. The Company is engaged in other legal actions, not described above, arising in the ordinary course of its business and, while there can be no assurance, believes that the ultimate outcome of these other legal actions will not have a material adverse effect on its business, results of operations, financial condition, or cash flows. Warranties The Company warrants its products against certain manufacturing and other defects. These product warranties are provided for specific periods of time depending on the nature of the product. Warranties are generally fulfilled by replacing defective products with new products. The following table provides the changes in our product warranty reserve, which are included in accrued liabilities: Three Months Ended March 31, 2024 2023 (in thousands) Warranty, beginning of period $ 670 $ 618 Warranty costs accrued 220 185 Settlements of warranty claims ( 203 ) ( 187 ) Warranty, end of period $ 687 $ 616 Operating Leases - Right of Use Assets The Company determines whether an arrangement is a lease at inception. The Company leases office spaces that provide for future minimum rental lease payments under non-cancelable operating leases that have remaining lease terms of one year to nine years , and do not contain any material residual value guarantees or material restrictive covenants. The components of the right-of-use assets and lease liabilities were as follows: Balance Sheet Classification March 31, 2024 (in thousands) Right-of-use assets Other assets $ 9,429 Lease liability obligations, current Other current liabilities $ 2,029 Lease liability obligations, noncurrent Other liabilities 8,090 Total lease liability obligations $ 10,119 Weighted-average remaining lease term (in years) 4.8 Weighted-average discount rate 8.5 % During the three months ended March 31, 2024, the Company recognized approximately $ 0.4 million of lease costs in operating expenses and approximately $ 0.3 million of operating cash flows from operating leases. Approximate future minimum lease payments for the Company’s right of use assets over the remaining lease periods as of March 31, 2024, are as follows: (in thousands) 2024 $ 1,759 2025 2,363 2026 2,314 2027 2,285 2028 1,282 Thereafter 2,005 Total minimum payments 12,008 Less: Imputed interest ( 1,889 ) Total $ 10,119 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and, in the opinion of management, reflect all adjustments (which include normal recurring adjustments) considered necessary for a fair presentation of the financial position, results of operations, and cash flows for the periods presented. All intercompany accounts and transactions have been eliminated in consolidation. Certain information and footnote disclosures, normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), have been condensed or omitted pursuant to those rules and regulations. The Company believes that the disclosures made are adequate to make the information presented not misleading. The results of operations for the interim periods are not necessarily indicative of the results of operations for the entire fiscal year. The December 31, 2023 Condensed Consolidated Balance Sheet has been derived from the Company’s audited financial statements included in its Annual Report on Form 10-K filed with the SEC on March 13, 2024 (“Annual Report”). These financial statements should be read in conjunction with the annual financial statements and the notes thereto included in the Annual Report that contains information useful to understanding the Company’s businesses and financial statement presentations. |
Use of Estimates | Use of estimates : The preparation of financial statements in conformity with generally accepted accounting principles requires management to use estimates and assumptions that affect the reported amount of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. The significant estimates and assumptions used by management affect: sales return reserve, allowances for cash discounts, warranty reserve, valuation of inventory, valuation of long-lived assets, goodwill and other intangible assets, depreciation and amortization of long-lived assets, valuation of deferred tax assets, probability of performance shares vesting and forfeiture rates utilized in issuing stock-based compensation awards. The Company evaluates estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ from these estimates, and those differences could be material to the consolidated financial statements. |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Business Combinations [Abstract] | |
Summary of Preliminary Allocation of Consideration Transferred to Assets Acquired and Liabilities Assumed | The following table summarizes preliminary allocation of the consideration transferred to the assets acquired and liabilities assumed at the acquisition date: (In thousands) Amount Cash 3,362 Accounts Receivable 22,026 Inventory 23,243 Prepaid and Other Current Assets 2,244 Property, Plant & Equipment 1,161 Other Assets 3,056 Intangible Assets 47,649 Accounts Payable ( 10,135 ) Accrued Liabilities ( 9,031 ) Lease Payable ( 1,890 ) Deferred Tax Liability ( 6,996 ) Total identifiable net assets 74,689 Goodwill 42,221 Total consideration paid $ 116,910 |
Summary of Preliminary Allocation of Purchase Consideration to Identifiable Intangible Assets | The following table summarizes the preliminary allocation of purchase consideration to identifiable intangible assets: (In thousands) Life Amount Tradenames 7 Years $ 15,159 Customer relationships 6 Years 2,067 Developed technology 6 Years 30,423 Total $ 47,649 |
Summary of Pro Forma Financial Information (Unaudited) | The following table reflects the unaudited pro forma operating results of the Company for the three months ended March 31, 2024 and 2023, which give effect to the acquisition of PDP as if it had occurred on January 1, 2023. Three Months Ended March 31, March 31, 2024 2023 (in thousands) Net revenue $ 77,832 $ 69,993 Net income (loss) $ ( 2,516 ) $ ( 20,814 ) |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Summary of Carrying Amounts and Estimated Fair Values of Financial Instruments | The following is a summary of the carrying amounts and estimated fair values of our financial instruments as of March 31, 2024 and December 31, 2023: March 31, 2024 December 31, 2023 Reported Fair Value Reported Fair Value (in thousands) Financial Assets and Liabilities: Cash and cash equivalents $ 17,816 $ 17,816 $ 18,726 $ 18,726 Term Loan $ 49,896 $ 49,896 $ — $ — Revolving credit facility $ — $ — $ — $ — |
Allowance for Sales Returns (Ta
Allowance for Sales Returns (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Allowance For Sales Returns [Abstract] | |
Schedule of Allowances for Sales Returns | The following table provides the changes in our sales return reserve, which is classified as a reduction of accounts receivable: Three Months Ended March 31, 2024 2023 (in thousands) Balance, beginning of period $ 8,449 $ 7,817 Reserve accrual 2,741 3,594 Recoveries and deductions, net ( 5,151 ) ( 4,772 ) Balance, end of period $ 6,039 $ 6,639 |
Composition of Certain Financ_2
Composition of Certain Financial Statement Items (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Condensed Consolidated Balance Sheet Components [Abstract] | |
Schedule of Inventory | Inventories consist of the following: March 31, December 31, (in thousands) Finished goods $ 66,328 $ 43,579 Raw materials 3,203 440 Total inventories $ 69,531 $ 44,019 |
Schedule of Property and Equipment | Property and equipment, net, consists of the following: March 31, December 31, (in thousands) Machinery and equipment $ 2,553 $ 2,597 Software and software development 2,437 2,438 Furniture and fixtures 1,684 1,700 Tooling 12,793 11,250 Leasehold improvements 2,008 1,988 Demonstration units and convention booths 15,765 15,767 Total property and equipment, gross 37,240 35,740 Less: accumulated depreciation and amortization ( 31,707 ) ( 30,916 ) Total property and equipment, net $ 5,533 $ 4,824 |
Other Current Liabilities | Other current liabilities consist of the following: March 31, December 31, (in thousands) Accrued employee expenses $ 5,226 $ 3,944 Accrued royalty 4,490 5,275 Accrued tax-related payables 3,529 5,206 Accrued freight 2,472 2,917 Accrued marketing 1,187 3,335 Accrued expenses 15,043 8,747 Total other current liabilities $ 31,947 $ 29,424 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Acquired identifiable intangible assets, and related accumulated amortization, as of March 31, 2024 and December 31, 2023 consisted of: March 31, 2024 Gross Accumulated Net Book (in thousands) Customer relationships $ 10,152 $ 7,336 $ 2,816 Tradenames 18,225 2,812 15,413 Developed technology 32,307 1,853 30,454 Foreign currency ( 1,121 ) ( 1,142 ) 21 Total Intangible Assets (1) $ 59,563 $ 10,859 $ 48,704 December 31, 2023 Gross Accumulated Net Book (in thousands) Customer relationships $ 8,085 $ 7,214 $ 871 Tradenames 3,066 2,607 459 Developed technology 1,884 1,613 271 Foreign currency ( 1,159 ) ( 1,292 ) 133 Total Intangible Assets (1) $ 11,876 $ 10,142 $ 1,734 (1) The accumulated amortization includes $ 1.9 million of accumulated impairment charges as of March 31, 2024 and December 31, 2023. |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | As of March 31, 2024, estimated annual amortization expense related to definite lived intangible assets in future periods was as follows: (in thousands) 2024 $ 6,440 2025 8,006 2026 7,751 2027 7,581 Thereafter 18,905 Total $ 48,683 |
Schedule of Changes in Carrying Values of Goodwill | Changes in the carrying values of goodwill for the three months ended March 31, 2024 from the balance as of December 31, 2023. (in thousands) Balance as of January 1, 2024 $ 10,686 PDP acquisition 42,221 Balance as of March 31, 2024 $ 52,907 |
Revolving Credit Facility and_2
Revolving Credit Facility and Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | March 31, December 31, (in thousands) Revolving credit facility, maturing March 2027 $ — $ — Term loan Due 2027 $ 49,896 $ — |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
Summary of Income Tax Expense and Effective Income Tax Rate | The following table presents the Company’s income tax expense and effective income tax rate: Three Months Ended March 31, 2024 2023 (in thousands) Income tax benefit $ ( 6,388 ) $ ( 70 ) Effective income tax rate 102.5 % 1.0 % |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Stock-based Compensation Expense | Total estimated stock-based compensation expense for employees and non-employees, related to all of the Company’s stock-based awards, was as follows: Three Months Ended March 31, 2024 2023 (in thousands) Cost of revenue $ 131 $ 175 Selling and marketing 487 490 Research and development 224 356 General and administrative 263 938 Total stock-based compensation $ 1,105 $ 1,959 |
Stock Activity and Total Number of Shares Available for Grant | The following table presents the stock activity and the total number of shares available for grant as of March 31, 2024: (in thousands) Balance at December 31, 2023 1,059 Restricted Stock Granted ( 2 ) Restricted Stock Forfeited 14 Balance at March 31, 2024 1,071 |
Stock Option Activity | Options Outstanding Number of Weighted- Weighted- Aggregate (in years) Outstanding at December 31, 2023 1,041,452 $ 9.10 4.22 $ 3,137,285 Options Granted - - Options Exercised ( 170,919 ) 7.81 Options Forfeited ( 824 ) 60.87 Outstanding at March 31, 2024 869,709 $ 9.30 4.45 $ 7,234,873 Vested and expected to vest at March 31, 2024 871,245 $ 9.53 4.45 $ 7,234,613 Exercisable at March 31, 2024 848,910 $ 9.50 4.41 $ 7,077,588 |
Restricted Stock Awards | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Restricted Stock Activity | Shares Weighted Nonvested restricted stock at December 31, 2023 764,942 $ 14.76 Granted 1,850 12.12 Vested ( 12,066 ) 21.24 Shares forfeited ( 13,935 ) 9.10 Nonvested restricted stock at March 31, 2024 740,791 $ 14.75 |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Net Income (Loss) per Share of Common Stock | The following table sets forth the computation of basic and diluted net income (loss) per share of common stock attributable to common stockholders: Three Months Ended March 31, 2024 2023 (in thousands, except per-share data) Net income (loss) $ 155 $ ( 6,705 ) Weighted average common shares outstanding — Basic 18,321 16,578 Plus incremental shares from assumed conversions: Dilutive effect of restricted stock 224 — Dilutive effect of stock options 294 — Dilutive effect of warrants 550 — Weighted average common shares outstanding — Diluted 19,389 16,578 Net income (loss) per share: Basic $ 0.01 $ ( 0.40 ) Diluted $ 0.01 $ ( 0.40 ) |
Schedule of Antidilutive Securities Excluded from Computation of Diluted Net Income per Share of Common Stock | Three Months Ended March 31, 2024 2023 (in thousands) Stock options 69 1,557 Unvested restricted stock awards 279 863 Warrants — 550 Total 348 2,970 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting [Abstract] | |
Schedule of Total Net Revenues | The following table represents total net revenues based on where customers are physically located: Three Months Ended March 31, 2024 2023 (in thousands) North America $ 42,159 $ 40,712 Europe and Middle East 10,961 9,726 Asia Pacific 2,728 1,006 Total net revenues $ 55,848 $ 51,444 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Product Warranty Liability | The following table provides the changes in our product warranty reserve, which are included in accrued liabilities: Three Months Ended March 31, 2024 2023 (in thousands) Warranty, beginning of period $ 670 $ 618 Warranty costs accrued 220 185 Settlements of warranty claims ( 203 ) ( 187 ) Warranty, end of period $ 687 $ 616 |
Components of the Right-of-Use Assets and Lease Liabilities | The components of the right-of-use assets and lease liabilities were as follows: Balance Sheet Classification March 31, 2024 (in thousands) Right-of-use assets Other assets $ 9,429 Lease liability obligations, current Other current liabilities $ 2,029 Lease liability obligations, noncurrent Other liabilities 8,090 Total lease liability obligations $ 10,119 Weighted-average remaining lease term (in years) 4.8 Weighted-average discount rate 8.5 % |
Schedule of Future Minimum Rental Payments for Operating Leases | Approximate future minimum lease payments for the Company’s right of use assets over the remaining lease periods as of March 31, 2024, are as follows: (in thousands) 2024 $ 1,759 2025 2,363 2026 2,314 2027 2,285 2028 1,282 Thereafter 2,005 Total minimum payments 12,008 Less: Imputed interest ( 1,889 ) Total $ 10,119 |
Acquisitions - Summary of Preli
Acquisitions - Summary of Preliminary Allocation of Consideration Transferred to Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Mar. 13, 2024 | Dec. 31, 2023 |
Business Acquisition [Line Items] | |||
Goodwill | $ 52,907 | $ 10,686 | |
PDP | |||
Business Acquisition [Line Items] | |||
Cash | $ 3,362 | ||
Accounts Receivable | 22,026 | ||
Inventory | 23,243 | ||
Prepaid and Other Current Assets | 2,244 | ||
Property, Plant & Equipment | 1,161 | ||
Other Assets | 3,056 | ||
Intangible assets | 47,649 | ||
Accounts Payable | (10,135) | ||
Accrued Liabilities | (9,031) | ||
Lease Payable | (1,890) | ||
Deferred Tax Liability | (6,996) | ||
Total identifiable net assets | 74,689 | ||
Goodwill | 42,221 | ||
Total consideration paid | $ 116,910 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) - USD ($) | 3 Months Ended | ||
Mar. 13, 2024 | Mar. 31, 2024 | Mar. 31, 2023 | |
Business Acquisition [Line Items] | |||
Revenue | $ 55,848,000 | $ 51,444,000 | |
Acquisition-related costs | 4,910,000 | ||
PDP | |||
Business Acquisition [Line Items] | |||
Revenue | 5,900 | ||
Acquisition-related costs | $ 4,900,000 | ||
Common stock price per share on acquisition date | $ 11.03 | ||
Preliminary purchase consideration | $ 116,910,000 | ||
Common stock shares issued | 3,450,000 | ||
Cash | $ 78,900,000 | ||
Percentage of issued stock | 16.40% |
Acquisitions - Summary of Pre_2
Acquisitions - Summary of Preliminary Allocation of Purchase Consideration to Identifiable Intangible Assets (Details) - PDP $ in Thousands | Mar. 31, 2024 USD ($) |
Business Acquisition [Line Items] | |
Intangible assets | $ 47,649 |
Customer Relationships | |
Business Acquisition [Line Items] | |
Useful life | 6 years |
Intangible assets | $ 2,067 |
Trade Names | |
Business Acquisition [Line Items] | |
Useful life | 7 years |
Intangible assets | $ 15,159 |
Developed Technology | |
Business Acquisition [Line Items] | |
Useful life | 6 years |
Intangible assets | $ 30,423 |
Acquisitions - Summary of Pro F
Acquisitions - Summary of Pro Forma Financial Information (Unaudited) (Details) - PDP - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Business Acquisition [Line Items] | ||
Net revenue | $ 77,832 | $ 69,993 |
Net income (loss) | $ (20,814) | |
Cost of revenue | $ 2,516 |
Fair Value Measurement - Summar
Fair Value Measurement - Summary of Carrying Amounts and Estimated Fair Values of Financial Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Reported Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents, fair value disclosure | $ 17,816 | $ 18,726 |
Term Loan, fair value disclosure | 49,896 | |
Estimate of Fair Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents, fair value disclosure | 17,816 | $ 18,726 |
Term Loan, fair value disclosure | $ 49,896 |
Allowance for Sales Returns - S
Allowance for Sales Returns - Schedule of Allowances for Sales Returns (Details) - Sales Returns and Allowances - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance, beginning of period | $ 8,449 | $ 7,817 |
Reserve accrual | 2,741 | 3,594 |
Recoveries and deductions, net | (5,151) | (4,772) |
Balance, end of period | $ 6,039 | $ 6,639 |
Composition of Certain Financ_3
Composition of Certain Financial Statement Items - Schedule of Inventory (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Condensed Consolidated Balance Sheet Components [Abstract] | ||
Finished goods | $ 66,328 | $ 43,579 |
Raw materials | 3,203 | 440 |
Total inventories | $ 69,531 | $ 44,019 |
Composition of Certain Financ_4
Composition of Certain Financial Statement Items - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | $ 37,240 | $ 35,740 |
Less: accumulated depreciation and amortization | (31,707) | (30,916) |
Total property and equipment, net | 5,533 | 4,824 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 2,553 | 2,597 |
Software and software development | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 2,437 | 2,438 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 1,684 | 1,700 |
Tooling | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 12,793 | 11,250 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 2,008 | 1,988 |
Demonstration units and convention booths | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | $ 15,765 | $ 15,767 |
Composition of Certain Financ_5
Composition of Certain Financial Statement Items - Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Condensed Consolidated Balance Sheet Components [Abstract] | ||
Accrued employee expenses | $ 5,226 | $ 3,944 |
Accrued royalty | 4,490 | 5,275 |
Accrued tax-related payables | 3,529 | 5,206 |
Accrued freight | 2,472 | 2,917 |
Accrued marketing | 1,187 | 3,335 |
Accrued expenses | 15,043 | 8,747 |
Total other current liabilities | $ 31,947 | $ 29,424 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Finite-lived Intangible Assets [Roll Forward] | ||
Total intangible assets, gross carrying value | $ 59,563 | $ 11,876 |
Finite-lived intangible assets, accumulated amortization | 10,859 | 10,142 |
Total intangible assets, net book value | 48,704 | 1,734 |
Total | 48,683 | |
Finite-lived intangible assets, gross carrying value | (1,121) | (1,159) |
Finite-lived intangible assets, accumulated amortization | (1,142) | (1,292) |
Total | 21 | 133 |
Customer Relationships | ||
Finite-lived Intangible Assets [Roll Forward] | ||
Finite-lived intangible assets, gross carrying value | 10,152 | 8,085 |
Finite-lived intangible assets, accumulated amortization | 7,336 | 7,214 |
Total | 2,816 | 871 |
Trade Names | ||
Finite-lived Intangible Assets [Roll Forward] | ||
Finite-lived intangible assets, gross carrying value | 18,225 | 3,066 |
Finite-lived intangible assets, accumulated amortization | 2,812 | 2,607 |
Total | 15,413 | 459 |
Developed Technology | ||
Finite-lived Intangible Assets [Roll Forward] | ||
Finite-lived intangible assets, gross carrying value | 32,307 | 1,884 |
Finite-lived intangible assets, accumulated amortization | 1,853 | 1,613 |
Total | $ 30,454 | $ 271 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Schedule of Intangible Assets (Parenthetical) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Accumulated impairment charges | $ 1.9 | $ 1.9 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Finite Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | $ 560 | $ 264 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Schedule of Finite-Lived Intangible Assets, Future Amortization Expense (Details) $ in Thousands | Mar. 31, 2024 USD ($) |
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | |
2024 | $ 6,440 |
2025 | 8,006 |
2026 | 7,581 |
2027 | 7,751 |
Thereafter | 18,905 |
Total | $ 48,683 |
Goodwill and Other Intangible_7
Goodwill and Other Intangible Assets - Schedule of Changes in Carrying Values of Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Balance as of January 1, 2024 | $ 10,686 |
PDP acquisition | 42,221 |
Balance as of March 31, 2024 | $ 52,907 |
Revolving Credit Facility and_3
Revolving Credit Facility and Long-Term Debt - Schedule Of Debt (Details) $ in Thousands | Mar. 31, 2024 USD ($) |
Debt Instrument [Line Items] | |
Term loan Due 2027 | $ 49,896 |
Revolving Credit Facility and_4
Revolving Credit Facility and Long-Term Debt - Schedule Of Debt (Parenthetical) (Details) | 3 Months Ended |
Mar. 31, 2024 | |
Revolving Credit Facility [Member] | |
Debt Instrument [Line Items] | |
Debt instrument maturity term | 2027-03 |
Revolving Credit Facility and_5
Revolving Credit Facility and Long-Term Debt - Additional Information (Details) - USD ($) | 3 Months Ended | ||||
Mar. 13, 2024 | Mar. 12, 2024 | Mar. 05, 2018 | Mar. 31, 2024 | Mar. 31, 2023 | |
Debt Instrument [Line Items] | |||||
Long Term Debt | $ 49,896,000 | ||||
Interest expense, debt | 400,000 | $ 200,000 | |||
Amortization of debt financing costs | $ 70,000 | $ 42,000 | |||
Revolving Credit Facility, Maturing March 13, 2027 | |||||
Debt Instrument [Line Items] | |||||
Expiration date | Mar. 13, 2027 | ||||
Maximum borrowing capacity | $ 50,000,000 | ||||
Debt instrument, covenant, current fixed charge ratio required, minimum | 1% | ||||
Remaining borrowing capacity | $ 43,800,000 | ||||
Revolving Credit Facility, Maturing March 13, 2027 | Base Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 9% | ||||
Revolving Credit Facility, Maturing March 13, 2027 | LIBOR Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 8.90% | ||||
Revolving Credit Facility, Maturing March 13, 2027 | U.S. BSBY Rate Loans, U.S. BSBY Daily Floating Rate Loans | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1.75% | ||||
Revolving Credit Facility, Maturing March 13, 2027 | UK Alternative Currency Loans | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 3.50% | ||||
Revolving Credit Facility, Maturing March 13, 2027 | Minimum | |||||
Debt Instrument [Line Items] | |||||
Unused commitment fee, percent | 0.375% | ||||
Revolving Credit Facility, Maturing March 13, 2027 | Minimum | Base Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 0.50% | ||||
Revolving Credit Facility, Maturing March 13, 2027 | Maximum | |||||
Debt Instrument [Line Items] | |||||
Unused commitment fee, percent | 0.50% | ||||
Revolving Credit Facility, Maturing March 13, 2027 | Maximum | Base Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 2.50% | ||||
Revolving Credit Facility, Maturing March 13, 2027 | UK Borrower | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 10,000,000 | ||||
Term Loan Facility | |||||
Debt Instrument [Line Items] | |||||
Expiration date | Mar. 13, 2027 | ||||
Maximum borrowing capacity | $ 50,000,000 | ||||
Monthly amortize percentage | 0.20833% | ||||
Third year interest percetage | 0.41667% | ||||
Prepayment premium interest percentage | 3% | ||||
Term Loan Facility | Minimum | |||||
Debt Instrument [Line Items] | |||||
Debt leverage ratio | 2.25 | ||||
Term Loan Facility | Minimum | Base Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 6.75% | ||||
Term Loan Facility | Minimum | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 7.75% | ||||
Term Loan Facility | Maximum | |||||
Debt Instrument [Line Items] | |||||
Debt leverage ratio | 2.25 | ||||
Term Loan Facility | Maximum | Base Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 7.25% | ||||
Term Loan Facility | Maximum | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 8.25% | ||||
Fourth Amendment | PDP Merger Agreement | |||||
Debt Instrument [Line Items] | |||||
Expiration date | Mar. 13, 2027 | Apr. 01, 2025 | |||
Maximum borrowing capacity | $ 15,000,000 | ||||
Aggregate Revolver Commitments | 30% | ||||
Fourth Amendment | Minimum | PDP Merger Agreement | Base Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 0.50% | ||||
Fourth Amendment | Minimum | PDP Merger Agreement | SOFR SONIA and EUIBOR Loans | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1.75% | ||||
Fourth Amendment | Maximum | PDP Merger Agreement | Base Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 2.50% | ||||
Fourth Amendment | Maximum | PDP Merger Agreement | SOFR SONIA and EUIBOR Loans | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 3.50% |
Income Taxes - Summary of Incom
Income Taxes - Summary of Income Tax Expense and Effective Income Tax Rate (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | ||
Income tax benefit | $ (6,388) | $ (70) |
Effective income tax rate | 102.50% | 1% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) $ in Millions | Mar. 31, 2024 USD ($) |
Income Tax [Line Items] | |
Unrecognized tax benefits inclusive of interest and penalties | $ 2.8 |
Interest and penalties | 0.6 |
PDP | |
Income Tax [Line Items] | |
Deferred tax liabilities, valuation allowance | $ 6.7 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation | $ 1,105 | $ 1,959 |
Cost of revenue | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation | 131 | 175 |
Selling and marketing | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation | 487 | 490 |
Research and development | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation | 224 | 356 |
General and administrative | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation | $ 263 | $ 938 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Dec. 31, 2023 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Common stock par value | $ 0.001 | $ 0.001 |
Forfeiture period after ending employment | 90 days | |
Options exercised, intrinsic value | $ 1.2 | |
Estimated grant date fair value of options vested | $ 1.1 | |
Stock Options | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Award expiration period | 10 years | |
Options granted | 0 | |
Total unrecognized compensation cost | $ 0.1 | |
Compensation cost not yet recognized, period for recognition | 3 months 18 days | |
Restricted Stock Awards | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total unrecognized compensation cost | $ 7 | |
Compensation cost not yet recognized, period for recognition | 3 years 4 months 24 days | |
Outstanding balance | 740,791 | 764,942 |
Shares issued | 1,850 | |
Shares vested | 12,066 | |
Performance Based Restricted Stock | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Outstanding balance | 162,672 | |
Vesting period | 3 years | |
Performance Based Restricted Stock | Minimum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Adjusted EBITDA percentage | 0% | |
Performance Based Restricted Stock | Maximum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Adjusted EBITDA percentage | 200% | |
Non-Executives | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Forfeiture rate | 10% | |
Executive Officer | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Forfeiture rate | 0% |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock Activity and Total Number of Shares Available for Grant (Details) | 3 Months Ended |
Mar. 31, 2024 shares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Shares Available for Grant [Roll Forward] | |
Balance, beginning of period | 1,059,000 |
Balance, end of period | 1,071,000 |
Restricted Stock Awards | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Shares Available for Grant [Roll Forward] | |
Stock Granted | (1,850) |
Stock Forfeited | 13,935 |
Stock-Based Compensation - St_3
Stock-Based Compensation - Stock Option Activity (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Outstanding beginning of period (in shares) | 1,041,452 | |
Options 'Exercised (in shares) | (170,919) | |
Options Forfeited (in shares) | (824) | |
Outstanding end of period (in shares) | 869,709 | 1,041,452 |
Vested and expected to vest (in shares) | 871,245 | |
Exercisable (in shares) | 848,910 | |
Weighted-Average Exercise Price | ||
Outstanding beginning of period (in dollars per share) | $ 9.1 | |
Options Exercised (in dollars per share) | 7.81 | |
Options Forfeited (in dollars per share) | 60.87 | |
Outstanding end of period (in dollars per share) | 9.3 | $ 9.1 |
Vested and expected to vest (in dollars per share) | 9.53 | |
Exercisable (in dollars per share) | $ 9.5 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Outstanding, weighted average remaining contractual term | 4 years 5 months 12 days | 4 years 2 months 19 days |
Vested and expected to vest, weighted average remaining contractual term | 4 years 5 months 12 days | |
Exercisable, weighted average remaining contractual term | 4 years 4 months 28 days | |
Outstanding, intrinsic value | $ 7,234,873 | $ 3,137,285 |
Vested and expected to vest, intrinsic value | 7,234,613 | |
Exercisable, intrinsic value | $ 7,077,588 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Activity (Details) - Restricted Stock Awards | 3 Months Ended |
Mar. 31, 2024 $ / shares shares | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Outstanding beginning of period (in shares) | shares | 764,942 |
Granted (in shares) | shares | 1,850 |
Vested (in shares) | shares | (12,066) |
Forfeited (in shares) | shares | (13,935) |
Outstanding end of period (in shares) | shares | 740,791 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Outstanding beginning of period (in dollars per share) | $ / shares | $ 14.76 |
Granted (in dollars per share) | $ / shares | 12.12 |
Vested (in dollars per share) | $ / shares | 21.24 |
Forfeited (in dollars per share) | $ / shares | 9.1 |
Outstanding end of period (in dollars per share) | $ / shares | $ 14.75 |
Net Income (Loss) Per Share - S
Net Income (Loss) Per Share - Schedule of Computation of Basic and Diluted Net Income (Loss) per Share of Common Stock (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Basic and diluted: | ||
Net income (loss) | $ 155 | $ (6,705) |
Basic: | ||
Weighted-average common shares outstanding, basic (in shares) | 18,321 | 16,578 |
Dilutive effect of restricted stock | 224 | |
Dilutive effect of stock options | 294 | |
Dilutive effect of warrants | 550 | |
Diluted: | ||
Weighted-average common shares outstanding, diluted (in shares) | 19,389 | 16,578 |
Net income (loss) per share: | ||
Basic (in dollars per share) | $ 0.01 | $ (0.4) |
Diluted (in dollars per share) | $ 0.01 | $ (0.4) |
Net Income (Loss) Per Share -_2
Net Income (Loss) Per Share - Schedule of Antidilutive Securities Excluded from Computation of Diluted Net Income per Share of Common Stock (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 348 | 2,970 |
Stock options | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 69 | 1,557 |
Restricted Stock Awards | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 279 | 863 |
Warrants | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 550 |
Segment Information - Schedule
Segment Information - Schedule of Total Net Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net revenue | $ 55,848 | $ 51,444 |
North America | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net revenue | 42,159 | 40,712 |
Europe and Middle East | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net revenue | 10,961 | 9,726 |
Asia Pacific | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net revenue | $ 2,728 | $ 1,006 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Millions | 3 Months Ended | ||
Mar. 31, 2024 USD ($) | May 22, 2020 Claim | Aug. 05, 2013 | |
Operating Leased Assets [Line Items] | |||
Number of shareholder claims | Claim | 8 | ||
Operating lease, expense | $ 0.4 | ||
Operating lease, payments | $ 0.3 | ||
Minimum | |||
Operating Leased Assets [Line Items] | |||
Operating lease remaining lease term | 1 year | ||
Maximum | |||
Operating Leased Assets [Line Items] | |||
Operating lease remaining lease term | 9 years | ||
Merger of VTB Holdings, Inc. and Parametric Sound Corporation | VTB Holdings, Inc | |||
Operating Leased Assets [Line Items] | |||
Ownership percentage | 80% | ||
Merger of VTB Holdings, Inc. and Parametric Sound Corporation | Parametric Sound Corporation | |||
Operating Leased Assets [Line Items] | |||
Ownership percentage | 20% |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Product Warranty Liability (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Warranty, beginning of period | $ 670 | $ 618 |
Warranty costs accrued | 220 | 185 |
Settlements of warranty claims | (203) | (187) |
Warranty, end of period | $ 687 | $ 616 |
Commitments and Contingencies_3
Commitments and Contingencies - Components of the Right-of-Use Assets and Lease Liabilities (Details) $ in Thousands | Mar. 31, 2024 USD ($) |
Lessee, Lease, Description [Line Items] | |
Right-of-use assets | $ 9,429 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other assets |
Lease liability obligations, current | $ 2,029 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Other current liabilities |
Lease liability obligations, noncurrent | $ 8,090 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other liabilities |
Total lease liability obligations | $ 10,119 |
Weighted-average remaining lease term (in years) | 4 years 9 months 18 days |
Weighted Average | |
Lessee, Lease, Description [Line Items] | |
Weighted-average discount rate | 8.50% |
Commitments and Contingencies_4
Commitments and Contingencies - Schedule of Future Minimum Rental Payments for Operating Leases (Details) $ in Thousands | Mar. 31, 2024 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2024 | $ 1,759 |
2025 | 2,363 |
2026 | 2,314 |
2027 | 2,285 |
2028 | 1,282 |
Thereafter | 2,005 |
Total minimum payments | 12,008 |
Less: Imputed interest | (1,889) |
Total | $ 10,119 |