Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Jan. 31, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2021 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | TURTLE BEACH CORPORATION | ||
Entity Central Index Key | 0001493761 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Interactive Data Current | Yes | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Public Float | $ 504,046,573 | ||
Entity Common Stock, Shares Outstanding | 16,168,892 | ||
Entity Shell Company | false | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Title of 12(b) Security | Common Stock, par value $0.001 | ||
Trading Symbol | HEAR | ||
Security Exchange Name | NASDAQ | ||
Entity File Number | 001-35465 | ||
Entity Incorporation, State or Country Code | NV | ||
Entity Tax Identification Number | 27-2767540 | ||
Entity Address, Address Line One | 44 South Broadway | ||
Entity Address, Address Line Two | 4th Floor | ||
Entity Address, City or Town | White Plains | ||
Entity Address, State or Province | NY | ||
Entity Address, Postal Zip Code | 10601 | ||
City Area Code | 888 | ||
Local Phone Number | 496-8001 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
ICFR Auditor Attestation Flag | true | ||
Auditor Name | BDO USA, LLP | ||
Auditor Firm ID | 243 | ||
Auditor Location | New York | ||
Documents Incorporated by Reference | The information required by Part III of this Report is incorporated herein by reference from the registrant’s definitive proxy statement or annual report on Form 10-K/A to be filed with the Securities and Exchange Commission within 120 days after the close of the registrant’s fiscal year. |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | |||
Net revenue | $ 366,354 | $ 360,093 | $ 234,663 |
Cost of revenue | 237,971 | 226,305 | 155,950 |
Gross profit | 128,383 | 133,788 | 78,713 |
Operating expenses: | |||
Selling and marketing | 58,883 | 46,779 | 38,634 |
Research and development | 17,490 | 12,265 | 7,856 |
General and administrative | 31,579 | 25,577 | 21,796 |
Total operating expenses | 107,952 | 84,621 | 68,286 |
Operating income | 20,431 | 49,167 | 10,427 |
Interest expense | 383 | 467 | 929 |
Other non-operating expense (income), net | (101) | (3,757) | (2,209) |
Income before income tax | 20,149 | 52,457 | 11,707 |
Income tax expense (benefit) | 2,428 | 13,711 | (6,237) |
Net income | $ 17,721 | $ 38,746 | $ 17,944 |
Net income per share: | |||
Basic (in dollars per share) | $ 1.11 | $ 2.62 | $ 1.24 |
Diluted (in dollars per share) | $ 0.97 | $ 2.37 | $ 1.04 |
Weighted average number of shares: | |||
Basic (in shares) | 15,915 | 14,801 | 14,483 |
Diluted (in shares) | 18,251 | 16,365 | 15,688 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Statement Of Income And Comprehensive Income [Abstract] | |||
Net income | $ 17,721 | $ 38,746 | $ 17,944 |
Foreign currency translation adjustment | (462) | 473 | 592 |
Other comprehensive income (loss) | (462) | 473 | 592 |
Comprehensive income (loss) | $ 17,259 | $ 39,219 | $ 18,536 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Current Assets: | ||
Cash and cash equivalents | $ 37,720 | $ 46,681 |
Accounts receivable, less allowances of $34,728 and $29,897 in 2021 and 2020, respectively | 35,953 | 43,867 |
Inventories | 101,933 | 71,301 |
Prepaid expenses and other current assets | 17,506 | 8,127 |
Total Current Assets | 193,112 | 169,976 |
Property and equipment, net | 6,955 | 6,575 |
Deferred income taxes | 5,899 | 6,946 |
Goodwill | 10,686 | 8,178 |
Intangible assets, net | 5,788 | 5,138 |
Other assets | 8,065 | 6,640 |
Total Assets | 230,505 | 203,453 |
Current Liabilities: | ||
Accounts payable | 40,475 | 42,529 |
Other current liabilities | 37,693 | 36,122 |
Total Current Liabilities | 78,168 | 78,651 |
Income tax payable | 3,774 | 3,146 |
Other liabilities | 7,194 | 5,257 |
Total Liabilities | 89,136 | 87,054 |
Commitments and Contingencies | ||
Stockholders’ Equity | ||
Common stock, $0.001 par value - 25,000,000 shares authorized; 16,168,147 and 15,475,504 shares issued and outstanding as of December 31, 2021 and 2020, respectively | 16 | 15 |
Additional paid-in capital | 198,278 | 190,568 |
Accumulated deficit | (57,052) | (74,773) |
Accumulated other comprehensive income | 127 | 589 |
Total Stockholders’ Equity | 141,369 | 116,399 |
Total Liabilities and Stockholders’ Equity | $ 230,505 | $ 203,453 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Statement Of Financial Position [Abstract] | ||
Allowances and discounts | $ 34,728 | $ 29,897 |
Common stock par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock shares authorized | 25,000,000 | 25,000,000 |
Common stock shares issued | 16,168,147 | 15,475,504 |
Common stock shares outstanding | 16,168,147 | 15,475,504 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net income | $ 17,721 | $ 38,746 | $ 17,944 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 4,052 | 4,359 | 4,556 |
Amortization of intangible assets | 1,261 | 889 | 642 |
Amortization of debt financing costs | 189 | 189 | 189 |
Stock-based compensation | 7,656 | 5,549 | 3,558 |
Deferred income taxes | 1,119 | 468 | (7,473) |
Change in sales returns reserve | (2,236) | 2,418 | (397) |
Provision for doubtful accounts | 468 | 215 | (10) |
Provision for obsolete inventory | 1,609 | 5,085 | 3,483 |
Loss on disposal of property and equipment | 42 | 28 | |
Unrealized loss (gain) on financial instrument obligation | (1,601) | ||
Decrease in unrecognized tax benefit | (686) | ||
Decrease in fair value of contingent consideration | (1,928) | (1,121) | (471) |
Changes in operating assets and liabilities, net of acquisitions: | |||
Accounts receivable | 9,682 | (1,755) | 9,931 |
Inventories | (32,240) | (30,675) | 7,264 |
Accounts payable | (2,793) | 18,668 | (393) |
Prepaid expenses and other assets | (6,091) | (4,108) | (66) |
Income taxes payable | (5,571) | 4,178 | (371) |
Other liabilities | 6,775 | 7,902 | 3,247 |
Net cash provided by (used for) operating activities | (327) | 51,049 | 39,374 |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Purchases of property and equipment | (5,621) | (5,663) | (1,912) |
Acquisition of a business, net of cash acquired | (2,500) | (12,667) | |
Net cash used for investing activities | (8,121) | (5,663) | (14,579) |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Borrowings on revolving credit facilities | 120,858 | 323,593 | 219,910 |
Repayment of revolving credit facilities | (120,858) | (339,248) | (241,640) |
Proceeds from sale of equity securities | 4,373 | ||
Proceeds from exercise of stock options and warrants | 5,289 | 4,195 | 330 |
Repurchase of common stock | (4,882) | (2,525) | |
Repurchase of common stock to satisfy employee tax withholding obligations | (463) | (325) | (255) |
Net cash used for financing activities | (56) | (7,412) | (24,180) |
Effect of exchange rate changes on cash and cash equivalents | (457) | 458 | 556 |
Net increase (decrease) in cash and cash equivalents | (8,961) | 38,432 | 1,171 |
Cash and cash equivalents - beginning of period | 46,681 | 8,249 | 7,078 |
Cash and cash equivalents - end of period | 37,720 | 46,681 | 8,249 |
SUPPLEMENTAL DISCLOSURE OF INFORMATION | |||
Cash paid for interest | 194 | 309 | 769 |
Cash paid for income taxes, net of refunds | 6,561 | 8,041 | 2,317 |
Accrual for purchases of property and equipment | $ 1,189 | $ 1,351 | 16 |
Reclassification of financial instrument obligation | $ 6,248 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity - USD ($) $ in Thousands | Total | Common stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) |
Beginning Balance at Dec. 31, 2018 | $ 37,496 | $ 14 | $ 169,421 | $ (131,463) | $ (476) |
Beginning Balance, shares at Dec. 31, 2018 | 14,268,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 17,944 | 17,944 | |||
Other comprehensive income (loss), net of tax | 592 | 592 | |||
Reclassification of financial instrument obligation | 6,248 | 6,248 | |||
Issuance of restricted stock | (1) | (1) | |||
Issuance of restricted stock, shares | 130,000 | ||||
Repurchase of common stock and retirement of related treasury shares | (255) | (255) | |||
Repurchase of common stock and retirement of related treasury shares, shares | (23,000) | ||||
Common stock buyback | (2,525) | (2,525) | |||
Common stock buyback, shares | (271,000) | ||||
Issuance of common stock upon exercise of warrants, shares | 296,000 | ||||
Stock options exercised | 330 | 330 | |||
Stock options exercised, shares | 89,000 | ||||
Stock-based compensation | 3,558 | 3,558 | |||
Ending Balance at Dec. 31, 2019 | 63,387 | $ 14 | 176,776 | (113,519) | 116 |
Ending Balance, shares at Dec. 31, 2019 | 14,488,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 38,746 | 38,746 | |||
Other comprehensive income (loss), net of tax | 473 | 473 | |||
Issuance of restricted stock | 1 | $ 1 | |||
Issuance of restricted stock, shares | 157,000 | ||||
Repurchase of common stock and retirement of related treasury shares | (325) | (325) | |||
Repurchase of common stock and retirement of related treasury shares, shares | (25,000) | ||||
Proceeds of sales of equity securities | 4,373 | 4,373 | |||
Proceeds of sales of equity securities, shares | 238,000 | ||||
Stock options exercised | 4,195 | 4,195 | |||
Stock options exercised, shares | 618,000 | ||||
Stock-based compensation | 5,549 | 5,549 | |||
Ending Balance at Dec. 31, 2020 | 116,399 | $ 15 | 190,568 | (74,773) | 589 |
Ending Balance, shares at Dec. 31, 2020 | 15,475,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 17,721 | 17,721 | |||
Other comprehensive income (loss), net of tax | (462) | (462) | |||
Issuance of restricted stock, shares | 244,000 | ||||
Settlement of deferred Stock | 111 | 111 | |||
Settlement of deferred Stock, shares | 6,000 | ||||
Repurchase of common stock and retirement of related treasury shares | (463) | (463) | |||
Repurchase of common stock and retirement of related treasury shares, shares | (15,000) | ||||
Common stock buyback | (4,882) | (4,882) | |||
Common stock buyback, shares | (169,000) | ||||
Stock options exercised | $ 5,289 | $ 1 | 5,288 | ||
Stock options exercised, shares | 626,306 | 626,000 | |||
Stock-based compensation | $ 7,656 | 7,656 | |||
Ending Balance at Dec. 31, 2021 | $ 141,369 | $ 16 | $ 198,278 | $ (57,052) | $ 127 |
Ending Balance, shares at Dec. 31, 2021 | 16,168,000 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 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®, ROCCAT® and Neat Microphone® 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 in the PC peripherals market. 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 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. Uses 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, determination of fair value of stock-based awards, stock warrants and share-based compensation. 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. The novel coronavirus (“COVID-19”) pandemic, and its variant strains, has disrupted worldwide economic markets and the extent to which COVID-19 continues to affect the Company’s business, results of operations and financial condition will depend on future developments, which are highly uncertain and difficult to predict. During 2020, the Company experienced a significant increase in demand for its products due to the COVID-19-related stay-at-home orders, which resulted in increased revenue. Going forward, the effects of the global pandemic and the measures being taken in response are uncertain and difficult to predict. Nonetheless, the Company continues to actively monitor and assess the impact of the pandemic on its business, operations, and financial condition. Revenue Recognition and Sales Return Reserve Net revenue consists primarily of revenue from the sale of gaming headsets and accessories to wholesalers, retailers and to a lesser extent, on-line customers. These products function on a standalone basis (in connection with a readily available gaming console, personal computer, or stereo) and are not sold with additional services or rights to future goods or services. Revenue is recorded for a contract through the following steps: (i) identifying the contract with the customer; (ii) identifying the performance obligations in the contract; (iii) determining the transaction price; (iv) allocating the transaction price to the performance obligations; and (v) recognizing revenue when or as each performance obligation is satisfied. Each contract at inception is evaluated to determine whether the contract should be accounted for as having one or more performance obligations. The Company's business activities were determined to be a single performance obligation with revenue recognized when obligations under the terms of a contract with its customer are satisfied; generally, this occurs at a point in time when the risk and title to the product transfers to the customer. The Company's standard terms of delivery are included in its contracts of sale, order confirmation documents, and invoices. The Company excludes sales taxes collected from customers from “Net Revenue” in its Consolidated Statements of Operations. Certain customers may receive cash-based incentives (including cash discounts, quantity rebates, and price concessions), which are accounted for as variable consideration. Provisions for sales returns are recognized in the period the sale is recorded based upon the Company's prior experience and current trends. These revenue reductions are established by the Company based upon management’s best estimates at the time of sale following the historical trend, adjusted to reflect known changes in the factors that impact such reserves and allowances, and the terms of agreements with customers. As of December 31, 2021 and 2020, the Company had an allowance for cash-based incentives of $25.6 million and $18.6 million, respectively, and an allowance for sales returns of $9.0 million and $11.2 million, respectively, and does not expect to have significant changes in its estimates for variable considerations. Cost of Revenue and Operating Expenses The following table illustrates the primary costs classified in each major expense category: Cost of Revenue Operating Expenses Cost to manufacture products; Payroll, bonus, and benefit costs; Freight costs associated with moving product from suppliers to distribution centers and to customers; Costs incurred in the research and development of new products and enhancements to existing products; Costs associated with the movement of merchandise through customs; Depreciation related to demonstration units; Costs associated with material handling and warehousing; Legal, finance, information systems and other corporate overhead costs; and Global supply chain personnel costs; and Sales commissions, advertising, and marketing costs. Product royalty costs. Product Warranty Obligations The Company provides for product warranties in accordance with the contract terms given to various customers by accruing estimated warranty costs at the time of revenue recognition. Warranties are generally fulfilled by replacing defective products with new products. Marketing Costs Costs associated with the production of advertising, such as print and other costs, as well as costs associated with communicating advertising that has been produced, such as magazine ads, are expensed when the advertising first appears in public. Advertising costs were approximately $9.7 million, $8.5 million and $7.5 million for the years ended December 31, 2021, 2020 and 2019, respectively. The Company also incurs co-operative advertising costs that represent reimbursements to customers for shared marketing expenses for sale of its products. These reimbursements are recorded as reductions of net revenue based on a percentage of sales for all period presented. Co-operative advertising reimbursements were approximately $7.6 million, $6.8 million and $5.7 million for the years ended December 31, 2021, 2020 and 2019, respectively. Deferred Financing Costs Deferred financing costs represent costs incurred in conjunction with the Company’s debt financing activities and are capitalized and amortized over the life of the related financing arrangements. If the debt is retired early, the related unamortized deferred financing costs are written off in the period the debt is retired as part of the net carrying value of the debt, and any gains or losses are recorded in the statement of operations under the caption “Other non-operating expense (income), net.” Stock-Based Compensation Compensation costs related to stock options, restricted stock grants and performance-based restricted share units are calculated based on the fair value of the stock-based awards on the date of grant, net of estimated forfeitures. The grant date fair value of awards is determined using the Black-Scholes option-pricing model and the related stock-based compensation is recognized on a straight-line basis over the period in which an employee is required to provide service in exchange for the award, which is generally four years. The Company estimates its forfeiture rate based on an analysis of actual forfeitures and will continue to evaluate the adequacy of the forfeiture rate based on actual forfeiture experience, analysis of employee turnover behavior, and other factors. The impact from any forfeiture rate adjustment would be recognized in the period of adjustment and if the actual number of future forfeitures differs from estimates, the Company might be required to record adjustments to stock-based compensation expense. For stock-based awards issued to non-employees, including consultants, compensation expense is based on the fair value of the Exit and Disposal Costs Management-approved restructuring activities are periodically initiated to achieve cost savings through reduced operational redundancies and to position the Company strategically in the market in response to prevailing economic conditions and associated customer demand. Costs associated with restructuring actions can include severance, infrastructure charges to vacate facilities or consolidate operations, contract termination costs and other related charges. For involuntary separation plans, a liability is recognized when it is probable and reasonably estimable. For one-time termination benefits, such as additional severance pay or benefit payouts, and other exit costs, such as lease termination costs, the liability is measured and recognized initially at fair value in the period in which the liability is incurred, with subsequent changes to the liability recognized as adjustments in the period of change. Net Earnings (Loss) per Common Share Basic earnings (loss) per share is calculated by dividing net income (loss) associated with common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share assumes the issuance of additional shares of common stock by the Company upon exercise of all outstanding stock options, stock warrants and contingently issuable securities if the effect is dilutive, in accordance with the treasury stock method. Cash Equivalents Cash and short-term highly liquid investments with original maturity dates of three months or less at time of purchase and no redemption restrictions are considered cash and cash equivalents. Inventories Inventories consist primarily of finished goods and related component parts and are stated at the lower of weighted average cost or market value (estimated net realizable value) using the first in, first out (“FIFO”) method. The Company maintains an inventory allowance for returned goods, slow-moving and unused inventories based on the historical trend and estimates. Inventory write-downs, once established, are not reversed as they establish a new cost basis for the inventory. Inventory write-downs are included as a component of cost of revenues in the accompanying consolidated statements of operations. Property and Equipment, net Property and equipment are presented at cost less accumulated depreciation and amortization. Repairs and maintenance expenditures are expensed as incurred. Depreciation and amortization are computed on a straight-line basis over the following estimated useful lives: Estimated Life Machinery and equipment 3 years Software and software development 2-3 years ERP Software 5 years Furniture and fixtures 5 years Tooling 2 years Leasehold improvements Term of lease or economic life of asset, if shorter Demonstration units and convention booths 2 years Demonstration headsets 1 year Valuation of Long-Lived and Intangible Assets and Goodwill At acquisition, we estimate and record the fair value of purchased intangible assets, which primarily consists of in-process research and development, customer relationships, trademarks and trade names, and patents. The fair values of these intangible assets are estimated based on the Company’s assessment. Goodwill is the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations. Goodwill and certain other intangible assets having indefinite lives are not amortized to earnings, but instead are subject to periodic testing for impairment. Intangible assets determined to have definite lives are amortized over their remaining useful lives. Long-lived and intangible assets are assessed for potential impairment whenever events or changes in circumstances indicate that full recoverability of net asset balances through future cash flows is in question. Goodwill and indefinite-lived intangible assets are assessed at least annually, but also whenever events or changes in circumstances indicate the carrying values may not be recoverable. Factors that could trigger an impairment review include (a) significant underperformance relative to historical or projected future operating results; (b) significant changes in the manner of use of the acquired assets or the strategy for the Company’s overall business; (c) significant negative industry or economic trends; (d) significant decline in the Company’s stock price for a sustained period; and (e) a decline in the Company’s market capitalization below net book value. Assessment for possible impairment is based on the Company’s ability to recover the carrying value of the long-lived asset from the expected future pre-tax cash flows. The expected future pre-tax cash flows are estimated based on historical experience, internal knowledge, and market data. Estimates of future cash flows require the Company to make assumptions and to apply judgment, including forecasting future sales and expenses and estimating the useful lives of assets. If the expected future cash flows related to the long-lived assets are less than the assets’ carrying value, an impairment charge is recognized for the difference between estimated fair value and carrying value. When performing the Company’s evaluation of goodwill for impairment, if it concludes qualitatively that it is not more likely than not that the fair value of the reporting unit is less than its carrying amount, the Company performs its annual goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. If the carrying amount exceeds the fair value a goodwill impairment charge would be recorded for the amount by which the reporting unit’s carrying amount exceeds its fair value. In addition, identifiable intangible assets having indefinite lives are reviewed for impairment on an annual basis using a methodology consistent with that used to evaluate goodwill. There are inherent assumptions and estimates used in developing future cash flows requiring management judgment including projecting revenues, interest rates and the cost of capital. Many of the factors used in assessing fair value are outside the Company’s control and it is reasonably likely that assumptions and estimates will change in future periods. These changes can result in future impairments. In the event the Company’s planning assumptions were modified resulting in impairment to our assets, the associated expense would be included in the Consolidated Statements of Operations, which could materially impact its business, financial condition, and results of operations. The Company conducted its annual impairment assessment on November 1, 2021, taking a qualitative evaluation approach to determine if there were any adverse market factors or changes in circumstances that would indicate that the carrying value of goodwill as determined in connection with the current year acquisition may not be recoverable. The Company’s qualitative assessment included an analysis of business changes, economic outlook, financial trends and forecasts, and events or circumstances that could unfavorably impact the key assumptions. Based on this review, management determined that no events or changes in circumstances indicated that the carrying value may not be recoverable and further consideration of potential goodwill impairment was not considered necessary. Income Taxes The Company accounts for income taxes in accordance with the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized based on the differences between the financial statement carrying value of existing assets and liabilities and their respective tax bases based on enacted tax laws and statutory tax rates applicable to the periods in which the Company expects the temporary differences to reverse. The Company had elected to record a “deferred charge” for basis differences relating to intra-entity profits as recognition as a deferred tax asset is prohibited. A valuation allowance is established for deferred tax assets when management anticipates that it is more likely than not that all, or a portion, of these assets would not be realized. In determining whether a valuation allowance is warranted, all positive and negative evidence and all sources of taxable income such as prior earnings history, expected future earnings, carryback and carryforward periods and tax strategies are considered to estimate if sufficient future taxable income will be generated to realize the deferred tax asset. The assessment of the adequacy of a valuation allowance is based on estimates of taxable income by jurisdiction and the period over which deferred tax assets will be recoverable. In the event that actual results differ from these estimates, or these estimates are adjusted in future periods for current trends or expected changes in assumptions, the Company may need to modify the level of valuation allowance which could materially impact our business, financial condition, and results of operations. The tax effects of uncertain tax positions taken or expected to be taken in income tax returns are recognized only if they are “more likely-than-not” to be sustained on examination by the taxing authorities based on the technical merits as of the reporting date. The tax benefits recognized in the financial statements from such positions are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. The Company recognizes estimated accrued interest and penalties related to uncertain tax positions in income tax expense. The Company and its domestic subsidiaries file a consolidated federal income tax return, while the Company’s foreign subsidiary files in its respective local jurisdictions. Fair Value of Financial Instruments The Company determines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company uses a hierarchical structure to prioritize the inputs used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1), then to quoted market prices for similar assets or liabilities in active or inactive markets (Level 2) and gives the lowest priority to unobservable inputs (Level 3). Financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, revolving line of credit, long-term debt and warrants reported as a financial instrument obligation. Cash equivalents are stated at amortized cost, which approximated 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 revolving line of credit is stated at the carrying value as the stated interest rate approximates market rates currently available to the Company, which are considered Level 2 inputs. The Company did not have any non-financial assets or non-financial liabilities recognized at fair value on a recurring basis at December 31, 2021 and 2020. Foreign Currency Translation Balance sheet accounts of the Company’s foreign subsidiaries are translated at the exchange rate in effect at the end of each period. Statement of operations accounts are translated using the weighted average of the prevailing exchange rates during each period. Gains or losses resulting from foreign currency transactions are included in the Company’s Consolidated Statements of Operations under the caption “Other non-operating expense (income), net” whereas translation adjustments are reflected in the Consolidated Statements of Comprehensive Income (Loss) under the caption “Foreign currency translation adjustment.” Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of investments in cash, cash equivalents and accounts receivables. The Company is exposed to credit risk and liquidity risk in the event of default by the financial institutions or issuers of investments in excess of FDIC insured limits. The Company performs periodic evaluations of the relative credit standing of these financial institutions and limits the amount of credit exposure with any institution. Accounts receivable are unsecured and represent amounts due based on contractual obligations of customers. Our five largest individual customers accounted for approximately 66% of our gross sales in 2021, 67% of our gross sales in 2020, and 66% Concentrations of credit risk with respect to accounts receivable are mitigated by performing ongoing credit evaluations of customers to assess the probability of collection based on a number of factors, including past transaction experience with the customer, evaluation of their credit history, limiting the credit extended, and review of the invoicing terms of the contract. In addition, the Company has credit insurance in place through a third-party insurer against defaults by certain other domestic and international customers, subject to policy limits. The Company generally does not require customers to provide collateral to support accounts receivable. The Company has recorded an allowance for doubtful accounts for those receivables that were determined not to be collectible. Foreign cash balances at December 31, 2021 and 2020 were $10.2 million and $5.9 million, respectively. Segment Information The company operates in a single who reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases $3.3 million. In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments-Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments," amending the accounting for the impairment of financial instruments, including trade receivables. Under previous guidance, credit losses were recognized when the applicable losses had a probable likelihood of occurring and this assessment was based on past events and current conditions. The amended guidance eliminates the “probable” threshold and requires an entity to use a broader range of information, including forecast information when estimating expected credit losses. Generally, this should result in a more timely recognition of credit losses. The requirements of the amended guidance should be applied using a modified retrospective approach except for debt securities, which require a prospective transition approach. We adopted this guidance as of January 1, 2020. The adoption of this guidance did not have a material impact on our financial condition and results of operations. In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (ASU 2020-04).” In 2017, the United Kingdom’s Financial Conduct Authority announced that it intends to stop persuading or compelling banks to submit the London Interbank Offered Rate ( “ LIBOR ” ), a benchmark interest rate referenced in a variety of agreements, after 2021. In March 2021, the United Kingdom's Financial Conduct Authority confirmed that U.S. Dollar LIBOR will no longer be published after December 31, 2021, for one-week and two-month U.S. Dollar LIBOR tenors, and after June 30, 2023, for all other U.S. Dollar LIBOR tenors. ASU 2020-04 provides entities with optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. In January 2021, the FASB issued amendments to the guidance through ASU 2021-01 to include all contract modifications and hedging relationships affected by reference rate reform, including those that do not directly reference LIBOR, or another reference rate expected to be discontinued, and clarify which optional expedients may be applied to them. The guidance can be applied prospectively. The optional relief is temporary and generally cannot be applied to contract modifications and hedging relationships entered into or evaluated after December 31, 2022. The Compan y does not expect the new guidance to have a material impact on their financial position, results of operations or liquidity. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2021 | |
Business Combinations [Abstract] | |
Acquisitions | Note 2. Acquisitions Neat Microphones On January 12, 2021, the Company acquired certain assets related to the Neat Microphones business (“Neat Microphones”) of Stray Electrons LLC, a California limited liability company for a purchase price of $2.5 million and up to $2.3 million in potential earn-outs based on revenues and earnings targets for the year ended December 31, 2021, as provided in the asset purchase agreement. The closing payment was funded from cash on the Company’s balance sheet. In addition, business transaction costs incurred in connection with the acquisition of $0.3 million for the year ended December 31, 2021, were recorded as a component of “General and administrative” expenses in the Company’s Condensed Consolidated Statements of Operations. Neat Microphones creates, manufactures, and sells high-quality digital USB and analog microphones that embrace cutting-edge technology and design. The goodwill from the acquisition of Neat Microphones, which is fully deductible for tax purposes, consists largely of synergies and economies of scale expected from adding the operations of Neat Microphones’ and the Company’s existing business and supply channels. The fair value of Neat Microphone’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. 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 key information underlying intangible assets related to the Neat Microphones acquisition: (In thousands) Life Amount Customer relationships 2 Years $ 440 Tradenames 10 Years 380 Developed technology 7 Years 1,100 Total $ 1,920 No payment will be made under the contingent earn-out provisions of the asset purchase agreement as certain revenue targets were not achieved, and as such, th ROCCAT On May 31, 2019, the Company completed its acquisition of the business and assets of ROCCAT, a provider of gaming keyboards, mice and other accessories for a purchase price of approximately $12.7 million and up to $3.4 million in potential earn-outs based on revenues for the years ended December 31, 2019 and 2020, as provided in the asset purchase agreement. The purchase price was paid in cash at closing and was funded by the Company’s cash reserves and additional borrowings under its credit facility. In addition, business transaction costs incurred i n connection with the acquisition of The ROCCAT purchase price allocation as of May 31, 2019 is shown in the following table: (In thousands) Amount Receivables $ 1,366 Inventories 6,986 Property and equipment 1,110 Intangible assets 5,589 Other long-term assets 461 Accounts payable (5,399 ) Accrued and other current liabilities (3,704 ) Contingent consideration (1,592 ) Other non-current liabilities (328 ) Total identifiable net assets 4,489 Goodwill 8,178 Total consideration $ 12,667 The fair values of ROCCAT’s assets and liabilities were determined based on estimates and assumptions that management believes are reasonable. These adjustments primarily relate to certain short-term assets, intangible assets, and certain liabilities including contingent consideration. The Company and the sellers of ROCCAT have agreed to settle an amount related to sales returns and allowances for approximately $1.8 million, which is included in “Accrued and other current liabilities” in the table above. The goodwill from the acquisition of ROCCAT, which is fully deductible for tax purposes, consists largely of synergies and economies of scale expected from combining the operations of ROCCAT and the Company’s existing business. The estimate of fair value of ROCCAT’s identifiable intangible assets was determined primarily using the “income approach,” which requires a forecast of all of the expected future cash flows either through the use of the multi-period excess earnings method or the relief-from-royalty method. 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 key information underlying intangible assets related to the ROCCAT acquisition: (In thousands) Life Amount Customer relationships 7 Years $ 2,119 Tradenames 10 Years 2,686 Developed technology 7 Years 784 Total $ 5,589 For the year ended December 31, 2019, revenue related to ROCCAT products was $14.4 million. Given that the ROCCAT operations have been substantially integrated into our legacy business, the Company is unable to provide the results of operations attributable to ROCCAT going forward. The Company has not presented combined pro forma financial information of the Company and the pre-acquisition ROCCAT business because the results of operations of the acquired business are considered immaterial. No e $1.1 million fair value recorded related to the potential $3.4 million earn-outs has been fully released as of December 31, 2020. |
Fair Value Measurement
Fair Value Measurement | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | Note 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 December 31, 2021 and 2020, the Company has not elected the fair value option for any financial assets and liabilities for which such an election would have been permitted, and the only outstanding financial assets and liabilities recorded at fair value on a recurring basis were the wholly-funded warrants reported as a financial instrument obligation. The following is a summary of the carrying amounts and estimated fair values of the Company’s financial instruments at December 31, 2021 and 2020: December 31, 2021 December 31, 2020 Reported Fair Value Reported Fair Value (in thousands) Financial Assets and Liabilities: Cash and cash equivalents $ 37,720 $ 37,720 $ 46,681 $ 46,681 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 equals fair value as the stated interest rate approximates market rates currently available to the Company, which is considered a Level 2 input. |
Allowance for Sales Returns
Allowance for Sales Returns | 12 Months Ended |
Dec. 31, 2021 | |
Allowance For Sales Returns [Abstract] | |
Allowance for Sales Returns | Note The following table provides the changes in the Company’s sales return reserve, which is classified as a reduction of accounts receivable: Year ended December 31, 2021 2020 2019 in thousands Balance, beginning of period $ 11,233 $ 8,815 $ 9,212 Reserve accrual 21,506 21,193 16,866 Recoveries and deductions, net (23,742 ) (18,775 ) (17,263 ) Balance, end of period $ 8,997 $ 11,233 $ 8,815 |
Composition of Certain Financia
Composition of Certain Financial Statement Items | 12 Months Ended |
Dec. 31, 2021 | |
Condensed Consolidated Balance Sheet Components [Abstract] | |
Composition of Certain Financial Statement Items | Note Inventories Inventories consist of the following: December 31, 2021 December 31, 2020 (in thousands) Finished goods $ 101,446 $ 69,939 Raw materials 487 1,362 Total inventories $ 101,933 $ 71,301 Property and Equipment, net Property and equipment, net consists of the following: December 31, 2021 December 31, 2020 (in thousands) Machinery and equipment $ 2,255 $ 2,223 Software and software development 2,404 1,629 Furniture and fixtures 1,257 1,123 Tooling 7,855 6,548 Leasehold improvements 1,794 1,833 Demonstration units and convention booths 14,493 14,439 Total property and equipment, gross 30,058 27,795 Less: accumulated depreciation and amortization (23,103 ) (21,220 ) Total property and equipment, net $ 6,955 $ 6,575 Depreciation and amortization expense on property and equipment for the years ended December 31, 2021, 2020 and 2019 was $4.1 million, $4.4 million and $4.6 million, respectively. Other Current Liabilities Other current liabilities consist of the following: December 31, 2021 December 31, 2020 (in thousands) Accrued royalty $ 11,582 $ 5,166 Accrued freight 6,251 3,401 Accrued employee expenses 4,114 7,070 Accrued marketing 3,723 5,487 Accrued tax-related payables 3,459 5,741 Accrued expenses 8,564 9,257 Total other current liabilities $ 37,693 $ 36,122 Other non-operating expense (income), net Other non-operating expense (income), net consists of the following: Year Ended December 31, 2021 2020 2019 (in thousands) Acquisition-related settlement $ — $ (1,702 ) $ — Change in fair value of contingent consideration (1,928 ) (1,121 ) (471 ) Unrealized loss (gain) on financial instrument obligation — — (1,601 ) Other non-operating expense (income) 1,827 (934 ) (137 ) Total other non-operating expense (income),net $ (101 ) $ (3,757 ) $ (2,209 ) |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Note Acquired Intangible Assets Acquired identifiable intangible assets, and related accumulated amortization, as of December 31, 2021 and 2020 consist of: December 31, 2021 Gross Carrying Value Accumulated Amortization Net Book Value (in thousands) Customer relationships $ 8,355 $ 6,315 $ 2,040 Tradenames 3,066 730 2,336 Developed technology 1,884 440 1,444 Foreign currency (896 ) (865 ) (32 ) Total Intangible Assets $ 12,409 $ 6,620 $ 5,788 December 31, 2020 Gross Carrying Value Accumulated Amortization Net Book Value (in thousands) Customer relationships $ 7,915 $ 5,584 $ 2,331 Tradenames 2,686 425 2,261 Developed technology 784 177 607 Foreign currency (845 ) (784 ) (61 ) Total Intangible Assets $ 10,540 $ 5,402 $ 5,138 In connection with the October 2012 acquisition of TB Europe, the acquired intangible asset related to customer relationships is being amortized over an estimated useful life of thirteen years 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. Refer to Note 2, “Acquisitions” for additional information related to ROCCAT’s and Neat Microphone’s identifiable intangible assets. Amortization expense related to definite lived intangible assets was $1.3 million, $0.9 million and $0.6 million for the years ended December 31, 2021, 2020 and 2019, respectively. As of December 31, 2021, estimated annual amortization expense related to definite lived intangible assets in future periods is as follows: (in thousands) 2022 $ 1,281 2023 1,041 2024 1,008 2025 889 2026 637 Thereafter 964 Total $ 5,820 All goodwill is attributable to the gaming accessories reporting unit. Changes in the carrying values of goodwill for twelve months ended December 31, 2021 are as follows: (in thousands) Balance as of January 1, 2021 $ 8,178 NEAT Microphones acquisition 2,508 Balance as of December 31, 2021 $ 10,686 |
Credit Facilities and Long-Term
Credit Facilities and Long-Term Debt | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Credit Facilities and Long-Term Debt | Note The Company had no outstanding balance related to its revolving credit facility as of December 31, 2021 and December 31, 2020. Total interest expense, inclusive of amortization of deferred financing costs, on long-term debt obligations was $0.4 million, $0.5 million and $0.9 million for the years ended December 31, 2021, 2020 and 2019, respectively. Amortization of deferred financing costs was $0.2 million for each of the years ended December 31, 2021, 2020 and 2019, respectively. In connection with the Company’s amendment and restatement of its Credit Facility (as noted below), the Company incurred $0.6 million of financing costs that have been deferred, added to the then remaining unamortized financing costs and will be recognized over the term of the respective agreement. Revolving Credit Facility On December 17, 2018, Turtle Beach and certain of its subsidiaries entered into an amended and restated loan, guaranty, and security agreement (“Credit Facility”) with Bank of America, N.A. (“Bank of America”), as Agent, Sole Lead Arranger and Sole Bookrunner, which replaced the then existing asset-based revolving loan agreement. The Credit Facility, which expires on March 5, 2024, provides for a line of credit of up to $80 million inclusive of a sub-facility limit of $12 million for TB Europe, a wholly-owned subsidiary of Turtle Beach. In addition, the Credit Facility provides for a $40 million accordion feature and the ability to increase the borrowing base with a FILO Loan of up to $6.8 million. On May 31, 2019, the Company amended the Credit Facility to provide for, amongst other items, (i) the addition of TBC Holding Company LLC, a wholly-owned subsidiary of VTB, as an obligor and (ii) the ability to make investments in TB Germany GmbH, a wholly-owned subsidiary of TB Europe, of up to $4 million in connection with the acquisition of ROCCAT and up to an additional $4 million annually. 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 either a rate published by Bank of America or the LIBOR rate, plus in each case, an applicable margin, which is between 0.50% to 1.25% for base rate loans, 1.25% to 2.00% for U.S. LIBOR loans and U.K. loans and 2.00% and 2.75% for the FILO Loan. In addition, Turtle Beach is required to pay a commitment fee on the unused revolving loan commitment at a rate ranging from 0.25% to 0.50%, and letter of credit fees and agent fees. As of December 31, 2021, interest rates for outstanding borrowings were 3.75% for base rate loans and 3.00% for LIBOR rate loans. The Company is subject to quarterly financial covenant testing if certain availability thresholds are not met or certain other events occur (as defined in the Credit Facility). 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 the Company's ability to take certain actions, including its 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 December 31, 2021, the Company was in compliance with all the financial covenants under the Credit Facility, as amended, and excess borrowing availability was approximately $64.6 million. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note The provision (benefit) for income taxes consists of the following: Year Ended December 31, 2021 2020 2019 (in thousands) Federal: Current $ (511 ) $ 8,518 $ 230 Deferred 701 714 (5,910 ) Total Federal 190 9,232 (5,680 ) State and Local: Current 769 3,476 114 Deferred 346 (221 ) (1,529 ) Total State and Local 1,115 3,255 (1,415 ) Foreign Current 1,051 1,249 897 Deferred 72 (25 ) (39 ) Total Foreign 1,123 1,224 858 Total $ 2,428 $ 13,711 $ (6,237 ) The reconciliation between the provision (benefit) for income taxes and the expected provision (benefit) for income taxes at the U.S. federal statutory rate is as follows: Year Ended December 31, 2021 2020 2019 (in thousands) U.S. Operations $ 15,146 $ 46,970 $ 8,030 Foreign Operations 5,003 5,487 3,677 Income before income taxes 20,149 52,457 11,707 Federal statutory rate 21 % 21 % 21 % Provision for income taxes at federal statutory rate 4,231 11,016 2,458 State taxes, net of federal benefit 812 1,434 989 Foreign tax rate differential (60 ) 4 (33 ) Change in valuation allowance — (2 ) (10,112 ) Unrealized loss (gain) on financial instrument obligation — — (336 ) Excess tax benefit recognized (2,159 ) (413 ) (44 ) Foreign Derived Intangible Income (a) (976 ) — — Foreign tax credit (770 ) (568 ) — R&D Credit (b) (878 ) — — Global intangible low taxed income 530 586 637 Prior year adjustment — 16 429 Change in unrecognized tax benefits 673 969 (715 ) Section 162(m) 634 414 402 Other 391 255 88 Provision (benefit) for income taxes $ 2,428 $ 13,711 $ (6,237 ) (a) The Company completed an analysis of its export sales during 2021. The FDII benefit is for the 2020 and 2021 tax years. (b) The Company completed a Research and Development credit study during 2021. The R&D credit benefit is for the 2018 through 2021 tax years. The tax effects of significant items comprising the Company’s deferred tax assets (liabilities) are as follows: December 31, 2021 December 31, 2020 (in thousands) Allowance for doubtful accounts $ 4 $ 4 Inventories 1,559 1,116 Employee benefits 1,980 2,506 Net operating loss 1,271 1,288 Sales reserves 1,520 2,428 Unrecognized tax benefits 575 621 Depreciation and amortization (250 ) (297 ) Intangible assets (109 ) (117 ) Other 40 160 6,590 7,709 Valuation allowance (891 ) (891 ) Net deferred tax assets (liabilities) $ 5,699 $ 6,818 At December 31, 2021, the Company has no balance of federal net operating loss carryforwards and $18.3 million of state net operating loss carryforwards, which will begin to expire in 2029. In October 2018, as a result of certain trading activity in the Company's common stock, the change of ownership provisions of Internal Revenue Code Section 382 (“Section 382”) were triggered. Based on the Section 382 limitation, the Company was not able to utilize its net operating losses to fully offset its taxable income in 2018. The Company believes, based on the estimated Section 382 limitation and the net operating loss carryforward period, that the pre ownership change net operating losses can be fully utilized in future years if there is sufficient taxable income in such carryforward period. The realization of deferred tax assets depends on the generation of future taxable income during the periods in which those temporary differences are deductible. During 2015, as a result of cumulative losses in recent years primarily due to incremental costs associated with the console transition, acquisition costs and initial investments in the HyperSound business, the Company concluded that a full valuation allowance was required on its net domestic deferred tax assets. During the fourth quarter of 2019, the Company concluded that it was more likely than not that the deferred tax assets would be realized. This conclusion was based on the recent profitability in 2019 and 2018, including the previous winddown of a business that was the cause of significant losses in previous years. For the year ended December 31, 2019, the Company reported a change in the valuation allowance for deferred tax assets of $10.1 million. The Company continues to maintain a valuation allowance on certain state net operating losses as it is not more likely than not that the losses in those specific jurisdictions will be realized. A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows: December 31, 2021 December 31, 2020 (in thousands) Gross unrecognized tax benefit, beginning of period $ 3,090 $ 2,023 Additions based on tax positions related to the current year 573 1,249 Settlements related to tax positions in a prior period — (36 ) Decreases based on tax positions in a prior period (248 ) (146 ) Gross unrecognized tax benefit, end of period $ 3,415 $ 3,090 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. The Company settled uncertain tax positions in certain jurisdictions, of approximately $36 thousand for year ended December 31, 2020; none were settled for the year ended December 31, 2021. To the extent these unrecognized tax benefits are ultimately recognized, approximately $3.4 million will impact the Company’s effective tax rate in future periods. The Company is considering filing for relief provisions in certain jurisdictions and based on such anticipated filings, it is reasonably possible that amounts of unrecognized tax benefits could decrease by $2.3 million within the next twelve months. Interest and penalties associated with income tax matters are included in the provision for income taxes. As of December 31, 2021, the Company had uncertain tax positions of $3.8 million, inclusive of $1.1 million of interest and penalties. The Company is not currently under examination by certain state and local taxing jurisdictions. Further, at any given time, multiple tax years may be subject to examination by various taxing authorities. The recorded amounts of income tax are subject to adjustment upon examination, changes in interpretation and changes in judgment utilized in determining estimates. The Company files U.S., state, and foreign income tax returns in jurisdictions with various statutes of limitations. Below is a summary of the filing jurisdictions and open tax years: Open Years U.S. Federal 2018 - 2020 U.S. State and Local 2017 - 2020 Non-U.S. 2018 - 2020 |
Net Income Per Share
Net Income Per Share | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Note The following table sets forth the computation of basic and diluted net income (loss) per share of common stock attributable to common stockholders: Year Ended December 31, 2021 2020 2019 (in thousands, except per-share data) Net income $ 17,721 $ 38,746 $ 17,944 Unrealized gain on financial instrument obligation — — (1,601 ) Net income - diluted $ 17,721 $ 38,746 $ 16,343 Weighted average common shares outstanding — Basic 15,915 14,801 14,483 Plus incremental shares from assumed conversions: Dilutive effect of restricted stock 438 235 19 Dilutive effect of stock options 1,348 917 432 Dilutive effect of warrants 550 412 754 Weighted average common shares outstanding — Diluted 18,251 16,365 15,688 Net income per share: Basic $ 1.11 $ 2.62 $ 1.24 Diluted $ 0.97 $ 2.37 $ 1.04 Incremental shares from stock options and restricted stock awards are computed by 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, unrecognized compensation expense for outstanding awards and the estimated tax benefit of the assumed exercises. Year Ended December 31, 2021 2020 2019 (in thousands) Stock options 721 813 480 Unvested restricted stock awards 294 136 194 Total 1,015 949 674 |
Equity and Stock-Based Compensa
Equity and Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2021 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Equity and Stock-Based Compensation | Note Stock Repurchase Activity On April 9, 2019, the Board of Directors authorized a stock repurchase program to acquire up to $15.0 million of its common stock. Any repurchases under the program will be made from time to time on the open market at prevailing market prices. On April 1, 2021, the Company’s Board of Directors approved an extension and expansion of this repurchase program to acquire up to $25 million of its common shares, expiring April 9, 2023. As of December 31, 2021 , the Company has repurchased 0.5 million shares of its common stock . Stock-Based Compensation On October 30, 2013, the Board of Directors adopted, and on December 27, 2013, the stockholders approved, the 2013 Stock-Based Incentive Compensation Plan (the “2013 Plan”), that became effective upon consummation of the Merger on January 15, 2014 and was subsequently amended at our 201 9 Annual Meeting and at our 2021 Annual Meeting . The Compa n y’s stock-based compensation program is a broad-based program designed to attract and retain employees while also aligning employees’ interests with the interests of our shareholders. In addition, members of the Board of Directors participate in the stock-based compensation program in connection with their service on the board. Stock option awards outstanding under the 2013 Plan are time-based and granted at exercise prices which are equal to the market value of the Company’s common stock on the grant date and expire no later than ten years from the date of grant, but only to the extent they have vested. The options generally vest as specified in the option agreements subject, in some instances, to acceleration in certain circumstances. The restrictions on restricted stock generally lapse over a three-year The following table presents the stock activity and the total number of shares available for grant as of December 31, 2021: (in thousands) Balance at December 31, 2020 501 Plan Amendment 975 Options granted (12 ) Options cancelled 29 Restricted stock granted (374 ) Forfeited/ Expired restricted stock added back 13 Performance-Based restricted stock granted (134 ) Balance at December 31, 2021 998 Total estimated stock-based compensation expense for employees and non-employees, related to all of the Company's stock-based awards, was comprised as follows: Year ended December 31, 2021 2020 2019 (in thousands) Cost of revenue $ 343 $ 927 $ 150 Selling and marketing 1,746 1,148 691 Research and development 1,379 664 417 General and administrative 4,188 2,810 2,300 Total stock-based compensation $ 7,656 $ 5,549 $ 3,558 Forfeitures on option grants are estimated at 10% based on evaluation of historical and expected future turnover for non-executives and 0% for executives. Stock-based compensation expense was recorded net of estimated forfeitures, such that expense was recorded only for those stock-based awards that are 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). In 2017, due to changes in the reporting of stock compensation, the Company’s previously unrecognized excess tax benefit related to the exercise of nonqualified stock options totaling $2.1 million was recognized as a deferred tax asset. The associated tax benefit recognized in the Consolidated Statements of Operations for the fiscal years ended December 31, 2021 and 2020 was approximately $2.2 million and $0.4 million, respectively. Stock Option Activity Options Outstanding Number of Shares Underlying Outstanding Options Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term Aggregate Intrinsic Value (in years) Outstanding at December 31, 2020 2,383,427 $ 7.85 7.78 $ 33,064,942 Granted 11,550 27.20 Exercised (626,306 ) 8.45 Forfeited (29,431 ) 10.77 Outstanding at December 31, 2021 1,739,240 $ 7.72 7.02 $ 25,542,823 Vested and expected to vest at December 31, 2021 1,710,829 $ 7.77 7.00 $ 25,177,406 Exercisable at December 31, 2021 1,008,002 $ 6.87 6.34 $ 15,778,518 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 option exercises was $13.6 million and $7.4 million for the years ended December 31, 2021 and 2020, respectively. As of December 31, 2021, total unrecognized compensation cost related to non-vested stock options granted to employees was $3.9 million, which is expected to be recognized over a remaining weighted average vesting period of 2.0 years. Determination of Fair Value Option valuation models require the input of highly subjective assumptions, including expected stock price volatility. The Black-Scholes option pricing model was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable. The fair value of options granted under the 2013 Plan was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions: Expected term (in years) 6.1 Risk-free interest rate 0.5%- 1.1% Expected volatility 59.6%- 59.8% Dividend rate 0% Each of these inputs is subjective and generally requires significant judgment to determine. The risk-free rate is based on a zero-coupon U.S. Treasury rate in effect at the time of grant with maturity dates that coincide with the expected life of the options. The expected life of the options is based on a simplified weighted average taking into account the vesting conditions and contractual life of the award. Since the Company has a limited trading history for its common stock, the expected volatility was derived from the historical stock volatilities of several unrelated public companies within the Company’s industry that are considered to be comparable to the Company’s business over a period equivalent to the expected term of the stock option grants. The weighted average grant date fair value of options granted during the three years ended December 31, 2021 was $14.89, $3.82, and $4.71, respectively. The total estimated fair value of employee options vested during the three years ended December 31, 2021 was $2.6 million, $1.7 million and $1.0 million, respectively. Restricted Stock Activity Shares Weighted Average Grant Date Fair Value Per Share Nonvested restricted stock at December 31, 2020 677,590 $ 9.71 Granted 374,445 26.03 Vested (250,483 ) 11.51 Shares forfeited (13,098 ) 13.90 Nonvested restricted stock at December 31, 2021 788,454 $ 16.81 As of December 31, 2021 total unrecognized compensation cost related to the nonvested restricted stock awards granted was $10.4 million, which is expected to be recognized over a remaining weighted average vesting period of 2.4 years. Performance-Based Restricted Share Units As of December 31, 2021, the Company had 134,000 performance-based restricted share units outstanding. The vesting of performance-based restricted share units is determined over a three-year Phantom Equity Activity In November 2011, VTBH adopted a 2011 Phantom Equity Appreciation Plan (“the Appreciation Plan”) that covers certain employees, consultants, and directors of VTBH (“Participants”) who are entitled to phantom units, as applicable, pursuant to the provisions of their respective award agreements. The Appreciation Plan is shareholder-approved, which permits the granting of phantom units to Participants of up to 1,500,000 units. These units are not exercisable or convertible into shares of common stock, but give the holder a right to receive a cash bonus equal to the appreciation in value between the exercise price and value of common stock at the time of a change in control event as defined in the plan. As of December 31, 2021 and 2020, 178,586 phantom units at a weighted-average exercise price of $3.72 have been granted and are outstanding. Because these phantom units are not exercisable or convertible into common shares, the share amounts, and exercise prices were not subject to the exchange ratio provided by the Merger agreement. As of December 31, 2021, compensation expense related to the Appreciation Plan units remained unrecognized because a change in control of VTB, as defined in the plan, had not occurred, and is not anticipated by the Company. In July 2015, the Appreciation Plan was terminated as to new grants, but vested phantom units remain in place. |
Stockholder's Equity
Stockholder's Equity | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Stockholder's Equity | Note 11. Stockholders’ Equity At-the-Market Common Stock Issuance On August 7, 2020, the Company entered into an ATM Equity Offering Sales Agreement (the “Sales Agreement”) with BofA Securities, Inc. (the “Sales Agent”). Pursuant to the terms of the Sales Agreement, the Company may sell from time to time through the Sales Agent shares of the Company’s common stock, par value $0.001 per share, having an aggregate offering price of up to $30 million. The Company intends to use the net proceeds from the offering, after deducting the Sales Agent’s commissions and the Company’s offering expenses, to support its strategic growth plans, as well as for general corporate purposes. During the year ended December 31, 2020, the Company sold a total of 237,813 shares of its common stock under the Sales Agreement in the open market at an average gross selling price of $18.39 per share for net proceeds of $4.4 million. During the year ended December 31, 2021, the Company had no sales of its common stock under the Sales Agreement. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment Information | Note The company operates in a single who reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance The following table represents total net revenue based on where customers are physically located: Year Ended December 31, 2021 2020 2019 (in thousands) North America $ 241,787 $ 262,170 $ 166,748 United Kingdom 32,745 38,251 25,671 Europe 69,059 45,629 34,707 Other 22,763 14,043 7,537 Total net revenues $ 366,354 $ 360,093 $ 234,663 The following table represents property and equipment, net based on physical location: Year Ended December 31, 2021 2020 (in thousands) United States $ 6,053 $ 5,645 International 902 930 Total $ 6,955 $ 6,575 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 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, 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 CEO, 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 defendants, including the Company, prevailed on all counts with final judgment entered in their favor on September 3, 2021. Plaintiff has filed a notice of their intent to appeal the judgment. Defendants have pending motions to obtain their costs and fees in successfully defending against the claims, which were heard in December 2021. Commercial Dispute : On July 20, 2016, BigBen Interactive S.A. (“BigBen”) filed a statement of claim against VTB before the Regional Court of Berlin, Germany. The statement of claim alleged that VTB’s termination of a distribution agreement by and between BigBen and VTB breached the terms thereof and was invalid, and that BigBen was entitled to damages as a result. On September 30, 2020, the Company and BigBen mutually agreed to resolve this claim. 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. Settlement of Disputes : On May 5, 2020, Jöllenbeck GmbH and First Wise Media GmbH, two of our distributors and affiliates of the sellers of the ROCCAT business, filed for insolvency in Germany. On June 30, 2020, the Company entered into a Settlement Agreement with those companies and the sellers of the ROCCAT business pursuant to which, among other things, the Company received a payment for certain outstanding claims and accounts receivable. On July 1, 2020, the insolvency proceedings for the two companies formally commenced. The Company has filed a claim in those proceedings for approximately €130,000 with respect to the remaining outstanding accounts receivable. Intellectual Property dispute: On November 24, 2020, ABP Technology Limited (ABP) issued a claim for trademark infringement in the High Court of England and Wales against Voyetra Turtle Beach, Inc. (“VTB”) and Turtle Beach Europe Limited (“TBEU”) relating to the use by VTB and TBEU of the sign STEALTH on and in relation to gaming headsets in the UK. VTB and TBEU filed and served a Defense to the claim on February 2, 2021. On March 31, 2021, ABP filed an application for summary judgement. The summary judgment application was heard by the Court in November 2021 and was dismissed. VTB and TBEU were granted permission by the Court to amend their Defense to include a counterclaim against ABP for trademark infringement. In January 2022, ABP was granted leave to appeal to the Court of Appeal in respect of the decision to allow VTB and TBEU to amend their Defense. The appeal is due to be heard before April 13, 2022. The next stage in the main proceedings will be a Case Management Conference (date to be set) at which the Court will give directions for each stage to trial. The trial is expected to be set for late 2022/early 2023. The Company will continue to vigorously defend itself in the foregoing 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 December 31, 2021 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 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 warranties, which are included in other current liabilities: Year ended December 31, 2021 2020 2019 (in thousands) Warranty, beginning of period $ 1,039 $ 742 $ 668 Warranty costs accrued 674 1,336 816 Settlements of warranty claims (857 ) (1,039 ) (742 ) Warranty, end of period $ 856 $ 1,039 $ 742 Operating Leases – Right of Use Assets The Company adopted ASU 2016-02, Leases The components of the right-of-use assets and lease liabilities were as follows: Balance Sheet Classification December 31, 2021 (in thousands) Right-of-use assets Other assets $ 7,412 Lease liability obligations, current Other current liabilities $ 765 Lease liability obligations, noncurrent Other liabilities 6,994 Total lease liability obligations $ 7,759 Weighted-average remaining lease term (in years) 6.0 Weighted-average discount rate 3.75 % During the year ended December 31, 2021, the Company recognized approximately $1.4 million of lease costs in operating expenses and approximately $1.1 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 December 31, 2021: (in thousands) 2022 $ 1,113 2023 1,143 2024 1,164 2025 1,148 2026 1,047 Thereafter 3,436 Total minimum payments 9,051 Less: Imputed interest (1,292 ) Total $ 7,759 |
Selected Quarterly Financial Da
Selected Quarterly Financial Data - Unaudited | 12 Months Ended |
Dec. 31, 2021 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Data - Unaudited | Note Fiscal 2021 Quarter First Second Third Fourth (in thousands, except per share data) Net Revenue $ 93,053 $ 78,564 $ 85,307 $ 109,430 Gross Margin 34,855 28,710 29,273 35,545 Net Income (Loss) 8,838 1,721 2,623 4,539 Earnings (Loss) Per Share Basic $ 0.57 $ 0.11 $ 0.16 $ 0.28 Diluted $ 0.49 $ 0.09 $ 0.14 $ 0.25 Fiscal 2020 Quarter First Second Third Fourth (in thousands, except per share data) Net Revenue $ 35,007 $ 79,680 $ 112,494 $ 132,912 Gross Margin 10,785 29,227 46,136 47,640 Net Income (Loss) (3,555 ) 8,204 17,794 16,303 Earnings (Loss) Per Share Basic $ (0.25 ) $ 0.56 $ 1.20 $ 1.07 Diluted $ (0.25 ) $ 0.51 $ 1.04 $ 0.93 |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2021 | |
Valuation And Qualifying Accounts [Abstract] | |
Schedule II - Valuation and Qualifying Accounts | Turtle Beach Corporation Schedule II - Valuation and Qualifying Accounts Years ended December 31, 2021, 2020 and 2019 Description Balance - Begin Additions Deductions / Other Balance - End (in thousands) Year Ended December 31, 2021: Allowance for sales returns $ 11,233 $ 21,506 $ (23,742 ) $ 8,997 Allowance for cash discounts 18,649 15,794 $ (8,814 ) 25,629 Allowance for doubtful accounts 15 468 $ (381 ) 102 $ 34,728 Year Ended December 31, 2020: Allowance for sales returns $ 8,815 $ 21,193 $ (18,775 ) $ 11,233 Allowance for cash discounts 15,979 21,847 $ (19,177 ) 18,649 Allowance for doubtful accounts 146 0 $ (131 ) 15 $ 29,897 Year Ended December 31, 2019: Allowance for sales returns $ 9,212 $ 16,866 $ (17,263 ) $ 8,815 Allowance for cash discounts 13,892 18,935 (16,848 ) 15,979 Allowance for doubtful accounts 167 6 (27 ) 146 $ 24,940 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying 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. |
Use of Estimates | Uses 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, determination of fair value of stock-based awards, stock warrants and share-based compensation. 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. The novel coronavirus (“COVID-19”) pandemic, and its variant strains, has disrupted worldwide economic markets and the extent to which COVID-19 continues to affect the Company’s business, results of operations and financial condition will depend on future developments, which are highly uncertain and difficult to predict. During 2020, the Company experienced a significant increase in demand for its products due to the COVID-19-related stay-at-home orders, which resulted in increased revenue. Going forward, the effects of the global pandemic and the measures being taken in response are uncertain and difficult to predict. Nonetheless, the Company continues to actively monitor and assess the impact of the pandemic on its business, operations, and financial condition. |
Revenue Recognition | Revenue Recognition and Sales Return Reserve Net revenue consists primarily of revenue from the sale of gaming headsets and accessories to wholesalers, retailers and to a lesser extent, on-line customers. These products function on a standalone basis (in connection with a readily available gaming console, personal computer, or stereo) and are not sold with additional services or rights to future goods or services. Revenue is recorded for a contract through the following steps: (i) identifying the contract with the customer; (ii) identifying the performance obligations in the contract; (iii) determining the transaction price; (iv) allocating the transaction price to the performance obligations; and (v) recognizing revenue when or as each performance obligation is satisfied. Each contract at inception is evaluated to determine whether the contract should be accounted for as having one or more performance obligations. The Company's business activities were determined to be a single performance obligation with revenue recognized when obligations under the terms of a contract with its customer are satisfied; generally, this occurs at a point in time when the risk and title to the product transfers to the customer. The Company's standard terms of delivery are included in its contracts of sale, order confirmation documents, and invoices. The Company excludes sales taxes collected from customers from “Net Revenue” in its Consolidated Statements of Operations. |
Sales Return Reserve | Certain customers may receive cash-based incentives (including cash discounts, quantity rebates, and price concessions), which are accounted for as variable consideration. Provisions for sales returns are recognized in the period the sale is recorded based upon the Company's prior experience and current trends. These revenue reductions are established by the Company based upon management’s best estimates at the time of sale following the historical trend, adjusted to reflect known changes in the factors that impact such reserves and allowances, and the terms of agreements with customers. As of December 31, 2021 and 2020, the Company had an allowance for cash-based incentives of $25.6 million and $18.6 million, respectively, and an allowance for sales returns of $9.0 million and $11.2 million, respectively, and does not expect to have significant changes in its estimates for variable considerations. |
Cost of Revenue and Operating Expenses | Cost of Revenue and Operating Expenses The following table illustrates the primary costs classified in each major expense category: Cost of Revenue Operating Expenses Cost to manufacture products; Payroll, bonus, and benefit costs; Freight costs associated with moving product from suppliers to distribution centers and to customers; Costs incurred in the research and development of new products and enhancements to existing products; Costs associated with the movement of merchandise through customs; Depreciation related to demonstration units; Costs associated with material handling and warehousing; Legal, finance, information systems and other corporate overhead costs; and Global supply chain personnel costs; and Sales commissions, advertising, and marketing costs. Product royalty costs. |
Product Warranty Obligations | Product Warranty Obligations The Company provides for product warranties in accordance with the contract terms given to various customers by accruing estimated warranty costs at the time of revenue recognition. Warranties are generally fulfilled by replacing defective products with new products. |
Marketing Costs | Marketing Costs Costs associated with the production of advertising, such as print and other costs, as well as costs associated with communicating advertising that has been produced, such as magazine ads, are expensed when the advertising first appears in public. Advertising costs were approximately $9.7 million, $8.5 million and $7.5 million for the years ended December 31, 2021, 2020 and 2019, respectively. |
Cooperative Advertising | The Company also incurs co-operative advertising costs that represent reimbursements to customers for shared marketing expenses for sale of its products. These reimbursements are recorded as reductions of net revenue based on a percentage of sales for all period presented. Co-operative advertising reimbursements were approximately $7.6 million, $6.8 million and $5.7 million for the years ended December 31, 2021, 2020 and 2019, respectively. |
Deferred Financing Costs | Deferred Financing Costs Deferred financing costs represent costs incurred in conjunction with the Company’s debt financing activities and are capitalized and amortized over the life of the related financing arrangements. If the debt is retired early, the related unamortized deferred financing costs are written off in the period the debt is retired as part of the net carrying value of the debt, and any gains or losses are recorded in the statement of operations under the caption “Other non-operating expense (income), net.” |
Stock-Based Compensation | Stock-Based Compensation Compensation costs related to stock options, restricted stock grants and performance-based restricted share units are calculated based on the fair value of the stock-based awards on the date of grant, net of estimated forfeitures. The grant date fair value of awards is determined using the Black-Scholes option-pricing model and the related stock-based compensation is recognized on a straight-line basis over the period in which an employee is required to provide service in exchange for the award, which is generally four years. The Company estimates its forfeiture rate based on an analysis of actual forfeitures and will continue to evaluate the adequacy of the forfeiture rate based on actual forfeiture experience, analysis of employee turnover behavior, and other factors. The impact from any forfeiture rate adjustment would be recognized in the period of adjustment and if the actual number of future forfeitures differs from estimates, the Company might be required to record adjustments to stock-based compensation expense. For stock-based awards issued to non-employees, including consultants, compensation expense is based on the fair value of the |
Exit and Disposal Costs | Exit and Disposal Costs Management-approved restructuring activities are periodically initiated to achieve cost savings through reduced operational redundancies and to position the Company strategically in the market in response to prevailing economic conditions and associated customer demand. Costs associated with restructuring actions can include severance, infrastructure charges to vacate facilities or consolidate operations, contract termination costs and other related charges. For involuntary separation plans, a liability is recognized when it is probable and reasonably estimable. For one-time termination benefits, such as additional severance pay or benefit payouts, and other exit costs, such as lease termination costs, the liability is measured and recognized initially at fair value in the period in which the liability is incurred, with subsequent changes to the liability recognized as adjustments in the period of change. |
Net Earnings (Loss) per Common Share | Net Earnings (Loss) per Common Share Basic earnings (loss) per share is calculated by dividing net income (loss) associated with common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share assumes the issuance of additional shares of common stock by the Company upon exercise of all outstanding stock options, stock warrants and contingently issuable securities if the effect is dilutive, in accordance with the treasury stock method. |
Cash Equivalents | Cash Equivalents Cash and short-term highly liquid investments with original maturity dates of three months or less at time of purchase and no redemption restrictions are considered cash and cash equivalents. |
Inventories | Inventories Inventories consist primarily of finished goods and related component parts and are stated at the lower of weighted average cost or market value (estimated net realizable value) using the first in, first out (“FIFO”) method. The Company maintains an inventory allowance for returned goods, slow-moving and unused inventories based on the historical trend and estimates. Inventory write-downs, once established, are not reversed as they establish a new cost basis for the inventory. Inventory write-downs are included as a component of cost of revenues in the accompanying consolidated statements of operations. |
Property and Equipment, net | Property and Equipment, net Property and equipment are presented at cost less accumulated depreciation and amortization. Repairs and maintenance expenditures are expensed as incurred. Depreciation and amortization are computed on a straight-line basis over the following estimated useful lives: Estimated Life Machinery and equipment 3 years Software and software development 2-3 years ERP Software 5 years Furniture and fixtures 5 years Tooling 2 years Leasehold improvements Term of lease or economic life of asset, if shorter Demonstration units and convention booths 2 years Demonstration headsets 1 year |
Valuation of Long-Lived and Intangible Assets and Goodwill | Valuation of Long-Lived and Intangible Assets and Goodwill At acquisition, we estimate and record the fair value of purchased intangible assets, which primarily consists of in-process research and development, customer relationships, trademarks and trade names, and patents. The fair values of these intangible assets are estimated based on the Company’s assessment. Goodwill is the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations. Goodwill and certain other intangible assets having indefinite lives are not amortized to earnings, but instead are subject to periodic testing for impairment. Intangible assets determined to have definite lives are amortized over their remaining useful lives. Long-lived and intangible assets are assessed for potential impairment whenever events or changes in circumstances indicate that full recoverability of net asset balances through future cash flows is in question. Goodwill and indefinite-lived intangible assets are assessed at least annually, but also whenever events or changes in circumstances indicate the carrying values may not be recoverable. Factors that could trigger an impairment review include (a) significant underperformance relative to historical or projected future operating results; (b) significant changes in the manner of use of the acquired assets or the strategy for the Company’s overall business; (c) significant negative industry or economic trends; (d) significant decline in the Company’s stock price for a sustained period; and (e) a decline in the Company’s market capitalization below net book value. Assessment for possible impairment is based on the Company’s ability to recover the carrying value of the long-lived asset from the expected future pre-tax cash flows. The expected future pre-tax cash flows are estimated based on historical experience, internal knowledge, and market data. Estimates of future cash flows require the Company to make assumptions and to apply judgment, including forecasting future sales and expenses and estimating the useful lives of assets. If the expected future cash flows related to the long-lived assets are less than the assets’ carrying value, an impairment charge is recognized for the difference between estimated fair value and carrying value. When performing the Company’s evaluation of goodwill for impairment, if it concludes qualitatively that it is not more likely than not that the fair value of the reporting unit is less than its carrying amount, the Company performs its annual goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. If the carrying amount exceeds the fair value a goodwill impairment charge would be recorded for the amount by which the reporting unit’s carrying amount exceeds its fair value. In addition, identifiable intangible assets having indefinite lives are reviewed for impairment on an annual basis using a methodology consistent with that used to evaluate goodwill. There are inherent assumptions and estimates used in developing future cash flows requiring management judgment including projecting revenues, interest rates and the cost of capital. Many of the factors used in assessing fair value are outside the Company’s control and it is reasonably likely that assumptions and estimates will change in future periods. These changes can result in future impairments. In the event the Company’s planning assumptions were modified resulting in impairment to our assets, the associated expense would be included in the Consolidated Statements of Operations, which could materially impact its business, financial condition, and results of operations. The Company conducted its annual impairment assessment on November 1, 2021, taking a qualitative evaluation approach to determine if there were any adverse market factors or changes in circumstances that would indicate that the carrying value of goodwill as determined in connection with the current year acquisition may not be recoverable. The Company’s qualitative assessment included an analysis of business changes, economic outlook, financial trends and forecasts, and events or circumstances that could unfavorably impact the key assumptions. Based on this review, management determined that no events or changes in circumstances indicated that the carrying value may not be recoverable and further consideration of potential goodwill impairment was not considered necessary. |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized based on the differences between the financial statement carrying value of existing assets and liabilities and their respective tax bases based on enacted tax laws and statutory tax rates applicable to the periods in which the Company expects the temporary differences to reverse. The Company had elected to record a “deferred charge” for basis differences relating to intra-entity profits as recognition as a deferred tax asset is prohibited. A valuation allowance is established for deferred tax assets when management anticipates that it is more likely than not that all, or a portion, of these assets would not be realized. In determining whether a valuation allowance is warranted, all positive and negative evidence and all sources of taxable income such as prior earnings history, expected future earnings, carryback and carryforward periods and tax strategies are considered to estimate if sufficient future taxable income will be generated to realize the deferred tax asset. The assessment of the adequacy of a valuation allowance is based on estimates of taxable income by jurisdiction and the period over which deferred tax assets will be recoverable. In the event that actual results differ from these estimates, or these estimates are adjusted in future periods for current trends or expected changes in assumptions, the Company may need to modify the level of valuation allowance which could materially impact our business, financial condition, and results of operations. The tax effects of uncertain tax positions taken or expected to be taken in income tax returns are recognized only if they are “more likely-than-not” to be sustained on examination by the taxing authorities based on the technical merits as of the reporting date. The tax benefits recognized in the financial statements from such positions are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. The Company recognizes estimated accrued interest and penalties related to uncertain tax positions in income tax expense. The Company and its domestic subsidiaries file a consolidated federal income tax return, while the Company’s foreign subsidiary files in its respective local jurisdictions. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company determines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company uses a hierarchical structure to prioritize the inputs used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1), then to quoted market prices for similar assets or liabilities in active or inactive markets (Level 2) and gives the lowest priority to unobservable inputs (Level 3). Financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, revolving line of credit, long-term debt and warrants reported as a financial instrument obligation. Cash equivalents are stated at amortized cost, which approximated 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 revolving line of credit is stated at the carrying value as the stated interest rate approximates market rates currently available to the Company, which are considered Level 2 inputs. The Company did not have any non-financial assets or non-financial liabilities recognized at fair value on a recurring basis at December 31, 2021 and 2020. |
Foreign Currency Translation | Foreign Currency Translation Balance sheet accounts of the Company’s foreign subsidiaries are translated at the exchange rate in effect at the end of each period. Statement of operations accounts are translated using the weighted average of the prevailing exchange rates during each period. Gains or losses resulting from foreign currency transactions are included in the Company’s Consolidated Statements of Operations under the caption “Other non-operating expense (income), net” whereas translation adjustments are reflected in the Consolidated Statements of Comprehensive Income (Loss) under the caption “Foreign currency translation adjustment.” |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of investments in cash, cash equivalents and accounts receivables. The Company is exposed to credit risk and liquidity risk in the event of default by the financial institutions or issuers of investments in excess of FDIC insured limits. The Company performs periodic evaluations of the relative credit standing of these financial institutions and limits the amount of credit exposure with any institution. Accounts receivable are unsecured and represent amounts due based on contractual obligations of customers. Our five largest individual customers accounted for approximately 66% of our gross sales in 2021, 67% of our gross sales in 2020, and 66% Concentrations of credit risk with respect to accounts receivable are mitigated by performing ongoing credit evaluations of customers to assess the probability of collection based on a number of factors, including past transaction experience with the customer, evaluation of their credit history, limiting the credit extended, and review of the invoicing terms of the contract. In addition, the Company has credit insurance in place through a third-party insurer against defaults by certain other domestic and international customers, subject to policy limits. The Company generally does not require customers to provide collateral to support accounts receivable. The Company has recorded an allowance for doubtful accounts for those receivables that were determined not to be collectible. Foreign cash balances at December 31, 2021 and 2020 were $10.2 million and $5.9 million, respectively. |
Segment Information | Segment Information The company operates in a single who reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases $3.3 million. In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments-Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments," amending the accounting for the impairment of financial instruments, including trade receivables. Under previous guidance, credit losses were recognized when the applicable losses had a probable likelihood of occurring and this assessment was based on past events and current conditions. The amended guidance eliminates the “probable” threshold and requires an entity to use a broader range of information, including forecast information when estimating expected credit losses. Generally, this should result in a more timely recognition of credit losses. The requirements of the amended guidance should be applied using a modified retrospective approach except for debt securities, which require a prospective transition approach. We adopted this guidance as of January 1, 2020. The adoption of this guidance did not have a material impact on our financial condition and results of operations. In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (ASU 2020-04).” In 2017, the United Kingdom’s Financial Conduct Authority announced that it intends to stop persuading or compelling banks to submit the London Interbank Offered Rate ( “ LIBOR ” ), a benchmark interest rate referenced in a variety of agreements, after 2021. In March 2021, the United Kingdom's Financial Conduct Authority confirmed that U.S. Dollar LIBOR will no longer be published after December 31, 2021, for one-week and two-month U.S. Dollar LIBOR tenors, and after June 30, 2023, for all other U.S. Dollar LIBOR tenors. ASU 2020-04 provides entities with optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. In January 2021, the FASB issued amendments to the guidance through ASU 2021-01 to include all contract modifications and hedging relationships affected by reference rate reform, including those that do not directly reference LIBOR, or another reference rate expected to be discontinued, and clarify which optional expedients may be applied to them. The guidance can be applied prospectively. The optional relief is temporary and generally cannot be applied to contract modifications and hedging relationships entered into or evaluated after December 31, 2022. The Compan y does not expect the new guidance to have a material impact on their financial position, results of operations or liquidity. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Schedule of Property and Equipment | Property and equipment are presented at cost less accumulated depreciation and amortization. Repairs and maintenance expenditures are expensed as incurred. Depreciation and amortization are computed on a straight-line basis over the following estimated useful lives: Estimated Life Machinery and equipment 3 years Software and software development 2-3 years ERP Software 5 years Furniture and fixtures 5 years Tooling 2 years Leasehold improvements Term of lease or economic life of asset, if shorter Demonstration units and convention booths 2 years Demonstration headsets 1 year Property and equipment, net consists of the following: December 31, 2021 December 31, 2020 (in thousands) Machinery and equipment $ 2,255 $ 2,223 Software and software development 2,404 1,629 Furniture and fixtures 1,257 1,123 Tooling 7,855 6,548 Leasehold improvements 1,794 1,833 Demonstration units and convention booths 14,493 14,439 Total property and equipment, gross 30,058 27,795 Less: accumulated depreciation and amortization (23,103 ) (21,220 ) Total property and equipment, net $ 6,955 $ 6,575 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Summary of ROCCAT Purchase Price Allocation | The ROCCAT purchase price allocation as of May 31, 2019 is shown in the following table: (In thousands) Amount Receivables $ 1,366 Inventories 6,986 Property and equipment 1,110 Intangible assets 5,589 Other long-term assets 461 Accounts payable (5,399 ) Accrued and other current liabilities (3,704 ) Contingent consideration (1,592 ) Other non-current liabilities (328 ) Total identifiable net assets 4,489 Goodwill 8,178 Total consideration $ 12,667 |
Neat Microphones | |
Summary of Underlying Intangible Assets | The following table summarizes key information underlying intangible assets related to the Neat Microphones acquisition: (In thousands) Life Amount Customer relationships 2 Years $ 440 Tradenames 10 Years 380 Developed technology 7 Years 1,100 Total $ 1,920 |
ROCCAT | |
Summary of Underlying Intangible Assets | The following table summarizes key information underlying intangible assets related to the ROCCAT acquisition: (In thousands) Life Amount Customer relationships 7 Years $ 2,119 Tradenames 10 Years 2,686 Developed technology 7 Years 784 Total $ 5,589 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
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 the Company’s financial instruments at December 31, 2021 and 2020: December 31, 2021 December 31, 2020 Reported Fair Value Reported Fair Value (in thousands) Financial Assets and Liabilities: Cash and cash equivalents $ 37,720 $ 37,720 $ 46,681 $ 46,681 |
Allowance for Sales Returns (Ta
Allowance for Sales Returns (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Allowance For Sales Returns [Abstract] | |
Schedule of Allowances for Sales Returns | The following table provides the changes in the Company’s sales return reserve, which is classified as a reduction of accounts receivable: Year ended December 31, 2021 2020 2019 in thousands Balance, beginning of period $ 11,233 $ 8,815 $ 9,212 Reserve accrual 21,506 21,193 16,866 Recoveries and deductions, net (23,742 ) (18,775 ) (17,263 ) Balance, end of period $ 8,997 $ 11,233 $ 8,815 |
Composition of Certain Financ_2
Composition of Certain Financial Statement Items (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Condensed Consolidated Balance Sheet Components [Abstract] | |
Schedule of Inventory | Inventories consist of the following: December 31, 2021 December 31, 2020 (in thousands) Finished goods $ 101,446 $ 69,939 Raw materials 487 1,362 Total inventories $ 101,933 $ 71,301 |
Schedule of Property and Equipment | Property and equipment are presented at cost less accumulated depreciation and amortization. Repairs and maintenance expenditures are expensed as incurred. Depreciation and amortization are computed on a straight-line basis over the following estimated useful lives: Estimated Life Machinery and equipment 3 years Software and software development 2-3 years ERP Software 5 years Furniture and fixtures 5 years Tooling 2 years Leasehold improvements Term of lease or economic life of asset, if shorter Demonstration units and convention booths 2 years Demonstration headsets 1 year Property and equipment, net consists of the following: December 31, 2021 December 31, 2020 (in thousands) Machinery and equipment $ 2,255 $ 2,223 Software and software development 2,404 1,629 Furniture and fixtures 1,257 1,123 Tooling 7,855 6,548 Leasehold improvements 1,794 1,833 Demonstration units and convention booths 14,493 14,439 Total property and equipment, gross 30,058 27,795 Less: accumulated depreciation and amortization (23,103 ) (21,220 ) Total property and equipment, net $ 6,955 $ 6,575 |
Other Current Liabilities | Other current liabilities consist of the following: December 31, 2021 December 31, 2020 (in thousands) Accrued royalty $ 11,582 $ 5,166 Accrued freight 6,251 3,401 Accrued employee expenses 4,114 7,070 Accrued marketing 3,723 5,487 Accrued tax-related payables 3,459 5,741 Accrued expenses 8,564 9,257 Total other current liabilities $ 37,693 $ 36,122 |
Other Non-operating Expense (Income), Net | Other non-operating expense (income), net consists of the following: Year Ended December 31, 2021 2020 2019 (in thousands) Acquisition-related settlement $ — $ (1,702 ) $ — Change in fair value of contingent consideration (1,928 ) (1,121 ) (471 ) Unrealized loss (gain) on financial instrument obligation — — (1,601 ) Other non-operating expense (income) 1,827 (934 ) (137 ) Total other non-operating expense (income),net $ (101 ) $ (3,757 ) $ (2,209 ) |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Acquired identifiable intangible assets, and related accumulated amortization, as of December 31, 2021 and 2020 consist of: December 31, 2021 Gross Carrying Value Accumulated Amortization Net Book Value (in thousands) Customer relationships $ 8,355 $ 6,315 $ 2,040 Tradenames 3,066 730 2,336 Developed technology 1,884 440 1,444 Foreign currency (896 ) (865 ) (32 ) Total Intangible Assets $ 12,409 $ 6,620 $ 5,788 December 31, 2020 Gross Carrying Value Accumulated Amortization Net Book Value (in thousands) Customer relationships $ 7,915 $ 5,584 $ 2,331 Tradenames 2,686 425 2,261 Developed technology 784 177 607 Foreign currency (845 ) (784 ) (61 ) Total Intangible Assets $ 10,540 $ 5,402 $ 5,138 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | As of December 31, 2021, estimated annual amortization expense related to definite lived intangible assets in future periods is as follows: (in thousands) 2022 $ 1,281 2023 1,041 2024 1,008 2025 889 2026 637 Thereafter 964 Total $ 5,820 |
Schedule of Changes in Carrying Values of Goodwill | All goodwill is attributable to the gaming accessories reporting unit. Changes in the carrying values of goodwill for twelve months ended December 31, 2021 are as follows: (in thousands) Balance as of January 1, 2021 $ 8,178 NEAT Microphones acquisition 2,508 Balance as of December 31, 2021 $ 10,686 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Expense (Benefit) | The provision (benefit) for income taxes consists of the following: Year Ended December 31, 2021 2020 2019 (in thousands) Federal: Current $ (511 ) $ 8,518 $ 230 Deferred 701 714 (5,910 ) Total Federal 190 9,232 (5,680 ) State and Local: Current 769 3,476 114 Deferred 346 (221 ) (1,529 ) Total State and Local 1,115 3,255 (1,415 ) Foreign Current 1,051 1,249 897 Deferred 72 (25 ) (39 ) Total Foreign 1,123 1,224 858 Total $ 2,428 $ 13,711 $ (6,237 ) |
Schedule of Effective Income Tax Rate Reconciliation | The reconciliation between the provision (benefit) for income taxes and the expected provision (benefit) for income taxes at the U.S. federal statutory rate is as follows: Year Ended December 31, 2021 2020 2019 (in thousands) U.S. Operations $ 15,146 $ 46,970 $ 8,030 Foreign Operations 5,003 5,487 3,677 Income before income taxes 20,149 52,457 11,707 Federal statutory rate 21 % 21 % 21 % Provision for income taxes at federal statutory rate 4,231 11,016 2,458 State taxes, net of federal benefit 812 1,434 989 Foreign tax rate differential (60 ) 4 (33 ) Change in valuation allowance — (2 ) (10,112 ) Unrealized loss (gain) on financial instrument obligation — — (336 ) Excess tax benefit recognized (2,159 ) (413 ) (44 ) Foreign Derived Intangible Income (a) (976 ) — — Foreign tax credit (770 ) (568 ) — R&D Credit (b) (878 ) — — Global intangible low taxed income 530 586 637 Prior year adjustment — 16 429 Change in unrecognized tax benefits 673 969 (715 ) Section 162(m) 634 414 402 Other 391 255 88 Provision (benefit) for income taxes $ 2,428 $ 13,711 $ (6,237 ) |
Schedule of Deferred Tax Assets and Liabilities | The tax effects of significant items comprising the Company’s deferred tax assets (liabilities) are as follows: December 31, 2021 December 31, 2020 (in thousands) Allowance for doubtful accounts $ 4 $ 4 Inventories 1,559 1,116 Employee benefits 1,980 2,506 Net operating loss 1,271 1,288 Sales reserves 1,520 2,428 Unrecognized tax benefits 575 621 Depreciation and amortization (250 ) (297 ) Intangible assets (109 ) (117 ) Other 40 160 6,590 7,709 Valuation allowance (891 ) (891 ) Net deferred tax assets (liabilities) $ 5,699 $ 6,818 |
Schedule of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows: December 31, 2021 December 31, 2020 (in thousands) Gross unrecognized tax benefit, beginning of period $ 3,090 $ 2,023 Additions based on tax positions related to the current year 573 1,249 Settlements related to tax positions in a prior period — (36 ) Decreases based on tax positions in a prior period (248 ) (146 ) Gross unrecognized tax benefit, end of period $ 3,415 $ 3,090 |
Summary of Income Tax Examinations | The Company files U.S., state, and foreign income tax returns in jurisdictions with various statutes of limitations. Below is a summary of the filing jurisdictions and open tax years: Open Years U.S. Federal 2018 - 2020 U.S. State and Local 2017 - 2020 Non-U.S. 2018 - 2020 |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
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: Year Ended December 31, 2021 2020 2019 (in thousands, except per-share data) Net income $ 17,721 $ 38,746 $ 17,944 Unrealized gain on financial instrument obligation — — (1,601 ) Net income - diluted $ 17,721 $ 38,746 $ 16,343 Weighted average common shares outstanding — Basic 15,915 14,801 14,483 Plus incremental shares from assumed conversions: Dilutive effect of restricted stock 438 235 19 Dilutive effect of stock options 1,348 917 432 Dilutive effect of warrants 550 412 754 Weighted average common shares outstanding — Diluted 18,251 16,365 15,688 Net income per share: Basic $ 1.11 $ 2.62 $ 1.24 Diluted $ 0.97 $ 2.37 $ 1.04 |
Schedule of Antidilutive Securities Excluded from Computation of Diluted Net Income per Share of Common Stock | Year Ended December 31, 2021 2020 2019 (in thousands) Stock options 721 813 480 Unvested restricted stock awards 294 136 194 Total 1,015 949 674 |
Equity and Stock-Based Compen_2
Equity and Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
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 December 31, 2021: (in thousands) Balance at December 31, 2020 501 Plan Amendment 975 Options granted (12 ) Options cancelled 29 Restricted stock granted (374 ) Forfeited/ Expired restricted stock added back 13 Performance-Based restricted stock granted (134 ) Balance at December 31, 2021 998 |
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 comprised as follows: Year ended December 31, 2021 2020 2019 (in thousands) Cost of revenue $ 343 $ 927 $ 150 Selling and marketing 1,746 1,148 691 Research and development 1,379 664 417 General and administrative 4,188 2,810 2,300 Total stock-based compensation $ 7,656 $ 5,549 $ 3,558 |
Stock Option Activity | Options Outstanding Number of Shares Underlying Outstanding Options Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term Aggregate Intrinsic Value (in years) Outstanding at December 31, 2020 2,383,427 $ 7.85 7.78 $ 33,064,942 Granted 11,550 27.20 Exercised (626,306 ) 8.45 Forfeited (29,431 ) 10.77 Outstanding at December 31, 2021 1,739,240 $ 7.72 7.02 $ 25,542,823 Vested and expected to vest at December 31, 2021 1,710,829 $ 7.77 7.00 $ 25,177,406 Exercisable at December 31, 2021 1,008,002 $ 6.87 6.34 $ 15,778,518 |
Schedule of Weighted-Average Assumptions | Plan was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions: Expected term (in years) 6.1 Risk-free interest rate 0.5%- 1.1% Expected volatility 59.6%- 59.8% Dividend rate 0% |
Restricted stock awards | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Restricted Stock Activity | Shares Weighted Average Grant Date Fair Value Per Share Nonvested restricted stock at December 31, 2020 677,590 $ 9.71 Granted 374,445 26.03 Vested (250,483 ) 11.51 Shares forfeited (13,098 ) 13.90 Nonvested restricted stock at December 31, 2021 788,454 $ 16.81 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Total Net Revenues | The following table represents total net revenue based on where customers are physically located: Year Ended December 31, 2021 2020 2019 (in thousands) North America $ 241,787 $ 262,170 $ 166,748 United Kingdom 32,745 38,251 25,671 Europe 69,059 45,629 34,707 Other 22,763 14,043 7,537 Total net revenues $ 366,354 $ 360,093 $ 234,663 |
Property and Equipment Net Based on Location | The following table represents property and equipment, net based on physical location: Year Ended December 31, 2021 2020 (in thousands) United States $ 6,053 $ 5,645 International 902 930 Total $ 6,955 $ 6,575 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Product Warranty Liability | The following table provides the changes in our product warranties, which are included in other current liabilities: Year ended December 31, 2021 2020 2019 (in thousands) Warranty, beginning of period $ 1,039 $ 742 $ 668 Warranty costs accrued 674 1,336 816 Settlements of warranty claims (857 ) (1,039 ) (742 ) Warranty, end of period $ 856 $ 1,039 $ 742 |
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 December 31, 2021 (in thousands) Right-of-use assets Other assets $ 7,412 Lease liability obligations, current Other current liabilities $ 765 Lease liability obligations, noncurrent Other liabilities 6,994 Total lease liability obligations $ 7,759 Weighted-average remaining lease term (in years) 6.0 Weighted-average discount rate 3.75 % |
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 December 31, 2021: (in thousands) 2022 $ 1,113 2023 1,143 2024 1,164 2025 1,148 2026 1,047 Thereafter 3,436 Total minimum payments 9,051 Less: Imputed interest (1,292 ) Total $ 7,759 |
Selected Quarterly Financial _2
Selected Quarterly Financial Data - Unaudited (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Information - Unaudited | Fiscal 2021 Quarter First Second Third Fourth (in thousands, except per share data) Net Revenue $ 93,053 $ 78,564 $ 85,307 $ 109,430 Gross Margin 34,855 28,710 29,273 35,545 Net Income (Loss) 8,838 1,721 2,623 4,539 Earnings (Loss) Per Share Basic $ 0.57 $ 0.11 $ 0.16 $ 0.28 Diluted $ 0.49 $ 0.09 $ 0.14 $ 0.25 Fiscal 2020 Quarter First Second Third Fourth (in thousands, except per share data) Net Revenue $ 35,007 $ 79,680 $ 112,494 $ 132,912 Gross Margin 10,785 29,227 46,136 47,640 Net Income (Loss) (3,555 ) 8,204 17,794 16,303 Earnings (Loss) Per Share Basic $ (0.25 ) $ 0.56 $ 1.20 $ 1.07 Diluted $ (0.25 ) $ 0.51 $ 1.04 $ 0.93 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) | 12 Months Ended | |||
Dec. 31, 2021USD ($)CustomerSegment | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Jan. 01, 2019USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | ||||
Allowance for cash discounts | $ 25,600,000 | $ 18,600,000 | ||
Allowance for sales returns | 9,000,000 | 11,200,000 | ||
Advertising expense | 9,700,000 | 8,500,000 | $ 7,500,000 | |
Cooperative advertising expense | $ 7,600,000 | 6,800,000 | $ 5,700,000 | |
Amortization period of unrecognized compensation costs | 4 years | |||
Non financial assets or non financial liabilities fair value disclosure | $ 0 | 0 | ||
Cash and cash equivalents | $ 37,720,000 | 46,681,000 | ||
Number of reportable segments | Segment | 1 | |||
Number of reporting unit structure | Segment | 2 | |||
Operating lease, liability | $ 7,759,000 | 7,759,000 | $ 3,300,000 | |
ASU 2016-02 | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Change in Accounting Principle, Accounting Standards Update, Adoption Date | Jan. 1, 2019 | |||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true | |||
ASU 2016-13 | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Change in Accounting Principle, Accounting Standards Update, Adoption Date | Jan. 1, 2020 | |||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true | |||
Change in Accounting Principle, Accounting Standards Update, Immaterial Effect [true false] | true | |||
Foreign Countries | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Cash and cash equivalents | $ 10,200,000 | $ 5,900,000 | ||
Accounts Receivable | Customer Concentration Risk | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Number of customers | Customer | 4 | |||
Five Largest Individual Customers | Sales | Customer Concentration Risk | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Number of customers | Customer | 5 | |||
Concentration risk, percentage | 66.00% | 67.00% | 66.00% | |
Walmart Target And Amazon | Sales | Customer Concentration Risk | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Number of customers | Customer | 3 | |||
Walmart Target And Amazon | Sales | Customer Concentration Risk | Minimum | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Concentration risk, percentage | 10.00% | |||
Walmart Target And Amazon | Sales | Customer Concentration Risk | Maximum | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Concentration risk, percentage | 23.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Summary of Property and Equipment, Net (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Machinery and equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Software and software development | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 2 years |
Software and software development | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
ERP Software | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Furniture and fixtures | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Tooling | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 2 years |
Leasehold improvements | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | Term of lease or economic life of asset, if shorter |
Demonstration units and convention booths | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 2 years |
Demonstration headsets | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 1 year |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) - USD ($) | Jan. 12, 2021 | May 31, 2019 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Business Acquisition [Line Items] | |||||||||||||
Net of cash | $ 12,700,000 | ||||||||||||
Contingent earn-out provisions payment | $ 0 | $ 0 | |||||||||||
Revenue | $ 109,430,000 | $ 85,307,000 | $ 78,564,000 | $ 93,053,000 | 132,912,000 | $ 112,494,000 | $ 79,680,000 | $ 35,007,000 | $ 366,354,000 | 360,093,000 | $ 234,663,000 | ||
Fair value of contingent consideration | $ 1,100,000 | 1,100,000 | |||||||||||
Business combination recognized potential earn outs amount fully released | 3,400,000 | ||||||||||||
Maximum | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Potential earn outs payments | 3,400,000 | ||||||||||||
Neat Microphones | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Net of cash | $ 2,500,000 | ||||||||||||
Fair value of contingent consideration | 1,900,000 | 1,900,000 | |||||||||||
Contingent earn-out provisions payment | 0 | 0 | |||||||||||
Neat Microphones | General and Administrative Expenses | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Acquisition costs | 300,000 | ||||||||||||
Neat Microphones | Maximum | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Potential earn outs payments | $ 2,300,000 | $ 2,300,000 | $ 2,300,000 | ||||||||||
ROCCAT | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Revenue | 14,400,000 | ||||||||||||
Fair value of contingent consideration | 1,592,000 | ||||||||||||
ROCCAT | General and Administrative Expenses | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Acquisition costs | $ 600,000 | $ 3,500,000 | |||||||||||
ROCCAT | Accrued and Other Current Liabilities | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Sales returns and allowance | $ 1,800,000 |
Acquisitions - Summary of Under
Acquisitions - Summary of Underlying Intangible Assets (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Neat Microphones | |
Business Acquisition [Line Items] | |
Intangible assets | $ 1,920 |
Neat Microphones | Customer Relationships | |
Business Acquisition [Line Items] | |
Intangible assets useful life | 2 years |
Intangible assets | $ 440 |
Neat Microphones | Trade Names | |
Business Acquisition [Line Items] | |
Intangible assets useful life | 10 years |
Intangible assets | $ 380 |
Neat Microphones | Developed Technology | |
Business Acquisition [Line Items] | |
Intangible assets useful life | 7 years |
Intangible assets | $ 1,100 |
ROCCAT | |
Business Acquisition [Line Items] | |
Intangible assets | $ 5,589 |
ROCCAT | Customer Relationships | |
Business Acquisition [Line Items] | |
Intangible assets useful life | 7 years |
Intangible assets | $ 2,119 |
ROCCAT | Trade Names | |
Business Acquisition [Line Items] | |
Intangible assets useful life | 10 years |
Intangible assets | $ 2,686 |
ROCCAT | Developed Technology | |
Business Acquisition [Line Items] | |
Intangible assets useful life | 7 years |
Intangible assets | $ 784 |
Acquisitions - Summary of ROCCA
Acquisitions - Summary of ROCCAT Purchase Price Allocation (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | May 31, 2019 |
Business Acquisition [Line Items] | |||
Contingent consideration | $ (1,100) | ||
Goodwill | $ 10,686 | $ 8,178 | |
ROCCAT | |||
Business Acquisition [Line Items] | |||
Receivables | $ 1,366 | ||
Inventories | 6,986 | ||
Property and equipment | 1,110 | ||
Intangible assets | 5,589 | ||
Other long-term assets | 461 | ||
Accounts payable | (5,399) | ||
Accrued and other current liabilities | (3,704) | ||
Contingent consideration | (1,592) | ||
Other non-current liabilities | (328) | ||
Total identifiable net assets | 4,489 | ||
Goodwill | 8,178 | ||
Total consideration | $ 12,667 |
Fair Value Measurement - Summar
Fair Value Measurement - Summary of Carrying Amounts and Estimated Fair Values of Financial Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Reported Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents, fair value disclosure | $ 37,720 | $ 46,681 |
Estimate of Fair Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents, fair value disclosure | $ 37,720 | $ 46,681 |
Allowance for Sales Returns - S
Allowance for Sales Returns - Schedule of Allowances for Sales Returns (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance, beginning of period | $ 29,897 | $ 24,940 | |
Reserve accrual | 15,794 | 21,847 | $ 18,935 |
Recoveries and deductions, net | (8,814) | (19,177) | (16,848) |
Balance, end of period | 34,728 | 29,897 | 24,940 |
Sales Returns and Allowances | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance, beginning of period | 11,233 | 8,815 | 9,212 |
Reserve accrual | 21,506 | 21,193 | 16,866 |
Recoveries and deductions, net | (23,742) | (18,775) | (17,263) |
Balance, end of period | $ 8,997 | $ 11,233 | $ 8,815 |
Composition of Certain Financ_3
Composition of Certain Financial Statement Items - Schedule of Inventory (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Condensed Consolidated Balance Sheet Components [Abstract] | ||
Finished goods | $ 101,446 | $ 69,939 |
Raw materials | 487 | 1,362 |
Total inventories | $ 101,933 | $ 71,301 |
Composition of Certain Financ_4
Composition of Certain Financial Statement Items - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | $ 30,058 | $ 27,795 |
Less: accumulated depreciation and amortization | (23,103) | (21,220) |
Total property and equipment, net | 6,955 | 6,575 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 2,255 | 2,223 |
Software and software development | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 2,404 | 1,629 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 1,257 | 1,123 |
Tooling | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 7,855 | 6,548 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 1,794 | 1,833 |
Demonstration units and convention booths | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | $ 14,493 | $ 14,439 |
Composition of Certain Financ_5
Composition of Certain Financial Statement Items - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Condensed Consolidated Balance Sheet Components [Abstract] | |||
Depreciation and amortization | $ 4,052 | $ 4,359 | $ 4,556 |
Composition of Certain Financ_6
Composition of Certain Financial Statement Items - Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Condensed Consolidated Balance Sheet Components [Abstract] | ||
Accrued royalty | $ 11,582 | $ 5,166 |
Accrued freight | 6,251 | 3,401 |
Accrued employee expenses | 4,114 | 7,070 |
Accrued marketing | 3,723 | 5,487 |
Accrued tax-related payables | 3,459 | 5,741 |
Accrued expenses | 8,564 | 9,257 |
Total other current liabilities | $ 37,693 | $ 36,122 |
Composition of Certain Financ_7
Composition of Certain Financial Statement Items - Other Non-operating Expense (Income), Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Schedule of Non-Operating Expense (Income) [Line Items] | |||
Unrealized loss (gain) on financial instrument obligation | $ (1,601) | ||
Total other non-operating expense (income),net | $ (101) | $ (3,757) | (2,209) |
Other Nonoperating Income (Expense) | |||
Schedule of Non-Operating Expense (Income) [Line Items] | |||
Acquisition-related settlement | (1,702) | ||
Change in fair value of contingent consideration | (1,928) | (1,121) | (471) |
Unrealized loss (gain) on financial instrument obligation | (1,601) | ||
Other non-operating expense (income) | 1,827 | (934) | (137) |
Total other non-operating expense (income),net | $ (101) | $ (3,757) | $ (2,209) |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Finite-lived Intangible Assets [Roll Forward] | ||
Total intangible assets, gross carrying value | $ 12,409 | $ 10,540 |
Finite-lived intangible assets, accumulated amortization | 6,620 | 5,402 |
Total intangible assets, net book value | 5,788 | 5,138 |
Total | 5,820 | |
Finite-lived intangible assets, gross carrying value | (896) | (845) |
Finite-lived intangible assets, accumulated amortization | (865) | (784) |
Total | (32) | (61) |
Customer Relationships | ||
Finite-lived Intangible Assets [Roll Forward] | ||
Finite-lived intangible assets, gross carrying value | 8,355 | 7,915 |
Finite-lived intangible assets, accumulated amortization | 6,315 | 5,584 |
Total | 2,040 | 2,331 |
Trade Names | ||
Finite-lived Intangible Assets [Roll Forward] | ||
Finite-lived intangible assets, gross carrying value | 3,066 | 2,686 |
Finite-lived intangible assets, accumulated amortization | 730 | 425 |
Total | 2,336 | 2,261 |
Developed Technology | ||
Finite-lived Intangible Assets [Roll Forward] | ||
Finite-lived intangible assets, gross carrying value | 1,884 | 784 |
Finite-lived intangible assets, accumulated amortization | 440 | 177 |
Total | $ 1,444 | $ 607 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Oct. 31, 2012 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Finite Lived Intangible Assets [Line Items] | ||||
Amortization of intangible assets | $ 1,261 | $ 889 | $ 642 | |
Acquisition of Lygo International Limited | Customer Relationships | ||||
Finite Lived Intangible Assets [Line Items] | ||||
Useful life | 13 years |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Schedule of Finite-Lived Intangible Assets, Future Amortization Expense (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Finite Lived Intangible Assets Future Amortization Expense Current And Five Succeeding Fiscal Years [Abstract] | |
2022 | $ 1,281 |
2023 | 1,041 |
2024 | 1,008 |
2025 | 889 |
2026 | 637 |
Thereafter | 964 |
Total | $ 5,820 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Schedule of Changes in Carrying Values of Goodwill (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Balance as of January 1, 2021 | $ 8,178 |
NEAT Microphones acquisition | 2,508 |
Balance as of December 31, 2021 | $ 10,686 |
Credit Facilities and Long-Te_2
Credit Facilities and Long-Term Debt - Additional Information (Details) - USD ($) | Dec. 17, 2018 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | May 31, 2019 |
Debt Instrument [Line Items] | ||||||
Interest expense, debt | $ 400,000 | $ 500,000 | $ 900,000 | |||
Amortization of debt financing costs | $ 189,000 | 189,000 | $ 189,000 | |||
Financing costs | $ 600,000 | |||||
Revolving Credit Facility, Maturing March 2024 | ||||||
Debt Instrument [Line Items] | ||||||
Expiration date | Mar. 5, 2024 | |||||
Maximum borrowing capacity | $ 80,000,000 | |||||
Line of credit facility, capacity available for trade purchases | 6,800,000 | |||||
Line of credit facility, capacity available for specific purpose other than for trade purchases | 40,000,000 | |||||
Debt instrument, covenant, current fixed charge ratio required, minimum | 1.00% | |||||
Remaining borrowing capacity | $ 64,600,000 | |||||
Revolving Credit Facility, Maturing March 2024 | Base Rate | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 3.75% | |||||
Revolving Credit Facility, Maturing March 2024 | London Interbank Offered Rate (LIBOR) | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 3.00% | |||||
Revolving Credit Facility, Maturing March 2024 | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Unused commitment fee, percent | 0.25% | |||||
Revolving Credit Facility, Maturing March 2024 | Minimum | Base Rate | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 0.50% | |||||
Revolving Credit Facility, Maturing March 2024 | Minimum | London Interbank Offered Rate (LIBOR) | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 1.25% | |||||
Revolving Credit Facility, Maturing March 2024 | Minimum | Adjustable Rate Loans | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 2.00% | |||||
Revolving Credit Facility, Maturing March 2024 | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Unused commitment fee, percent | 0.50% | |||||
Revolving Credit Facility, Maturing March 2024 | Maximum | Base Rate | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 1.25% | |||||
Revolving Credit Facility, Maturing March 2024 | Maximum | London Interbank Offered Rate (LIBOR) | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 2.00% | |||||
Revolving Credit Facility, Maturing March 2024 | Maximum | Adjustable Rate Loans | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 2.75% | |||||
Revolving Credit Facility, Maturing March 2024 | UK Borrower | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 12,000,000 | |||||
Revolving Credit Facility, Maturing March 2024 | TB Germany GmbH | Maximum | ROCCAT | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit to make investments | $ 4,000,000 | |||||
Line of credit to make additional investments | $ 4,000,000 | |||||
Revolving credit facilities | ||||||
Debt Instrument [Line Items] | ||||||
Long Term Debt | $ 0 | $ 0 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Federal: | |||
Current | $ (511) | $ 8,518 | $ 230 |
Deferred | 701 | 714 | (5,910) |
Total Federal | 190 | 9,232 | (5,680) |
State and Local: | |||
Current | 769 | 3,476 | 114 |
Deferred | 346 | (221) | (1,529) |
Total State and Local | 1,115 | 3,255 | (1,415) |
Foreign | |||
Current | 1,051 | 1,249 | 897 |
Deferred | 72 | (25) | (39) |
Total Foreign | 1,123 | 1,224 | 858 |
Total | $ 2,428 | $ 13,711 | $ (6,237) |
Income Taxes - Effective Income
Income Taxes - Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | |||
U.S. Operations | $ 15,146 | $ 46,970 | $ 8,030 |
Foreign Operations | 5,003 | 5,487 | 3,677 |
Income before income tax | $ 20,149 | $ 52,457 | $ 11,707 |
Federal statutory rate | 21.00% | 21.00% | 21.00% |
Provision for income taxes at federal statutory rate | $ 4,231 | $ 11,016 | $ 2,458 |
State taxes, net of federal benefit | 812 | 1,434 | 989 |
Foreign tax rate differential | (60) | 4 | (33) |
Change in valuation allowance | 0 | (2) | (10,112) |
Unrealized loss (gain) on financial instrument obligation | 0 | 0 | (336) |
Excess tax benefit recognized | (2,159) | (413) | (44) |
Foreign Derived Intangible Income (a) | (976) | 0 | 0 |
Foreign tax credit | (770) | (568) | 0 |
R&D Credit (b) | (878) | 0 | 0 |
Global intangible low taxed income | 530 | 586 | 637 |
Prior year adjustment | 0 | 16 | 429 |
Change in unrecognized tax benefits | 673 | 969 | (715) |
Section 162(m) | 634 | 414 | 402 |
Other | 391 | 255 | 88 |
Total | $ 2,428 | $ 13,711 | $ (6,237) |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred Tax Assets: | ||
Allowance for doubtful accounts | $ 4 | $ 4 |
Inventories | 1,559 | 1,116 |
Employee benefits | 1,980 | 2,506 |
Net operating loss | 1,271 | 1,288 |
Sales reserves | 1,520 | 2,428 |
Unrecognized tax benefits | 575 | 621 |
Other | 40 | 160 |
Total deferred tax assets | 6,590 | 7,709 |
Deferred Tax Liabilities: | ||
Depreciation and amortization | (250) | (297) |
Intangible assets | (109) | (117) |
Valuation allowance | (891) | (891) |
Net deferred tax assets (liabilities) | $ 5,699 | $ 6,818 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Operating Loss Carryforwards [Line Items] | |||
Change in valuation allowance for deferred tax assets | $ 10,100,000 | ||
Unrecognized tax positions of prior years due to settled tax positions | $ 0 | $ 36,000 | |
Unrecognized tax benefits that would impact effective tax rate | 3,400,000 | ||
Decrease for tax positions of current years | 2,300,000 | ||
Unrecognized tax benefits inclusive of interest and penalties | 3,800,000 | ||
Interest and penalties | 1,100,000 | ||
2029 | Federal | |||
Operating Loss Carryforwards [Line Items] | |||
NOL available to offset future income | 0 | ||
2029 | State and Local Jurisdiction | |||
Operating Loss Carryforwards [Line Items] | |||
NOL available to offset future income | $ 18,300,000 |
Income Taxes - Schedule of Unre
Income Taxes - Schedule of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Gross unrecognized tax benefit, beginning of period | $ 3,090 | $ 2,023 |
Additions based on tax positions related to the current year | 573 | 1,249 |
Settlements related to tax positions in a prior period | (36) | |
Decreases based on tax positions in a prior period | (248) | (146) |
Gross unrecognized tax benefit, end of period | $ 3,415 | $ 3,090 |
Income Taxes - Summary of Incom
Income Taxes - Summary of Income Tax Examinations (Details) | 12 Months Ended |
Dec. 31, 2020 | |
U.S. Federal | Earliest Tax Year | |
Income Tax Contingency [Line Items] | |
Open Years | 2018 |
U.S. Federal | Latest Tax Year | |
Income Tax Contingency [Line Items] | |
Open Years | 2020 |
U.S. State and Local | Earliest Tax Year | |
Income Tax Contingency [Line Items] | |
Open Years | 2017 |
U.S. State and Local | Latest Tax Year | |
Income Tax Contingency [Line Items] | |
Open Years | 2020 |
Non-U.S. | Earliest Tax Year | |
Income Tax Contingency [Line Items] | |
Open Years | 2018 |
Non-U.S. | Latest Tax Year | |
Income Tax Contingency [Line Items] | |
Open Years | 2020 |
Net Income Per Share - Schedule
Net Income 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 | 12 Months Ended | |||||||||
Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Basic and diluted: | |||||||||||
Net income | $ 4,539 | $ 2,623 | $ 1,721 | $ 8,838 | $ 16,303 | $ 17,794 | $ 8,204 | $ (3,555) | $ 17,721 | $ 38,746 | $ 17,944 |
Unrealized loss (gain) on financial instrument obligation | (1,601) | ||||||||||
Net income - diluted | $ 17,721 | $ 38,746 | $ 16,343 | ||||||||
Basic: | |||||||||||
Weighted-average common shares outstanding, basic (in shares) | 15,915 | 14,801 | 14,483 | ||||||||
Incremental Common Shares Attributable to Dilutive Effect of Restricted Stock Awards | 438 | 235 | 19 | ||||||||
Dilutive effect of stock options | 1,348 | 917 | 432 | ||||||||
Incremental Common Shares Attributable to Dilutive Effect of Call Options and Warrants | 550 | 412 | 754 | ||||||||
Diluted: | |||||||||||
Weighted-average common shares outstanding, diluted (in shares) | 18,251 | 16,365 | 15,688 | ||||||||
Net income per share: | |||||||||||
Basic (in dollars per share) | $ 0.28 | $ 0.16 | $ 0.11 | $ 0.57 | $ 1.07 | $ 1.20 | $ 0.56 | $ (0.25) | $ 1.11 | $ 2.62 | $ 1.24 |
Diluted (in dollars per share) | $ 0.25 | $ 0.14 | $ 0.09 | $ 0.49 | $ 0.93 | $ 1.04 | $ 0.51 | $ (0.25) | $ 0.97 | $ 2.37 | $ 1.04 |
Net Income Per Share - Schedu_2
Net Income Per Share - Schedule of Antidilutive Securities Excluded from Computation of Diluted Net Income per Share of Common Stock (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share | 1,015 | 949 | 674 |
Stock options | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share | 721 | 813 | 480 |
Restricted stock awards | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share | 294 | 136 | 194 |
Equity and Stock-Based Compen_3
Equity and Stock-Based Compensation - Additional Information (Details) - USD ($) | Apr. 01, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2017 | Dec. 31, 2021 | Apr. 09, 2019 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Stock repurchase activity, authorized amount | $ 15,000,000 | ||||||
Stock repurchase program expiration date | Apr. 9, 2023 | ||||||
Stock repurchased during period, shares | 500,000 | ||||||
Stock repurchased during period, value | $ 4,882,000 | $ 2,525,000 | $ 7,400,000 | ||||
Forfeiture period after ending employment | 90 days | ||||||
Employee service share-based compensation, tax benefit from compensation expense | $ 2,200,000 | $ 400,000 | |||||
Option exercised, intrinsic value | $ 13,600,000 | $ 7,400,000 | |||||
Compensation cost not yet recognized, period for recognition | 4 years | ||||||
Weighted average grant date fair value of options granted (in dollars per share) | $ 14.89 | $ 3.82 | $ 4.71 | ||||
Estimated grant date fair value of options vested | $ 2,600,000 | $ 1,700,000 | $ 1,000,000 | ||||
Stock-based compensation | $ 7,656,000 | $ 5,549,000 | $ 3,558,000 | ||||
Tax Year 2017 | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Employee service share-based compensation, tax benefit from compensation expense | $ 2,100,000 | ||||||
Non-Executives | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Forfeiture rate | 10.00% | ||||||
Executive Officer | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Forfeiture rate | 0.00% | ||||||
Stock Options | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Award expiration period | 10 years | ||||||
Total unrecognized compensation cost | $ 3,900,000 | 3,900,000 | |||||
Compensation cost not yet recognized, period for recognition | 2 years | ||||||
Restricted stock awards | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Award restriction period | 3 years | ||||||
Total unrecognized compensation cost | $ 10,400,000 | $ 10,400,000 | |||||
Compensation cost not yet recognized, period for recognition | 2 years 4 months 24 days | ||||||
Outstanding balance | 788,454 | 677,590 | 788,454 | ||||
Performance Based Restricted Stock | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Outstanding balance | 134,000 | 134,000 | |||||
Vesting period | 3 years | ||||||
Stock-based compensation | $ 1,000,000 | ||||||
Phantom equity | 2011 Phantom Equity Appreciation Plan | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Shares authorized | 1,500,000 | 1,500,000 | |||||
Shares granted and outstanding (in shares) | 178,586 | 178,586 | |||||
Weighted average exercise price of options granted and outstanding (in dollars per share) | $ 3.72 | $ 3.72 | |||||
Maximum | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Stock repurchase activity, authorized amount | $ 25,000,000 | ||||||
Maximum | Performance Based Restricted Stock | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Adjusted EBITDA percentage | 200.00% | ||||||
Minimum | Performance Based Restricted Stock | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Adjusted EBITDA percentage | 0.00% |
Equity and Stock-Based Compen_4
Equity and Stock-Based Compensation - Stock Activity and Total Number of Shares Available for Grant (Details) | 12 Months Ended |
Dec. 31, 2021shares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Shares Available for Grant [Roll Forward] | |
Balance, beginning of period | 501,000 |
Plan Amendment | 975,000 |
Options granted | (11,550) |
Options cancelled | 29,431 |
Forfeited/ Expired restricted stock added back | 13,000 |
Balance, end of period | 998,000 |
Restricted stock awards | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Shares Available for Grant [Roll Forward] | |
Stock granted | (374,445) |
Performance Based Restricted Stock | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Shares Available for Grant [Roll Forward] | |
Stock granted | (134,000) |
Equity and Stock-Based Compen_5
Equity and Stock-Based Compensation - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Stock-based compensation | $ 7,656 | $ 5,549 | $ 3,558 |
Cost of revenue | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Stock-based compensation | 343 | 927 | 150 |
Selling and marketing | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Stock-based compensation | 1,746 | 1,148 | 691 |
Research and development | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Stock-based compensation | 1,379 | 664 | 417 |
General and administrative | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Stock-based compensation | $ 4,188 | $ 2,810 | $ 2,300 |
Equity and Stock-Based Compen_6
Equity and Stock-Based Compensation - Stock Option Activity (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Outstanding beginning of period (in shares) | 2,383,427 | |
Options 'Granted (in shares) | 11,550 | |
Options 'Exercised (in shares) | (626,306) | |
Options Forfeited (in shares) | (29,431) | |
Outstanding end of period (in shares) | 1,739,240 | 2,383,427 |
Vested and expected to vest (in shares) | 1,710,829 | |
Exercisable (in shares) | 1,008,002 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||
Outstanding beginning of period (in dollars per share) | $ 7.85 | |
Options 'Granted (in dollars per share) | 27.20 | |
Options 'Exercised (in dollars per share) | 8.45 | |
Options Forfeited (in dollars per share) | 10.77 | |
Outstanding end of period (in dollars per share) | 7.72 | $ 7.85 |
Vested and expected to vest (in dollars per share) | 7.77 | |
Exercisable (in dollars per share) | $ 6.87 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Outstanding, weighted average remaining contractual term | 7 years 7 days | 7 years 9 months 10 days |
Vested and expected to vest, weighted average remaining contractual term | 7 years | |
Exercisable, weighted average remaining contractual term | 6 years 4 months 2 days | |
Outstanding, intrinsic value | $ 25,542,823 | $ 33,064,942 |
Vested and expected to vest, intrinsic value | 25,177,406 | |
Exercisable, intrinsic value | $ 15,778,518 |
Equity and Stock-Based Compen_7
Equity and Stock-Based Compensation - Schedule of Weighted-Average Assumptions (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Expected term (in years) | 6 years 1 month 6 days |
Risk-free interest rate, minimum | 0.50% |
Risk-free interest rate, maximum | 11.00% |
Expected volatility, minimum | 59.60% |
Expected volatility, maximum | 59.80% |
Dividend rate | 0.00% |
Equity and Stock-Based Compen_8
Equity and Stock-Based Compensation - Restricted Stock Activity (Details) - Restricted stock awards | 12 Months Ended |
Dec. 31, 2021$ / sharesshares | |
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 | 677,590 |
Granted (in shares) | shares | 374,445 |
Vested (in shares) | shares | (250,483) |
Forfeited (in shares) | shares | (13,098) |
Outstanding end of period (in shares) | shares | 788,454 |
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 | $ 9.71 |
Granted (in dollars per share) | $ / shares | 26.03 |
Vested (in dollars per share) | $ / shares | 11.51 |
Forfeited (in dollars per share) | $ / shares | 13.90 |
Outstanding end of period (in dollars per share) | $ / shares | $ 16.81 |
Stockholder's Equity - Addition
Stockholder's Equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Aug. 07, 2020 | Dec. 31, 2021 | Dec. 31, 2020 |
Class Of Stock [Line Items] | |||
Common stock par value (in dollars per share) | $ 0.001 | $ 0.001 | |
Aggregate offering price of common stock | $ 4,373 | ||
ATM Equity Offering Sales Agreement | |||
Class Of Stock [Line Items] | |||
Stock issued during period, shares | 0 | 237,813 | |
Shares issued, price per share | $ 18.39 | ||
Net proceeds from issuance of common stock | $ 4,400 | ||
ATM Equity Offering Sales Agreement | BofA Securities, Inc. | |||
Class Of Stock [Line Items] | |||
Common stock par value (in dollars per share) | $ 0.001 | ||
ATM Equity Offering Sales Agreement | BofA Securities, Inc. | Maximum | |||
Class Of Stock [Line Items] | |||
Aggregate offering price of common stock | $ 30,000 |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2021Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 1 |
Segment Information - Schedule
Segment Information - Schedule of Total Net Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net revenue | $ 109,430 | $ 85,307 | $ 78,564 | $ 93,053 | $ 132,912 | $ 112,494 | $ 79,680 | $ 35,007 | $ 366,354 | $ 360,093 | $ 234,663 |
United States | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net revenue | 241,787 | 262,170 | 166,748 | ||||||||
United Kingdom | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net revenue | 32,745 | 38,251 | 25,671 | ||||||||
Europe | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net revenue | 69,059 | 45,629 | 34,707 | ||||||||
Other | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net revenue | $ 22,763 | $ 14,043 | $ 7,537 |
Segment Information - Net Reven
Segment Information - Net Revenues and Property and Equipment Net by Geographical Location (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net | $ 6,955 | $ 6,575 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net | 6,053 | 5,645 |
Other | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net | $ 902 | $ 930 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Millions | 12 Months Ended | |||||
Dec. 31, 2021USD ($) | Aug. 10, 2020Motion | Jul. 01, 2020EUR (€)Company | May 22, 2020Claim | May 05, 2020Distributor | Aug. 05, 2013 | |
Operating Leased Assets [Line Items] | ||||||
Number of shareholder claims | Claim | 8 | |||||
Number of motions | Motion | 2 | |||||
Number of distributors | Distributor | 2 | |||||
Number of companies | Company | 2 | |||||
Accounts receivable, outstanding | € | € 130,000 | |||||
Operating lease, expense | $ 1.4 | |||||
Operating lease, payments | $ 1.1 | |||||
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 | 80.00% | |||||
Merger of VTB Holdings, Inc. and Parametric Sound Corporation | Parametric Sound Corporation | ||||||
Operating Leased Assets [Line Items] | ||||||
Ownership percentage | 20.00% |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Product Warranty Liability (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | |||
Warranty, beginning of period | $ 1,039 | $ 742 | $ 668 |
Warranty costs accrued | 674 | 1,336 | 816 |
Settlements of warranty claims | (857) | (1,039) | (742) |
Warranty, end of period | $ 856 | $ 1,039 | $ 742 |
Commitments and Contingencies_3
Commitments and Contingencies - Components of the Right-of-Use Assets and Lease Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Jan. 01, 2019 |
Lessee, Lease, Description [Line Items] | |||
Right-of-use assets | $ 7,412 | ||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other assets | ||
Lease liability obligations, current | $ 765 | ||
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Other current liabilities | ||
Lease liability obligations, noncurrent | $ 6,994 | ||
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other liabilities | ||
Total lease liability obligations | $ 7,759 | $ 7,759 | $ 3,300 |
Weighted-average remaining lease term (in years) | 6 years | ||
Weighted Average | |||
Lessee, Lease, Description [Line Items] | |||
Weighted-average discount rate | 3.75% |
Commitments and Contingencies_4
Commitments and Contingencies - Schedule of Future Minimum Rental Payments for Operating Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Jan. 01, 2019 |
Commitments And Contingencies Disclosure [Abstract] | |||
2022 | $ 1,113 | ||
2023 | 1,143 | ||
2024 | 1,164 | ||
2025 | 1,148 | ||
2026 | 1,047 | ||
Thereafter | 3,436 | ||
Total minimum payments | 9,051 | ||
Less: Imputed interest | (1,292) | ||
Total | $ 7,759 | $ 7,759 | $ 3,300 |
Selected Quarterly Financial _3
Selected Quarterly Financial Data - Unaudited - Summary of Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net revenue | $ 109,430 | $ 85,307 | $ 78,564 | $ 93,053 | $ 132,912 | $ 112,494 | $ 79,680 | $ 35,007 | $ 366,354 | $ 360,093 | $ 234,663 |
Gross Margin | 35,545 | 29,273 | 28,710 | 34,855 | 47,640 | 46,136 | 29,227 | 10,785 | 128,383 | 133,788 | 78,713 |
Net Income (Loss) | $ 4,539 | $ 2,623 | $ 1,721 | $ 8,838 | $ 16,303 | $ 17,794 | $ 8,204 | $ (3,555) | $ 17,721 | $ 38,746 | $ 17,944 |
Earnings (Loss) Per Share | |||||||||||
Basic | $ 0.28 | $ 0.16 | $ 0.11 | $ 0.57 | $ 1.07 | $ 1.20 | $ 0.56 | $ (0.25) | $ 1.11 | $ 2.62 | $ 1.24 |
Diluted | $ 0.25 | $ 0.14 | $ 0.09 | $ 0.49 | $ 0.93 | $ 1.04 | $ 0.51 | $ (0.25) | $ 0.97 | $ 2.37 | $ 1.04 |
Schedule II - Valuation and Q_2
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance, beginning of period | $ 29,897 | $ 24,940 | |
Additions | 15,794 | 21,847 | $ 18,935 |
Deductions / Other | (8,814) | (19,177) | (16,848) |
Balance, end of period | 34,728 | 29,897 | 24,940 |
Sales Returns and Allowances | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance, beginning of period | 11,233 | 8,815 | 9,212 |
Additions | 21,506 | 21,193 | 16,866 |
Deductions / Other | (23,742) | (18,775) | (17,263) |
Balance, end of period | 8,997 | 11,233 | 8,815 |
Measurement Input, Discount Rate | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance, beginning of period | 18,649 | 15,979 | 13,892 |
Balance, end of period | 25,629 | 18,649 | 15,979 |
Allowance for doubtful accounts | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance, beginning of period | 15 | 146 | 167 |
Additions | 468 | 0 | 6 |
Deductions / Other | (381) | (131) | (27) |
Balance, end of period | $ 102 | $ 15 | $ 146 |