FREMONT, Calif., Feb. 09, 2021 (GLOBE NEWSWIRE) -- Corsair Gaming, Inc. (NASDAQ:CRSR) (“Corsair”), a leading global provider and innovator of high-performance gear for gamers and content creators, today announced preliminary financial results for the fourth quarter and full year ended December 31, 2020.

Fourth Quarter 2020 Highlights

Full Year 2020 Highlights

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

“We are excited to see the market for gaming and streaming product continue to grow at such a pace.  It is clear that a new wave of gamers and streamers has entered the market as well as consumers building gaming PCs for the first time.  Our expectation is that all these people that are new to the market will continue to buy gaming and streaming products from us for many years into the future.  I am particularly pleased that the revenue from our gaming components and systems segment is now over $1 billion.  And equally happy to see our gamer and creator peripherals segment grow by 83% and break through the half billion milestone.  Obviously this is amazing growth in both segments.  We continue to bring out exciting new product in all our product lines, and these seem to be resonating well with our current and new customers.  In fact our last three major product launches, the K100 keyboard, the Elgato Wave microphone, and the 4000X gaming case, are all showing near 5 star reviews at major retailers, and gained solid market share in a short time,” stated Andy Paul, Chief Executive Officer of Corsair.

“We are extremely pleased with our financial performance in the fourth quarter.  We have paid off an additional $50 million in debt during the quarter, making the total debt repayment $190 million for 2020.  We expect to continue to use our operating cashflows to reduce our debt and continue to invest in growth.  We also had a successful secondary offering this January, with all net proceeds going to the selling shareholders participating in the secondary,” said Michael G. Potter, Chief Financial Officer of Corsair.

Financial Outlook

For the full year 2021, we currently expect:

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

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

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

Recent Developments

Conference Call and Webcast Information

We will host a conference call to discuss the fourth quarter and full year 2020 financial results on February 9, 2021, at 5:30 a.m. PT. The conference call can be accessed live over the phone by dialing 1-877-407-0784, or for international callers 1-201-689-8560. A replay will be available from 8:30 a.m. PT on February 9, 2021 through February 16, 2021, by dialing 1-844-512-2921, or for international callers 1-412-317-6671. The replay passcode is 13715251.

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

About Corsair Gaming, Inc.

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

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

Forward Looking Statements

Except for the historical information contained herein, the matters set forth in this press release are forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, our estimated full year 2021 net revenue, adjusted operating income and adjusted EBITDA, as well as our belief that more new gamers and streamers are entering the market  and that they will continue to buy gaming and streaming products from us for many years into the future. Forward-looking statements are based on our management’s beliefs, as well as assumptions made by, and information currently available to, them. Because such statements are based on expectations as to future financial and operating results and are not statements of fact, actual results may differ materially from those projected. Factors which may cause actual results to differ materially from current expectations include, but are not limited to: our ability to build and maintain the strength of our brand among gaming and streaming enthusiasts and our ability to continuously develop and successfully market new gear and improvements;  the introduction and success of new third-party high-performance computer hardware, particularly graphics processing units and central processing units as well as sophisticated new video games; the risk that we are not able to compete with competitors and/or that the gaming industry, including streaming and eSports, does not grow as expected or declines; the loss or inability to attract and retain key management; delays or disruptions at our or third-party’s manufacturing and distribution facilities; currency exchange rate fluctuations or international trade disputes resulting in our gear becoming relatively more expensive to our overseas customers or resulting in an increase in our manufacturing costs; the impact of the coronavirus on our  business; general economic conditions that adversely effect, among other things, consumer confidence and spending.; and the other factors described under the heading “Risk Factors” in our Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission (“SEC”) on November 10, 2020, in our Annual Report on Form 10-K for the year ended December 31, 2020 (once available) and our subsequent filings with the SEC. Copies of each filing may be obtained from us or the SEC. All forward-looking statements reflect our beliefs and assumptions only as of the date of this press release. We undertake no obligation to update forward-looking statements to reflect future events or circumstances. Our results for the quarter and full year ended December 31, 2020 are not necessarily indicative of our operating results for any future periods.

Use and Reconciliation of Non-GAAP Financial Measures

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

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

Our use of these terms may vary from that of others in our industry. These non-GAAP financial measures should not be considered as an alternative to revenues, operating income, net income, cash provided by operating activities or any other measures derived in accordance with GAAP as measures of operating performance or liquidity. Reconciliations of these measures to the most directly comparable GAAP financial measures are presented in the attached schedules.

We calculate these non-GAAP financial measures as follows:

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

Source: Corsair Gaming, Inc.

Investor Relations Contact:

Ronald van Veen
ir@corsair.com
510-578-1407

Media Contact:

Adrian Bedggood
510-657-8747
+44-7989-258827


Corsair Gaming, Inc.
Preliminary Condensed Combined Consolidated Statements of Operations
(Unaudited, in thousands, except per share amounts)

  Three Months Ended
December 31,		  Year Ended
December 31,		 
  2020  2019  2020  2019 
Net revenue $556,339  $326,555  $1,702,367  $1,097,174 
Cost of revenue  402,540   256,102   1,236,938   872,887 
Gross profit  153,799   70,453   465,429   224,287 
Operating expenses:                
Sales, general and administrative  81,127   47,041   257,004   163,033 
Product development  13,779   9,194   50,064   37,547 
Total operating expenses  94,906   56,235   307,068   200,580 
Operating income  58,893   14,218   158,361   23,707 
Other (expense) income:                
Interest expense  (6,021)  (8,485)  (35,137)  (35,548)
Other expense, net  (1,153)  (81)  (1,182)  (1,558)
Total other expense, net  (7,174)  (8,566)  (36,319)  (37,106)
Income (loss) before income taxes  51,719   5,652   122,042   (13,399)
Income tax (expense) benefit  (8,676)  360   (18,825)  5,005 
Net income (loss) $43,043  $6,012  $103,217  $(8,394)
Net income (loss) per share:                
Basic $0.47  $0.08  $1.20  $(0.11)
Diluted $0.43  $0.08  $1.14  $(0.11)
Weighted-average shares used to compute net income
  (loss) per share		                
Basic  91,923   77,293   86,256   76,223 
Diluted  99,771   79,514   90,577   76,223 


Corsair Gaming, Inc.
Preliminary Segment Information
(Unaudited, in thousands, except percentages)

  Three Months Ended
December 31,		  Year Ended
December 31,		 
   2020  2019  2020  2019 
Net revenue:                
Gamer and Creator Peripherals $191,835  $94,057  $539,366  $294,141 
Gaming Components and Systems  364,504   232,498   1,163,001   803,033 
Total Net Revenue $556,339  $326,555  $1,702,367  $1,097,174 
                 
Gross Margin:                
Gamer and Creator Peripherals  35.9%  24.6%  35.2%  27.7%
Gaming Components and Systems  23.3%  20.4%  23.7%  17.8%
Total Gross Margin  27.6%  21.6%  27.3%  20.4%


Corsair Gaming, Inc.
Preliminary Condensed Combined Consolidated Balance Sheets
(Unaudited, in thousands, except per share amounts)

  December 31,
2020		  December 31,
2019		 
Assets        
Current assets:        
Cash and restricted cash $133,338  $51,717 
Accounts receivable, net  293,629   202,334 
Inventories  226,007   151,063 
Prepaid expenses and other current assets  37,997   24,696 
Total current assets  690,971   429,810 
Property and equipment, net  16,475   15,365 
Goodwill  312,760   312,750 
Intangible assets, net  259,317   291,027 
Restricted cash, noncurrent  230   230 
Other assets  34,362   10,536 
TOTAL ASSETS $1,314,115  $1,059,718 
Liabilities and Stockholders’ Equity        
Current liabilities:        
Accounts payable $299,636  $182,025 
Current portion of debt, net  —   2,364 
Other liabilities and accrued expenses  205,745   115,541 
Total current liabilities  505,381   299,930 
Debt, net  321,393   503,448 
Deferred tax liabilities  29,752   33,820 
Other liabilities, noncurrent  20,199   5,745 
TOTAL LIABILITIES  876,725   842,943 
Stockholders’ Equity:        
Common stock and additional paid-in capital  438,676   324,976 
Accumulated deficit  (2,813)  (106,030)
Accumulated other comprehensive income (loss)  1,527   (2,171)
Total Stockholders’ Equity  437,390   216,775 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $1,314,115  $1,059,718 


Corsair Gaming, Inc.
Preliminary Condensed Combined Consolidated Statements of Cash Flows
(Unaudited, in thousands)

  Three Months Ended
December 31,		  Year Ended
December 31,		 
  2020  2019  2020  2019 
Cash flows from operating activities:                
Net income (loss) $43,043  $6,012  $103,217  $(8,394)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:                
Stock-based compensation  1,510   1,035   5,796   3,848 
Depreciation  2,613   1,936   9,318   7,384 
Amortization of intangible assets  8,572   6,572   33,916   30,123 
Debt issuance costs amortization  560   708   2,550   2,989 
Loss on debt extinguishment  858   —   4,114   — 
Deferred income taxes  (584)  (4,278)  (7,476)  (11,535)
Other  1,524   (945)  2,594   (347)
Changes in operating assets and liabilities:                
Accounts receivable  (33,425)  (37,460)  (91,492)  (48,033)
Inventories  (19,200)  28,732   (80,086)  15,711 
Prepaid expenses and other assets  12,478   1,693   (7,953)  (1,619)
Accounts payable  23,750   14,138   116,522   16,203 
Other liabilities and accrued expenses  26,930   17,826   77,933   30,773 
Net cash provided by operating activities  68,629   35,969   168,953   37,103 
Cash flows from investing activities:                
Acquisition of business, net of cash acquired  (455)  (121,258)  (1,291)  (126,104)
Payment of deferred consideration  —   —   —   (10,300)
Purchase of property and equipment  (3,917)  (1,845)  (8,989)  (8,848)
Purchase of intangible asset  —   (175)  —   (175)
Net cash used in investing activities  (4,372)  (123,278)  (10,280)  (145,427)
Cash flows from financing activities:                
Proceeds from issuance of debt, net  —   113,885   —   113,885 
Repayment of debt  (50,000)  (1,194)  (190,394)  (3,969)
Payment of debt issuance costs  —   (2,300)  (194)  (2,450)
Repayment of line of credit, net  —   (35,700)  —   (27,000)
Proceeds from initial public offering, net of underwriting
   discounts and commissions		  —   —   118,575   — 
Payment of other offering costs  (2,873)  (137)  (8,455)  (245)
Proceeds from issuance of common stock to
   common stockholders		  —   53,500   —   53,500 
Repurchase of common stock  —   (962)  —   (1,531)
Proceeds from exercise of stock options  113   44   1,337   124 
Net cash provided by (used in) financing activities  (52,760)  127,136   (79,131)  132,314 
Effect of exchange rate changes on cash  1,930   (9)  2,079   37 
Net increase in cash and restricted cash  13,427   39,818   81,621   24,027 
Cash and restricted cash at the beginning of the period  120,141   12,129   51,947   27,920 
Cash and restricted cash at the end of the period $133,568  $51,947  $133,568  $51,947 


Corsair Gaming, Inc.
GAAP to Non-GAAP Reconciliations

Preliminary Non-GAAP Operating Income Reconciliations
(Unaudited, in thousands, except percentages)

  Three Months Ended
December 31,		  Year Ended
December 31,		 
  2020  2019  2020  2019 
Operating Income - GAAP $58,893  $14,218  $158,361  $23,707 
Acquisition accounting impact related to recognizing acquired deferred revenue at fair value  -   1,067   -   1,067 
Acquisition accounting impact related to recognizing acquired inventory at fair value  -   1,604   394   1,604 
Change in fair value of contingent consideration for business acquisition  954   (635)  954   (635)
Stock-based compensation  1,510   1,035   5,796   3,848 
Intangible asset amortization  8,572   6,571   33,916   30,123 
Acquisition-related and integration-related costs  680   1,250   3,156   3,099 
Executive transition costs  -   444   -   984 
Non-deferred IPO and secondary offering costs  428   224   1,633   1,135 
Debt modification costs  -   836   623   836 
Adjusted Operating Income - Non-GAAP $71,037  $26,614  $204,833  $65,768 
As a % of net revenue - GAAP  10.6%  4.4%  9.3%  2.2%
As a % of net revenue - Non-GAAP  12.8%  8.1%  12.0%  6.0%


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

  Three Months Ended
December 31,		  Year Ended
December 31,		 
  2020  2019  2020  2019 
Net Income (Loss) - GAAP $43,043  $6,012  $103,217  $(8,394)
Acquisition accounting impact related to recognizing acquired deferred revenue at fair value  -   1,067   -   1,067 
Acquisition accounting impact related to recognizing acquired inventory at fair value  -   1,604   394   1,604 
Change in fair value of contingent consideration for business acquisition  954   (635)  954   (635)
Stock-based compensation  1,510   1,035   5,796   3,848 
Intangible asset amortization  8,572   6,571   33,916   30,123 
Acquisition-related and integration-related costs  680   1,250   3,156   3,099 
Executive transition costs  -   444   -   984 
Non-deferred IPO and secondary offering costs  428   224   1,633   1,135 
Debt modification costs  -   836   623   836 
Loss on debt extinguishment  858   -   4,114   - 
Non-GAAP income tax adjustment  (3,032)  (1,567)  (8,850)  (6,163)
Adjusted Net Income - Non-GAAP $53,013  $16,841  $144,953  $27,504 
Diluted Net income (loss) per share:                
GAAP $0.43  $0.08  $1.14  $(0.11)
Adjusted, Non-GAAP $0.53  $0.21  $1.60  $0.35 
Shares used to compute diluted net income (loss) per share:                
GAAP  99,771   79,514   90,577   76,223 
Adjusted, Non-GAAP  99,771   79,514   90,577   78,117 


Corsair Gaming, Inc.
Preliminary Adjusted EBITDA Reconciliations
(Unaudited, in thousands, except percentages)

  Three Months Ended
December 31,		  Year Ended
December 31,		 
  2020  2019  2020  2019 
Net Income (Loss) - GAAP $43,043  $6,012  $103,217  $(8,394)
Acquisition accounting impact related to recognizing acquired deferred revenue at fair value  -   1,067   -   1,067 
Acquisition accounting impact related to recognizing acquired inventory at fair value  -   1,604   394   1,604 
Change in fair value of contingent consideration for business acquisition  954   (635)  954   (635)
Stock-based compensation  1,510   1,035   5,796   3,848 
Acquisition-related and integration-related costs  680   1,250   3,156   3,099 
Executive transition costs  -   444   -   984 
Non-deferred IPO and secondary offering costs  428   224   1,633   1,135 
Debt modification costs  -   836   623   836 
Intangible asset amortization  8,572   6,571   33,916   30,123 
Depreciation  2,613   1,936   9,318   7,384 
Interest expense (includes loss on debt extinguishment)  6,021   8,485   35,137   35,548 
Tax expense (benefit)  8,676   (360)  18,825   (5,005)
Adjusted EBITDA - Non-GAAP $72,497  $28,469  $212,969  $71,594 
                 
Adjusted EBITDA margin - Non-GAAP  13.0%  8.7%  12.5%  6.5%