Turtle Beach Corp
For the period ended Mar 31, 2026. Filed May 7, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 7, 2026
TBCH$15.19-8.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-06.
0001193125-25-270035
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-07.
0001193125-26-212345
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 84 previous paragraphs and 77 current paragraphs.
34 unchanged; 23 reworded; 17 added; 25 removed; 2 previous and 3 current paragraphs rearranged.
Tables are not compared: 5 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (17)
Current report
Tariffs Update
Current report
Beginning in 2025, the U.S. implemented a broad-based tariff framework applicable to most imports, with higher country- and product-specific rates imposed on certain trading partners, including Mexico, Germany, and China among others. Certain foreign jurisdictions also announced reciprocal measures. In February 2026, the U.S. Supreme Court ruled that tariffs imposed under the International Emergency Economic Powers
Current report
Act (“IEEPA”) were unconstitutional. Following this decision, the U.S. Court of International Trade ordered U.S. Customs and Border Protection (“CBP”) to establish a process for issuing refunds related to these tariffs.
Current report
On April 20, 2026, CBP launched an online portal for the submission of IEEPA-related tariff refund requests. Submitted claims will be reviewed by CBP to determine eligibility prior to the issuance of any refunds. In response to the Supreme Court’s ruling, the U.S. implemented a new 10% tariff on all imports under Section 122 of the Trade Act of 1974. These tariffs became effective on February 24, 2026, and are scheduled to remain in effect for up to 150 days, which is the maximum duration permitted under Section 122 without congressional authorization. Existing exclusions, including those related to the United States-Mexico-Canada Agreement (“USMCA”), remain in effect. As of March 31, 2026, our condensed consolidated financial statements do not reflect any impacts attributable to such refunds.
Current report
For the three months ended March 31, 2026, gross margin decreased to 26.8% from 36.6% in the comparable prior year period primarily due to decline in net revenues relative to cost of goods sold. During the three months ended March 31, 2026, gross margin was adversely affected compared with the prior year quarter, driven in part by transition-related costs associated with the relocation of the Company's principal third-party logistics provider.
Current report
Research and development costs increased by $0.6 million or 14.6% for the three months ended March 31, 2026 as compared to the same period in the prior year due to engineering costs related to new products.
Current report
Interest expense decreased by $0.6 million or 31.8% for the three months ended March 31, 2026, as compared to the same period in the prior year primarily due to lower interest costs associated with our refinancing in August 2025.
Current report
Costs in connection with reorganization of operations which primarily include severance, related benefits and post-acquisition costs related to PDP acquisition.
Current report
Professional fees related to potential acquisition opportunities, warehouse relocation and certain litigation proceedings fees.
Current report
Cash provided by operating activities for the three months ended March 31, 2026 was $29.4 million, decrease of $11.1 million as compared to $40.5 million used for the three months ended March 31, 2025. The decrease is primarily due to higher net loss of $14.5 million, paydown of accounts payable of $8.9 million and lower accounts receivable of $5.6 million. This was partially offset by $7.4 million of inventory sold, lower paydown of $5.4 million in other liabilities and lower prepaid expenses and other assets of $4.0 million.
Current report
2025 Credit Facility
Current report
On April 30, 2026, the Company repaid in full the amount then-outstanding under the 2025 Credit Facility in connection with the 2026 Credit Facility.
Current report
2026 Term Loan Facility
Current report
On April 30, 2026, we entered into the 2026 Term Loan Facility governed by the 2026 Term Loan Financing Agreement by and among us, VTB, as borrower, each of our subsidiaries listed as a guarantor on the signature pages thereto, the lenders from time to time party thereto, and Blue Torch, as administrative agent and collateral agent, pursuant to which Blue Torch made a loan to VTB in the aggregate amount of $85.0 million, the proceeds of which were used to or will be used to (a) refinance existing indebtedness of ours and our subsidiaries; (b) for general corporate purposes; and (c) to pay fees and expenses related to the loan transactions. The 2026 Term Loan Facility will amortize in a quarterly amount equal to 1.25% of the aggregate original principal amount of the 2026 Term Loan Facility and may be prepaid at any time subject to a prepayment premium during the first year of the interest payments payable during the first year plus 3.00%. The 2026 Term Loan Facility is secured by substantially all of our assets and those of our subsidiaries which are party to the 2026 Term Loan Facility.
Current report
2026 Revolving Credit Facility
Current report
On April 30, 2026, we entered into the 2026 Revolving Credit Facility governed by the 2026 Revolving Credit Agreement, by and among us, Voyetra Turtle Beach, Inc., TBC Holding Company LLC, Performance Designed Products LLC, Turtle Beach Europe Limited, VTB Holdings, Inc., Tide Acquisition Sub II, LLC, the financial institutions party thereto and Bank of America, as agent, collateral agent and security trustee for the lenders to the credit facility. The 2025 Revolving Credit Agreement provides for, among other things: (a) subject in each case to the applicable borrowing base, a US commitment in an amount equal to $50.0 million or $65.0million based on the season and a UK commitment equal to $10.0 million or $15.0 million based on the season; (b) a maturity date of April 30, 2029; (c) interest rate and margin terms such that the loans will bear interest at a rate equal to (1) SOFR, (2) the US Base Rate, (3) SONIA for loans denominated in Sterling, and (4) EURIBOR for loans denominated in Euros, plus in each case, an applicable margin, which is between 0.50% and 1.00% for US Base Rate Loans and 1.50% and 2.00% for US Term SOFR Loans, UK SONIA Rate Loans and UK EURIBOR Loans; and (d) certain affirmative and negative covenants and a springing (subject to certain triggers) fixed charge coverage ratio. The obligations under the 2026 Revolving Credit Agreement are secured by substantially all of our assets and those of our subsidiaries which are party to the 2026 Revolving Credit Agreement.
Current report
The respective priorities of the security interests securing the 2026 Term Loan Financing Agreement and the 2026 Revolving Credit Agreement are governed by an intercreditor agreement, dated as of April 30, 2026, between Blue Torch and Bank of America.
Removed paragraphs (25)
Previous report
For the three months ended September 30, 2025, gross margin increased to 37.4% from 36.2% in the comparable prior year period primarily due to the unfavorable impact of fair value step-up adjustment in the prior period relating to the PDP acquisition, partially offset by higher tariffs in 2025.
Previous report
Comparison of the Nine Months Ended September 30, 2025 to the Nine Months Ended September 30, 2024
Previous report
Net revenue for the nine months ended September 30, 2025 was $201.1 million, a $25.6 million decrease from $226.7 million, due to a significant reduction in market demand for computer gaming accessories.
Previous report
For the nine months ended September 30, 2025, gross margin increased to 35.6% from 33.1% in the comparable prior year period primarily due to the unfavorable impact of fair value step-up adjustment in the prior period relating to the PDP acquisition, partially offset by higher tariffs in 2025.
Previous report
Selling and marketing expenses increased by $1.4 million, or 3.9% for the nine months ended September 30, 2025 primarily due to certain employee-related expenses, professional fees, certain marketing initiatives and incremental intangible assets amortization expenses related to the PDP acquisition.
Previous report
Research and development costs decreased by $0.2 million or 3.5% for the three months ended September 30, 2025 as compared to the same period in the prior year.
Previous report
Research and development costs decreased by $0.2 million or 1.4% for the nine months ended September 30, 2025 as compared to the same period in the prior year.
Previous report
General and administrative expenses increased by $3.6 million or 18.6% for the nine months ended September 30, 2025 as compared to the same period in the prior year primarily due to higher public company costs for professional services, consulting fees and information technology investments.
Previous report
Interest expense increased by $1.0 million or 37% for the three months ended September 30, 2025, as compared to the same period in the prior year primarily due to the $1.9 million loss on debt extinguishment related to the Revolving Credit Facility and Blue Torch Term Loan. Interest expense increased by $2.7 million or 53% for the nine months ended September 30, 2025 as compared to the same period in the prior year primarily due to the $1.9 million loss on debt extinguishment related to the Revolving Credit Facility and Blue Torch Term Loan.
Previous report
An income tax benefit of $7.0 million was recorded in the three months ended March 31, 2024 as a result of the reversal of a
Previous report
portion of the Company’s deferred tax asset valuation allowance.
Previous report
Costs relate to the step-up of acquired finished goods inventory to fair market value as required under purchase accounting. This
Previous report
step-up in value over original cost is recorded as a charge to cost of revenue as such inventory is sold.
Previous report
Certain professional fees related to recovery initiatives in connection with a loss of inventory while in transit that occurred in the fourth quarter of 2024.
Previous report
Litigation and other primarily includes one-time legal and other professional fees associated with certain proceedings and settlements.
Previous report
Revolving Credit Facility
Previous report
On March 5, 2018, Turtle Beach and certain of its subsidiaries entered into an amended and restated loan, guaranty and security agreement (the “Revolving Credit Facility”) with Bank of America, N.A. (“Bank of America”), as administrative agent, collateral agent and security trustee for the lenders. The Revolving Credit Facility provided for a line of credit of up to $50 million inclusive of a sub-facility limit of $10 million for TB Europe, and was secured by substantially all of the Company's assets. The was intended for working capital, letters of credit and other corporate purposes.
Previous report
On March 13, 2024, the Company entered into a Fourth Amendment, dated as of March 13, 2024 (the “Fourth Amendment”), to the Revolving Credit Facility. The Fourth Amendment extended the maturity date to March 13, 2027, incorporated PDP acquisition assets into the U.S. Borrowing Base ( up to $15,000,000 or 30% of the aggregate Revolver Commitments), and updated interest terms. Loans bore interest at SOFR, U.S. Base Rate, SONIA or EUIBOR, plus applicable margins, which was between 0.50% to 2.50% for base rate loans and UK base rate loans, and 1.75% to 3.50% for U.S. BSBY rate loans, U.S. BSBY daily floating rate loans and UK alternative currency loans. In addition, Turtle Beach was required to pay a commitment fee on the unused revolving loan commitment at a rate ranging from 0.375% to 0.50% and letter of credit fees and agent fees.
Previous report
The Revolving Credit Facility included customary affirmative and negative covenants and required a minimum fixed charge coverage ratio of at least 1.00 when availability thresholds were not met. These covenants restricted the Company’s ability to incur additional debt, pay dividends, repurchase stock, make certain investments, enter into mergers, and dispose of assets.
Previous report
On August 1, 2025, the Company entered into a Credit Agreement (the “Credit Agreement”), discussed below, and made a payment of $16.0 million from the Bank of America term loan facility, including $15.9 million and $0.1 million of principal and accrued interest, respectively. The Company treated the Credit Agreement as a partial extinguishment to the Revolving Credit Facility and recognized a loss on extinguishment of debt of $0.3 million to write-off the unamortized deferred financing costs in interest expense in its condensed consolidated statements of operations.
Previous report
Term Loan
Previous report
On March 13, 2024, Turtle Beach and certain of its subsidiaries entered into a new financing agreement with Blue Torch Finance, LLC, (“Blue Torch”), pursuant to which Blue Torch provided for an aggregate amount of $50 million (the “Term Loan Facility”), the proceeds of which were used to (i) fund a portion of the PDP acquisition purchase price; (ii) repay certain indebtedness of the acquired business; (iii) to pay fees and expenses related to such transactions and (iv) for general corporate purposes. The Term Loan Facility amortized in a monthly amount equal to 0.21% during the first two years and 0.42% during the third year. As the prepayment period concluded on March 13, 2025, the Term Loan Facility was no longer subject to the prepayment premium applied during the first year. The Term Loan Facility was secured by substantially all of the assets of the Company and its subsidiaries which were party to the Term Loan Facility.
Previous report
On August 1, 2025, the Term Loan Facility was repaid in full from the proceeds of the Bank of America credit agreement, discussed below, for the amount of $43.2 million. The Company treated the repayment as a debt extinguishment and recognized a loss on extinguishment of debt of $1.7 million to write-off the unamortized deferred financing costs in interest expense in the condensed consolidated statements of operations.
Previous report
Credit Agreement
Previous report
As of September 30, 2025, the Company was in compliance with all the financial covenants under the Credit Agreement and excess borrowing availability was approximately $34.5 million.
Reworded paragraphs (23)
Previous wording
Turtle Beach Corporation, headquartered in San Diego, California, 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 brand. The Turtle Beach® brand is a market share leader in console gaming headsets with a vast portfolio of headsets designed to be compatible with the latest Xbox, PlayStation, and Nintendo consoles, as well as for personal computers (“PCs”) and mobile/tablet devices. Turtle Beach Corporation’s PC product portfolio includes headsets, gaming keyboards, mice and other gaming accessories focused on the PC gaming platform and it has recently expanded its brand beyond gaming headsets and launched its gaming controller product line, as well as, gaming flight simulation and racing simulation accessories. In March 2024, Turtle Beach acquired Performance Designed Products LLC (“PDP”), another leading gaming accessory brand with a robust slate of products, including gaming controllers/gamepads for all platforms and licensing deals with popular gaming and entertainment properties. The Company has transitioned all gaming accessories under its best-selling Turtle Beach brand, with products for consoles and PC, including multiplatform gaming headsets, controllers, mice, keyboards, microphones, and flight/racing simulation accessories under one of the industry’s most recognized and trusted brand names.
Current wording
We are 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 our brand, Turtle Beach. The Turtle Beach® brand is a market share leader in console gaming headsets for over 16 years running with a vast portfolio of headsets designed to be multiplatform compatible with the latest Xbox, PlayStation, and Nintendo consoles, as well as for PCs and mobile and tablet devices. Our PC product portfolio includes PC gaming headsets, keyboards, mice, microphones and other PC gaming peripherals and in 2021 we expanded our brand beyond gaming headsets and launched our gaming controller product line, as well as, flight simulation and racing simulation accessories. In 2024, we acquired PDP, another leading gaming accessory brand with a robust slate of products, including gaming controllers for all major platforms and licensing deals with popular gaming and entertainment properties. We are headquartered in San Diego, California, and were incorporated in the State of Nevada in 2010.
Previous wording
Turtle Beach operates in the approximately $200 billion global games and accessories market. The global gaming audience now exceeds global cinema and music markets with over 3.6 billion active gamers worldwide. Gaming peripherals, such as headsets, controllers, keyboards, mice, microphones, and flight and racing simulation controls are estimated to be an $11 billion business globally.
Current wording
We operate in a nearly $200.0 billion global games and accessories market, according to Newzoo Peripheral Market Forecast. The global gaming audience now exceeds global cinema and music markets with over 3.5 billion active gamers worldwide. Gaming peripherals, such as headsets, controllers, keyboards, mice, microphones, and flight and racing simulation controls are estimated to be an $11.2 billion business globally.
Previous wording
The console and PC gaming accessories markets are driven by major game launches and long-running franchises that encourage players to continually buy equipment and accessories. On Xbox, PlayStation, Nintendo Switch and PC, flagship games like Call of Duty, Destiny, Star Wars: Battlefront, Grand Theft Auto, Battlefield, and battle royale games like Fortnite, Call of Duty Warzone, Apex Legends, and PlayerUnknown’s Battlegrounds, are examples of major franchises that prominently feature online multiplayer modes that encourage player-to-player communication and drive increased demand for gaming headsets, controllers, and more. Many of these established franchises launch new titles annually, leading into the holidays and beyond, and as a result can cause an additional boost to the normally strong holiday sales for gaming accessories.
Current wording
The console and PC gaming accessory markets are also driven by major game launches and long-running franchises that encourage players to continually buy equipment and accessories. On Xbox, PlayStation, Nintendo Switch, and PC, flagship games like Call of Duty, Destiny, Star Wars: Battlefront, Grand Theft Auto, Battlefield, and battle royale games like Fortnite, Call of Duty Warzone, Apex Legends, and PlayerUnknown’s Battlegrounds, are examples of major franchises that prominently feature online multiplayer modes that promote player-to-player communication and drive increased demand for gaming headsets, controllers, and more. Many of these established franchises launch new titles annually, leading into the holidays and beyond, and as a result can cause an additional boost to the normally strong holiday sales for gaming accessories.
Previous wording
Additionally, some larger franchise games, for example Call of Duty and Fortnite, follow-up with post-launch downloadable content or new content update packs, to keep interest and fan engagement/momentum going for months following a game’s initial release. Many gamers play online where a gaming headset, which includes a microphone, is required because it allows players to communicate with each other in real-time, provides a more immersive experience, and delivers a competitive advantage.
Current wording
Additionally, some larger franchise games, for example Call of Duty and Fortnite, follow-up with multiple post-launch downloadable content or new content update packs, to keep interest and fan engagement/momentum going for months following a game’s initial release. Many gamers play online where a gaming headset, which includes a microphone, is required because it allows players to communicate with each other in real-time, provides a more immersive experience, and delivers a competitive advantage.
Previous wording
Net revenue for the three months ended September 30, 2025 was $80.5 million, a $13.9 million decrease from $94.4 million driven by a significant reduction in market demand for computer gaming accessories.
Current wording
Net revenue for the three months ended March 31, 2026 was $42.2 million, a $21.7 million decrease from $63.9 million for the three months ended March 31, 2025, reflecting softer market demand for gaming accessories driven primarily by macroeconomic challenges affecting consumer spending.
Previous wording
Selling and marketing expenses decreased by $1.0 million, or 7.6% for the three months ended September 30, 2025 as compared to the same period in the prior year primarily due to lower market demand-driven direct media marketing.
Current wording
Selling and marketing expenses decreased by $0.2 million, or 1.5% for the three months ended March 31, 2026 as compared to the same period in the prior year primarily due to lower employee compensation cost.
Previous wording
General and administrative expenses increased by $1.2 million or 18.7% for the three months ended September 30, 2025 as compared to the same period in the prior year primarily due to higher public company costs for professional services and consulting fees.
Current wording
General and administrative expenses increased by $0.3 million or 3.7% for the three months ended March 31, 2026 as compared to the same period in the prior year primarily due to professional services and fees.
Previous wording
Insurance recovery for the nine months ended September 30, 2025 was $9.4 million, and relates to the receipt of certain insurance claims from the previously disclosed loss of inventory while in transit that occurred in the fourth quarter of 2024. There was no insurance recovery for the three months ended September 30, 2025.
Current wording
Insurance recovery relates to the recognition of certain initial insurance claim receivables from the previously disclosed loss of inventory while in transit that occurred in the fourth quarter of 2024.
Previous wording
Acquisition-related costs include costs incurred in connection with the PDP acquisition, including professional fees such as legal and accounting along with other certain integration related costs.
Current wording
Acquisition-related costs include one-time costs incurred in connection with the PDP acquisition including professional fees such as legal and accounting along with other certain integration related costs.
Previous wording
Income tax expense for the three months ended September 30, 2025 was $0.3 million at an effective tax rate of 12.9% compared to income tax expense of $0.05 million for the three months ended September 30, 2024 at an effective tax rate of 1.3%. The effective tax rate for the three months ended September 30, 2025 was primarily impacted by the change in U.S. valuation allowance, foreign taxes and Federal and State current tax. The effective tax rate for the three months ended September 30, 2024 was primarily impacted by the change in U.S. valuation allowance and foreign taxes.
Current wording
Income tax benefit for the three months ended March 31, 2026 was $0.1 million at an effective tax rate of 0.8% compared to income tax benefit of $0.1 million for the three months ended March 31, 2025 at an effective tax rate of 14.1%. The effective tax rate for the three months ended March 31, 2026 was primarily impacted by the change in U.S. valuation allowance, foreign taxes and Federal and State current tax. The effective tax rate for the three months ended March 31, 2025 was primarily impacted by the change in U.S. valuation allowance and foreign taxes.
Previous wording
Management routinely reviews key performance indicators, including revenue, operating income and margins, and earnings per share, among others. In addition, we believe certain other measures provide useful information to management and investors about us and our financial condition and results of operations for the following reasons: (i) they are measures used by our Board of Directors and management team to evaluate our operating performance; (ii) they are measures used by our management team to make day-to-day operating decisions; (iii) the adjustments made are often viewed as either non-recurring or not reflective of ongoing financial performance and/or have no cash impact on operations; and (iv) the measures are used by securities analysts, investors and other interested parties as a common operating performance measure to compare results across companies in our industry by adjusting for potential differences caused by variations in capital structures (affecting relative interest expense), and the age and book value of facilities and equipment (affecting relative depreciation and amortization expense). These other metrics, however, are not measures of financial performance under accounting principles generally accepted in the United States of America (“GAAP”) and given the limitations of these metrics as analytical tools, should not be considered a substitute for gross profit, gross margins, net income (loss) or other consolidated income statement data as determined in accordance with GAAP.
Current wording
Management routinely reviews key performance indicators, including revenue, operating income and margins, and earnings per share, among others. In addition, we believe certain other measures provide useful information to management and investors about us and our financial condition and results of operations for the following reasons: (i) they are measures used by our Board and management team to evaluate our operating performance; (ii) they are measures used by our management team to make day-to-day operating decisions; (iii) the adjustments made are often viewed as either non-recurring or not reflective of ongoing financial performance and/or have no cash impact on operations; and (iv) the measures are used by securities analysts, investors and other interested parties as a common operating performance measure to compare results across companies in our industry by adjusting for potential differences caused by variations in capital structures (affecting relative interest expense), and the age and book value of facilities and equipment (affecting relative depreciation and amortization expense). These other metrics, however, are not measures of financial performance under accounting principles generally accepted in the United States of America (“GAAP”) and given the limitations of these metrics as analytical tools, should not be considered a substitute for gross profit, gross margins, net income (loss) or other consolidated income statement data as determined in accordance with GAAP.
Previous wording
Adjusted EBITDA (and a reconciliation to Net loss, the nearest GAAP financial measure) for the three and nine months ended September 30, 2025 and September 30, 2024, are as follows (in thousands):
Current wording
Adjusted EBITDA (and a reconciliation to Net loss, the nearest GAAP financial measure) for the three months ended March 31, 2026 and March 31, 2025, are as follows (in thousands):
Previous wording
Insurance proceeds from claims related to a loss of inventory while in transit that occurred in the fourth quarter of 2024.
Current wording
Insurance proceeds from claims related to a loss of inventory while in transit that occurred primarily in the fourth quarter of 2024.
Previous wording
Cash provided by operating activities for the nine months ended September 30, 2025 was $22.1 million, an increase of $30.7 million as compared to $8.6 million used for the nine months ended September 30, 2024. The increase is primarily due to higher gross receipts, insurance proceeds from claims related to a loss of inventory, lower acquisition-related costs and reduced spending levels.
Current wording
Cash provided by operating activities for the three months ended March 31, 2025 was $40.5 million, an increase of $13.2 million as compared to $27.3 million for the three months ended March 31, 2024. The increase is primarily due to higher gross receipts as a result of incremental PDP revenue.
Previous wording
Cash provided by investing activities was $1.3 million for the nine months ended September 30, 2025, which was primarily related to purchase price working capital adjustments of $2.5 million, compared to $80.7 million used for the nine months ended September 30, 2024 primarily related to the acquisition of the PDP business.
Current wording
Cash provided by investing activities was $2.3 million for the three months ended March 31, 2025, which was primarily related to a $2.5 million working capital adjustment payment, compared to $76.2 million used for the three months ended March 31, 2024 primarily related to the acquisition of the PDP business.
Previous wording
Net cash used for financing activities was $24.5 million during the nine months ended September 30, 2025 compared to net cash provided by financing activities of $82.7 million during the nine months ended September 30, 2024. Financing activities during the nine months ended September 30, 2025 consisted primarily of $15.9 million revolving credit facility net repayments, $17.0 million of share repurchases, $2.3 million of debt financing costs and $8.9 million of term loan net proceeds.
Current wording
Net cash used for financing activities was $44.9 million during the three months ended March 31, 2025 compared to net cash provided by financing activities of $48.0 million during the three months ended March 31, 2024. Financing activities during the three months ended March 31, 2025 consisted primarily of $42.8 million revolving credit facility net repayments, $1.8 million of share repurchases, and $0.3 million of term loan repayments.
Previous wording
Foreign cash balances at September 30, 2025 and December 31, 2024 were $4.6 million and $4.5 million, respectively.
Current wording
Foreign cash balances at March 31, 2026 and December 31, 2025 were $6.6 million and $8.7 million, respectively.
Previous wording
On August 1, 2025, the Company and certain of its subsidiaries (the "Borrowers") entered into the Credit Agreement (the “Credit Agreement”) with Bank of America, as the administrative agent, the swingline lender and the line of credit issuer. The Credit Agreement, matures on August 1, 2028 and includes a $60 million term loan facility and a $90 million revolving credit facility with designated sub-facility limits of (i) $15 million for the U.K. Borrower, (ii) $10 million for a swingline facility and (iii) $5 million for letters of credit. Actual credit availability under the revolving facility is subject to a borrowing base limitation that is calculated based on a percentage of eligible trade accounts receivable and inventories, the balances of which fluctuate, and is subject to discretionary reserves and revaluation adjustments. The Borrowers may utilize the facilities for borrowings as well as for the issuance of letters of credit, repaying existing indebtedness outstanding as of the effective date of the Credit Agreement and ongoing working capital and general corporate purposes as defined by the Credit Agreement. The facilities under the Credit Agreement replaced the Company’s previous debt arrangements.
Current wording
On August 1, 2025, we and certain of our subsidiaries entered into the 2025 Credit Facility. The 2025 Credit Facility was to mature on August 1, 2028 and included a $60 million term loan facility and a $90 million revolving credit facility with designated sub-facility limits of (i) $15 million for the U.K. Borrower, (ii) $10 million for a swingline facility and (iii) $5 million for letters of credit. Actual credit availability under the revolving facility was subject to a borrowing base limitation that was calculated based on a percentage of eligible trade accounts receivable and inventories, the balances of which fluctuate, and was subject to discretionary reserves and revaluation adjustments. The 2025 Credit Facility may have been used for borrowings as well as for the issuance of letters of credit, repaying existing indebtedness outstanding as of the effective date of the 2025 Credit Facility and ongoing working capital and general corporate purposes as defined by the Credit Agreement governing the 2025 Credit Facility. The 2025 Credit Facility replaced our previous debt arrangements at that time.
Previous wording
Borrowings will bear interest at a rate that varies depending on the type of loan and the Borrower. The interest rate will be calculated using a floating rate plus a margin. Depending on the type of loan, the floating rate will either be the prime rate announced by Bank of America, Term SOFR, Daily Simple SOFR, EURIBOR or SONIA. The margin will range from 2.00% to 2.75% for base rate loans and SONIA based loans and from 3.00% to 3.75% for Term SOFR, Daily Simple SOFR and EURIBOR loans. The Credit Agreement also provides for an unused line fee, letter of credit fees, and agent fees. The Borrowers will be able to voluntarily prepay the principal of any advance, without penalty or premium, at any time in whole or in part, subject to certain breakage costs. As of September 30, 2025, interest rates for the term loan and revolving credit facilities were 7.66% and 7.53%, respectively.
Current wording
Borrowings under the 2025 Credit Facility bore interest at a rate that varied depending on the type of loan and the borrower. The interest rate was calculated using a floating rate plus a margin. Depending on the type of loan, the floating rate was either the prime rate announced by Bank of America, Term SOFR, Daily Simple SOFR, EURIBOR or SONIA. The margin will range from 2.00% to 2.75% for base rate loans and SONIA based loans and from 3.00% to 3.75% for Term SOFR, Daily Simple SOFR and EURIBOR loans. The 2025 Credit Facility also provided for an unused line fee, letter of credit fees, and agent fees. The borrowers were able to voluntarily prepay the principal of any advance, without penalty or premium, at any time in whole or in part, subject to certain breakage costs. As of March 31, 2026, there were no outstanding borrowings under the revolving credit facility provided by the 2025 Credit Facility. As of March 31, 2026, interest rates for the term loan and revolving credit facilities under the 2025 Credit Facility were 7.02% and 0.00%, respectively.
Previous wording
The Credit Agreement requires the Company and its subsidiaries to (i) maintain a fixed charge coverage ratio, defined as the ratio, determined on a consolidated basis for the Company and its subsidiaries for the applicable measurement period, of (a) EBITDA minus unfinanced capital expenditures and cash taxes paid for such period to (b) consolidated interest charges for such period plus principal payments or redemptions of outstanding debt plus certain restricted payments and (ii) maintain a consolidated leverage ratio, defined as the ratio, determined on a consolidated basis for the Company and its subsidiaries for the applicable measurement period, of (a) certain funded indebtedness minus unrestricted cash up to a maximum of $12 million to (b) EBITDA.
Current wording
The 2025 Credit Facility required us and our subsidiaries to (i) maintain a fixed charge coverage ratio, defined as the ratio, determined on a consolidated basis for us and our subsidiaries for the applicable measurement period, of (a) EBITDA minus unfinanced capital expenditures and cash taxes paid for such period to (b) consolidated interest charges for such period plus principal payments or redemptions of outstanding debt plus certain restricted payments and (ii) maintain a consolidated leverage ratio, defined as the ratio, determined on a consolidated basis for us and our subsidiaries for the applicable measurement period, of (a) certain funded indebtedness minus unrestricted cash up to a maximum of $12.0 million to (b) EBITDA.
Previous wording
The Credit Agreement also contains affirmative and negative covenants that, subject to certain exceptions, limit our ability to take certain actions, including our 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. The Credit Agreement contains customary events of default, including defaults triggered by the failure to make payments when due, breaches of covenants and representations, material impairment in the perfection of the lenders’ security interest in the collateral, and events related to bankruptcy and insolvency of the Company and its subsidiaries. If an event of default occurs and is continuing, the lenders may terminate and/or suspend their obligations to make loans and issue letters of credit and/or accelerate amounts due under the Credit Agreement and exercise other rights and remedies. To secure their obligations under the Credit Agreement, the Company and each of the other loan parties granted an all-assets lien with a first priority security interest in substantially all of their assets to the administrative agent.
Current wording
The 2025 Credit Facility also contained affirmative and negative covenants that, subject to certain exceptions, limited our ability to take certain actions, including our 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. The 2025 Credit Facility contained customary events of default, including defaults triggered by the failure to make payments when due, breaches of covenants and representations, material impairment in the perfection of the lenders’ security interest in the collateral, and events related to bankruptcy and insolvency of us and our subsidiaries. To secure their obligations under the 2025 Credit Facility, the Company and each of the other loan parties granted an all-assets lien with a first priority security interest in substantially all of their assets to the administrative agent.
Previous wording
As part of the Credit Agreement, the Company recorded deferred debt financing costs of $2.3 million.
Current wording
As part of the Credit Agreement, we recorded deferred debt financing costs of $2.3 million.
Previous wording
The Term Loan Facility (a) had a maturity date of March 13, 2027; (b) bore interest at a rate equal to (i) a base rate plus 7.25% per annum for Reference Rate Loans and Secured Overnight Financing Rate (“SOFR”) plus 8.25% per annum for SOFR Loans if the total net leverage ratio is greater than or equal to 2.25x and (ii) a base rate plus 6.75% per annum for Reference Rate Loans and SOFR plus 7.75% per annum for SOFR Loans if the total net leverage ratio is less than 2.25x; and (c) was subject to certain affirmative, negative and financial covenants, including a minimum liquidity covenant and a quarterly total net leverage ratio covenant.
Current wording
The 2026 Term Loan Facility (a) will mature on April 30, 2029; (b) will bear interest at a rate equal to (i) a base rate plus 6.50% per annum for Reference Rate Loans and SOFR plus 7.50% per annum for SOFR Loans if the total leverage ratio is greater than or equal to 3.00x, (ii) a base rate plus 6.25% per annum for Reference Rate Loans and SOFR plus 7.25% per annum for SOFR Loans if the total leverage ratio is greater than or equal to 2.25x but less than 3.00x, and (iii) a base rate plus 5.75% per annum for Reference Rate Loans and SOFR plus 6.75% per annum for SOFR Loans if the total leverage ratio is less than 2.25x; and (c) is subject to certain affirmative, negative and financial covenants, including a minimum liquidity covenant and a quarterly total net leverage ratio covenant.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
Loss of inventory while in transit.
Current report — wording carried from elsewhere
Cash used for investing activities was $0.3 million for the three months ended March 31, 2026, which was primarily related to purchase of property and equipment of $0.3 million, compared to $2.3 million used for the three months ended March 31, 2025 primarily related to the acquisition of the PDP business.
Current report — wording carried from elsewhere
Net cash used for financing activities was $33.7 million during the three months ended March 31, 2026 compared to net cash provided by financing activities of $44.9 million during the three months ended March 31, 2025. Financing activities during the three months ended March 31, 2026 consisted primarily of $29.4 million repayment of revolving credit facility, $2.1 million term loan principal payment and $2.2 million repurchase of our common stock.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Income tax benefit for the nine months ended September 30, 2025 was $0.1 million at an effective tax rate of 5.1% compared to income tax benefit for the nine months ended September 30, 2024 of $5.5 million at an effective tax rate of 58.2%. The effective tax rate for the nine months ended September 30, 2025 was primarily impacted by the change in U.S. valuation allowance, foreign taxes and Federal and State current tax. The effective tax rate for the nine months ended September 30, 2024 was primarily impacted by the reversal of a portion of the Company’s deferred tax asset valuation allowance.
Previous report — wording carried elsewhere
Acquisition-related costs include costs we incurred in connection with the PDP acquisition, including warehouse lease impairment, professional fees such as legal and accounting along with other integration-related costs.