Turtle Beach Corporation · NASDAQ:TBCH

Turtle Beach — Investor Presentation (January 2016)

30 slides from Turtle Beach's investor presentation, Jan 21, 2016

1. Slide 1: Turtle Beach Corporation Corporate Presentation

   JURTLE BEACH’ CORPORATION CORPORATE: PRESENTATION : 7. = JANUARY 21, 2016

2. Slide 2: Safe Harbor Statement

   N A S D A Q : H E A R Safe Harbor Statement Forward-Looking Information This presentation includes “forward-looking statements” within the meaning of the federal securities laws. These forward-looking statements are statements that are not historical facts including statements about our beliefs and

3. Slide 3: Who We Are

   N A S D A Q : H E A R Who We Are  Turtle Beach is a premier audio innovation company with 40-year legacy of creating new audio categories  Longstanding, #1 brand for gaming headsets with 42% share of the U.S. market1  Positioned for renewed revenue and profit growth as major industry product cycl

4. Slide 4: Headsets and HyperSound Overview

   N A S D A Q : H E A R Headsets HyperSound Overview Market share leader with large, loyal customer base Breakthrough audio technology that allows directed placement of sound Markets Catalysts Well-positioned product portfolio for new gen consoles Launched HyperSound Clear™ into the $5B hearing health

5. Slide 5: Gaming Headsets

   N A S D A Q : H E A R Gaming Headsets

6. Slide 6: Dominant Gaming Audio Provider with Leading Market Share

   N A S D A Q : H E A R 42% 2015 U.S. Gaming Headset Market Share1 Dominant Gaming Audio Provider with Leading Market Share  #1 gaming headset provider for Xbox and PlayStation  42% of U.S. market in 2015 (44% in Q4)1  45% of U.K. market in 2015 (48% in Q4)2  Completely transitioned portfolio from

7. Slide 7: New Gen Console Growth

   N A S D A Q : H E A R 3.0 11.5 22.1 34.6 47.7 60.0 4.6 18.8 36.3 55.3 74.9 94.6 0M 20M 40M 60M 80M 100M 120M 2013 2014 2015 2016E 2017E 2018E Xbox One PS4 0M 20M 40M 60M 80M 100M 120M 2013 2014 2015 2016E 2017E 2018E (# of consoles) New Gen Console Growth 36M  94M 22M  60M Sources: DFC Intelligenc

8. Slide 8: We Cover All Key Price Points

   N A S D A Q : H E A R Retail ASP <$50 $50 - $99 $100 - $200 >$200 Console PS4 Xbox One PS4 Xbox One PS4 Xbox One PS4 Xbox One TOTAL Recon 60P Recon 50P P4c Recon 50X Recon 30X Stealth 400 PX22 XO4 Stealth XO1 Stealth 500P Stealth 420X XO7 Pro Elite 800 Stealth 500X Elite 800X 16 PX24 Sony Silver Wir

9. Slide 9: We Have Differentiated Technology

   N A S D A Q : H E A R We Have Differentiated Technology… Advanced Chat Chat technology like noise gate, chat boost, variable microphone monitor Bluetooth Dual-pairing Bluetooth in most wireless headsets for chat, mobile gaming, audio calls and music streaming DTS Headphone:X 1st gaming headsets with

10. Slide 10: Strong Retail Presence, Great Partnerships and Strong Distribution

    N A S D A Q : H E A R Strong Retail Presence Great Partnerships 12,000+ Interactive Displays Sample retailers …And Strong Distribution 9 Product sales in over 40 countries with over 280,000 points of distribution Partnerships with industry leading brands Market leader in deploying interactive gaming

11. Slide 11: PC Gaming International Headset Growth Opportunities

    N A S D A Q : H E A R PC Gaming International Headset Growth Opportunities 10  Approximately $400 million market globally1  Launched eight new SKUs in 2014 and 2015  Launched PC gaming accessories via a partner in 2014 including:  Keyboards  Mice  Mouse pads  PC gaming more popular than conso

12. Slide 12: China Growth Opportunity

    N A S D A Q : H E A R PC Gaming International Headset Growth Opportunities 11  China represents long-term growth opportunity for console and PC gaming headsets  446M Chinese gamers2  China represents <2% of our annual revenues today  China lifted video game console ban in Sept 2013  Turtle Beac

13. Slide 13: HyperSound

    ‘®HYPERSOUND

14. Slide 14: HyperSound – A New Sound Delivery Mechanism

    N A S D A Q : H E A R HyperSound – A New Sound Delivery Mechanism  How does HyperSound technology work?  Thin panels produce directional audio within an ultrasound beam masking ambient noise  Q4-15 launch into $5 billion1 hearing health market via HyperSound Clear ™ product  HyperSound Clear™ TV

15. Slide 15: HyperSound Clear – Entering a $5 Billion Hearing Health Market

    N A S D A Q : H E A R HyperSound Clear™ improves the listening experience and speech intelligibility for individuals with hearing loss HyperSound Clear™ – Entering a $5 Billion Hearing Health Market 14 1) Johns Hopkins School of Medicine, Nov 2011. World Health Organization, 2013. 2) The Hearing Rev

16. Slide 16: U.S. Hearing Health Market Structure & Channel Approach

    N A S D A Q : H E A R 1) Approximate units of hearing aids sold via this channel. Channel Landscape Market Size Retail Channel U.S. Hearing Health Market Structure & Channel Approach 15 Independent & Buying Groups Retail Store Front Veterans Admin. Direct to Consumer 8,000 POS (Points of Sale) 1.2M

17. Slide 17: HyperSound Clear 500P For Hearing Market: Our Strategy

    N A S D A Q : H E A R HyperSound Clear™ 500P For Hearing Market: Our Strategy  Hire Leader: Former president/CEO of two large hearing aid companies hired in in 2014 to lead HyperSound  Commercialize Product: Two years of product development on HyperSound Clear™ 500P completed with shipments starte

18. Slide 18: HyperSound Clear Initial Channel Ramp Progress

    N A S D A Q : H E A R HyperSound Clear™ Initial Channel Ramp Progress  We are in early stage of rollout to hearing healthcare offices, pursuing careful approach to ensure success  Offices require training and visit to become “Fully Active” (more than expected which has slowed ramp)  Fully Active

19. Slide 19: Growth Opportunities for HyperSound Technology

    N A S D A Q : H E A R Commercial Potential Growth Opportunities for HyperSound Technology 18 1) POPAI | HyperSound In-Store Research Report, Jun. 2015. 2) BUNN Research, Jan. 2014. 3) Self-Service Markets: ATMs, Kiosks, Vending Machines, BCC Research, Mar. 2011.  Pre-defined sound zones for in-stor

20. Slide 20: Strong & Rapidly Growing Patent Portfolio

    N A S D A Q : H E A R 26 28 35 49 20 68 86 109 Jan 2013 Jan 2014 Jan 2015 Jan 2016 Pending Issued  Headset innovations:  Audio processing  Gaming specific features  HyperSound innovations:  Emitter construction  Ultrasound and emitter electronics  Digital signal processing techniques  Market

21. Slide 21: Financial Summary

    N A S D A Q : H E A R Financial Summary

22. Slide 22: Balance Sheet Highlights

    N A S D A Q : H E A R Balance Sheet Highlights  Revolver typically peaks in Q4 ahead of holiday and is lowest in Q1 after holiday receipts  Secured $15M term loan July 2015  Prepaid $2.5M term loan Nov 2015 with proceeds of additional subordinated notes  $46.6M federal, $19.4M state net operatin

23. Slide 23: Revenue Growth Profile

    N A S D A Q : H E A R $M $1M $2M $3M $4M $5M $6M $7M $8M $9M Q1-'15 Q2-'15 Q3-'15 Q4-'15E¹ 2016E $7M - $10M3 ~$.5M ~$.2M ~$.1M ~$.1M Headset Revenue Growth Revenue Growth Profile 22 Revenue Profile Over Time  New gen sales up 24% from 2014 to 2015, 31% in Q4 YoY2  Old gen sales declined ~$40M to u

24. Slide 24: Preliminary Financial Results for Q4 and FY 2015

    N A S D A Q : H E A R 1) Q4 and FY 2015 results are preliminary estimates and may change materially, including as a result of the finalization of financial statements for the company’s fourth quarter and full year ended December 31, 2015 and the completion of the company’s audit by the independent r

25. Slide 25: 2016 Guidance

    N A S D A Q : H E A R 1) Guidance issued as of January 20, 2016. 2016 Guidance1 24 ($ in millions) 2016 Guidance Management Commentary Revenue: New Gen $140M-$145M 12% to 16% growth from 2015 Old Gen $8M-$10M 60% to 70% decline from 2015 Other $5M-$7M Flat with opportunity for International growth T

26. Slide 26: Key Takeaways

    N A S D A Q : H E A R Key Takeaways  Longstanding, dominant market leader in console gaming headset market with technologically differentiated products  Console market growing strongly post new platform launches late 2013  Company now completed successful portfolio transition for new Xbox and Pla

27. Slide 27: Contact Information

    N A S D A Q : H E A R Contact Information Investor Relations: Media Contact: Cody Slach Maclean Marshall Liolios Turtle Beach Corporation 949.574.3860 858.914.5093 HEAR@Liolios.com Maclean.Marshall@turtlebeach.com www.turtlebeach.com www.hypersound.com C O M PA N Y W E B S I T E S www.turtlebeachcor

28. Slide 28: Appendix

    Appendix

29. Slide 29: Experienced Management Team

    N A S D A Q : H E A R Experienced Management Team Juergen Stark CEO • COO of Motorola Mobility’s mobile business • 10 years as principal at McKinsey & Company John Hanson CFO • EVP and CFO at Dialogic • CFO at One Communications Corp Rodney Shutt SVP, GM - HyperSound Richard Kuvalik CTO • 25+ years

30. Slide 30: Experienced Board of Directors

    N A S D A Q : H E A R Experienced Board of Directors Laureen DeBuono Director Ken Fox Director William Keitel Director Dr. Andrew Wolfe, PhD Director Ron Doornink Chairman • Partner at leading CFO consulting services firm FLG Partners, LLC • Former President and CEO of Coapt Systems, Inc. • Former C

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