Slide 1: Third Quarter 2022 Earnings
November 3, 2022 Third Quarter 2022 Earnings
Slide 2: Cautionary Notes
2 Cautionary NotesUPDATE HOLLYWOOD This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this presentation, including statements regarding our future resu
Slide 3: Funko is built on the principle that everyone is a fan of something
3 is built on the principle that everyone is a fan of something… FUNKO 2022
Slide 4: … and Funko Has Something for Every Fan
4 … and Funko Has Something for Every Fan Movies TV Music Sports Anime Games Note: Represents a sampling of our current portfolio offerings as of September 30, 2022. FUNKO 2022
Slide 5: Q3 Operating Highlights
5 Q3 Operating Highlights HOLLYWOOD UPDATE • Record quarterly net sales ($366 million, +37% y/y) on broad-based strength • Double-digit net sales growth across all reported geographies and brand categories • Direct-to-consumer (DTC) net sales increased 37% y/y, driven by strong growth in average ord
Slide 6: Q3 & YTD Earnings Summary
6 Q3 & YTD Earnings HOLLYWOOD Summary UPDATE Q3’22 Q3’21 % Change YTD’22 YTD’21 % Change $ millions, except per share amounts, unaudited Net sales $365.6 $267.7 36.6% $989.7 $693.0 42.8% Gross profit(1) $127.9 $96.4 32.6% $339.7 $267.1 27.2% Gross margin %(1) 35.0% 36.0% 34.3% 38.5% SG&A 97.9 59.9 6
Slide 7: Q3 Active Properties & Net Sales per Active Property
7 Q3 Active Properties HOLLYWOOD & Net Sales per Active Property UPDATE Active Properties & Net Sales per Active Property Third Quarter Year-to-Date $ in thousands, unaudited Active Properties Net Sales per Active Property Active Properties down 5.5% Active Properties up 0.2% Net Sales per Active Pr
Slide 8: Top Properties Breakout
8 Top Properties Breakout Q3’21 Q4’21 Q1’22 Q2’22 Q3’22 Q3'22 6%* 5%* 6%* 6%* 5%* Commentary 1 The top property in 2 Q3'22 represented 5% of sales 3 Evergreen properties accounted for 64% of 4 sales in Q3'22 5 6 7 8 9 10 10 *% of net sales Top 10 33% 31% 31% 34% 35% Properties % of Net Sales
Slide 9: Q3 Geographic Performance
9 Q3 Geographic Performance HOLLYWOOD UPDATE United States Europe Other International $ in millions, unaudited 37.1% 32.9% 42.6% increase increase increase All reported geographies grew double-digits on broad-based strength: US grew 37.1%; Europe grew 32.9%; Other International grew 42.6%
Slide 10: YTD Geographic Performance
10 YTD Geographic Performance HOLLYWOOD UPDATE United States Europe Other International $ in millions, unaudited 47.8% 31.9% 27.2% increase increase increase
Slide 11: Q3 Brand Category Performance
11 Q3 Brand Category HOLLYWOOD Performance UPDATE Core Collectibles Loungefly Other $ in millions, unaudited 33.7% 57.3% 24.6% Increase Increase Increase Core Collectible Brands grew on strong Pop! Vinyl as well as continued contributions from emerging brands; The Loungefly Brand generated strong gr
Slide 12: YTD Product Brand Performance
12 YTD Product Brand HOLLYWOOD Performance UPDATE Pop! Loungefly Other $ in millions, unaudited 34.8% 88.2% 45.0% Increase Increase Increase
Slide 13: Q3 & YTD Adjusted EBITDA
13 Q3 & YTD Adjusted HOLLYWOOD EBITDA(1) UPDATE Adjusted EBITDA(1) Third Quarter Year-to-Date $ in millions, unaudited Adjusted EBITDA 15.0% 9.8% 16.0% 10.5% 6.6% Margin(1) Adjusted EBITDA margin(1) declined y/y on unfavorable product mix and ongoing infrastructure investment 1. See Supplemental Fin
Slide 14: Q3 & YTD Adjusted Net Income
14 Q3 & YTD Adjusted HOLLYWOOD Net Income(1) UPDATE Adjusted Net Income(1) Third Quarter Year-to-Date $ in millions, unaudited Adjusted Net Income 7.9% 4.1% 8.0% 4.8% 6% Margin(1) Adjusted Net Income margin(1) declined y/y on unfavorable product mix and ongoing infrastructure investment 1. See Suppl
Slide 15: Key Balance Sheet Highlights
15 Key Balance SheetUPDATE HOLLYWOOD Highlights $ in millions, unaudited 9/30/22 9/30/21 YoY % Change Cash & Cash $25.1 $93.2 (73.1)% Equivalents Accounts Receivable, $189.9 $153.7 23.6% net Inventory $265.8 $140.8 88.7% Total Debt(1) $250.2 $177.6 40.9% Total Liquidity(2) $150.1 $193.2 (22.4)% 1. T
Slide 16: Liquidity Overview
16 Liquidity Overview HOLLYWOOD UPDATE Total Liquidity(1) 2021 2022 $ in millions, unaudited Liquidity increased sequentially due to the activation of an additional $115 million under the Company’s revolving credit facility 1. Total liquidity is calculated as cash and cash equivalents plus availabil
Slide 17: Debt Overview
17 Debt Overview UPDATE HOLLYWOOD Total Debt(1) 2021 2022 $ in millions, unaudited Total debt increased y/y and sequentially to support long-term infrastructure investments and provide additional liquidity 1. Total Debt is defined as the amount outstanding under the Company’s Line of Credit plus Cur
Slide 18: Supplemental Financial Information
Supplemental Financial Information
Slide 19: Condensed Consolidated Statements of Operations
19 Condensed Consolidated Statements of Operations HOLLYWOOD UPDATE (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 (In thousands, except per share data) Net sales $ 365,607 $ 267,733 $ 989,666 $ 693,020 Cost of sales (exclusive of depreciation and am
Slide 20: Condensed Consolidated Balance Sheets
20 Condensed Consolidated Balance Sheets HOLLYWOOD UPDATE (Unaudited) September 30, 2022 December 31, 2021 (In thousands, except per share amounts) Assets Current assets: Cash and cash equivalents $ 25,050 $ 83,557 Accounts receivable, net 189,917 187,688 Inventory 265,799 166,428 Prepaid expenses a
Slide 21: Condensed Consolidated Statements of Cash Flows
21 Condensed Consolidated Statements of Cash Flows HOLLYWOOD UPDATE (Unaudited) Nine Months Ended September 30, 2022 2021 (In thousands) Operating Activities Net income $ 41,460 $ 50,405 Adjustments to reconcile net income to net cash (used in) provided by operating activities: Depreciation, amortiz
Slide 22: Reconciliation of Non-GAAP Financial Metrics
22 Reconciliation of Non-GAAP Financial Metrics HOLLYWOOD UPDATE (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 (In thousands, except per share data) Net income attributable to Funko, Inc. $ 9,630 $ 11,901 $ 34,184 $ 32,228 Reallocation of net income
Slide 23: Reconciliation of Non-GAAP Financial Metrics
23 Reconciliation of Non-GAAP Financial Metrics (Unaudited) Three Months Ended September Nine Months Ended September 30, 30, 2022 2021 2022 2021 (amounts in thousands) Net income $ 11,149 $ 18,375 $ 41,460 $ 50,405 Interest expense, net 2,977 1,711 5,854 5,921 Income tax expense (benefit) 2,342 5,93
Slide 24: Slide 24