Slide 1: Second Quarter 2019 Earnings
Second Quarter 2019 Earnings August 8, 2019
Slide 2: Cautionary Notes
Cautionary Notes 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 results of operations
Slide 3: Everyone is a fan of something…
is built on the principle that everyone is a fan of something… 3
Slide 4: …and Funko has something for every fan
…and Funko has something for every fan Funko is like an “index fund” for pop culture 4 NOTE: Represents a sampling of our current portfolio of properties as of January 2019.
Slide 5: Second Quarter 2019 Snapshot
Second Quarter 2019 Snapshot (2) All of our global markets Net Sales increased 38% to $191.2m showed sales growth in Q2’19 Net Sales in Q2’19 compared to Q2’18 Balanced compared to Q2 ’18 38% QoQ Net Sales growth driven primarily by Growth Sales growth in our other product strong sales deman
Slide 6: Q2 & YTD Earnings Summary
Q2 & YTD Earnings Summary $ in millions, except per share amounts, 2Q’19 2Q’18 % Change YTD’19 YTD’18 % Change unaudited Net Sales $191.2 $138.7 37.8% $358.3 $275.9 29.8% Gross Profit(1) $71.2 $52.8 34.8% $134.6 $103.4 30.2% Gross Margin %(1) 37.2% 38.1% 37.6% 37.5% Operating Income $17.1 $8.7 98.0%
Slide 7: Q2 & YTD Active Properties & Net Sales per Active Property
Q2 & YTD Active Properties & Net Sales per Active Property Active Properties & Net Sales per Active Property Second Quarter Year to Date $ in thousands, unaudited Active Properties Net Sales per Active Property Active Properties up 16% Active Properties up 24% Net Sales per Active Property up 19% Ne
Slide 8: Top Properties Breakout
Top Properties Breakout Q3’18 Q4’18 Q1’19 Q2’19 Top property in Q2’ 19 only represented 1 7%* 12%* 10%* 6%* 6% of sales Evergreen properties 2 accounted for 46% of sales in Q2’19 and 3 Q2’ 18 4 Pokémon was the 11th top property in Q2’19 despite a 5 limited distribution and number of SKU’s 6 7 8 9 10
Slide 9: Q2 & YTD Product Category Performance
Q2 & YTD Product Category Performance Figures Other Second Quarter Year to Date Second Quarter Year to Date $ in millions 39% 29% 30% 36% Growth Growth Growth Growth $62.4 $295.8 $31.5 $159.7 $230.1 $45.9 $24.2 $114.5 Q2'18 Q2'19 YTD'18 YTD'19 Q2'18 Q2'19 YTD'18 YTD'19 The significant sales growth i
Slide 10: Something for Everyone
Something for Everyone Fans can find their something as the world of Funko continues to expand with new product categories. FIGURES OTHER 84% of 16% of Sales* Sales* 10 *% of net sales for Q2’ 19
Slide 11: Q2 & YTD Geographic Performance
Q2 & YTD Geographic Performance United States International Second Quarter Year to Date Second Quarter Year to Date $ in millions, unaudited 26% 25% 65% 41% Growth Growth Growth Growth Specialty channel up 83% for the quarter Strong sales growth in all international markets 3rd party e-commerc
Slide 12: Funkoverse
Funkoverse Funkoverse gives fans a chance to create new, exciting moments by mixing their favorite collectible characters! PRESS RELEASE METRICS SDCC EARNED COVERAGE FUNKOVERSE AT GEN-CON Potential Reach: 143 million Funkoverse July 18 Launch “Excited about a new game system, Funko just created a wo
Slide 13: San Diego Comic Con
San Diego Comic Con San Diego Comic Con allowed us to succeed in new ways and grow the Funko brand with our fans and partners! CELEB ENGAGEMENT SDCC TAKEOVER FAN ENGAGEMENT Earned coverage: 175 articles 112 million readership Live Funkast First to > Licensed SDCC 1,000 Fans Character Partner EVER! C
Slide 14: Q2 & YTD Adjusted Net Income
Q2 & YTD Adjusted Net Income(1) Adjusted Net Income(1) Second Quarter Year to Date $ in millions, unaudited 305% 364% Growth $12.9 Growth $21.2 $3.2 $4.6 YTD' 18 YTD' 19 Q2'18 Q2'19 Adjusted Net Income 2.3% 6.7% 1.7% 5.9% 6.6% Margin (1) Improvement in Adjusted Net Income and Adjusted Net Income Mar
Slide 15: Q2 & YTD Adjusted EBITDA
Q2 & YTD Adjusted EBITDA(1) Adjusted EBITDA(1) Second Quarter Year to Date $ in millions, unaudited 61% 55% $31.4 Growth $56.7 Growth $19.5 $36.5 Q2'18 Q2'19 YTD' 18 YTD' 19 Adj. EBITDA 14.0% 16.4% 13.2% 15.8% Margin %(1) Improvement in Adjusted EBITDA and Adjusted EBITDA Margin driven by timing of
Slide 16: Key Balance Sheet Highlights
Key Balance Sheet Highlights 6/30/2019 6/30/2018 YoY % Change 12/31/2018 $ in millions, unaudited Cash & Cash Equivalents $19.5 $10.9 78.9% $13.5 Accounts $131.6 $96.5 36.5% $148.6 Receivable, net Inventory $75.3 $64.2 17.4% $86.6 Total Debt(1) $241.3 $248.5 (3.0)% $247.3 Net Debt(2) $221.8 $237.6 (
Slide 17: Fiscal Year 2019 Guidance
Fiscal Year 2019 Guidance Fiscal Year 2019 Guidance Range(1) % Growth YoY Net Sales $840 to $850 million 22% to 24% Adjusted EBITDA(2) $140 to $145 million 20% to 25% Adjusted EPS(2) $1.15 to $1.22 40% to 48% (1) The guidance should be read in conjunction with Funko’s second quarter 2019 earnings re
Slide 18: Supplemental Financial Information
Supplemental Financial Information
Slide 19: Q2 & YTD Condensed Consolidated Statements of Operations
Q2 & YTD Condensed Consolidated Statements of Operations (2) Q2’19 Q2’18 % Change YTD’19 YTD’18 % Change $ in thousands, unaudited Net Sales $191,199 $138,723 37.8% $358,264 $275,934 29.8% Cost of Sales(1) 119,998 85,884 39.7% 223,654 172,528 29.6% Gross Profit(1) 71,201 52,839 34.8% 134,610 103,406
Slide 20: Condensed Consolidated Balance Sheet
Condensed Consolidated Balance Sheet(1) 6/30/2019 6/30/2018 12/31/2018 $ in thousands, unaudited Cash and Cash Equivalents $19,485 $10,892 $13,486 Accounts Receivable, net 131,646 96,474 148,627 Inventory 75,298 64,153 86,622 Prepaid Expenses & Other Current Assets 17,170 18,515 11,904 Total Current
Slide 21: Quarterly Condensed Consolidated Statements of Operations
Quarterly Condensed Consolidated Statements of Operations (2) Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 $ in thousands, unaudited Net Sales $ 104,746 $ 142,812 $ 169,474 $ 137,211 $ 138,723 $ 176,915 $ 233,224 $ 167,065 $ 191,199 Cost of Sales(1) 66,005 84,606 102,595 86,644 85,884 109,0
Slide 22: Reconciliation of Non-GAAP Financial Metrics
Reconciliation of Non-GAAP Financial Metrics (12) Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 (In thousands, except per share data) Net income attributable to Funko, Inc. $ (4,103) $ 8,045 $ 5,624 $ 597 $ 70 $ 1,570 $ 5,227 $ 2,195 $ 5,132 Reallocation of net income attributable to non-con
Slide 23: Reconciliation of Non-GAAP Financial Metrics Cont.
Reconciliation of Non-GAAP Financial Metrics Cont. (12) Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 (amounts in thousands) Net income $ (4,103) $ 8,045 $ 7,671 $ 1,719 $ 274 $ 7,551 $ 15,519 $ 7,145 $ 11,415 Interest expense, net 7,692 9,091 6,868 5,896 5,584 5,750 4,509 4,072 3,763 Income
Slide 24: Guidance Reconciliation of Net Income to EBITDA, Adjusted EBITDA, Adjusted Net Income
Guidance Reconciliation of Net Income to EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings per Diluted Share Estimated Range for the Year Ending December 31, 2019 (In millions, except per share amounts) Net income $ 52.4 $ 57.6 Interest expense, net 15.8 15.6 Income tax expense 17.9
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