Slide 1: Third Quarter 2021 Earnings
November 4, 2021 Third Quarter 2021 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: Everyone is a fan of something
3 is built on the principle that everyone is a fan of something… FUNKO 2021
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, 2021. FUNKO 2021
Slide 5: Q3 Summary and Recent Operational Highlights
5 Q3 Summary andUPDATE HOLLYWOOD Recent Operational Highlights Q3 2021 Financial Summary Q3 2021 Operational Highlights • Exceeded Q3 expectations and raised full year • Net sales increased 40.0% to $267.7 millions guidance despite unprecedented supply chain headwinds. • Net income increased 17.8% m
Slide 6: Q3 & YTD Earnings Summary
6 Q3 & YTD Earnings HOLLYWOOD Summary UPDATE Q3’21 Q3’20 % Change YTD’21 YTD’20 % Change $ millions, except per share amounts, unaudited Net sales $267.7 $191.2 40.0% $693.0 $426.0 62.7% Gross profit(1) $96.4 $73.7 30.8% $267.1 $164.9 61.9% Gross margin %(1) 36.0% 38.6% 38.5% 38.7% SG&A 59.9 41.2 45
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 up 12.7% Active Properties up 11.3% Net Sales per Active Pr
Slide 8: Top Properties Breakout
8 Top Properties Breakout HOLLYWOOD UPDATE Q3’20 Q4’20 Q1’21 Q2’21 Q3’21 Q3’21 Commentary 1 7%* 6%* 4%* 6%* 6%* The top property in 2 Q3’21 represented 6% of sales 3 Evergreen properties accounted for 66% of 4 sales in Q3’21 5 6 7 8 9 10 Top 10 *% of net sales Properties 40% 33% 30% 31% 33% % of Net
Slide 9: Q3 & YTD Product Category Performance
9 Q3 & YTD ProductUPDATE HOLLYWOOD Category Performance Figures Other (Non-figures) Third Quarter Year-to-Date Third Quarter Year-to-Date $ in millions, unaudited 42.0% 63.0% 33.8% 61.6% Increase Increase Increase Increase The Figures category grew 42.0% in Q3 driven by recovery in the specialty cha
Slide 10: Something for Everyone
10 Something for Everyone HOLLYWOOD UPDATE Funko is providing fans with an increasingly diverse array of products and categories FIGURES OTHER (NON-FIGURES) 76.9% of 23.1% of Sales* Sales* *% of net sales for Q3’ 21
Slide 11: Q3 Product Brand Performance
11 Q3 Product BrandUPDATE HOLLYWOOD Performance Pop! Loungefly Other $ in millions, unaudited 41.3% 36.3% 37.3% Increase Increase Increase Both Pop! and Loungefly branded products generated strong growth in the Specialty channel, as well as continued strength in direct-to-consumer and third-party e-
Slide 12: YTD Product Brand Performance
12 YTD Product Brand HOLLYWOOD Performance UPDATE Pop! Loungefly Other $ in millions, unaudited 61.3% 70.8% 63.1% Increase Increase Increase
Slide 13: Q3 Geographic Performance
13 Q3 Geographic Performance HOLLYWOOD UPDATE United States Europe Other International $ in millions, unaudited 35.7% 65.7% 19.1% increase increase increase The United States region grew 35.7% and Europe grew 65.7%, with strength across all channels and product categories; Other International grew 1
Slide 14: YTD Geographic Performance
14 YTD Geographic Performance HOLLYWOOD UPDATE United States Europe Other International $ in millions, unaudited 54.7% 110.2% 38.8% increase increase increase
Slide 15: Q3 & YTD Adjusted EBITDA
15 Q3 & YTD Adjusted HOLLYWOOD EBITDA(1) UPDATE Adjusted EBITDA(1) Third Quarter Year-to-Date $ in millions, unaudited Adjusted EBITDA 18.9% 15.0% 11.0% 16.0% 6.6% Margin(1) Inflationary supply chain pressures reduced Adjusted EBITDA margin(1) 390 basis points y/y to 15.0% in Q3 1. See Supplemental
Slide 16: Q3 & YTD Adjusted Net Income (Loss)
16 Q3 & YTD Adjusted HOLLYWOOD Net Income (Loss)(1) UPDATE Adjusted Net Income (Loss)(1) Third Quarter Year-to-Date $ in millions, unaudited Adjusted Net Income 8.4% 7.9% 0.9% 8.0% 6% (Loss) Margin(1) Q3 Adjusted Net Income (Loss) margin(1) declined 50 basis points y/y reflecting higher supply chain
Slide 17: Key Balance Sheet Highlights
17 Key Balance SheetUPDATE HOLLYWOOD Highlights $ in millions, unaudited 9/30/21 9/30/20 YoY % Change Cash & Cash $93.2 $31.9 192.3% Equivalents Accounts Receivable, $153.7 $136.3 12.7% net Inventory $140.8 $72.6 94.0% Total Debt(1) $177.6 $208.1 (14.7)% Total Liquidity(2) $193.2 $106.9 80.8% 1. Tot
Slide 18: Liquidity Overview
18 Liquidity Overview HOLLYWOOD UPDATE Total Liquidity(1) 2020 2021 $ in millions, unaudited Funko’s liquidity position remains strong and increased 80.8% from Q3’20 levels to $193.2 million 1. Total liquidity is calculated as cash and cash equivalents plus availability under the Company’s $100..0 m
Slide 19: Debt Overview
19 Debt Overview UPDATE HOLLYWOOD Total Debt(1) 2020 2021 $ in millions, unaudited Total debt decreased 14.7% from Q3’20 1. Total Debt is defined as the amount outstanding under the Company’s Line of Credit plus Current Portion of Long-Term Debt, Net of Unamortized Discount plus Long-Term Debt, Net
Slide 20: Supplemental Financial Information
Supplemental Financial Information
Slide 21: Condensed Consolidated Statements of Operations
21 Condensed Consolidated Statements of Operations HOLLYWOOD UPDATE (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (In thousands, except per share data) Net sales $ 267,733 $ 191,229 $ 693,020 $ 426,028 Cost of sales (exclusive of depreciation and am
Slide 22: Condensed Consolidated Balance Sheets
22 Condensed Consolidated Balance Sheets HOLLYWOOD UPDATE (Unaudited) September 30, 2021 December 31, 2020 (In thousands, except per share amounts) Assets Current assets: Cash and cash equivalents $ 93,245 $ 52,255 Accounts receivable, net 153,655 131,837 Inventory 140,834 59,773 Prepaid expenses an
Slide 23: Condensed Consolidated Statements of Cash Flows
23 Condensed Consolidated Statements of Cash Flows HOLLYWOOD UPDATE (Unaudited) Nine Months Ended September 30, 2021 2020 (In thousands) Operating Activities Net income (loss) $ 50,405 $ (5,144) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation, am
Slide 24: Reconciliation of Non-GAAP Financial Metrics
24 Reconciliation of Non-GAAP Financial Metrics HOLLYWOOD UPDATE (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (In thousands, except per share data) Net income (loss) attributable to Funko, Inc. $ 11,901 $ 9,796 $ 32,228 $ (4,915) Reallocation of ne
Slide 25: Reconciliation of Non-GAAP Financial Metrics
25 Reconciliation of Non-GAAP Financial Metrics (Unaudited) Three Months Ended September Nine Months Ended September 30, 30, 2021 2020 2021 2020 (amounts in thousands) Net income (loss) $ 18,375 $ 15,597 $ 50,405 $ (5,144) Interest expense, net 1,711 2,875 5,921 8,221 Income tax expense (benefit) 5,
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