Funko, Inc. · NASDAQ:FNKO
Funko — Q4 2019 Earnings Presentation
27 slides from Funko's earnings presentation, Mar 5, 2020
Slide 1: Fourth Quarter and Fiscal Year 2019 Earnings
Exhibit 99.2 Fourth Quarter and Fiscal Year 2019 Earnings March 5, 2020
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: 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: Fiscal Year 2019 Highlights
Fiscal Year 2019 Highlights Operational Highlights Financial Highlights Completed the strategic acquisition of world-class Net sales increased 16% to $795.1 million game design studio Forrest-Pruzan, creating Funko (1) Games, and successfully entered the board game Gross profit increased 11% t
Slide 6: Q4 & Fiscal Year Earnings Summary
Q4 & Fiscal Year Earnings Summary $ in millions, except per share amounts, 4Q’19 4Q’18 % Change FY’19 FY’18 % Change unaudited Net Sales $213.6 $233.2 (8.4)% $795.1 $686.1 15.9% Gross Profit(1) $62.4 $84.1 (25.7)% $282.5 $255.3 10.7% Gross Margin %(1) 29.2% 36.0% 35.5% 37.2% Gross profit excluding t
Slide 7: Active Properties & Net Sales per Active Property
Q4 & Fiscal Year Active Properties & Net Sales per Active Property Active Properties & Net Sales per Active Property Fourth Quarter Fiscal Year $ in thousands, unaudited Active Properties Net Sales per Active Property 667 850 804 $1,400 583 800 $1,300 750 700 672 $1,200 650 $1,021 $1,100 $400 600 $9
Slide 8: Top Properties Breakout
Top Properties Breakout Q4’18 Q1’19 Q2’19 Q3’19 Q4’19 The top property in 1 12%* 10%* 6%* 9%* 6%* Q4’19 represented only 6% of sales 2 Evergreen properties 3 accounted for 52% of sales in Q4’19 4 5 6 7 8 9 10 Top 10 Properties 38% 41% 37% 38% 38% *% of net sales 8 % of Net Sales
Slide 9: Q4 & Fiscal Year Product Category Performance
Q4 & Fiscal Year Product Category Performance Figures Other Fourth Quarter Fiscal Year Fourth Quarter Fiscal Year $ in millions, unaudited 10% 15% 4% 21% Decrease Growth Decrease Growth $188.3 $642.5 $152.6 $560.1 $170.2 $126.0 $45.0 $43.3 Q4'18 Q4'19 FY'18 FY'19 Q4'18 Q4'19 FY'18 FY'19 The sales gr
Slide 10: Annual Product Category Performance
Annual Product Category Performance Annual Product Category Performance $ in millions, unaudited ’16-’19 CAGR Figures Other Figures 22% $795 Other 26% $686 Total 23% $153 $126 $516 $427 $94 $77 $643 $560 $422 $350 FY'16 FY'17 FY'18 FY'19 % Figures 82% 82% 82% 81% Funko is able to continue to drive g
Slide 11: 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 80% of 20% of Sales* Sales* 11 *% of net sales for Q4’ 19
Slide 12: Recent Non-Licensed Toy Line Announcements
Recent Non-Licensed Toy Line Announcements Funko is expanding its addressable market by launching new non-licensed toy lines that will live in the toy aisle and be supported by Funko Animation Studios 12
Slide 13: Recent Board Game Announcements
Recent Board Game Announcements Funko Games are expecting to release dozens of new board games in 2020 that include new Funkoverse games as well as new licensed and non-licensed games 13
Slide 14: Q4 & Fiscal Year Geographic Performance
Q4 & Fiscal Year Geographic Performance United States International Fourth Quarter Fiscal Year Fourth Quarter Fiscal Year $ in millions, unaudited 9% 12% 8% 23% Decline Growth Decline Growth $27 $158.8 $523.9 $74.5 $144.9 $466.0 $68.6 1.2 $220.0 Q4'18 Q4'19 FY'18 FY'19 Q4'18 Q4'19 FY'18 FY'19 Stro
Slide 15: Annual Geographic Performance
Annual Geographic Performance Annual Geographic Performance $ in millions, unaudited ’16-’19 CAGR US International $795 U.S. 14% International 54% $686 Total 23% $271 $516 $220 $427 $140 $74 $524 $466 $353 $376 FY'16 FY'17 FY'18 FY'19 % U.S. 83% 73% 68% 66% Funko can leverage its diverse property an
Slide 16: Q4 & Fiscal Year Adjusted Net Income
Q4 & Fiscal Year Adjusted Net Income(1) Adjusted Net Income(1) Fourth Quarter Fiscal Year $ in millions, unaudited 58% 26% Decline Growth $49.9 $21.3 $39.5 $8.9 Q4'18 Q4'19 FY'18 FY'19 Adjusted Net Income 9.1% 4.2% 5.8% 6.6%6.3% Margin(1) Q4’19 decline in Adjusted Net Income(1) is primarily due to t
Slide 17: Q4 & Fiscal Year Adjusted EBITDA
Q4 & Fiscal Year Adjusted EBITDA(1) Adjusted EBITDA(1) Fourth Quarter Fiscal Year $ in millions, unaudited 40% 8% Decline Growth $43.1 $123.0 $113.5 $25.7 Q4'18 Q4'19 FY'18 FY'19 Adj. EBITDA 18.5% 12.0% 16.5% 15.5% Margin %(1) Adj. EBITDA Margin(1) decreased in Q4’19 due to sales decline and the pla
Slide 18: Key Balance Sheet Highlights
Key Balance Sheet Highlights 12/31/2019 12/31/2018 YoY % Change $ in millions, unaudited Cash & Cash Equivalents $25.2 $13.5 87.1% Accounts $151.6 $148.6 2.0% Receivable, net Inventory $62.1 $86.6 (28.3)% Total Debt(1) $242.3 $247.3 (2.0)% 18 (1) Total Debt is defined as Line of Credit Outstandings
Slide 19: Fiscal Year 2020 Guidance
Fiscal Year 2020 Guidance Fiscal Year 2020 Guidance Range(1) Net Sales $840 to $865 million Adjusted EBITDA(2) $115 to $125 million Adjusted Net Income(2) $43 to $51 million Adjusted EPS(2) $0.85 to $1.00 (1) The guidance should be read in conjunction with Funko’s fourth quarter 2019 earnings releas
Slide 20: Supplemental Financial Information
Supplemental Financial Information
Slide 21: Condensed Consolidated Statements of Operations
Q4 & Fiscal Year Condensed Consolidated Statements of Operations Q4’19 Q4’18 % Change FY’19 FY’18 % Change $ in thousands, unaudited Net Sales $213,551 $233,224 (8.4)% $795,122 $686,073 15.9% Cost of Sales(1) 151,125 149,172 1.3% 512,580 430,746 19.0% Gross Profit(1) 62,426 84,052 (25.7)% 282,542 25
Slide 22: Condensed Consolidated Balance Sheet
Condensed Consolidated Balance Sheet 12/31/2019 12/31/2018 $ in thousands, unaudited Cash and Cash Equivalents $25,229 $13,486 Accounts Receivable, net 151,564 148,627 Inventory 62,124 86,622 Prepaid Expenses & Other Current Assets 20,280 11,904 Total Current Assets 259,197 260,639 Property & Equipm
Slide 23: Reconciliation of Non-GAAP Financial Metrics
Reconciliation of Non-GAAP Financial Metrics Three Months Ended December 31, Twelve Months Ended December 31, 2019 2018 2019 2018 (amounts in thousands) Net sales $ 213,551 $ 233,224 $ 795,122 $ 686,073 Cost of sales (exclusive of depreciation and amortization) 151,125 149,172 512,580 430,746 Gross
Slide 24: Reconciliation of Non-GAAP Financial Metrics Cont.
Reconciliation of Non-GAAP Financial Metrics Cont. Three Months Ended December 31, Twelve Months Ended December 31, 2019 2018 2019 2018 (In thousands, except per share data) Net income (loss) attributable to Funko, Inc. $ (4,241) $ 5,227 $ 11,725 $ 7,463 Reallocation of net income (loss) attributabl
Slide 25: Reconciliation of Non-GAAP Financial Metrics Cont.
Reconciliation of Non-GAAP Financial Metrics Cont. Three Months Ended December 31, Twelve Months Ended December 31, 2019 2018 2019 2018 (amounts in thousands) Net income (loss) $ (6,288) $ 15,519 $ 27,820 $ 25,062 Interest expense, net 2,887 4,509 14,342 21,739 Income tax (benefit) expense (1,988) 2
Slide 26: Guidance Reconciliation of Net Income to EBITDA and Adjusted Measures
Guidance Reconciliation of Net Income to EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income and Adjusted Earnings per Diluted Share Estimated Range for the Year Ending December 31, 2020 (In millions, except per share amounts) Net Sales $ 840.0 $ 865.0 Net income $ 34.1 $ 41.9 Inter
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