Slide 1: First Quarter 2023 Earnings
May 4, 2023 First Quarter 2023 Earnings
Slide 2: Cautionary Notes
2 Cautionary Notes This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this presentation that do not relate to matters of historical fact should be considered forward-looking statements, includi
Slide 3: Funko is built on the principle that everyone is a fan of something
is built on the principle that everyone is a fan of something…
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 March 31, 2023.
Slide 5: Q1 Summary and Operating Highlights
5 Q1 Summary and Operating Highlights Q1 2023 Financial Summary Q1 2023 Operating Highlights (Compared to Q1 2022) • Net sales decreased 18% to $251.9 million • Direct-to-consumer net sales grew 61% YoY driven by strong fan enthusiasm and enhanced e-commerce capabilities, reflecting the strength of
Slide 6: Q1 Earnings Summary
6 Q1 Earnings Summary HOLLYWOOD UPDATE 1Q’23 1Q’22 % Change millions, except per share amounts, unaudited $251.9 $308.3 (18)% Net sales Gross profit(1) $49.6 $108.7 (54)% Gross margin %(1) 19.7% 35.3% SG&A $100.1 $78.4 28% D&A $14.0 $10.5 33% Income from operations $(64.5) $19.8 (426)% Operating mar
Slide 7: Active Properties & Net Sales per Active Property
7 HOLLYWOOD Q1 UPDATE Active Properties & Net Sales per Active Property Active Properties & Net Sales per Active Property First Quarter $ in thousands, unaudited Active Properties Net Sales per Active Property 763 736 $404 $342 Q1’22 Q1’23 Active Properties down (3.5)% Net Sales per Active Property
Slide 8: Top Properties Breakout
88 Top PropertiesUPDATE HOLLYWOOD Breakout Q1’22 Q2 ‘22 Q1’21 Q3’22 Q4’22 Q1’23 Q1’23 Commentary 1 6%* 6%* 6%* 5%* 4%* The top property in 2 Q1’23 represented 4% of sales 3 Evergreen properties accounted for 61% of 4 sales in Q1’23 5 6 7 8 9 10 Top 10 *% of net sales Properties 31% 34% 35% 30% 30% %
Slide 9: Q1 Brand Category Performance
9 Q1 Brand Category HOLLYWOOD Performance UPDATE Core Collectible Brands Loungefly Other Brands (Toy & Game Brands and Digital Brands) $ in millions, unaudited (23)% 4% (13)% Decrease Increase Decrease $52.2 $18.6 $50.1 $239.6 $16.2 $183.5 Q1’22 Q1’23 Q1’22 Q1’23 Q1’22 Q1’23 Core Collectible Brands
Slide 10: Q1 Geographic Performance
10 Q1 GeographicUPDATE HOLLYWOOD Performance United States Europe Other International $ in millions, unaudited (23)% 4% (23)% decrease increase decrease $232.2 $59.3 $19.1 $57.1 $177.8 $14.8 Q1'22 Q1'23 Q1’22 Q1’23 Q1’22 Q1’23 All three geographies faced headwinds from slower retail restocking
Slide 11: Q1 Non-GAAP Financial Metrics
11 Q1 Non -GAAP UPDATE HOLLYWOOD Financial Metrics Adjusted EBITDA(1) Adjusted Net (Loss) Income (2) First Quarter First Quarter $ in millions, unaudited $36.3 $18.4 $(25.3) $(14.0) Q1’22 Q1’23 Q1’22 Q1’23 Adjusted Adjusted EBITDA 11.8% 6.0% (10.0)% 6.6% (5.6)% Net (Loss) Margin(1) Income Margin(2)
Slide 12: Key Balance Sheet Highlights
12 Key Balance Sheet HOLLYWOOD Highlights UPDATE $ in millions, unaudited 3/31/2023 3/31/2022 Y/Y % Change Cash & Cash $34.8 $33.1 5.0% Equivalents Accounts Receivable, $161.3 $188.2 (14.3)% net Inventory $191.6 $161.5 18.6% Total Debt(1) $310.4 168.9 83.8% Inventory increased YoY, but declined 22%
Slide 13: Debt Overview
13 Debt OverviewUPDATE HOLLYWOOD Total Debt(1) 2022 2023 $ in millions, unaudited $310.4 $250.2 $245.8 $234.5 $168.9 Q1’22 Q2’22 Q3’22 Q4’22 Q1’23 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
Slide 14: Supplemental Financial Information
Supplemental Financial Information
Slide 15: Condensed Consolidated Statements of Operations
15 Condensed Consolidated Statements of Operations HOLLYWOOD UPDATE (Unaudited) Three Months Ended March 31, 2023 2022 (In thousands, except per share data) Net sales $ 251,878 $ 308,343 Cost of sales (exclusive of depreciation and amortization shown separately below) 202,303 199,649 Selling, genera
Slide 16: Condensed Consolidated Balance Sheets
16 Condensed Consolidated Balance Sheets HOLLYWOOD UPDATE (Unaudited) March 31, 2023 December 31, 2022 (In thousands, except per share amounts) Assets Current assets: Cash and cash equivalents $ 34,797 $ 19,200 Accounts receivable, net 161,313 167,895 Inventory 191,558 246,429 Prepaid expenses and o
Slide 17: Condensed Consolidated Statements of Cash Flows
17 Condensed Consolidated Statements of Cash Flows HOLLYWOOD UPDATE (Unaudited) Three Months Ended March 31, 2023 2022 (In thousands) Operating Activities Net (loss) income $ (61,144) $ 14,518 Adjustments to reconcile net (loss) income to net cash used in operating activities: Depreciation, amortiza
Slide 18: Reconciliation of Non-GAAP Financial Metrics
18 Reconciliation of Non-GAAP Financial Metrics HOLLYWOOD UPDATE (Unaudited) Three Months Ended March 31, 2023 2022 (In thousands, except per share data) Net (loss) income attributable to Funko, Inc. $ (55,311) $ 9,882 Reallocation of net (loss) income attributable to non-controlling interests from
Slide 19: Reconciliation of Non-GAAP Financial Metrics
19 Reconciliation of Non-GAAP Financial Metrics (Unaudited) Three Months Ended March 31, 2023 2022 (In thousands, except per share data) Cost of sales (exclusive of depreciation and amortization shown separately) $ 202,303 $ 199,649 One-time inventory write-down (1) 30,084 — Adjusted cost of sales (
Slide 20: Reconciliation of Non-GAAP Financial Metrics
20 Reconciliation of Non-GAAP Financial Metrics (Unaudited) Three Months Ended March 31, 2022 2021 (amounts in thousands) Net (loss) income $ (61,144) $ 14,518 Interest expense, net 5,687 1,210 Income tax (benefit) expense (10,320) 3,678 Depreciation and amortization 13,976 10,471 EBITDA $ (51,801)
Slide 21: Slide 21