Slide 1: Second Quarter 2020 Earnings
August 6, 2020 Second Quarter 2020 Earnings
Slide 2: Cautionary Notes
2 HOLLYWOOD UPDATE 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 res
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 2020
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 June 2020. FUNKO 2020
Slide 5: Q2 Summary and Operational Highlights
5 HOLLYWOOD UPDATE Q2 Summary and Operational Highlights Q2 2020 Financial Summary Q2 2020 Operational Highlights Strong consumer demand within the domestic mass-market and third party e- Net sales of $98.1 million commerce channels Gross margin(1) of 36.6% Funko’s direct-to-consumer e-commerce sale
Slide 6: Q2 & YTD Earnings Summary
6 HOLLYWOOD UPDATE Q2 & YTD Earnings Summary 2Q’20 2Q’19 % Change YTD’20 YTD’19 % Change $ in millions, except per share amounts, unaudited Net Sales $98.1 $191.2 (48.7%) $234.8 $358.3 (34.5%) Gross Profit(1) $35.9 $71.2 (49.6%) $91.2 $134.6 (32.2%) Gross Margin %(1) 36.6% 37.2% 38.8% 37.6% SG&A 39.
Slide 7: Recently Launched Products
7 HOLLYWOOD UPDATE Recently Launched Products Continuing to innovate and expand our product offering by creating new ways for fans to connect with their fandoms Marvel Battleworld: Mystery of Thanostones Launched multiple new game offerings in the Stitch Shoppe is Loungefly’s new high quality target
Slide 8: Q2 & YTD Active Properties & Net Sales per Active Property
8 HOLLYWOOD Q2 & YTD ActiveUPDATE Properties & Net Sales per Active Property Active Properties & Net Sales per Active Property Second Quarter Year to Date Active Properties Net Sales per Active Property 800 $50 0 850 $1,0 00 700 644 $45 0 735 $90 0 592 750 663 $40 0 $80 0 600 $35 0 $70 0 650 500 $30
Slide 9: Top Properties Breakout
9 HOLLYWOOD Top PropertiesUPDATE Breakout Q2’19 Q3’19 Q4’19 Q1’20 Q2’20 Q2’20 Commentary 1 6%* 9%* 6%* 4%* 9%* The top property in 2 Q2’20 represented 9% of sales 3 Evergreen properties accounted for 66% of 4 sales in Q2’20 5 6 7 8 9 10 Top 10 *% of net sales Properties 37% 38% 38% 31% 40% % of Net
Slide 10: Q2 & YTD Product Category Performance
10 HOLLYWOOD UPDATE Q2 & YTD Product Category Performance Figures Other Second Quarter Year to Date Second Quarter Year to Date 52% 36% 34% 26% Decrease Decrease Decrease Decrease $159.7 $31.5 $62.1 $296.2 $46.1 $20.7 $188.7 $77.4 Q2'19 Q2'20 YTD'19 YTD'20 Q2'19 Q2'20 YTD'19 YTD'20 The declines in t
Slide 11: Something for Everyone
11 HOLLYWOOD Something forUPDATE Everyone Fans can find their something as the world of Funko continues to expand with new product categories FIGURES OTHER 79% of 21% of Sales* Sales* *% of net sales for Q2’ 20
Slide 12: Q2 & YTD Geographic Performance
12 HOLLYWOOD UPDATEPerformance Q2 & YTD Geographic United States International Second Quarter Year to Date Second Quarter Year to Date 36% 24% 71% 54% Decrease Decrease Decrease Decrease $122.7 $231.5 $126.7 $68.5 $176.4 $77.9 $58.4 $20.2 Q2'19 Q2'20 YTD'19 YTD'20 Q2'19 Q2'20 YTD'19 YTD'20 In the Un
Slide 13: Q2 & YTD Adjusted EBITDA
13 HOLLYWOOD UPDATE Q2 & YTD Adjusted EBITDA(1) Adjusted EBITDA(1) Second Quarter Year to Date 99% 81% Decrease Decrease $56.7 $31.4 $10.8 $0.2 Q2'19 Q2'20 YTD'19 YTD'20 Adjusted EBITDA 16.4% 0.2% 15.8% 4.6% 6.6% Margin(1) Adjusted EBITDA declined in Q2’20 primarily due to the reduction in net sales
Slide 14: Q2 & YTD Adjusted Net (Loss) Income
14 HOLLYWOOD UPDATE Q2 & YTD Adjusted Net (Loss) Income(1) Adjusted Net (Loss) Income(1) Second Quarter Year to Date 179% 159% Decrease Decrease $12.9 $21.2 ($10.2) $(12.4) Q2'19 Q2'20 YTD'19 YTD'20 Adjusted Net (Loss) 6.7% (10.3%) 5.9% (5.3%) 6.6% Income Margin(1) Adjusted Net (Loss) Income decline
Slide 15: Key Balance Sheet Highlights
15 HOLLYWOOD UPDATE Key Balance Sheet Highlights $ in millions, unaudited 6/30/2020 6/30/2019 YoY % Change Cash & Cash Equivalents $41.1 $19.5 111.1% Accounts Receivable, net $94.1 $131.6 (28.6%) Inventory $60.4 $75.3 (19.8%) Total Debt(1) $239.9 $241.3 (0.6%) Total Liquidity(2) $87.0 $75.2 15.8% (1
Slide 16: Supplemental Financial Information
Supplemental Financial Information
Slide 17: Condensed Consolidated Statements of Operations
17 HOLLYWOOD UPDATE Statements of Operations Condensed Consolidated Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 (In thousands, except per share data) Net sales $ 98,099 $ 191,199 $ 234,799 $ 358,264 Cost of sales (exclusive of depreciation and amortization shown separat
Slide 18: Condensed Consolidated Balance Sheets
18 HOLLYWOOD UPDATE Balance Sheets Condensed Consolidated June 30, Decem ber 31, 2020 2019 (In thousands, except per share am ounts) Assets Current assets: Cash and cash equivalents $ 41,127 $ 25,229 Accounts receivable, net 94,050 151,564 Inventory 60,354 62,124 Prepaid expenses and other current a
Slide 19: Condensed Consolidated Statements of Cash Flows
19 HOLLYWOOD UPDATE Statements of Cash Flows Condensed Consolidated Six Months Ended June 30, 2020 2019 (In thousands) Operating Activities Net (loss) income $ (20,741) $ 18,560 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation, amortization and ot
Slide 20: Reconciliation of Non-GAAP Financial Metrics
20 HOLLYWOOD ReconciliationUPDATE of Non-GAAP Financial Metrics Three Months Ended June 30, Six Months Ended June 30, 1) (Represents the reallocation of net (loss) income attributable to non- 2020 2019 2020 2019 controlling interests from the assumed exchange of common units of (In thousands, except
Slide 21: Reconciliation of Non-GAAP Financial Metrics
21 HOLLYWOOD ReconciliationUPDATE of Non-GAAP Financial Metrics Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 (am ounts in thousands) Net (loss) income $ (15,009) $ 11,415 $ (20,741) $ 18,560 Interest expense, net 2,691 3,763 5,346 7,835 Income tax (benefit) expense (1,70
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