Slide 1: First Quarter 2019 Earnings
First Quarter 2019 Earnings May 2, 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: 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… 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: First Quarter 2019 Snapshot
First Quarter 2019 Snapshot In Q1’19, Pop! Vinyl brand Net Sales increased 22% to Pop! products grew 21% compared Net Sales $166.8m in Q1’19 compared to Brand to Q1’18 Q1’18 22% QoQ Net Sales growth driven by broad- 26% QoQ Growth in Pop! Vinyl was Growth based growth across geographies Grow
Slide 6: Q1 Earnings Summary
Q1 Earnings Summary $ in millions, except per share and net sales per 1Q’19 1Q’18 % Change active property, unaudited Net Sales $166.8 $137.2 21.6% Gross Profit(1) $63.5 $51.3 23.9% Gross Margin %(1) 38.1% 37.4% Operating Income $12.6 $7.2 76.5% Operating Margin % 7.6% 5.2% Net Income $7.1 $2.2 216.
Slide 7: Q1 Active Properties & Net Sales per Active Property
Q1 Active Properties & Net Sales per Active Property Active Properties & Net Sales per Active Property First Quarter $ in thousands Active Properties Net Sales per Active Property 611 700 $350 $302 600 $300 500 454 $250 $273 400 $200 300 $150 200 $100 100 $50 0 $- Q1'18 Q1'19 Active Properties up 35
Slide 8: Top Properties Breakout
Top Properties Breakout Q2’18 Q3’18 Q4’18 Q1’19 Top property in Q1’ 19 1 6%* 7%* 12%* 10%* only represented 10% of sales 2 Top 10 properties were only 41% of sales in 3 Q1’19 4 Evergreen properties accounted for 45% of sales in Q1’19 versus 5 42% of sales in Q1’ 18 6 7 8 9 10 Top 10 Properties 38% 3
Slide 9: Q1 Product Category Performance
Q1 Product Category Performance Figures Other First Quarter First Quarter $ in millions 18% 43% Growth Growth $136.0 $30.8 $21.6 $115.6 Q1'18 Q1'19 Q1'18 Q1'19 The significant sales growth in the other product category 9 was due primarily from our Loungefly brand and other softline products
Slide 10: Something For Everyone
Something For Everyone The Funko-verse continues to expand with new product categories. Figures Other 82% of 18% of Sales* Sales* 10 *% of net sales for Q1’ 19
Slide 11: Q1 Geographic Performance
Q1 Geographic Performance United States International First Quarter First Quarter $ in millions 22% 20% Growth Growth $108.7 $88.9 $58.1 $48.4 Q1'18 Q1'19 Q1'18 Q1'19 Specialty channel up over 62% for the quarter Strong sales growth in all international markets 3rd party e-commerce sites are u
Slide 12: Fan Engagement
Fan Engagement Connecting fans to their favorite characters, moments and stories from pop culture. Campaigns Original Content Social Media #FunkoWomenOfPower • Promote Funko’s Captain • In-house video content • Direct engagement via • Engaging audiences with Marvel products leading and Funko Animati
Slide 13: Funko App – For the Fans by Fans
Funko App – For the Fans by Fans Debuted at #14 in the Lifestyle section of the Apple App Store ~ 1 million downloads in first 3 weeks in 155 countries “Great app and a must for every funko pop collector!!!!!” – Newsome20 "So much better than Stashpedia.“ – ECCC Funatic “So good.. I recommend it esp
Slide 14: Retail Activations – United States
Retail Activations United States 14
Slide 15: Retail Activations – Europe
Retail Activations Europe • Cinemas – Germany • Across key German cinema locations in 2019 • Product feature • Touch screen unit for product browsing Digital animation integration • • Cinemas – Italy (UCI) • Close proximity retail support • Key Tentpole Moment Product Offerings: • Pop! • Pocket Pop!
Slide 16: Retail Activations – Rest of World
Retail Activations Rest of World 16
Slide 17: Q1 Adjusted Pro Forma Net Income
Q1 Adjusted Pro Forma Net Income(1) Adjusted Pro Forma Net Income(1) First Quarter $ in millions, unaudited 401% Growth Adjusted Pro Forma Net Income improved in Q1’ 19 due to growth in sales, improved gross margin, leveraging SG&A costs, and lower interest expense Adjusted Pro Forma 1.2% 5.1% Net I
Slide 18: Q1 Adjusted EBITDA
Q1 Adjusted EBITDA(1) Adjusted EBITDA(1) First Quarter $ in millions, unaudited 46% Growth Adjusted EBITDA improved in Q1’ 19 due to growth in sales, improved gross margin, and leveraging SG&A costs Adj. EBITDA 12.7% 15.3% Margin %(1) (1) See Supplemental Financial Information section for a reconcil
Slide 19: Key Balance Sheet Highlights
Key Balance Sheet Highlights 3/31/2019 3/31/2018 YoY % Change 12/31/2018 $ in millions, unaudited Cash & Cash Equivalents $22.5 $6.5 249.6% $13.5 Accounts $117.6 $88.6 32.8% $148.6 Receivable, net Inventory $75.4 $74.0 2.0% $86.6 Total Debt(1) $247.1 $241.7 2.3% $247.3 Net Debt(2) $224.6 $235.2 (4.6
Slide 20: Fiscal Year 2019 Guidance
Fiscal Year 2019 Guidance Fiscal Year 2019 Guidance Range(1) % Growth YoY Net Sales $810 to $825 million 18% to 20% Adjusted EBITDA(2) $133 to $143 million 15% to 23% Adjusted Pro Forma EPS(2) $1.05 to $1.15 28% to 40% (1) The guidance should be read in conjunction with Funko’s first quarter 2019 ea
Slide 21: Supplemental Financial Information
Supplemental Financial Information
Slide 22: Q1 Condensed Consolidated Statements of Operations
Q1 Condensed Consolidated Statements of Operations Q1’19 Q1’18 % Change $ in thousands, unaudited Net Sales $166,800 $137,211 21.6% Cost of Sales(1) 103,268 85,921 20.2% Gross Profit(1) 63,532 51,290 23.9% Gross Margin(1) 38.1% 37.4% Selling, General and Administrative Expenses 40,818 34,810 17.3% A
Slide 23: Condensed Consolidated Balance Sheet
Condensed Consolidated Balance Sheet 3/31/2019 3/31/2018 12/31/2018 $ in thousands, unaudited Cash and Cash Equivalents $22,546 $6,450 $13,486 Accounts Receivable, net 117,618 88,616 148,627 Inventory 75,396 73,950 86,622 Prepaid Expenses & Other Current Assets 16,935 24,670 11,904 Total Current Ass
Slide 24: Reconciliation of Non-GAAP Financial Metrics
Reconciliation of Non-GAAP Financial Metrics Three Months Ended March 31, 2019 2018 (In thousands, except per share data) Net income attributable to Funko, Inc. $ 2,160 $ 899 Reallocation of net income attributable to non-controlling interests from the assumed exchange of common units of FAH, LLC fo
Slide 25: Reconciliation of Non-GAAP Financial Metrics Cont.
Reconciliation of Non-GAAP Financial Metrics Cont. Three Months Ended March 31, 2019 2018 (am ounts in thousands) Net income $ 7,070 $ 2,237 Interest expense, net 4,072 5,896 Income tax expense 1,414 460 Depreciation and amortization 10,093 9,301 EBITDA $ 22,649 $ 17,894 Adjustments: Equity-based co
Slide 26: Guidance Reconciliation of Net Income to EBITDA, Adjusted EBITDA, Adjusted Pro Forma Net Income
Guidance Reconciliation of Net Income to EBITDA, Adjusted EBITDA, Adjusted Pro Forma Net Income and Adjusted Pro Forma Earnings per Diluted Share Estimated Range for the Year Ending December 31, 2019 (In millions except per share amounts) Net income $ 47.3 $ 50.8 Interest expense, net 16.0 17.0 Inco
Slide 27: Slide 27