Slide 1: Third Quarter 2020 Earnings
November 5, 2020 Third 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 September 2020. FUNKO 2020
Slide 5: Q3 Summary and Operational Highlights
5 HOLLYWOOD UPDATE Q3 Summary and Operational Highlights Q3 2020 Financial Summary Q3 2020 Operational Highlights Strong consumer demand within the domestic mass-market Net sales of $191.2 million and third party e-commerce channels Gross margin(1) increased 30bps to 38.6% Funko’s direct-to-consumer
Slide 6: Q3 & YTD Earnings Summary
6 HOLLYWOOD UPDATE Q3 & YTD Earnings Summary 3Q’20 3Q’19 % Change YTD’20 YTD’19 % Change $ in millions, except per share amounts, unaudited Net Sales $191.2 $223.3 (14.4%) $426.0 $581.6 (26.7%) Gross Profit(1) $73.7 $85.5 (13.8%) $164.9 $220.1 (25.1%) Gross Margin %(1) 38.6% 38.3% 38.7% 37.8% SG&A 4
Slide 7: Q3 & YTD Active Properties & Net Sales per Active Property
7 HOLLYWOOD Q3 & YTD ActiveUPDATE Properties & Net Sales per Active Property Active Properties & Net Sales per Active Property Third Quarter Year to Date Active Properties Net Sales per Active Property 850 805 $1,200 800 715 737 750 627 $500 $1,000 700 600 650 $400 $800 $789 500 $356 550 $300 $600 4
Slide 8: Top Properties Breakout
8 HOLLYWOOD Top PropertiesUPDATE Breakout Q3’19 Q4’19 Q1’20 Q2’20 Q3’20 Q3’20 Commentary 1 9%* 6%* 4%* 9%* 7%* The top property in 2 Q3’20 represented 7% of sales 3 Evergreen properties accounted for 70% of 4 sales in Q3’20 5 6 7 8 9 10 Top 10 *% of net sales Properties 38% 38% 31% 40% 40% % of Net
Slide 9: Q3 & YTD Product Category Performance
9 HOLLYWOOD UPDATE Q3 & YTD Product Category Performance Figures Other Third Quarter Year to Date Third Quarter Year to Date 18% 29% 1% 16% Decrease Decrease Decrease Decrease $176.5 $472.3 $46.8 $46.2 $109.2 $145.0 $92.3 $333.7 Q3'19 Q3'20 YTD'19 YTD'20 Q3'19 Q3'20 YTD'19 YTD'20 The figures categor
Slide 10: Something for Everyone
10 HOLLYWOOD Something forUPDATE Everyone Fans can find their something as the world of Funko continues to expand with new product categories FIGURES OTHER 76% of 24% of Sales* Sales* *% of net sales for Q3’ 20
Slide 11: Q3 & YTD Geographic Performance
11 HOLLYWOOD UPDATEPerformance Q3 & YTD Geographic United States International Third Quarter Year to Date Third Quarter Year to Date 4% 16% 34% 46% Decrease Decrease Decrease Decrease $147.3 $378.9 $140.9 $76.0 $202.7 $317.3 $50.3 $108.7 Q3'19 Q3'20 YTD'19 YTD'20 Q3'19 Q3'20 YTD'19 YTD'20 In the Uni
Slide 12: Q3 & YTD Adjusted EBITDA
12 HOLLYWOOD UPDATE Q3 & YTD Adjusted EBITDA(1) Adjusted EBITDA(1) Third Quarter Year to Date 11% 52% Decrease Decrease $40.6 $97.3 $36.2 $47.0 Q3'19 Q3'20 YTD'19 YTD'20 Adjusted EBITDA 18.2% 18.9% 16.7% 11.0% 6.6% Margin(1) Strong gross margin and cost controls drove an increase in Adjusted EBITDA
Slide 13: Q3 & YTD Adjusted Net Income
13 HOLLYWOOD UPDATE Q3 & YTD Adjusted Net Income(1) Adjusted Net Income(1) Third Quarter Year to Date 19% 91% Decrease Decrease $19.9 $41.1 $16.1 $3.6 Q3'19 Q3'20 YTD'19 YTD'20 Adjusted Net Income 8.9% 8.4% 7.1% 0.9% 6.6% Margin(1) Adjusted Net Income margin(1) declined by 50bps primarily due to hig
Slide 14: Key Balance Sheet Highlights
14 HOLLYWOOD UPDATE Key Balance Sheet Highlights $ in millions, unaudited 9/30/2020 9/30/2019 YoY % Change Cash & Cash Equivalents $31.9 $13.5 136.4% Accounts Receivable, net $136.3 $163.1 (16.4%) Inventory $72.6 $94.3 (23.0%) Total Debt(1) $208.1 $237.7 (12.5%) Total Liquidity(2) $106.9 $70.0 52.8%
Slide 15: Liquidity Overview
15 HOLLYWOOD UPDATE Liquidity Overview Total Liquidity(1) $106.9 $101.7 $87.0 $75.1 $75.2 $74.4 $70.0 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Funko’s liquidity position remains strong and increased 52.8% from Q3’19 levels (1) Total liquidity is calculated as cash and cash equivalents plus availabi
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 Septem ber 30, Nine Months Ended Septem ber 30, 2020 2019 2020 2019 (In thousands, except per share data) Net sales $ 191,229 $ 223,307 $ 426,028 $ 581,571 Cost of sales (exclusive of depreciation and amortization
Slide 18: Condensed Consolidated Balance Sheets
18 HOLLYWOOD UPDATE Balance Sheets Condensed Consolidated September 30, December 31, 2020 2019 (In thousands, except per share am ounts) Assets Current assets: Cash and cash equivalents $ 31,895 $ 25,229 Accounts receivable, net 136,300 151,564 Inventory 72,603 62,124 Prepaid expenses and other curr
Slide 19: Condensed Consolidated Statements of Cash Flows
19 HOLLYWOOD UPDATE Statements of Cash Flows Condensed Consolidated Nine Months Ended Septem ber 30, 2020 2019 (In thousands) Operating Activities Net income (loss) $ (5,144) $ 34,108 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation, amortization
Slide 20: Reconciliation of Non-GAAP Financial Metrics
20 HOLLYWOOD ReconciliationUPDATE of Non-GAAP Financial Metrics Three Months Ended Septem ber 30, Nine Months Ended Septem ber 30, 2020 2019 2020 2019 (1) Represents the reallocation of net income (loss) attributable to non-controlling interests from the assumed exchange of common units of FAH, LLC
Slide 21: Reconciliation of Non-GAAP Financial Metrics
21 HOLLYWOOD ReconciliationUPDATE of Non-GAAP Financial Metrics Three Months Ended Septem ber 30, Nine Months Ended Septem ber 30, 2020 2019 2020 2019 (am ounts in thousands) Net income (loss) $ 15,597 $ 15,548 $ (5,144) $ 34,108 Interest expense, net 2,875 3,620 8,221 11,455 Income tax expense (ben
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