Slide 1: Third Quarter 2019 Earnings
Third Quarter 2019 Earnings October 31, 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: 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: Third Quarter 2019 Snapshot
Third Quarter 2019 Snapshot (1) In Q3’19, sales in the United States Net Sales increased 26% to $223.3m and International region grew 21% Net Sales in Q3’19 compared to Q3’18 Broad-Based and 37%, respectively, year over year In Q3’19, sales growth across both 26% QoQ Net Sales growth driven
Slide 6: Q3 & YTD Earnings Summary
Q3 & YTD Earnings Summary $ in millions, except per share amounts, 3Q’19 3Q’18 % Change YTD’19 YTD’18 % Change unaudited Net Sales $223.3 $176.9 26.2% $581.6 $452.8 28.4% Gross Profit(1) $85.5 $67.8 26.0% $220.1 $171.3 28.5% Gross Margin %(1) 38.3% 38.4% 37.8% 37.8% Operating Income $22.6 $16.6 35.9
Slide 7: Q3 & YTD Active Properties & Net Sales per Active Property
Q3 & YTD Active Properties & Net Sales per Active Property Active Properties & Net Sales per Active Property Third Quarter Year to Date $ in thousands, unaudited Active Properties Net Sales per Active Property Active Properties up 13% Active Properties up 23% Net Sales per Active Property up 11% Net
Slide 8: Top Properties Breakout
Top Properties Breakout Q3’18 Q4’18 Q1’19 Q2’19 Q3’19 The top property in 1 7%* 12%* 10%* 6%* 9%* Q3’19 represented only 9% of sales 2 Evergreen properties 3 accounted for 58% of sales in Q3’19 driven 4 by the expansion of properties and 5 product categories 6 7 8 9 10 Top 10 Properties 34% 38% 41%
Slide 9: Q3 & YTD Product Category Performance
Q3 & YTD Product Category Performance Figures Other Third Quarter Year to Date Third Quarter Year to Date $ in millions 24% 27% 33% 35% Growth Growth Growth Growth $472.3 $46.8 $176.5 $109.2 $371.8 $141.8 $35.2 $81.0 Q3'18 Q3'19 YTD'18 YTD'19 Q3'18 Q3'19 YTD'18 YTD'19 The significant sales growth in
Slide 10: 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 79% of 21% of Sales* Sales* 10 *% of net sales for Q3’ 19
Slide 11: Q3 & YTD Geographic Performance
Q3 & YTD Geographic Performance United States International Third Quarter Year to Date Third Quarter Year to Date $ in millions, unaudited 21% 23% 37% 39% Growth Growth Growth Growth $378.9 $76.0 $147.3 $202.7 $121.3 $307.3 $55.6 $145.6 Q3'18 Q3'19 YTD'18 YTD'19 Q3'18 Q3'19 YTD'18 YTD'19 Sales in
Slide 12: Q3 & YTD Adjusted Net Income
Q3 & YTD Adjusted Net Income(1) Adjusted Net Income(1) Third Quarter Year to Date $ in millions, unaudited 46% 126% Growth Growth $19.9 $41.1 $13.6 $18.2 Q3'18 Q3'19 YTD' 18 YTD' 19 Adjusted Net Income 7.7% 8.9% 4.0% 7.1% 6.6% Margin(1) Q3’19 improvement in Adjusted Net Income(1) and Adjusted Net In
Slide 13: Q3 & YTD Adjusted EBITDA
Q3 & YTD Adjusted EBITDA(1) Adjusted EBITDA(1) Third Quarter Year to Date $ in millions, unaudited 20% 38% Growth Growth $40.6 $97.3 $70.4 $33.9 Q3'18 Q3'19 YTD' 18 YTD' 19 Adj. EBITDA 19.2% 18.2% 15.5% 16.7% Margin %(1) Adj. EBITDA Margin(1) decreased in Q3’19 due to the planned increase in investm
Slide 14: Key Balance Sheet Highlights
Key Balance Sheet Highlights 9/30/2019 9/30/2018 YoY % Change 12/31/2018 $ in millions, unaudited Cash & Cash Equivalents $13.5 $10.6 27.6% $13.5 Accounts $163.1 $127.0 28.4% $148.6 Receivable, net Inventory $94.3 $82.3 14.7% $86.6 Total Debt(1) $237.7 $259.1 -8.2% $247.3 Net Debt(2) $224.2 $248.5 -
Slide 15: Fiscal Year 2019 Guidance
Fiscal Year 2019 Guidance Fiscal Year 2019 Guidance Range(1) % Growth YoY Net Sales $840 to $850 million 22% to 24% Adjusted EBITDA(2) $140 to $145 million 20% to 25% Adjusted EPS(2) $1.15 to $1.22 40% to 48% (1) The guidance should be read in conjunction with Funko’s third quarter 2019 earnings rel
Slide 16: Supplemental Financial Information
Supplemental Financial Information
Slide 17: Q3 & YTD Condensed Consolidated Statements of Operations
Q3 & YTD Condensed Consolidated Statements of Operations (2) Q3’19 Q3’18 % Change YTD’19 YTD’18 % Change $ in thousands, unaudited Net Sales $223,307 $176,915 26.2% $581,571 $452,849 28.4% Cost of Sales(1) 137,801 109,046 26.4% 361,455 281,574 28.4% Gross Profit(1) 85,506 67,869 26.0% 220,116 171,27
Slide 18: Condensed Consolidated Balance Sheet
Condensed Consolidated Balance Sheet(1) 9/30/2019 9/30/2018 12/31/2018 $ in thousands, unaudited Cash and Cash Equivalents $13,492 $10,576 $13,486 Accounts Receivable, net 163,088 127,026 148,627 Inventory 94,347 82,254 86,622 Prepaid Expenses & Other Current Assets 14,039 25,302 11,904 Total Curren
Slide 19: Reconciliation of Non-GAAP Financial Metrics
Reconciliation of Non-GAAP Financial Metrics Three Months Ended Septem ber 30, Nine Months Ended Septem ber 30, (9) (9) (9) 2019 2018 2019 2018 (In thousands, except per share data) Net income attributable to Funko, Inc. $ 8,639 $ 1,570 $ 15,966 $ 2,237 Reallocation of net income attributable to non
Slide 20: Reconciliation of Non-GAAP Financial Metrics Cont.
Reconciliation of Non-GAAP Financial Metrics Cont. Three Months Ended September 30, Nine Months Ended September 30, (8) (8) (8) 2019 2018 2019 2018 (amounts in thousands) Net income $ 15,548 $ 7,551 $ 34,108 $ 9,544 Interest expense, net 3,620 5,750 11,455 17,230 Income tax expense 2,865 1,906 6,464
Slide 21: Guidance Reconciliation of Net Income to EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted EPS
Guidance Reconciliation of Net Income to EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings per Diluted Share Estimated Range for the Year Ending December 31, 2019 (In millions, except per share amounts) Net income $ 54.0 $ 58.3 Interest expense, net 15.8 15.6 Income tax expense 10.2
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