\nFunko, Inc. (“Funko,\u201d or the \u201cCompany\u201d) (Nasdaq: FNKO), a leading pop culture lifestyle brand, today reported its consolidated financial results for the first quarter ended March 31, 2023.<\/p>\n
\n\u201cWe are off to a strong start in 2023, with progress on our cost-savings initiatives and continued innovation in our product lineup. Enthusiasm for the brand remains strong, highlighted by our 61% sales increase in our direct-to-consumer channel, the success of our recent product launches, and the early promise of our recent commercial partnership with Fanatics,\u201d said Brian Mariotti, Chief Executive Officer.<\/p>\n
\n\u201cDue to our actions to reduce our cost structure, we are raising the midpoint of our outlook for adjusted EBITDA for the full year to between $65 million and $75 million. While our top priority continues to be improving our operations, we haven\u2019t lost sight of all the tremendous opportunities that we believe will drive long-term growth and shareholder value.\u201d<\/p>\n
First Quarter 2023 Financial Summary (Compared to First Quarter 2022)<\/b><\/p>\n First Quarter 2023 Operating Highlights<\/b><\/p>\n First Quarter 2023 Financial Results<\/b><\/p>\n \nThe tables below show the breakdown of net sales on a geographical, brand category and product category basis (in thousands):<\/p>\n \n\u00a0<\/p>\n<\/td>\n 2023<\/b><\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n 2022<\/b><\/p>\n<\/td>\n Dollar<\/b><\/p>\n<\/td>\n Percentage<\/b><\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n183,471<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n239,647<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n(56,176<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n(23.4<\/p>\n<\/td>\n \n)%<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n52,174<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n50,103<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n2,071<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n4.1<\/p>\n<\/td>\n \n%<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n16,233<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n18,593<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n(2,360<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n(12.7<\/p>\n<\/td>\n \n)%<\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n251,878<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n308,343<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n(56,465<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n(18.3<\/p>\n<\/td>\n \n)%<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n 2023<\/b><\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n 2022<\/b><\/p>\n<\/td>\n Dollar<\/b><\/p>\n<\/td>\n Percentage<\/b><\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n177,785<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n232,165<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n(54,380<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n(23.4<\/p>\n<\/td>\n \n)%<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n59,336<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n57,057<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n2,279<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n4.0<\/p>\n<\/td>\n \n%<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n14,757<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n19,121<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n(4,364<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n(22.8<\/p>\n<\/td>\n \n)%<\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n251,878<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n308,343<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n(56,465<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n(18.3<\/p>\n<\/td>\n \n)%<\/p>\n<\/td>\n<\/tr>\n<\/table>\n \nGross margin2<\/sup> declined to 19.7% compared to 35.3% in the first quarter of 2022, reflecting a one-time write down of $30.1 million of inventory. Excluding the inventory write-down, adjusted gross margin would have been approximately 32%.<\/p>\n \nSG&A expenses increased 27.6% to $100.1 million or 39.7% of net sales compared to $78.4 million or 25.4% of net sales in the first quarter of 2022, driven primarily by higher fulfillment costs, but compared favorably to expectations due to progress on fulfillment cost reduction.<\/p>\n \nNet loss was $61.1 million and net loss margin was 24.3%, compared to net income of $14.5 million and net income margin of 4.7% in the first quarter of 2022. Adjusted Net loss1<\/sup> (non-GAAP) was $25.3 million compared to Adjusted Net Income1<\/sup> of $18.4 million in the first quarter of 2022. Adjusted EBITDA1<\/sup> in the first quarter of 2023 was a loss of $14.0 million and Adjusted EBITDA margin1<\/sup> was (5.6)%, compared to Adjusted EBITDA2<\/sup> of $36.3 million and Adjusted EBITDA margin2 <\/sup>of 11.8% in the first quarter of 2022. A reconciliation of these non-GAAP measures to GAAP is provided below.<\/p>\n Balance Sheet Highlights<\/b><\/p>\n \nTotal cash and cash equivalents as of March 31, 2023 totaled $34.8 million, an increase of 5.0% compared to March 31, 2022.<\/p>\n \nAs of March 31, 2023, total debt was $310.4 million, including the amount outstanding under the Company’s term loan facility, net of unamortized discounts, revolving line of credit and the Company’s equipment finance loan.<\/p>\n \nInventories at the end of the first quarter of 2023 totaled $191.6 million, up 18.6% compared to a year ago, but down 22.3% over the fourth quarter of 2022.<\/p>\n Outlook<\/b><\/p>\n \n“We have made strong progress in reducing costs and right sizing our business.” said Steve Nave, Chief Financial Officer and Chief Operating Officer. “We are raising our full year adjusted EBITDA outlook due to that progress, but revising our net sales outlook to reflect the well documented retail inventory destocking. While Funko\u2019s success, built on fan enthusiasm, has shown resilience to volatility in the broader market, we are not immune to these external factors in the short term.”<\/p>\n \nFor the second quarter of 2023, the Company expects:<\/p>\n \nFor the full year 2023, the Company expects:<\/p>\n 1<\/sup>Adjusted Net Loss, Adjusted Earnings per Diluted Share, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted cost of sales and Adjusted gross margin are non-GAAP financial measures. For a reconciliation of historical Adjusted Net Income, Adjusted Earnings per Diluted Share, Adjusted EBITDA, Adjusted cost of sales and Adjusted gross margin to the most directly comparable U.S. GAAP financial measures, please refer to the \u201cNon-GAAP Financial Measures\u201d section of this press release. A reconciliation of Adjusted Net Loss, Adjusted Earnings per Diluted Share and Adjusted EBITDA margin outlook to the corresponding GAAP measure on a forward-looking basis cannot be provided without unreasonable efforts, as we are unable to provide reconciling information with respect to certain items. However, for the second quarter of 2023 the Company expects equity-based compensation of approximately $3.8 million, depreciation and amortization of approximately $14.5 million, interest expense of approximately $6.7 million and severance and restructuring expenses of approximately $0.2 million. For the full year 2023 the Company expects equity-based compensation of approximately $14.9 million, depreciation and amortization of approximately $58.1 million, interest expense of approximately $24.3 million, and severance and restructuring expenses of approximately $2.4 million, each of which is a reconciling item to Net Income. See “Non-GAAP Financial Measures” for more information.<\/p>\n 2<\/sup>Gross margin is calculated as net sales less cost of sales (exclusive of depreciation and amortization) as a percentage of net sales.<\/p>\n Conference Call and Webcast<\/b><\/p>\n \nThe Company will host a conference call at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) today, May 4, 2023, to further discuss its first quarter results and business outlook. A live webcast and replay of the event will be available on the Investor Relations section on the Company\u2019s website at investor.funko.com. The replay of the webcast will be available for one year.<\/p>\n About Funko<\/b><\/p>\n Funko, Inc. and Subsidiaries<\/b><\/p>\n Condensed Consolidated Statements of Operations<\/b><\/p>\n (Unaudited)<\/b><\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n 2023<\/b><\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n 2022<\/b><\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n251,878<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n308,343<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n202,303<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n199,649<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n100,061<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n78,420<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n13,976<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n10,471<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n316,340<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n288,540<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n(64,462<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n19,803<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n5,687<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n1,210<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n494<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u2014<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n821<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n397<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n(71,464<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n18,196<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n(10,320<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n3,678<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n(61,144<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n14,518<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n(5,833<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n4,636<\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n(55,311<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n9,882<\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n(1.17<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n0.25<\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n(1.17<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n0.23<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n47,248<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n40,324<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n47,248<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n42,529<\/p>\n<\/td>\n<\/tr>\n<\/table>\n Funko, Inc. and Subsidiaries<\/b><\/p>\n Condensed Consolidated Balance Sheets<\/b><\/p>\n (Unaudited)<\/b><\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n34,797<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n19,200<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n161,313<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n167,895<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n191,558<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n246,429<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n48,490<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n39,648<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n436,158<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n473,172<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n104,963<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n102,232<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n68,469<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n71,072<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n135,283<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n131,380<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n179,262<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n181,284<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n123,610<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n123,893<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n10,849<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n8,112<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n1,058,594<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n1,091,145<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n141,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n70,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n21,790<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n22,041<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n18,703<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n18,904<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n55,542<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n67,651<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n866<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n871<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n46,356<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n69,098<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n110,323<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n112,832<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n394,580<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n361,397<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n147,574<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n153,778<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n79,602<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n82,356<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n390<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n382<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n99,620<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n99,620<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n3,499<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n3,923<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n5<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n5<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n\u2014<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u2014<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n314,537<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n310,807<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n(1,665<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n(2,603<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n4,704<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n60,015<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n317,581<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n368,224<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n15,748<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n21,465<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n333,329<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n389,689<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n1,058,594<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n1,091,145<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n<\/table>\n Funko, Inc. and Subsidiaries<\/b><\/p>\n Condensed Consolidated Statements of Cash Flows<\/b><\/p>\n (Unaudited)<\/b><\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n 2023<\/b><\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n 2022<\/b><\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n(61,144<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n14,518<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n13,745<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n10,141<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n3,642<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n3,369<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n267<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n217<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n494<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n–<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n(1,702<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n(9<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n8,031<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n(1,108<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n55,824<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n3,894<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n(8,063<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n(3,408<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n(12,139<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n(1,876<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n(34<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n1,991<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n(22,742<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n1,506<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n(6,449<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n(52,190<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n(30,270<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n(22,955<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n(12,746<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n(19,182<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n(5,274<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u2014<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n233<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n(292<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n(17,787<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n(19,474<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n71,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u2014<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n(1,957<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u2014<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n(5,621<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n(4,500<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n\u2014<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n(3,408<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n87<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n78<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n63,509<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n(7,830<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n145<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n(167<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n15,597<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n(50,426<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n19,200<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n83,557<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n34,797<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n33,131<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n<\/table>\n Funko, Inc. and Subsidiaries \nAdjusted Net (Loss) Income, Adjusted (Loss) Earnings per Diluted Share, EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted cost of sales and Adjusted gross margin are supplemental measures of our performance that are not required by, or presented in accordance with, U.S. GAAP. Adjusted Net (Loss) Income, Adjusted (Loss) Earnings per Diluted Share, EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted cost of sales and Adjusted gross margin are not measurements of our financial performance under U.S. GAAP and should not be considered as an alternative to net income, earnings per share or any other performance measure derived in accordance with U.S. GAAP. We define Adjusted Net (Loss) Income as net income attributable to Funko, Inc. adjusted for the reallocation of income (loss) attributable to non-controlling interests from the assumed exchange of all outstanding common units and options in FAH, LLC for newly issued-shares of Class A common stock of Funko, Inc. and further adjusted for the impact of certain non-cash charges and other items that we do not consider in our evaluation of ongoing operating performance. These items include, among other things, non-cash charges related to equity-based compensation programs, loss of extinguishment of debt, acquisition transaction costs and other expenses, certain severance, relocation and related costs, foreign currency transaction gains and losses, tax receivable agreement liability adjustments, one-time inventory write-down and other unusual or one-time items, and the income tax expense (benefit) effect of these adjustments. We define Adjusted (Loss) Earnings per Diluted Share as Adjusted Net (Loss) Income divided by the weighted-average shares of Class A common stock outstanding, assuming (1) the full exchange of all outstanding common units and options in FAH, LLC for newly issued-shares of Class A common stock of Funko, Inc. and (2) the dilutive effect of stock options and unvested common units, if any. We define EBITDA as net income before interest expense, net, income tax expense, depreciation and amortization. We define Adjusted EBITDA as EBITDA further adjusted for non-cash charges related to equity-based compensation programs, loss of extinguishment of debt, acquisition transaction costs and other expenses, certain severance, relocation and related costs, foreign currency transaction gains and losses, tax receivable agreement liability adjustments, one-time inventory write-down and other unusual or one-time items. Adjusted EBITDA margin is calculated as Adjusted EBITDA as a percentage of net sales. We define Adjusted cost of sales as cost of sales (excluding depreciation and amortization) adjusted for a one-time inventory write-down to improve U.S. warehouse operational efficiency. Adjusted gross margin is calculated as net sales less Adjusted cost of sales divided by net sales. We caution investors that amounts presented in accordance with our definitions of Adjusted Net (Loss) Income, Adjusted (Loss) Earnings per Diluted Share, EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted cost of sales and Adjusted gross margin may not be comparable to similar measures disclosed by our competitors, because not all companies and analysts calculate these measures in the same manner. We present Adjusted Net Income, Adjusted (Loss) Earnings per Diluted Share, EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted cost of sales and Adjusted gross margin because we consider them to be important supplemental measures of our performance and believe they are frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in our industry. Management believes that investors\u2019 understanding of our performance is enhanced by including these non-GAAP financial measures as a reasonable basis for comparing our ongoing results of operations. Management uses Adjusted Net (Loss) Income, Adjusted (Loss) Earnings per Diluted Share, EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted cost of sales and Adjusted gross margin as a measurement of operating performance because they assist us in comparing the operating performance of our business on a consistent basis, as they remove the impact of items not directly resulting from our core operations; for planning purposes, including the preparation of our internal annual operating budget and financial projections; as a consideration to assess incentive compensation for our employees; to evaluate the performance and effectiveness of our operational strategies; and to evaluate our capacity to expand our business.<\/p>\n \nBy providing these non-GAAP financial measures, together with reconciliations, we believe we are enhancing investors\u2019 understanding of our business and our results of operations, as well as assisting investors in evaluating how well we are executing our strategic initiatives. In addition, our senior secured credit facilities use Adjusted EBITDA to measure our compliance with covenants such as senior leverage ratio. Adjusted Net (Loss) Income, Adjusted (Loss) Earnings per Diluted Share, EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted cost of sales and Adjusted gross margin have limitations as analytical tools, and should not be considered in isolation, or as an alternative to, or a substitute for net income or other financial statement data presented in this press release as indicators of financial performance. Some of the limitations are:<\/p>\n \nDue to these limitations, Adjusted Net (Loss) Income, Adjusted (Loss) Earnings per Diluted Share, EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted cost of sales and Adjusted gross margin should not be considered as measures of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our GAAP results and using these non-GAAP measures only supplementally. As noted in the table below, Adjusted Net (Loss) Income, Adjusted (Loss) Earnings per Diluted Share, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted cost of sales and Adjusted gross margin include adjustments for non-cash charges related to equity-based compensation programs, loss of extinguishment of debt, acquisition transaction costs and other expenses, certain severance, relocation and related costs, foreign currency transaction gains and losses, tax receivable agreement liability adjustments, one-time inventory write-down and other unusual or one-time items. It is reasonable to expect that these items will occur in future periods. However, we believe these adjustments are appropriate because the amounts recognized can vary significantly from period to period, do not directly relate to the ongoing operations of our business and complicate comparisons of our internal operating results and operating results of other companies over time. Each of the normal recurring adjustments and other adjustments described herein and in the reconciliation table below help management with a measure of our core operating performance over time by removing items that are not related to day-to-day operations.<\/p>\n \nThe following tables reconcile the Non-GAAP Financial Measures to the most directly comparable U.S. GAAP financial performance measure, which is net income, for the periods presented:<\/p>\n \n\u00a0<\/p>\n<\/td>\n 2023<\/b><\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n 2022<\/b><\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n(55,311<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n9,882<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n(5,833<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n4,636<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n3,642<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n3,369<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n494<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u2014<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n1,010<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n930<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n1,735<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n1,680<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n822<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n397<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n30,084<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u2014<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n(1,901<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n(2,465<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n(25,258<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n18,429<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n(10.0<\/p>\n<\/td>\n \n)%<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n6.0<\/p>\n<\/td>\n \n%<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n47,248<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n40,324<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n4,364<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n13,808<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n51,612<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n54,132<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n(0.49<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n0.34<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n<\/table>\n \n\u00a0<\/p>\n<\/td>\n 2023<\/b><\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n 2022<\/b><\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n(61,144<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n14,518<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n5,687<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n1,210<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n(10,320<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n3,678<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n13,976<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n10,471<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n(51,801<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n29,877<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n3,642<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n3,369<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n494<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u2014<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n1,010<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n930<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n1,735<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n1,680<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n822<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n397<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n30,084<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u2014<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n(14,014<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n36,253<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n(5.6<\/p>\n<\/td>\n \n)%<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n11.8<\/p>\n<\/td>\n \n%<\/p>\n<\/td>\n<\/tr>\n<\/table>\n \n\u00a0<\/p>\n<\/td>\n 2023<\/b><\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n 2022<\/b><\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n202,303<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n199,649<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n30,084<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u2014<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n172,219<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n199,649<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n31.6<\/p>\n<\/td>\n \n%<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n35.3<\/p>\n<\/td>\n \n%<\/p>\n<\/td>\n<\/tr>\n<\/table>\n \n(1)<\/p>\n<\/td>\n \nRepresents the reallocation of net income attributable to non-controlling interests from the assumed exchange of common units of FAH, LLC for Class A common stock in periods in which income was attributable to non-controlling interests.<\/p>\n<\/td>\n<\/tr>\n \n(2)<\/p>\n<\/td>\n \nRepresents non-cash charges related to equity-based compensation programs, which vary from period to period depending on the timing of awards.<\/p>\n<\/td>\n<\/tr>\n \n(3)<\/p>\n<\/td>\n \nRepresents write-off of unamortized debt financing fees for the three months ended March 31, 2023.<\/p>\n<\/td>\n<\/tr>\n \n(4)<\/p>\n<\/td>\n \nFor the three months ended March 31, 2023 and 2022 includes acquisition-related costs related to due diligence fees.<\/p>\n<\/td>\n<\/tr>\n \n(5)<\/p>\n<\/td>\n \nFor the three months ended March 31, 2023, includes charges related severance and benefit costs related to a reduction-in- force. For the three months ended March 31, 2022, includes charges related to one-time relocation costs for U.S. warehouse personnel in connection with the new opening of a warehouse and distribution facility in Buckeye, Arizona.<\/p>\n<\/td>\n<\/tr>\n \n(6)<\/p>\n<\/td>\n \nRepresents both unrealized and realized foreign currency losses on transactions denominated other than in U.S. dollars, including derivative gains and losses on foreign currency forward exchange contracts.<\/p>\n<\/td>\n<\/tr>\n \n(7)<\/p>\n<\/td>\n \nFor the three months ended March 31, 2023, represents a one-time inventory write-down to improve U.S. warehouse operational efficiency.<\/p>\n<\/td>\n<\/tr>\n \n(8)<\/p>\n<\/td>\n \nRepresents the income tax expense effect of the above adjustments. This adjustment uses an effective tax rate of 25% for all periods presented.<\/p>\n<\/td>\n<\/tr>\n \n(9)<\/p>\n<\/td>\n \nAdjusted net (loss) income margin is calculated as Adjusted net (loss) income as a percentage of net sales.<\/p>\n<\/td>\n<\/tr>\n \n(10)<\/p>\n<\/td>\n \nAdjusted EBITDA margin is calculated as Adjusted EBITDA as a percentage of net sales.<\/p>\n<\/td>\n<\/tr>\n \n(11)<\/p>\n<\/td>\n \nAdjusted gross margin is calculated as net sales less Adjusted cost of sales (exclusive of depreciation and amortization shown separately) as a percentage of net sales.<\/p>\n<\/td>\n<\/tr>\n<\/table>\n \n\u00a0<\/p>\n View source version on businesswire.com: <\/span>https:\/\/www.businesswire.com\/news\/home\/20230504005942\/en\/<\/a><\/span><\/p>\n Investor Relations:\n
\n
\n
\n Sales Breakout<\/b><\/td>\n \n \n \n <\/tr>\n \n \n Three Months Ended March 31,<\/b><\/td>\n Period Over Period Change<\/b><\/td>\n<\/tr>\n \n \n \n \n \n \n \n \n \n Net sales by brand category:<\/b><\/td>\n \n \n \n <\/tr>\n \n Core Collectible<\/td>\n \n \n \n \n \n \n \n \n \n \n Loungefly<\/td>\n \n \n \n \n \n \n \n \n \n \n Other<\/td>\n \n \n \n \n \n \n \n \n \n \n Total net sales<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n \n Three Months Ended March 31,<\/b><\/td>\n Period Over Period Change<\/b><\/td>\n<\/tr>\n \n \n \n \n \n \n \n \n \n Net sales by geography:<\/b><\/td>\n \n \n \n <\/tr>\n \n United States<\/td>\n \n \n \n \n \n \n \n \n \n \n Europe<\/td>\n \n \n \n \n \n \n \n \n \n \n Other International<\/td>\n \n \n \n \n \n \n \n \n \n \n Total net sales<\/td>\n \n \n \n \n \n \n \n \n \n \n
\n
\n
\n \n \n <\/tr>\n \n \n Three Months Ended March 31,<\/b><\/td>\n<\/tr>\n \n \n \n \n \n \n \n \n \n (In thousands, except per share data)<\/b><\/td>\n<\/tr>\n \n Net sales<\/td>\n \n \n \n \n \n \n Cost of sales (exclusive of depreciation and amortization shown separately below)<\/td>\n \n \n \n \n \n \n Selling, general, and administrative expenses<\/td>\n \n \n \n \n \n \n Depreciation and amortization<\/td>\n \n \n \n \n \n \n Total operating expenses<\/td>\n \n \n \n \n \n \n (Loss) income from operations<\/td>\n \n \n \n \n \n \n Interest expense, net<\/td>\n \n \n \n \n \n \n Loss on extinguishment of debt<\/td>\n \n \n \n \n \n \n Other expense, net<\/td>\n \n \n \n \n \n \n (Loss) income before income taxes<\/td>\n \n \n \n \n \n \n Income tax (benefit) expense<\/td>\n \n \n \n \n \n \n Net (loss) income<\/td>\n \n \n \n \n \n \n Less: net (loss) income attributable to non-controlling interests<\/td>\n \n \n \n \n \n \n Net (loss) income attributable to Funko, Inc.<\/td>\n \n \n \n \n \n \n (Loss) earnings per share of Class A common stock:<\/td>\n \n <\/tr>\n \n Basic<\/td>\n \n \n \n \n \n \n Diluted<\/td>\n \n \n \n \n \n \n Weighted average shares of Class A common stock outstanding:<\/td>\n \n <\/tr>\n \n Basic<\/td>\n \n \n \n \n \n \n Diluted<\/td>\n \n \n \n \n \n \n
\n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n \n March 31,
2023<\/b><\/td>\nDecember 31,
2022<\/b><\/td>\n<\/tr>\n\n \n (In thousands, except per share amounts)<\/b><\/td>\n<\/tr>\n \n Assets<\/td>\n \n <\/tr>\n \n Current assets:<\/td>\n \n <\/tr>\n \n Cash and cash equivalents<\/td>\n \n \n \n \n \n \n \n Accounts receivable, net<\/td>\n \n \n \n \n \n \n \n Inventory<\/td>\n \n \n \n \n \n \n \n Prepaid expenses and other current assets<\/td>\n \n \n \n \n \n \n \n Total current assets<\/td>\n \n \n \n \n \n \n \n Property and equipment, net<\/td>\n \n \n \n \n \n \n \n Operating lease right-of-use assets<\/td>\n \n \n \n \n \n \n \n Goodwill<\/td>\n \n \n \n \n \n \n \n Intangible assets, net<\/td>\n \n \n \n \n \n \n \n Deferred tax asset<\/td>\n \n \n \n \n \n \n \n Other assets<\/td>\n \n \n \n \n \n \n \n Total assets<\/td>\n \n \n \n \n \n \n \n Liabilities and Stockholders\u2019 Equity<\/td>\n \n <\/tr>\n \n Current liabilities:<\/td>\n \n <\/tr>\n \n Line of credit<\/td>\n \n \n \n \n \n \n \n Current portion of long-term debt, net of unamortized discount<\/td>\n \n \n \n \n \n \n \n Current portion of operating lease liabilities<\/td>\n \n \n \n \n \n \n \n Accounts payable<\/td>\n \n \n \n \n \n \n \n Income taxes payable<\/td>\n \n \n \n \n \n \n \n Accrued royalties<\/td>\n \n \n \n \n \n \n \n Accrued expenses and other current liabilities<\/td>\n \n \n \n \n \n \n \n Total current liabilities<\/td>\n \n \n \n \n \n \n \n Long-term debt, net of unamortized discount<\/td>\n \n \n \n \n \n \n \n Operating lease liabilities, net of current portion<\/td>\n \n \n \n \n \n \n \n Deferred tax liability<\/td>\n \n \n \n \n \n \n \n Liabilities under tax receivable agreement, net of current portion<\/td>\n \n \n \n \n \n \n \n Other long-term liabilities<\/td>\n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n Commitments and Contingencies<\/td>\n \n <\/tr>\n \n \n \n \u00a0<\/td>\n<\/tr>\n \n Stockholders\u2019 equity:<\/td>\n \n <\/tr>\n \n Class A common stock, par value $0.0001 per share, 200,000 shares authorized; 47,326 and 47,192 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively<\/td>\n \n \n \n \n \n \n \n Class B common stock, par value $0.0001 per share, 50,000 shares authorized; 3,293 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively<\/td>\n \n \n \n \n \n \n \n Additional paid-in-capital<\/td>\n \n \n \n \n \n \n \n Accumulated other comprehensive loss<\/td>\n \n \n \n \n \n \n \n Retained earnings<\/td>\n \n \n \n \n \n \n \n Total stockholders\u2019 equity attributable to Funko, Inc.<\/td>\n \n \n \n \n \n \n \n Non-controlling interests<\/td>\n \n \n \n \n \n \n \n Total stockholders\u2019 equity<\/td>\n \n \n \n \n \n \n \n Total liabilities and stockholders\u2019 equity<\/td>\n \n \n \n \n \n \n \n
\n \n \n \n \u00a0<\/td>\n<\/tr>\n \n \n Three Months Ended March 31,<\/b><\/td>\n<\/tr>\n \n \n \n \n \n \n \n \n \n \n (In thousands)<\/b><\/td>\n<\/tr>\n \n Operating Activities<\/b><\/td>\n \n <\/tr>\n \n Net (loss) income<\/td>\n \n \n \n \n \n \n \n Adjustments to reconcile net (loss) income to net cash used in operating activities:<\/td>\n \n <\/tr>\n \n Depreciation, amortization and other<\/td>\n \n \n \n \n \n \n \n Equity-based compensation<\/td>\n \n \n \n \n \n \n \n Amortization of debt issuance costs and debt discounts<\/td>\n \n \n \n \n \n \n \n Loss on debt extinguishment<\/td>\n \n \n \n \n \n \n \n Other<\/td>\n \n \n \n \n \n \n \n Changes in operating assets and liabilities:<\/td>\n \n <\/tr>\n \n Accounts receivable, net<\/td>\n \n \n \n \n \n \n \n Inventory<\/td>\n \n \n \n \n \n \n \n Prepaid expenses and other assets<\/td>\n \n \n \n \n \n \n \n Accounts payable<\/td>\n \n \n \n \n \n \n \n Income taxes payable<\/td>\n \n \n \n \n \n \n \n Accrued royalties<\/td>\n \n \n \n \n \n \n \n Accrued expenses and other liabilities<\/td>\n \n \n \n \n \n \n \n Net cash used in operating activities<\/td>\n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n Investing Activities<\/b><\/td>\n \n <\/tr>\n \n Purchases of property and equipment<\/td>\n \n \n \n \n \n \n \n Acquisitions, net of cash received<\/td>\n \n \n \n \n \n \n \n Other<\/td>\n \n \n \n \n \n \n \n Net cash used in investing activities<\/td>\n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n Financing Activities<\/b><\/td>\n \n <\/tr>\n \n Borrowings on line of credit<\/td>\n \n \n \n \n \n \n \n Debt issuance costs<\/td>\n \n \n \n \n \n \n \n Payments of long-term debt<\/td>\n \n \n \n \n \n \n \n Distributions to continuing equity owners<\/td>\n \n \n \n \n \n \n \n Proceeds from exercise of equity-based options<\/td>\n \n \n \n \n \n \n \n Net cash provided by (used in) financing activities<\/td>\n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n Effect of exchange rates on cash and cash equivalents<\/td>\n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n Net change in cash and cash equivalents<\/td>\n \n \n \n \n \n \n \n Cash and cash equivalents at beginning of period<\/td>\n \n \n \n \n \n \n \n Cash and cash equivalents at end of period<\/td>\n \n \n \n \n \n \n
\n
<\/b>Non-GAAP Financial Measures
\n
<\/b>(Unaudited)<\/b><\/p>\n\n
\n
\n
\n
\n
\n
\n \n Three Months Ended March 31,<\/b><\/td>\n<\/tr>\n \n \n \n \n \n \n \n \n \n \n (In thousands, except per share data)<\/b><\/td>\n<\/tr>\n \n Net (loss) income attributable to Funko, Inc.<\/td>\n \n \n \n \n \n \n \n Reallocation of net (loss) income attributable to non-controlling interests from the assumed exchange of common units of FAH, LLC for Class A common stock (1)<\/sup><\/td>\n \n \n \n \n \n \n \n Equity-based compensation (2)<\/sup><\/td>\n \n \n \n \n \n \n \n Loss on extinguishment of debt (3)<\/sup><\/td>\n \n \n \n \n \n \n \n Acquisition transaction costs and other expenses (4)<\/sup><\/td>\n \n \n \n \n \n \n \n Certain severance, relocation and related costs (5)<\/sup><\/td>\n \n \n \n \n \n \n \n Foreign currency transaction loss (6)<\/sup><\/td>\n \n \n \n \n \n \n \n One-time inventory write-down (7)<\/sup><\/td>\n \n \n \n \n \n \n \n Income tax expense (8)<\/sup><\/td>\n \n \n \n \n \n \n \n Adjusted net (loss) income<\/td>\n \n \n \n \n \n \n \n Adjusted net (loss) income margin (9)<\/sup><\/td>\n \n \n \n \n \n \n \n Weighted-average shares of Class A common stock outstanding-basic<\/td>\n \n \n \n \n \n \n \n Equity-based compensation awards and common units of FAH, LLC that are convertible into Class A common stock<\/td>\n \n \n \n \n \n \n \n Adjusted weighted-average shares of Class A stock outstanding – diluted<\/td>\n \n \n \n \n \n \n \n Adjusted (loss) earnings per diluted share<\/td>\n \n \n \n \n \n \n \n
\n \n Three Months Ended March 31,<\/b><\/td>\n<\/tr>\n \n \n \n \n \n \n \n \n \n \n (amounts in thousands)<\/b><\/td>\n<\/tr>\n \n Net (loss) income<\/td>\n \n \n \n \n \n \n \n Interest expense, net<\/td>\n \n \n \n \n \n \n \n Income tax (benefit) expense<\/td>\n \n \n \n \n \n \n \n Depreciation and amortization<\/td>\n \n \n \n \n \n \n \n EBITDA<\/td>\n \n \n \n \n \n \n \n Adjustments:<\/b><\/td>\n \n <\/tr>\n \n Equity-based compensation (2)<\/sup><\/td>\n \n \n \n \n \n \n \n Loss on extinguishment of debt (3)<\/sup><\/td>\n \n \n \n \n \n \n \n Acquisition transaction costs and other expenses (4)<\/sup><\/td>\n \n \n \n \n \n \n \n Certain severance, relocation and related costs (5)<\/sup><\/td>\n \n \n \n \n \n \n \n Foreign currency transaction loss (6)<\/sup><\/td>\n \n \n \n \n \n \n \n One-time inventory write-down (7)<\/sup><\/td>\n \n \n \n \n \n \n \n Adjusted EBITDA<\/td>\n \n \n \n \n \n \n \n Adjusted EBITDA margin (10)<\/sup><\/td>\n \n \n \n \n \n \n \n
\n \n Three Months Ended March 31,<\/b><\/td>\n<\/tr>\n \n \n \n \n \n \n \n \n \n \n (In thousands, except per share data)<\/b><\/td>\n<\/tr>\n \n Cost of sales (exclusive of depreciation and
amortization shown separately)<\/td>\n\n \n \n \n \n \n \n One-time inventory write-down (7)<\/sup><\/td>\n \n \n \n \n \n \n \n Adjusted cost of sales (exclusive of depreciation and amortization shown separately)<\/td>\n \n \n \n \n \n \n \n Adjusted gross margin (11)<\/sup><\/td>\n \n \n \n \n \n \n \n
\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n <\/p>\n
\n<\/b>
investorrelations@funko.com<\/a><\/p>\n
![\"Logo\"](\"https:\/\/mms.businesswire.com\/media\/20230504005942\/en\/774845\/3\/download.jpg\")
<\/td>\n<\/tr>\n