Announces Successful Amendment to Existing
Credit Facilities Expects COVID-19 Impacts to Intensify in Q2
2020
Funko, Inc. ("Funko,” or the “Company”) (Nasdaq: FNKO), a
leading pop culture consumer products company, today reported its
consolidated financial results for the first quarter ended March
31, 2020.
First Quarter 2020 Financial Summary
- Net sales decreased 18% to $136.7 million
- Gross profit1 decreased 13% to $55.3 million
- Gross margin1 increased 240 basis points to 40.4%
- Net loss of $5.7 million
- Adjusted EBITDA2 of $10.6 million and Adjusted EBITDA Margin2
of 7.8%
- Cash flow from operations increased 35% to $37.0 million
- Total liquidity3 of $101.7 million as of March 31, 2020
Brian Mariotti, Chief Executive Officer, stated, “As people
around the world navigate the many challenges of COVID-19, I am
incredibly grateful to our Funko employees for their hard work and
unwavering commitment to delivering innovation, delighting our fans
and driving long-term growth. In recent weeks, our management team
acted decisively to mitigate business disruption and increase
financial flexibility by reducing operating expenses, cutting
capital expenditures and successfully amending our credit
facility.”
Liquidity Update
As of March 31, 2020, the Company had total liquidity3 of $101.7
million, comprised of cash and cash equivalents of $55.4 million
and total revolver availability of $46.3 million. During the
quarter, the Company implemented measures to preserve liquidity and
cash on hand, which include:
- Proactively drawing down a portion of the Company’s $75.0
million revolving credit facility to increase cash on hand;
- Reducing operating expenses across personnel, marketing,
travel, professional fees and contract labor which is expected to
decrease planned SG&A expenses by $15 million in the second
quarter of 2020;
- Cutting non-product development capital expenditures, which is
anticipated to reduce total capital expenditures by approximately
one third for the year; and
- Proactively managing working capital by reducing incoming
inventory to align with anticipated demand.
As of April 30, 2020, the Company had over $60.0 million of cash
on hand and $46.0 million of availability on its revolving credit
facility, resulting in total liquidity3 of over $106.0 million.
While the Company is continuing to evaluate options to increase
liquidity, it believes the underlying strength of its business and
financial flexibility will enable it to navigate the impacts of
COVID-19.
First Quarter 2020 Financial Results
Net sales decreased 18% to $136.7 million in the first quarter
of 2020 compared to $167.1 million in the first quarter of 2019.
The year-over-year decline was primarily attributable to the weaker
content lineup in the first quarter of 2020 compared to the year
ago period as well as impacts from COVID-19. During the quarter,
the Company experienced supply chain disruptions related to
COVID-19 as well as reduced shipments to its customers as
non-essential business closures and social distancing guidelines
took effect in the final weeks of the quarter.
In the first quarter of 2020, the number of active properties
increased 11% to 681 from 611 in the first quarter 2019 and net
sales per active property decreased 27%. On a geographical basis,
net sales in the United States decreased 10% to $98.5 million. Net
sales internationally decreased 34% to $38.2 million, reflecting
more significant impacts from COVID-19 as non-essential business
closures impacted overseas markets earlier in the quarter,
especially within Europe. On a product category basis, net sales of
figures decreased 18% to $111.3 million. Net sales of other
products decreased 18% to $25.4 million, which reflects decreased
sales in accessories, plush and other items, partially offset by
growth in our Loungefly and Apparel products.
The tables below show the breakdown of net sales on a
geographical and product category basis (in thousands):
Three Months Ended March 31, Period Over Period
Change
2020
2019
Dollar Percentage Net sales by geography:
United States
$
98,509
$
108,871
$
(10,362
)
-9.5
%
International
38,191
58,194
(20,003
)
-34.4
%
Total net sales
$
136,700
$
167,065
$
(30,365
)
-18.2
%
Three Months Ended March 31, Period Over Period
Change
2020
2019
Dollar Percentage Net sales by product:
Figures
$
111,290
$
136,180
$
(24,890
)
-18.3
%
Other
25,410
30,885
(5,475
)
-17.7
%
Total net sales
$
136,700
$
167,065
$
(30,365
)
-18.2
%
Gross margin1 in the first quarter of 2020 increased 240 basis
points to 40.4% compared to 38.0% in the first quarter of 2019. The
year-over-year increase is primarily attributable to improved
product margins and enhanced inventory management processes
implemented in the second half of 2019. The increase in product
margins was primarily attributable to higher average selling prices
driven by a mix shift toward direct-to-consumer sales as well as
higher margins on our Loungefly products and sales to our European
customers.
SG&A expenses increased 17% to $47.3 million in the first
quarter of 2020 compared to $40.5 million in the first quarter of
2019, primarily reflecting increased headcount, rent and facility
costs as well as professional fees.
Net loss in the first quarter of 2020 was $5.7 million compared
to net income of $7.1 million in the first quarter of 2019, and
Adjusted Net Loss2 (non-GAAP) was $2.3 million in the first quarter
of 2020 versus Adjusted Net Income2 of $8.3 million in the first
quarter of 2019. Adjusted EBITDA2 in the first quarter of 2020 was
$10.6 million and Adjusted EBITDA margin2 was 7.8%, compared to
$25.3 million and 15.2%, respectively, in the first quarter of
2019. A reconciliation of these non-GAAP measures to its most
directly related GAAP measure is provided below.
Balance Sheet Highlights
As of March 31, 2020, total debt was $242.5 million, comprised
of $213.8 million outstanding under its term loan facility, net of
unamortized discounts, and $28.7 million outstanding under its
revolver.
Inventories at the end of the first quarter totaled $53.3
million, a decrease of 30% compared to a year ago, primarily
reflecting a one-time inventory write-down in the fourth quarter of
2019 of $16.8 million.
Existing Credit Facility Amendment
On May 5, 2020, certain of the Company’s subsidiaries entered
into an amendment to their existing credit facilities, which, among
other changes, includes the following:
- Leverage ratio and fixed charge coverage ratio covenants for
the second and third quarter of 2020 have been waived;
- Leverage ratio thresholds have been increased for the fourth
quarter of 2020 through the fourth quarter of 2021;
- New minimum liquidity covenant of $30.0 million until Funko’s
leverage ratio is below 2.50x; and
- Increased interest rate and certain applicable fees.
Additional details regarding the amendment will be set forth in
a Current Report on Form 8-K to be filed with the Securities and
Exchange Commission.
2020 Outlook
Given the continued and uncertain duration of the impacts from
COVID-19 on Funko’s business, the Company is not issuing updated
guidance at this time. The Company anticipates the greatest impact
from COVID-19 in fiscal 2020 will occur in the second quarter.
Mariotti concluded, “Looking at the second half of 2020, we are
remaining nimble and pivoting as needed to adapt to changes in
content release dates, as well as the needs of our retail partners
as they navigate customer capacity limits and the timing of
reopenings. Additionally, we are directing greater resources toward
our e-commerce growth strategy, which includes building a robust
online platform, while developing a more powerful selling model and
broadening our product catalog on Funko.com.”
1
Gross profit is calculated as net sales
less cost of sales (exclusive of depreciation and amortization).
Gross margin is calculated as net sales less cost of sales
(exclusive of depreciation and amortization) as a percentage of net
sales.
2
Adjusted Net (Loss) Income, Adjusted
(Loss) Earnings per Diluted Share, Adjusted EBITDA and Adjusted
EBITDA margin are non-GAAP financial measures. For a reconciliation
of Adjusted Net (Loss) Income, Adjusted Earnings per Diluted Share
and Adjusted EBITDA to the most directly comparable U.S. GAAP
financial measures, please refer to the “Non-GAAP Financial
Measures” section of this press release.
3
Total liquidity is calculated as cash and
cash equivalents plus availability under the Company’s $75.0
million revolving credit facility.
Conference Call and Webcast
The Company will host a conference call at 4:30 p.m. Eastern
Time (1:30 p.m. Pacific Time) today, May 7, 2020, to further
discuss its first quarter results. Investors and analysts can
participate on the conference call by dialing (833) 227-5847 or
(647) 689-4074 and referencing passcode 9468237. Interested parties
can also listen to a live webcast or replay of the conference call
by logging on to the Investor Relations section on the Company’s
website at https://investor.funko.com/. The replay of the webcast
will be available for one year.
About Funko
Headquartered in Everett, Washington, Funko is a leading pop
culture consumer products company. Funko designs, sources and
distributes licensed pop culture products across multiple
categories, including vinyl figures, action toys, plush, apparel,
housewares and accessories for consumers who seek tangible ways to
connect with their favorite pop culture brands and characters.
Learn more at https://funko.com/, and follow us on Twitter
(@OriginalFunko) and Instagram (@OriginalFunko).
Financial Disclosure Advisory
Any statements included in this press release regarding the
Company’s liquidity as of April 30, 2020 are not necessarily
indicative of the Company’s liquidity that may be expected for the
end of the second quarter of 2020 or 2020 fiscal year.
Forward Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. All statements contained in this press release that do not
relate to matters of historical fact should be considered
forward-looking statements, including statements regarding our
anticipated financial results, the underlying trends in our
business, the anticipated impact of COVID-19 on our business, and
the anticipated timing of such impact, our potential for growth,
plans for investments in our business and expected enhancements to
operations, our expected liquidity and our strategy. These
forward-looking statements are based on management’s current
expectations. These statements are neither promises nor guarantees,
but involve known and unknown risks, uncertainties and other
important factors that may cause our actual results, performance or
achievements to be materially different from any future results,
performance or achievements expressed or implied by the
forward-looking statements, including, but not limited to, the
following: our ability to execute our business strategy; risks
related to the impact of COVID-19 on our business, financial
results and financial condition; our ability to maintain and
realize the full value of our license agreements; the ongoing level
of popularity of our products with consumers; changes in the retail
industry and markets for our consumer products; our ability to
maintain our relationships with retail customers and distributors;
our ability to compete effectively; fluctuations in our gross
margin; our dependence on content development and creation by third
parties; our ability to manage our inventories; our ability to
develop and introduce products in a timely and cost-effective
manner; our ability to obtain, maintain and protect our
intellectual property rights or those of our licensors; potential
violations of the intellectual property rights of others; risks
associated with counterfeit versions of our products; our ability
to attract and retain qualified employees and maintain our
corporate culture; our use of third-party manufacturing; risks
associated with our international operations; changes in effective
tax rates or tax law; foreign currency exchange rate exposure; the
possibility or existence of global and regional economic downturns;
our dependence on vendors and outsourcers; risks relating to
government regulation; risks relating to litigation, including
products liability claims and securities class action litigation;
any failure to successfully integrate or realize the anticipated
benefits of acquisitions or investments; reputational risk
resulting from our e-commerce business and social media presence;
risks relating to our indebtedness and our ability to secure
additional financing; the potential for our electronic data or the
electronic data of our customers to be compromised; the influence
of our significant stockholder, ACON, and the possibility that
ACON’s interests may conflict with the interests of our other
stockholders; risks relating to our organizational structure;
volatility in the price of our Class A common stock; and risks
associated with our internal control over financial reporting.
These and other important factors discussed under the caption “Risk
Factors” in our quarterly report on Form 10-Q for the quarter ended
March 31, 2020 and our other filings with the Securities and
Exchange Commission could cause actual results to differ materially
from those indicated by the forward-looking statements made in this
press release. Any such forward-looking statements represent
management’s estimates as of the date of this press release. While
we may elect to update such forward-looking statements at some
point in the future, we disclaim any obligation to do so, even if
subsequent events cause our views to change. These forward-looking
statements should not be relied upon as representing our views as
of any date subsequent to the date of this press release.
Funko, Inc. and
Subsidiaries
Condensed Consolidated
Statements of Operations
(Unaudited)
Three Months Ended March
31,
2020
2019
(In thousands, except per share data) Net sales
$
136,700
$
167,065
Cost of sales (exclusive of depreciation andamortization shown
separately below)
81,417
103,656
Selling, general, and administrative expenses
47,313
40,468
Depreciation and amortization
10,989
10,230
Total operating expenses
139,719
154,354
(Loss) income from operations
(3,019
)
12,711
Interest expense, net
2,655
4,072
Other expense, net
914
65
(Loss) income before income taxes
(6,588
)
8,574
Income tax (benefit) expense
(856
)
1,429
Net (loss) income
(5,732
)
7,145
Less: net (loss) income attributable to non-controlling interests
(1,606
)
4,950
Net (loss) income attributable to Funko, Inc.
$
(4,126
)
$
2,195
(Loss) earnings per share of Class A common stock: Basic
$
(0.12
)
$
0.08
Diluted
$
(0.12
)
$
0.08
Weighted average shares of Class A common stock outstanding: Basic
34,944
26,640
Diluted
34,944
28,458
Funko, Inc. and
Subsidiaries
Condensed Consolidated Balance
Sheets
(Unaudited)
March 31,
December 31,
2020
2019
(In thousands, except per share amounts) Assets
Current assets: Cash and cash equivalents
$
55,413
$
25,229
Accounts receivable, net
105,176
151,564
Inventory
53,284
62,124
Prepaid expenses and other current assets
15,031
20,280
Total current assets
228,904
259,197
Property and equipment, net
64,470
65,712
Operating lease right-of-use assets
60,309
62,901
Goodwill
124,329
124,835
Intangible assets, net
217,183
221,492
Deferred tax asset
58,008
57,547
Other assets
4,730
4,783
Total assets
$
757,933
$
796,467
Liabilities and Stockholders' Equity Current
liabilities: Line of credit
$
28,731
$
25,822
Current portion long-term debt, net of unamortized discount
16,642
13,685
Current portion of operating lease liability
11,949
11,314
Accounts payable
29,806
42,531
Income taxes payable
138
637
Accrued royalties
20,400
34,625
Accrued expenses and other current liabilities
28,080
28,955
Total current liabilities
135,746
157,569
Long-term debt, net of unamortized discount
197,175
202,816
Operating lease liabilities, net of current portion
59,345
61,622
Deferred tax liability
310
341
Liabilities under tax receivable agreement, net of current portion
61,557
61,554
Deferred rent and other long-term liabilities
7,202
7,421
Commitments and contingencies
Stockholders'
equity: Class A common stock, par value $0.0001 per share,
200,000 shares authorized; 34,953 shares and 34,918 shares issued
and outstanding as of March 31, 2020 and December 31, 2019,
respectively
3
3
Class B common stock, par value $0.0001 per share, 50,000 shares
authorized; 14,515 shares issued and outstanding as of March 31,
2020 and December 31, 2019
1
1
Additional paid-in-capital
206,570
204,174
Accumulated other comprehensive loss
(785
)
791
Retained earnings
16,316
20,442
Total stockholders' equity attributable to Funko, Inc.
222,105
225,411
Non-controlling interests
74,493
79,733
Total stockholders' equity
296,598
305,144
Total liabilities and stockholders' equity
$
757,933
$
796,467
Funko, Inc. and
Subsidiaries
Condensed Consolidated
Statements of Cash Flows
(Unaudited)
March 31,
2020
2019
(In thousands) Operating Activities Net (loss) income
$
(5,732
)
$
7,145
Adjustments to reconcile net (loss) income to net cash provided by
operating activities: Depreciation, amortization and other
11,937
10,187
Equity-based compensation
2,413
2,748
Amortization of debt issuance costs and debt discounts
317
354
Other
851
(451
)
Changes in operating assets and liabilities: Accounts receivable,
net
43,760
31,452
Inventory
7,312
11,662
Prepaid expenses and other assets
6,437
(3,838
)
Accounts payable
(12,923
)
(12,885
)
Income taxes payable
(491
)
933
Accrued royalties
(14,209
)
(10,667
)
Accrued expenses and other liabilities
(2,720
)
(9,338
)
Net cash provided by operating activities
36,952
27,302
Investing Activities Purchase of property and
equipment
(4,961
)
(3,613
)
Acquisitions of businesses and related intangible assets, net of
cash —
(6,369
)
Net cash used in investing activities
(4,961
)
(9,982
)
Financing Activities Borrowings on line of credit
28,267
22,543
Payments on line of credit
(25,281
)
(20,000
)
Debt issuance costs —
(272
)
Payments of long-term debt
(2,938
)
(2,938
)
Distributions to continuing equity owners
(2,675
)
(8,052
)
Payments under tax receivable agreement
(166
)
— Proceeds from exercise of equity-based options
41
1,149
Net cash used in financing activities
(2,752
)
(7,570
)
Effect of exchange rates on cash and cash equivalents
945
(690
)
Net increase in cash and cash equivalents
30,184
9,060
Cash and cash equivalents at beginning of period
25,229
13,486
Cash and cash equivalents at end of period
$
55,413
$
22,546
Funko, Inc. and Subsidiaries Non-GAAP
Financial Measures
Adjusted Net (Loss) Income, Adjusted Net (Loss) Income margin,
Adjusted (Loss) Earnings per Diluted Share, EBITDA, Adjusted EBITDA
and Adjusted EBITDA 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 Net (Loss)
Income margin, Adjusted (Loss) Earnings per Diluted Share, EBITDA,
Adjusted EBITDA and Adjusted EBITDA margin are not measurements of
our financial performance under U.S. GAAP and should not be
considered as an alternative to net (loss) income, earnings per
share or any other performance measure derived in accordance with
U.S. GAAP. We define Adjusted Net (Loss) Income as net (loss)
income attributable to Funko, Inc. adjusted for the reallocation of
(loss) income 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, acquisition transaction costs and other expenses, certain
severance, relocation and related costs, foreign currency
transaction gains and losses, and other unusual or one-time items,
and the income tax expense (benefit) effect of these adjustments.
Adjusted Net (Loss) Income margin is calculated as Adjusted Net
(Loss) Income as a percentage of net sales. 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 (loss) income before interest expense, net, income tax
expense (benefit), depreciation and amortization. We define
Adjusted EBITDA as EBITDA further adjusted for non-cash charges
related to equity-based compensation programs, acquisition
transaction costs and other expenses, certain severance, relocation
and related costs, foreign currency transaction gains and losses
and other unusual or one-time items. Adjusted EBITDA margin is
calculated as Adjusted EBITDA as a percentage of 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 and Adjusted EBITDA
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 (Loss) Income,
Adjusted Net (Loss) Income margin, Adjusted (Loss) Earnings per
Diluted Share, EBITDA, Adjusted EBITDA and Adjusted EBITDA 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’
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 Net (Loss) Income margin, Adjusted (Loss) Earnings
per Diluted Share, EBITDA, Adjusted EBITDA and Adjusted EBITDA
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.
By providing these non-GAAP financial measures, together with
reconciliations, we believe we are enhancing investors’
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 Net (Loss) Income margin, Adjusted (Loss) Earnings
per Diluted Share, EBITDA, Adjusted EBITDA and Adjusted EBITDA
margin have limitations as analytical tools, and should not be
considered in isolation, or as an alternative to, or a substitute
for net (loss) income or other financial statement data presented
in this press release as indicators of financial performance. Some
of the limitations are:
- such measures do not reflect our cash expenditures, or future
requirements for capital expenditures or contractual
commitments;
- such measures do not reflect changes in, or cash requirements
for, our working capital needs;
- such measures do not reflect the interest expense, or the cash
requirements necessary to service interest or principal payments on
our debt;
- although depreciation and amortization are non-cash charges,
the assets being depreciated and amortized will often have to be
replaced in the future and such measures do not reflect any cash
requirements for such replacements; and
- other companies in our industry may calculate such measures
differently than we do, limiting their usefulness as comparative
measures.
Due to these limitations, Adjusted Net (Loss) Income, Adjusted
Net (Loss) Income margin, Adjusted (Loss) Earnings per Diluted
Share, EBITDA, Adjusted EBITDA and Adjusted EBITDA 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 Net (Loss) Income
margin, Adjusted (Loss) Earnings per Diluted Share, Adjusted EBITDA
and Adjusted EBITDA margin include adjustments for non-cash charges
related to equity-based compensation programs, acquisition
transaction costs and other expenses, certain severance, relocation
and related costs, foreign currency transaction gains and losses
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.
The following tables reconcile Adjusted Net (Loss) Income,
Adjusted (Loss) Earnings per Diluted Share, EBITDA and Adjusted
EBITDA to the most directly comparable U.S. GAAP financial
performance measure:
Three Months Ended March 31,
2020
2019
(In thousands, except per share data) Net (loss) income
attributable to Funko, Inc.
$
(4,126
)
$
2,195
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)
(1,606
)
4,950
Equity-based compensation (2)
2,413
2,748
Acquisition transaction costs and other expenses (3) —
(350
)
Certain severance, relocation and related costs (4)
213
— Foreign currency transaction loss (5)
914
65
Income tax expense (6)
(94
)
(1,330
)
Adjusted net (loss) income
(2,286
)
8,278
Adjusted net (loss) income margin (7)
(1.7
%)
5.0
%
Weighted-average shares of Class A common stockoutstanding -
basic
34,944
26,640
Equity-based compensation awards and common units ofFAH, LLC that
are convertible into Class A commonstock
15,927
24,994
Adjusted weighted-average shares of Class A stockoutstanding -
diluted
50,871
51,634
Adjusted (loss) earnings per diluted share
$
(0.04
)
$
0.16
Three Months Ended March 31,
2020
2019
(amounts in thousands) Net (loss) income
$
(5,732
)
$
7,145
Interest expense, net
2,655
4,072
Income tax (benefit) expense
(856
)
1,429
Depreciation and amortization
10,989
10,230
EBITDA
$
7,056
$
22,876
Adjustments: Equity-based compensation (2)
2,413
2,748
Acquisition transaction costs and other expenses (3)
—
(350
)
Certain severance, relocation and related costs (4)
213
—
Foreign currency transaction loss (5)
914
65
Adjusted EBITDA
$
10,596
$
25,339
Adjusted EBITDA margin (8)
7.8
%
15.2
%
(1)
Represents the 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 in
periods in which income (loss) was attributable to non-controlling
interests.
(2)
Represents non-cash charges related to
equity-based compensation programs, which vary from period to
period depending on timing of awards.
(3)
Represents legal, accounting, and other
related costs incurred in connection with acquisitions and other
potential transactions. For the three months ended March 31, 2019,
includes a $0.4 million reversal of a pre-acquisition contingent
loss related to our Loungefly acquisition.
(4)
For the three months ended March 31, 2020,
represents severance, relocation and related costs associated with
the consolidation of our warehouse facilities in the United
Kingdom.
(5)
Represents both unrealized and realized
foreign currency losses on transactions other than in U.S. dollars,
including derivative gains and losses on foreign currency forward
exchange contracts.
(6)
Represents the income tax expense effect
of the above adjustments. This adjustment uses an effective tax
rate of 25% for all periods presented.
(7)
Adjusted net (loss) income margin is
calculated as Adjusted net (loss) income as a percentage of net
sales.
(8)
Adjusted EBITDA margin is calculated as
Adjusted EBITDA as a percentage of net sales.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200507006074/en/
Investor Relations: Andrew Harless Funko Investor
Relations investorrelations@funko.com
Media: Jessica Piha-Grafstein Funko Public Relations
jessicap@funko.com
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