Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 02, 2021 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-38274 | |
Entity Registrant Name | FUNKO, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 35-2593276 | |
Entity Address, Address Line One | 2802 Wetmore Avenue | |
Entity Address, City or Town | Everett | |
Entity Address, State or Province | WA | |
Entity Address, Postal Zip Code | 98201 | |
City Area Code | 425 | |
Local Phone Number | 783-3616 | |
Title of 12(b) Security | Class A Common Stock,$0.0001 par value per share | |
Trading Symbol | FNKO | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Shell Company | false | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001704711 | |
Current Fiscal Year End Date | --12-31 | |
Class A common shares outstanding | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 39,929,863 | |
Class B common shares outstanding | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 10,791,972 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Statement [Abstract] | ||||
Net sales | $ 267,733 | $ 191,229 | $ 693,020 | $ 426,028 |
Cost of sales (exclusive of depreciation and amortization shown separately below) | 171,320 | 117,504 | 425,929 | 261,103 |
Selling, general, and administrative expenses | 59,890 | 41,167 | 166,032 | 127,590 |
Depreciation and amortization | 10,328 | 11,887 | 30,778 | 33,947 |
Total operating expenses | 241,538 | 170,558 | 622,739 | 422,640 |
Income from operations | 26,195 | 20,671 | 70,281 | 3,388 |
Interest expense, net | 1,711 | 2,875 | 5,921 | 8,221 |
Loss on debt extinguishment | 675 | 0 | 675 | 0 |
Other (income) expense, net | (505) | 779 | 466 | 1,450 |
Income (loss) before income taxes | 24,314 | 17,017 | 63,219 | (6,283) |
Income tax expense (benefit) | 5,939 | 1,420 | 12,814 | (1,139) |
Net income (loss) | 18,375 | 15,597 | 50,405 | (5,144) |
Less: net income (loss) attributable to non-controlling interests | 6,474 | 5,801 | 18,177 | (229) |
Net income (loss) attributable to Funko, Inc. | $ 11,901 | $ 9,796 | $ 32,228 | $ (4,915) |
Earnings (loss) per share of Class A common stock: | ||||
Basic (in dollars per share) | $ 0.30 | $ 0.28 | $ 0.85 | $ (0.14) |
Diluted (in dollars per share) | $ 0.28 | $ 0.27 | $ 0.80 | $ (0.14) |
Weighted average shares of Class A common stock outstanding: | ||||
Basic (in shares) | 39,448,391 | 35,483,266 | 37,856,435 | 35,154,617 |
Diluted (in shares) | 41,796,383 | 35,903,738 | 40,078,871 | 35,154,617 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 18,375 | $ 15,597 | $ 50,405 | $ (5,144) |
Other comprehensive income (loss): | ||||
Foreign currency translation gain (loss), net of tax effect of $159 and $(315) for the three months ended September 30, 2021 and 2020, respectively, and $180 and $153 for the nine months ended September 30, 2021 and 2020, respectively | (1,266) | 1,647 | (739) | (896) |
Comprehensive income (loss) | 17,109 | 17,244 | 49,666 | (6,040) |
Less: Comprehensive income (loss) attributable to non-controlling interests | 6,142 | 6,397 | 18,042 | (578) |
Comprehensive income (loss) attributable to Funko, Inc. | $ 10,967 | $ 10,847 | $ 31,624 | $ (5,462) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Foreign currency translation gain (loss), tax | $ 159 | $ (315) | $ 180 | $ 153 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 93,245 | $ 52,255 |
Accounts receivable, net | 153,655 | 131,837 |
Inventory | 140,834 | 59,773 |
Prepaid expenses and other current assets | 23,790 | 15,486 |
Total current assets | 411,524 | 259,351 |
Property and equipment, net | 54,831 | 56,141 |
Operating lease right-of-use assets | 52,831 | 58,079 |
Goodwill | 126,612 | 125,061 |
Intangible assets, net | 193,666 | 205,541 |
Deferred tax asset | 70,339 | 54,682 |
Other assets | 5,104 | 4,735 |
Total assets | 914,907 | 763,590 |
Current liabilities: | ||
Current portion of long-term debt, net of unamortized discount | 17,378 | 10,758 |
Current portion of operating lease liabilities | 15,187 | 13,840 |
Accounts payable | 63,936 | 29,199 |
Income taxes payable | 10,544 | 425 |
Accrued royalties | 47,611 | 40,525 |
Accrued expenses and other current liabilities | 89,019 | 43,949 |
Total current liabilities | 243,675 | 138,696 |
Long-term debt, net of unamortized discount | 160,172 | 180,012 |
Operating lease liabilities, net of current portion | 50,495 | 57,512 |
Deferred tax liability | 769 | 780 |
Liabilities under tax receivable agreement, net of current portion | 80,787 | 60,297 |
Other long-term liabilities | 5,135 | 3,848 |
Commitments and Contingencies (Note 7) | ||
Stockholders’ equity: | ||
Additional paid-in-capital | 245,859 | 216,141 |
Accumulated other comprehensive income | 1,114 | 1,718 |
Retained earnings | 56,631 | 24,403 |
Total stockholders’ equity attributable to Funko, Inc. | 303,609 | 242,267 |
Non-controlling interests | 70,265 | 80,178 |
Total stockholders’ equity | 373,874 | 322,445 |
Total liabilities and stockholders’ equity | 914,907 | 763,590 |
Class A common shares outstanding | ||
Stockholders’ equity: | ||
Common stock, value | 4 | 4 |
Class B common shares outstanding | ||
Stockholders’ equity: | ||
Common stock, value | $ 1 | $ 1 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 |
Class A common shares outstanding | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 39,749,000 | 35,657,000 |
Common stock, shares outstanding (in shares) | 39,749,000 | 35,657,000 |
Class B common shares outstanding | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock, shares issued (in shares) | 10,856,000 | 14,040,000 |
Common stock, shares outstanding (in shares) | 10,856,000 | 14,040,000 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Operating Activities | ||
Net income (loss) | $ 50,405 | $ (5,144) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation, amortization and other | 30,356 | 35,929 |
Equity-based compensation | 9,869 | 7,494 |
Amortization of debt issuance costs and debt discounts | 893 | 1,006 |
Loss on debt extinguishment | 675 | 0 |
Deferred tax expense | 994 | 1,237 |
Other | (93) | 1,715 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (22,223) | 13,507 |
Inventory | (81,770) | (11,115) |
Prepaid expenses and other assets | (1,582) | 15,163 |
Accounts payable | 33,933 | (1,595) |
Income taxes payable | 10,135 | (465) |
Accrued royalties | 7,086 | (3,045) |
Accrued expenses and other liabilities | 40,114 | 5,658 |
Net cash provided by operating activities | 78,792 | 60,345 |
Investing Activities | ||
Purchases of property and equipment | (17,434) | (14,704) |
Acquisitions of businesses and related intangible assets, net of cash | 199 | 0 |
Other | 84 | 0 |
Net cash used in investing activities | (17,151) | (14,704) |
Financing Activities | ||
Borrowings on line of credit | 0 | 28,267 |
Payments on line of credit | 0 | (55,103) |
Debt issuance costs | (1,055) | (569) |
Issuance of long-term debt | 180,000 | 0 |
Payments of long-term debt | (193,875) | (8,814) |
Contributions from continuing equity owners | 0 | 177 |
Distributions to continuing equity owners | (9,284) | (3,496) |
Payments under tax receivable agreement | (6) | (165) |
Proceeds from exercise of equity-based options | 3,726 | 41 |
Net cash used in financing activities | (20,494) | (39,662) |
Effect of exchange rates on cash and cash equivalents | (157) | 687 |
Net increase in cash and cash equivalents | 40,990 | 6,666 |
Cash and cash equivalents at beginning of period | 52,255 | 25,229 |
Cash and cash equivalents at end of period | $ 93,245 | $ 31,895 |
Organization and Operations
Organization and Operations | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Operations | Organization and Operations The unaudited condensed consolidated financial statements include Funko, Inc. and its subsidiaries (together, the “Company”) and have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). All intercompany balances and transactions have been eliminated. The Company was formed as a Delaware corporation on April 21, 2017. The Company was formed for the purpose of completing an initial public offering (“IPO”) of its Class A common stock and related transactions in order to carry on the business of Funko Acquisition Holdings, L.L.C. (“FAH, LLC”) and its subsidiaries. Reorganization transactions occurring at the time of our IPO resulted in Funko, Inc. being the sole managing member of FAH, LLC. As the sole managing member of FAH, LLC, Funko, Inc. operates and controls all of FAH, LLC’s operations and, through FAH, LLC and its subsidiaries, conducts FAH, LLC’s business. Accordingly, the Company consolidates the financial results of FAH, LLC and reports a non-controlling interest in its unaudited condensed consolidated financial statements representing the common units of FAH, LLC interests still held by other owners of FAH, LLC (collectively, the “Continuing Equity Owners”). Interim Financial Information In the opinion of management, all adjustments considered necessary for a fair presentation of the results as of the date of and for the interim periods presented have been included, and such adjustments consist of normal recurring adjustments. Certain prior-year amounts have been reclassified to conform to the current year presentation. The unaudited condensed consolidated results of operations for the current interim period are not necessarily indicative of the results for the entire year ending December 31, 2021, due to seasonality and other factors. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes included in its Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission on March 11, 2021. Net Sales Correction During the quarter ended December 31, 2020, the Company corrected an immaterial error that impacted net sales for the quarter ended September 30, 2020. The correction increased Q3 2020 net sales by $2.7 million and decreased Q4 2020 net sales by $2.7 million. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Use of Estimates The preparation of the Company’s unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates and assumptions. Significant Accounting Policies A description of the Company’s significant accounting policies is included in the audited consolidated financial statements within its Annual Report on Form 10-K for the year ended December 31, 2020. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | AcquisitionsTokenWave LLC. On March 26, 2021, the Company acquired a majority of the membership interests of TokenWave LLC, the developer of TokenHead, a mobile app and website for showcasing and tracking Non-Fungible Token (“NFT”) holdings. This transaction represents an opportunity to expand the Company’s product offerings into digital NFTs. The Company accounted for the acquisition as a business combination. The purchase consideration, fair value of the assets acquired and liabilities assumed, and acquisition related transaction costs were not material. The activity of TokenWave LLC included in the Company’s consolidated statements of operations from the acquisition date to September 30, 2021 was not material. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company’s financial instruments, other than those discussed below, include cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities. The carrying amount of these financial instruments approximate fair value due to the short-term nature of these instruments. For financial instruments measured at fair value on a recurring basis, the Company prioritizes the inputs used in measuring fair value according to a three-tier fair value hierarchy defined by U.S. GAAP. For a description of the methods and assumptions that the Company uses to estimate the fair value and determine the classification according to the fair value hierarchy for each financial instrument, see the Company’s audited consolidated financial statements and related notes included in its Annual Report on Form 10-K for the year ended December 31, 2020. Cash equivalents. As of September 30, 2021 and December 31, 2020, cash equivalents included $63.3 million and $34.5 million, respectively, of highly liquid money market funds, which are classified as Level 1 within the fair value hierarchy. Debt. The estimated fair value of the Company’s debt instruments, which are classified as Level 3 financial instruments, at September 30, 2021 and December 31, 2020, was approximately $180.0 million and $193.9 million, respectively. The carrying values of the Company’s debt instruments at September 30, 2021 and December 31, 2020, were $177.6 million and $190.8 million, respectively. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Debt | Debt Debt consists of the following (in thousands): September 30, 2021 December 31, 2020 Term loan facility $ 180,000 $ 193,875 Debt issuance costs (2,450) (3,105) Total term debt 177,550 190,770 Less: current portion 17,378 10,758 Long-term debt, net $ 160,172 $ 180,012 Credit Facilities Former Credit Facilities On October 22, 2018, the Company entered into a credit agreement (as amended, the “Former Credit Agreement”) providing for a term loan facility in the amount of $235.0 million (the “Former Term Loan Facility”) and a revolving credit facility of $50.0 million (the “Former Revolving Credit Facility”) (together the “Former Credit Facilities”). On February 11, 2019, the Company amended the Former Credit Agreement to increase the Former Revolving Credit Facility to $75.0 million. On September 23, 2019, the Company entered into a second amendment to the Former Credit Agreement, which extended the maturity date of the Former Term Loan Facility and the Former Revolving Credit Facility under the Former Credit Facilities to September 23, 2024 (the “Maturity Date”), reduced the interest margin applicable to all loans under the Former Credit Agreement by 0.75% and reduced certain fees incurred under the Former Credit Agreement. The second amendment also allowed the Company to request an additional $25.0 million increase to the Former Term Loan Facility. On May 5, 2020 the Company entered into a third amendment to the Former Credit Agreement, which modified the financial covenants and adjusted the required leverage levels for the Leverage Ratio (as defined in the Former Credit Agreement) to provide the Company with additional flexibility. The Former Term Loan Facility amortized in quarterly installments in aggregate amounts equal to 5.00% of the original principal amount of the Former Term Loan Facility in the first and second years of the Former Term Loan Facility, 10.00% of the original principal amount of the Former Term Loan Facility in the third and fourth years of the Former Term Loan Facility and 12.50% of the original principal amount of the Former Term Loan Facility in the fifth year of the Former Term Loan Facility, with any outstanding balance due and payable on the Maturity Date. The first amortization payment was on December 31, 2018. The Former Revolving Credit Facility would have terminated on the Maturity Date and loans thereunder were eligible to be borrowed, repaid, and reborrowed up to such date. As amended, loans under the Credit Facilities bore interest, at the Company’s option, at either the Euro-Rate (as defined in the Credit Agreement), or in the case of swing loans, the Swing Rate (as defined in the Credit Agreement), plus 3.00% or the Base Rate (as defined in the Credit Agreement) plus 2.00%, with 0.25% step-downs based on the achievement of certain leverage ratios. The Euro-Rate was subject to a 1.00% floor and for loans based on the Euro-Rate, interest payments were due at the end of each applicable interest period. The Former Credit Facilities were secured by substantially all of the assets of the Company and its material domestic subsidiaries, subject to customary exceptions. As of December 31, 2020, the Company was in compliance with all of the covenants in its Former Credit Agreement. In September 2021, all of the outstanding aggregate principal balance and accrued interest of $180.1 million on the Company’s Former Term Loan Facility was repaid, and the Company recorded a $0.7 million loss on debt extinguishment as a result of the write-off of unamortized deferred financing fees. New Credit Facilities On September 17, 2021, the Company, entered into a new credit agreement (the “New Credit Agreement”) providing for a term loan facility in the amount of $180.0 million (the “New Term Loan Facility”) and a revolving credit facility of $100.0 million (the “New Revolving Credit Facility”) (together the “New Credit Facilities”). Proceeds from the New Credit Facilities were primarily used to repay the Former Credit Facilities. The New Term Loan Facility matures on September 17, 2026 (the “Maturity Date”) and amortizes in quarterly installments in aggregate amounts equal to 2.50% of the original principal amount of the New Term Loan Facility, with any outstanding balance due and payable on the Maturity Date. The first amortization payment commences with the quarter ending on December 31, 2021. The New Revolving Credit Facility also terminates on the Maturity Date and loans thereunder may be borrowed, repaid, and reborrowed up to such date. Loans under the New Credit Facilities will, at the Borrowers’ option, bear interest at either (i) LIBOR, EURIBOR, HIBOR, CDOR, Daily Simple SONIA and/or the Central Bank Rate, as applicable, plus 2.50% or (ii) ABR or the Canadian prime rate, as applicable, plus 1.50%, in each case of clauses (i) and (ii), subject to two 0.25% step-downs based on the achievement of certain leverage ratios following the Closing Date. Each of LIBOR, EURIBOR, HIBOR, CDOR and Daily Simple SONIA rates are subject to a 0.00% floor. For loans based on ABR, the Central Bank Rate or the Canadian prime rate, interest payments are due quarterly. For loans based on Daily Simple SONIA, interest payments are due monthly. For loans based on LIBOR, EURIBOR, HIBOR or CDOR, interest payments are due at the end of each applicable interest period. The New Credit Facilities are secured by substantially all of the assets of the Company and any of its existing or future material domestic subsidiaries, subject to customary exceptions. As of September 30, 2021, the Company was in compliance with all of the covenants in its New Credit Agreement. At September 30, 2021 and December 31, 2020, the Company had $180.0 million and $193.9 million of borrowings outstanding under the New Term Loan Facility and Former Term Loan Facility, respectively, and no outstanding borrowings under the New Revolving Credit Facility and Former Revolving Credit Facility, respectively. At September 30, 2021 and December 31, 2020, the Company had $100.0 million and $75.0 million available under the New Revolving Credit Facility and Former Revolving Credit Facility, respectively. There were no outstanding letters of credit as of September 30, 2021 and December 31, 2020. |
Liabilities under Tax Receivabl
Liabilities under Tax Receivable Agreement | 9 Months Ended |
Sep. 30, 2021 | |
Liabilities Under Tax Receivable Agreement [Abstract] | |
Liabilities under Tax Receivable Agreement | Liabilities under Tax Receivable Agreement On November 1, 2017, the Company entered into a tax receivable agreement with FAH, LLC (the “Tax Receivable Agreement”) and each of the Continuing Equity Owners that provides for the payment by the Company to the Continuing Equity Owners of 85% of the amount of tax benefits, if any, that it realizes, or in some circumstances, is deemed to realize, as a result of (i) future redemptions funded by the Company or exchanges, or deemed exchanges in certain circumstances, of common units of FAH, LLC for Class A common stock of Funko, Inc. or cash, and (ii) certain additional tax benefits attributable to payments made under the Tax Receivable Agreement. During the three and nine months ended September 30, 2021 the Company acquired 0.5 million and 3.7 million, respectively, of common units of FAH, LLC. During the three months ended September 30, 2020 the Company did not acquire any common units. During the nine months ended September 30, 2020 the Company acquired 0.5 million of common units of FAH, LLC. As a result of these exchanges, during the three and nine months ended September 30, 2021, the Company recognized an increase to its net deferred tax assets in the amount of $1.9 million and $16.5 million, respectively, and $0.4 million for the nine months ended September 30, 2020. The following table summarizes changes in the amount of the Company’s Tax Receivable Agreement liability (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Beginning balance $ 80,500 $ 66,606 $ 62,317 $ 65,816 Additional liabilities for exchanges 1,890 — 20,079 955 Payments under tax receivable agreement — — (6) (165) Ending balance $ 82,390 $ 66,606 $ 82,390 $ 66,606 As of September 30, 2021, the Company’s total obligation under the Tax Receivable Agreement, including accrued interest, was $82.4 million, of which $1.6 million was included in accrued expenses and other current liabilities on the unaudited condensed consolidated balance sheets. There were no transactions subject to the Tax Receivable Agreement for which the Company did not recognize the related liability, as the Company concluded that it was probable that the Company would have sufficient future taxable income to utilize all of the related tax benefits. At December 31, 2020, the Company’s total obligation under the Tax Receivable Agreement, including accrued interest, was $62.3 million, of which $2.0 million was included in accrued expenses and other current liabilities on the condensed consolidated balance sheets. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies License Agreements The Company enters into license agreements with various licensors of copyrighted and trademarked characters and design in connection with the products that it sells. The agreements generally require royalty payments based on product sales and in some cases may require minimum royalty and other related commitments. Employment Agreements The Company has employment agreements with certain officers. The agreements include, among other things, an annual bonus based on certain performance metrics of the Company, as defined by the board of directors, and up to one year’s severance pay beyond termination date. Leases The Company has entered into non-cancellable operating leases for office, warehouse, and distribution facilities, with original lease periods expiring through 2032. Some operating leases also contain the option to renew for five-year periods at prevailing market rates at the time of renewal. In addition to minimum rent, certain of the leases require payment of real estate taxes, insurance, common area maintenance charges, and other executory costs. Debt The Company has entered into the New Credit Agreement which includes a New Term Loan Facility and a New Revolving Credit Facility. See Note 5, Debt. Tax Receivable Agreement The Company is party to the Tax Receivable Agreement with FAH, LLC and each of the Continuing Equity Owners that provides for the payment by the Company to the Continuing Equity Owners under certain circumstances. See Note 6, Liabilities under Tax Receivable Agreement. Legal Contingencies The Company is involved in claims and litigation in the ordinary course of business, some of which seek monetary damages, including claims for punitive damages, which are not covered by insurance. For certain pending matters, accruals have not been established because such matters have not progressed sufficiently through discovery, and/or development of important factual information and legal information is insufficient to enable the Company to estimate a range of possible loss, if any. An adverse determination in one or more of these pending matters could have an adverse effect on the Company’s consolidated financial position, results of operations or cash flows. The Company is, and may in the future become, subject to various legal proceedings and claims that arise in or outside the ordinary course of business. For example, on March 10, 2020, a purported stockholder of the Company filed a putative class action lawsuit in the United States District Court for the Central District of California against the Company and certain of its officers, entitled Ferreira v. Funko, Inc. et al. The complaint alleges that the Company violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as well as Rule 10b-5 promulgated thereunder, by making allegedly materially misleading statements in its earnings announcement and Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, as well as by omitting material facts necessary to make the statements made therein not misleading. The lawsuit seeks, among other things, compensatory damages and attorneys’ fees and costs. Two additional complaints making substantially similar allegations— Nahas v. Funko, Inc. et al. and Dachev v. Funko, Inc. et al. —were filed April 3, 2020 in the United States District Court for the Central District of California and April 9, 2020 in the United States District Court for the Western District of Washington, respectively. On June 25, 2020, the Dachev action was voluntarily dismissed. On June 11, 2020, the Central District of California actions were consolidated for all purposes into one action under the Ferreira caption, and lead plaintiffs and lead counsel were appointed pursuant to the Private Securities Litigation Reform Act. Lead plaintiffs filed the consolidated complaint on July 31, 2020, against the Company and certain of its officers and directors, as well as entities affiliated with ACON Funko Investors, L.L.C. (“ACON”). The consolidated complaint added Section 10(b) and 20(a) claims based on the Company’s earnings announcement and Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, as well as claims under Section 20A of the Exchange Act. All defendants moved to dismiss the consolidated action on October 2, 2020, and briefing on the motions to dismiss concluded on January 29, 2021. On February 25, 2021, the Court granted all defendants’ motions to dismiss the Ferreira action, allowing the lead plaintiffs leave to amend the complaint. Lead plaintiffs filed their amended complaint on March 29, 2021. On May 7, 2021, all defendants moved to dismiss the amended complaint; briefing on those motions concluded on July 17, 2021. On October 25, 2021, the Court issued an order granting defendants’ motion in part and denying the motion in part. Several shareholder derivative actions based on the earnings announcement and Quarterly Report on Form 10-Q for the quarter ended September 30, 2019 have been brought on behalf of the Company against certain of its directors and officers. Specifically, on April 23, June 5, and June 10, 2020, the actions captioned Cassella v. Mariotti et al. , Evans v. Mariotti et al. , and Igelido v. Mariotti et al. , respectively, were filed in the United States District Court for the Central District of California. On July 6, 2020, these three actions were consolidated for all purposes into one action under the title In re Funko, Inc. Derivative Litigation , and on August 13, 2020, the consolidated action was stayed pending final resolution of the motion to dismiss in the Ferreira action. Additionally, on July 14 and July 31, 2020, the actions captioned Rubin v. Mariotti et al. and Fletcher v. Mariotti et al. , respectively, were filed in the United States District Court for the District of Delaware. These two actions were consolidated for all purposes into one action under the title In re Funko, Inc. Stockholder Derivative Litigation on September 8, 2020 and were subsequently transferred to the United States District Court for the Central District of California. On April 23, 2021, both cases pending under the “Stockholder Derivative Litigation” caption were voluntarily dismissed, without prejudice. On June 11, 2021, an additional derivative action, captioned Silverberg v. Mariotti, et al. , was filed in the Court of Chancery of the State of Delaware. In response, on July 8, 2021, the Company moved to stay and dismiss the action. Those motions remain pending. The complaints filed in the shareholder derivative actions have alleged breaches of fiduciary duties, unjust enrichment, waste of corporate assets, insider trading, and violations of the Exchange Act. The actions seek, among other things, payment of damages to the Company and to disgorge the directors and officers from all profits and benefits they obtained due to their alleged wrongful conduct. Additionally, between November 16, 2017 and June 12, 2018, seven purported stockholders of the Company filed putative class action lawsuits in the Superior Court of Washington in and for King County against the Company, certain of its officers and directors, ACON, Fundamental Capital, LLC and Funko International, LLC (collectively, “Fundamental”), the underwriters of its IPO, and certain other defendants. On July 2, 2018, the suits were ordered consolidated for all purposes into one action under the title In re Funko, Inc. Securities Litigation . On August 1, 2018, plaintiffs filed a consolidated complaint against the Company, certain of its officers and directors, ACON, Fundamental, and certain other defendants. On October 1, 2018, the Company moved to dismiss the action. The motion was fully briefed as of November 30, 2018, and oral argument on the motion was held on May 3, 2019. On August 2, 2019, the Court granted the Company’s motion to dismiss the action, allowing plaintiffs leave to amend the complaint. The Court found, inter alia, that “Funko’s statements regarding its financial disclosures were not materially false or misleading” and that “plaintiffs have not shown that Funko’s ‘opinion statements’ were false or that such statements were not simply corporate optimism or puffery.” On October 3, 2019, plaintiffs filed a first amended consolidated complaint. The Company moved to dismiss that complaint on December 5, 2019. The motion was fully briefed as of March 17, 2020, and oral argument on the motion was held on May 15, 2020. On August 5, 2020, the Superior Court of Washington in and for King County dismissed the consolidated action with prejudice. Plaintiffs filed a notice of appeal to the Washington Court of Appeals on September 4, 2020. Briefing on the appeal concluded on June 1, 2021 and the Washington Court of Appeals heard argument on the appeal on September 17, 2021. On November 1, 2021, the Court of Appeals reversed the trial court’s dismissal decision in most respects, and remanded it to the trial court for further proceedings. On June 4, 2018, a putative class action lawsuit entitled Kanugonda v. Funko, Inc., et al. was filed in the United States District Court for the Western District of Washington against the Company, certain of its officers and directors, and certain other defendants. On January 4, 2019, a lead plaintiff was appointed in that case. On April 30, 2019, the lead plaintiff filed an amended complaint against the previously named defendants. The parties to the federal action, now captioned Berkelhammer v. Funko, Inc. et al. , have agreed to a stay of that action pending developments in the state case. The complaints in Washington state court and Berkelhammer v. Funko, Inc. et al. allege that the Company violated Sections 11, 12, and 15 of the Securities Act of 1933, as amended, by making allegedly materially misleading statements in documents filed with the U.S. Securities and Exchange Commission in connection with the Company’s IPO and by omitting material facts necessary to make the statements made therein not misleading. The lawsuits seek, among other things, compensatory statutory damages and rescissory damages in account of the consideration paid for the Company’s Class A common stock by the plaintiffs and members of the putative class, as well as attorneys’ fees and costs. The Company is party to additional legal proceedings incidental to its business. While the outcome of these additional matters could differ from management’s expectations, the Company does not believe that the resolution of such matters is reasonably likely to have a material effect on its results of operations or financial condition. |
Segments
Segments | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Segments | Segments The Company identifies its segments according to how the business activities are managed and evaluated and for which discrete financial information is available and regularly reviewed by its Chief Operating Decision Maker (the “CODM”) to allocate resources and assess performance. Because its CODM reviews financial performance and allocates resources at a consolidated level on a regular basis, the Company has one segment. The following tables present summarized product information as a percent of sales: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Figures 76.9 % 75.9 % 78.5 % 78.3 % Other 23.1 % 24.1 % 21.5 % 21.7 % Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Pop! Branded Products 72.1 % 71.5 % 76.3 % 77.0 % Loungefly Branded Products 13.7 % 14.1 % 13.1 % 12.5 % Other 14.2 % 14.4 % 10.6 % 10.5 % The following tables present summarized geographical information (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Net sales: United States $ 191,289 $ 140,935 $ 490,993 $ 317,348 Europe 58,873 35,538 150,683 71,677 Other International 17,571 14,756 51,344 37,003 Total net sales $ 267,733 $ 191,229 $ 693,020 $ 426,028 September 30, 2021 December 31, 2020 Long-term assets: United States $ 67,618 $ 72,813 United Kingdom 27,324 29,998 Vietnam and China 17,824 16,144 Total long-lived assets $ 112,766 $ 118,955 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Funko, Inc. is taxed as a corporation and pays corporate federal, state and local taxes on income allocated to it from FAH, LLC based upon Funko, Inc.’s economic interest held in FAH, LLC. FAH, LLC is treated as a pass-through partnership for income tax reporting purposes. FAH, LLC’s members, including the Company, are liable for federal, state and local income taxes based on their share of FAH, LLC’s pass-through taxable income. The Company recorded $5.9 million and $1.4 million of income tax expense for the three months ended September 30, 2021 and 2020, respectively, and $12.8 million of income tax expense and $1.1 million of income tax benefit for the nine months ended September 30, 2021 and 2020, respectively. The Company’s effective tax rate for the nine months ended September 30, 2021 was 20.3%. The Company’s effective tax rate is less than the statutory rate of 21% primarily because the Company is not liable for income taxes on the portion of FAH, LLC’s earnings that are attributable to non-controlling interests. The Company is party to the Tax Receivable Agreement with FAH, LLC and each of the Continuing Equity Owners that provides for the payment by the Company to the Continuing Equity Owners under certain circumstances. See Note 6, Liabilities under Tax Receivable Agreement. |
Stockholders_ Equity
Stockholders’ Equity | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity The following is a reconciliation of changes in stockholders’ equity for the three and nine months ended September 30, 2021 and 2020: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (In thousands) Class A common stock Beginning balance $ 4 $ 4 $ 4 $ 3 Shares issued — — — 1 Ending balance $ 4 $ 4 $ 4 $ 4 Class B common stock Beginning balance $ 1 $ 1 $ 1 $ 1 Redemption of common units of FAH, LLC — — — — Ending balance $ 1 $ 1 $ 1 $ 1 Additional paid-in capital Beginning balance $ 239,269 $ 210,735 $ 216,141 $ 204,174 Equity-based compensation 3,658 2,456 9,869 7,494 Shares issued for equity-based compensation awards 48 174 3,726 219 Shares withheld related to net share settlement of equity-based compensation awards — — — (101) Other — — 200 — Redemption of common units of FAH, LLC 2,852 — 19,532 2,115 Establishment of liabilities under tax receivable agreement and related changes to deferred tax assets 32 — (3,609) (536) Ending balance $ 245,859 $ 213,365 $ 245,859 $ 213,365 Accumulated other comprehensive (loss) income Beginning balance $ 2,048 $ (807) $ 1,718 $ 791 Foreign currency translation (loss) gain, net of tax (934) 1,051 (604) (547) Ending balance $ 1,114 $ 244 $ 1,114 $ 244 Retained earnings Beginning balance $ 44,730 $ 5,731 $ 24,403 $ 20,442 Net income (loss) attributable to Funko, Inc. 11,901 9,796 32,228 (4,915) Ending balance $ 56,631 $ 15,527 $ 56,631 $ 15,527 Non-controlling interests Beginning balance $ 69,346 $ 67,968 $ 80,178 $ 79,733 Distributions to Continuing Equity Owners (2,371) (821) (9,284) (3,496) Other — — 861 — Redemption of common units of FAH, LLC (2,852) — (19,532) (2,115) Foreign currency translation (loss) gain, net of tax (332) 596 (135) (349) Net income (loss) attributable to non-controlling interests 6,474 5,801 18,177 (229) Ending balance $ 70,265 $ 73,544 $ 70,265 $ 73,544 Total stockholders’ equity $ 373,874 $ 302,685 $ 373,874 $ 302,685 The following is a reconciliation of changes in Class A and Class B common shares outstanding for the three and nine months ended September 30, 2021 and 2020: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (In thousands) Class A common shares outstanding Beginning balance 39,245 35,465 35,657 34,918 Shares issued for equity-based compensation awards 12 21 419 85 Redemption of common units of FAH, LLC 492 — 3,673 483 Ending balance 39,749 35,486 39,749 35,486 Class B common shares outstanding Beginning balance 11,201 14,040 14,040 14,515 Redemption of common units of FAH, LLC (345) — (3,184) (475) Ending balance 10,856 14,040 10,856 14,040 Total Class A and Class B common shares outstanding 50,605 49,526 50,605 49,526 |
Non-controlling interests
Non-controlling interests | 9 Months Ended |
Sep. 30, 2021 | |
Noncontrolling Interest [Abstract] | |
Non-controlling interests | Non-controlling interests Funko, Inc. is the sole managing member of FAH, LLC and as a result consolidates the financial results of FAH, LLC and reports a non-controlling interest representing the common units of FAH, LLC held by the Continuing Equity Owners. Changes in Funko, Inc.’s ownership interest in FAH, LLC while Funko, Inc. retains its controlling interest in FAH, LLC will be accounted for as equity transactions. As such, future redemptions or direct exchanges of common units of FAH, LLC by the Continuing Equity Owners will result in a change in ownership and reduce the amount recorded as non-controlling interest and increase or decrease additional paid-in capital when FAH, LLC has positive or negative net assets, respectively. Net income (loss) and comprehensive income (loss) are attributed between Funko, Inc. and non-controlling interest holders based on each party’s relative economic ownership interest in FAH, LLC. As of September 30, 2021 and December 31, 2020, Funko, Inc. owned 39.7 million and 35.7 million of FAH, LLC common units, respectively, representing a 76.8% and 69.5% economic ownership interest in FAH, LLC, respectively. Net income (loss) and comprehensive income (loss) of FAH, LLC excludes certain activity attributable to Funko, Inc., including equity-based compensation expense for share-based compensation awards issued by Funko, Inc. and income tax expense (benefit) for corporate, federal, state and local taxes attributable to Funko, Inc. The following represents the amounts excluded from the computation of net income (loss) and comprehensive income (loss) of FAH, LLC for the three and nine months ended September 30, 2021 and 2020: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (In thousands) Funko, Inc. Equity-based compensation $ 3,658 $ 2,438 $ 9,869 $ 7,384 Income tax expense (benefit) $ 5,257 $ 911 $ 11,050 $ (2,318) |
Earnings (loss) per Share
Earnings (loss) per Share | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Earnings (loss) per Share | Earnings (loss) per Share Basic earnings (loss) per share of Class A common stock is computed by dividing net income (loss) attributable to Funko, Inc. by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted earnings (loss) per share of Class A common stock is computed by dividing net income (loss) attributable to Funko, Inc. by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities. The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings (loss) per share of Class A common stock (in thousands, except shares and per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Numerator: Net income (loss) $ 18,375 $ 15,597 $ 50,405 $ (5,144) Less : net income (loss) attributable to non-controlling interests 6,474 5,801 18,177 (229) Net income (loss) attributable to Funko, Inc. — basic and diluted $ 11,901 $ 9,796 $ 32,228 $ (4,915) Denominator: Weighted-average shares of Class A common stock outstanding — basic 39,448,391 35,483,266 37,856,435 35,154,617 Add: Dilutive common units of FAH, LLC that are convertible into Class A common stock 227,537 249,718 227,500 — Add : Dilutive Funko, Inc. equity compensation awards 2,120,455 170,754 1,994,936 — Weighted-average shares of Class A common stock outstanding — diluted 41,796,383 35,903,738 40,078,871 35,154,617 Earnings (loss) per share of Class A common stock — basic $ 0.30 $ 0.28 $ 0.85 $ (0.14) Earnings (loss) per share of Class A common stock — diluted $ 0.28 $ 0.27 $ 0.80 $ (0.14) For the three months ended September 30, 2021 and 2020, an aggregate of 13.9 million and 19.5 million, respectively, and for the nine months ended September 30, 2021 and 2020, an aggregate of 15.0 million and 20.3 million, respectively, of potentially dilutive securities were excluded from the weighted-average in the computation of diluted earnings (loss) per share of Class A common stock because the effect would have been anti-dilutive. For the three months ended September 30, 2021 and 2020, anti-dilutive securities included 12.3 million and 15.6 million, respectively, and for the nine months ended September 30, 2021 and 2020, anti-dilutive securities included 13.7 million and 15.8 million, respectively, of common units of FAH, LLC that are convertible into Class A common stock, but were excluded from the computations of diluted earnings (loss) per share because the effect would have been anti-dilutive under the if-converted method. Shares of the Company’s Class B common stock do not participate in the earnings or losses of the Company and are therefore not participating securities. As such, separate presentation of basic and diluted earnings (loss) per share of Class B common stock under the two-class method has not been presented. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of the Company’s unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates and assumptions. |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Summary of Debt | Debt consists of the following (in thousands): September 30, 2021 December 31, 2020 Term loan facility $ 180,000 $ 193,875 Debt issuance costs (2,450) (3,105) Total term debt 177,550 190,770 Less: current portion 17,378 10,758 Long-term debt, net $ 160,172 $ 180,012 |
Liabilities under Tax Receiva_2
Liabilities under Tax Receivable Agreement (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Liabilities Under Tax Receivable Agreement [Abstract] | |
Summary of Tax Receivable Agreement Liability | The following table summarizes changes in the amount of the Company’s Tax Receivable Agreement liability (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Beginning balance $ 80,500 $ 66,606 $ 62,317 $ 65,816 Additional liabilities for exchanges 1,890 — 20,079 955 Payments under tax receivable agreement — — (6) (165) Ending balance $ 82,390 $ 66,606 $ 82,390 $ 66,606 |
Segments (Tables)
Segments (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Summary of Main Product Categories as Percent of Sales | The following tables present summarized product information as a percent of sales: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Figures 76.9 % 75.9 % 78.5 % 78.3 % Other 23.1 % 24.1 % 21.5 % 21.7 % Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Pop! Branded Products 72.1 % 71.5 % 76.3 % 77.0 % Loungefly Branded Products 13.7 % 14.1 % 13.1 % 12.5 % Other 14.2 % 14.4 % 10.6 % 10.5 % |
Summary of Net Sales and Long-Lived Assets | The following tables present summarized geographical information (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Net sales: United States $ 191,289 $ 140,935 $ 490,993 $ 317,348 Europe 58,873 35,538 150,683 71,677 Other International 17,571 14,756 51,344 37,003 Total net sales $ 267,733 $ 191,229 $ 693,020 $ 426,028 September 30, 2021 December 31, 2020 Long-term assets: United States $ 67,618 $ 72,813 United Kingdom 27,324 29,998 Vietnam and China 17,824 16,144 Total long-lived assets $ 112,766 $ 118,955 |
Stockholders_ Equity (Tables)
Stockholders’ Equity (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Reconciliation of Changes in Stockholders' Equity | The following is a reconciliation of changes in stockholders’ equity for the three and nine months ended September 30, 2021 and 2020: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (In thousands) Class A common stock Beginning balance $ 4 $ 4 $ 4 $ 3 Shares issued — — — 1 Ending balance $ 4 $ 4 $ 4 $ 4 Class B common stock Beginning balance $ 1 $ 1 $ 1 $ 1 Redemption of common units of FAH, LLC — — — — Ending balance $ 1 $ 1 $ 1 $ 1 Additional paid-in capital Beginning balance $ 239,269 $ 210,735 $ 216,141 $ 204,174 Equity-based compensation 3,658 2,456 9,869 7,494 Shares issued for equity-based compensation awards 48 174 3,726 219 Shares withheld related to net share settlement of equity-based compensation awards — — — (101) Other — — 200 — Redemption of common units of FAH, LLC 2,852 — 19,532 2,115 Establishment of liabilities under tax receivable agreement and related changes to deferred tax assets 32 — (3,609) (536) Ending balance $ 245,859 $ 213,365 $ 245,859 $ 213,365 Accumulated other comprehensive (loss) income Beginning balance $ 2,048 $ (807) $ 1,718 $ 791 Foreign currency translation (loss) gain, net of tax (934) 1,051 (604) (547) Ending balance $ 1,114 $ 244 $ 1,114 $ 244 Retained earnings Beginning balance $ 44,730 $ 5,731 $ 24,403 $ 20,442 Net income (loss) attributable to Funko, Inc. 11,901 9,796 32,228 (4,915) Ending balance $ 56,631 $ 15,527 $ 56,631 $ 15,527 Non-controlling interests Beginning balance $ 69,346 $ 67,968 $ 80,178 $ 79,733 Distributions to Continuing Equity Owners (2,371) (821) (9,284) (3,496) Other — — 861 — Redemption of common units of FAH, LLC (2,852) — (19,532) (2,115) Foreign currency translation (loss) gain, net of tax (332) 596 (135) (349) Net income (loss) attributable to non-controlling interests 6,474 5,801 18,177 (229) Ending balance $ 70,265 $ 73,544 $ 70,265 $ 73,544 Total stockholders’ equity $ 373,874 $ 302,685 $ 373,874 $ 302,685 |
Reconciliation of Changes in Class A and Class B Common Shares Outstanding | The following is a reconciliation of changes in Class A and Class B common shares outstanding for the three and nine months ended September 30, 2021 and 2020: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (In thousands) Class A common shares outstanding Beginning balance 39,245 35,465 35,657 34,918 Shares issued for equity-based compensation awards 12 21 419 85 Redemption of common units of FAH, LLC 492 — 3,673 483 Ending balance 39,749 35,486 39,749 35,486 Class B common shares outstanding Beginning balance 11,201 14,040 14,040 14,515 Redemption of common units of FAH, LLC (345) — (3,184) (475) Ending balance 10,856 14,040 10,856 14,040 Total Class A and Class B common shares outstanding 50,605 49,526 50,605 49,526 |
Non-controlling interests (Tabl
Non-controlling interests (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Noncontrolling Interest [Abstract] | |
Schedule of Amounts Excluded from the Computation of Net Income (Loss) and Comprehensive Income (Loss) of FAH, LLC | The following represents the amounts excluded from the computation of net income (loss) and comprehensive income (loss) of FAH, LLC for the three and nine months ended September 30, 2021 and 2020: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (In thousands) Funko, Inc. Equity-based compensation $ 3,658 $ 2,438 $ 9,869 $ 7,384 Income tax expense (benefit) $ 5,257 $ 911 $ 11,050 $ (2,318) |
Earnings (loss) per Share (Tabl
Earnings (loss) per Share (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliations of Numerators and Denominators Used to Compute Basic and Diluted Earnings Per Share | The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings (loss) per share of Class A common stock (in thousands, except shares and per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Numerator: Net income (loss) $ 18,375 $ 15,597 $ 50,405 $ (5,144) Less : net income (loss) attributable to non-controlling interests 6,474 5,801 18,177 (229) Net income (loss) attributable to Funko, Inc. — basic and diluted $ 11,901 $ 9,796 $ 32,228 $ (4,915) Denominator: Weighted-average shares of Class A common stock outstanding — basic 39,448,391 35,483,266 37,856,435 35,154,617 Add: Dilutive common units of FAH, LLC that are convertible into Class A common stock 227,537 249,718 227,500 — Add : Dilutive Funko, Inc. equity compensation awards 2,120,455 170,754 1,994,936 — Weighted-average shares of Class A common stock outstanding — diluted 41,796,383 35,903,738 40,078,871 35,154,617 Earnings (loss) per share of Class A common stock — basic $ 0.30 $ 0.28 $ 0.85 $ (0.14) Earnings (loss) per share of Class A common stock — diluted $ 0.28 $ 0.27 $ 0.80 $ (0.14) |
Organization and Operations- Ad
Organization and Operations- Additional information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Net sales increase (decrease) | $ 267,733 | $ 191,229 | $ 693,020 | $ 426,028 | |
Adjustment | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Net sales increase (decrease) | $ (2,700) | $ 2,700 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | $ 63,300 | $ 34,500 |
Long-term Debt | 177,550 | 190,770 |
Funko Acquisition Holdings, L.L.C. | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated fair value of debt instruments | $ 180,000 | $ 193,900 |
Debt - Summary of Debt (Detail)
Debt - Summary of Debt (Detail) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Debt issuance costs | $ (2,450) | $ (3,105) |
Total term debt | 177,550 | 190,770 |
Less: current portion | 17,378 | 10,758 |
Long-term debt, net | 160,172 | 180,012 |
Term Loan | ||
Debt Instrument [Line Items] | ||
Term loan facility | $ 180,000 | $ 193,875 |
Debt - New Credit Facilities -
Debt - New Credit Facilities - Additional Information (Detail) - USD ($) | Sep. 17, 2021 | Sep. 23, 2019 | Oct. 22, 2018 | Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Feb. 11, 2019 |
Debt Instrument [Line Items] | ||||||||||
Payments of long-term debt | $ 193,875,000 | $ 8,814,000 | ||||||||
Loss on debt extinguishment | $ 675,000 | $ 0 | 675,000 | $ 0 | ||||||
Outstanding amount | $ 177,550,000 | 177,550,000 | 177,550,000 | $ 190,770,000 | ||||||
Former Credit Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Reduction in interest margin applicable to all loans | 0.75% | |||||||||
Term Loan | Former Credit Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Facility amount | $ 235,000,000 | |||||||||
Line increase amount | $ 25,000,000 | |||||||||
Long term debt maturity percentage first and second year | 5.00% | |||||||||
Long term debt maturity percentage third and fourth year | 10.00% | |||||||||
Long term debt maturities percentage fifth year | 12.50% | |||||||||
Payments of long-term debt | 180,100,000 | |||||||||
Loss on debt extinguishment | 700,000 | |||||||||
Outstanding amount | 193,900,000 | |||||||||
Term Loan | New Credit Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Facility amount | $ 180,000,000 | |||||||||
Long term debt maturity percentage first and second year | 2.50% | |||||||||
Outstanding amount | 180,000,000 | 180,000,000 | 180,000,000 | |||||||
SONIA Rate | New Credit Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate margins | 2.50% | |||||||||
Interest rate of borrowings | 0.00% | |||||||||
Prime Rate | New Credit Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate margins | 1.50% | |||||||||
Supplementary leverage ratio | 0.25% | |||||||||
Base Rate | Term Loan | Former Credit Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate margins | 2.00% | |||||||||
Supplementary leverage ratio | 0.25% | |||||||||
Euro Rate | Term Loan | Former Credit Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate margins | 3.00% | |||||||||
Interest rate of borrowings | 1.00% | |||||||||
Swing Rate | Term Loan | Former Credit Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate margins | 3.00% | |||||||||
Supplementary leverage ratio | 0.25% | |||||||||
Letters of Credit | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit | 0 | 0 | 0 | 0 | ||||||
Revolving Credit Facility | Line of Credit | Former Credit Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit | $ 50,000,000 | $ 75,000,000 | ||||||||
Line of credit | 0 | |||||||||
Remaining borrowing capacity | $ 75,000,000 | |||||||||
Revolving Credit Facility | Line of Credit | New Credit Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit | $ 100,000,000 | |||||||||
Line of credit | 0 | 0 | 0 | |||||||
Remaining borrowing capacity | $ 100,000,000 | $ 100,000,000 | $ 100,000,000 |
Liabilities under Tax Receiva_3
Liabilities under Tax Receivable Agreement - Additional information (Detail) - USD ($) $ in Thousands, shares in Millions | Nov. 01, 2017 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Jun. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Liabilities Under Tax Receivable Agreement [Line Items] | |||||||||
Percentage of tax benefit paid to equity owner | 85.00% | ||||||||
Common units acquired (in shares) | 0.5 | 0 | 3.7 | 0.5 | |||||
Increase in deferred tax assets | $ 1,900 | $ 400 | $ 16,500 | $ 400 | |||||
Obligation included in accrued expenses | 82,390 | $ 66,606 | 82,390 | $ 66,606 | $ 80,500 | $ 62,317 | $ 66,606 | $ 65,816 | |
Funko Acquisition Holdings, L.L.C. | |||||||||
Liabilities Under Tax Receivable Agreement [Line Items] | |||||||||
Obligation included in accrued expenses | 82,400 | 82,400 | 62,300 | ||||||
Funko Acquisition Holdings, L.L.C. | Accrued Expenses and Other Current Liabilities | |||||||||
Liabilities Under Tax Receivable Agreement [Line Items] | |||||||||
Obligation included in accrued expenses | $ 1,600 | $ 1,600 | $ 2,000 |
Liabilities under Tax Receiva_4
Liabilities under Tax Receivable Agreement - Schedule of Liability Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Liabilities Under Tax Receivable Agreement [Roll Forward] | ||||
Beginning balance | $ 80,500 | $ 66,606 | $ 62,317 | $ 65,816 |
Additional liabilities for exchanges | 1,890 | 0 | 20,079 | 955 |
Payments under tax receivable agreement | 0 | 0 | (6) | (165) |
Ending balance | $ 82,390 | $ 66,606 | $ 82,390 | $ 66,606 |
Commitments and Contingencies -
Commitments and Contingencies - Additional information (Detail) - lawsuit | Sep. 08, 2020 | Jul. 06, 2020 | Apr. 09, 2020 | Jul. 02, 2018 | Jun. 12, 2018 | Jul. 31, 2020 | Sep. 30, 2021 |
Lessee, Lease, Description [Line Items] | |||||||
Severance payment period (up to) | 1 year | ||||||
Nahas v. Funko, Inc. et al. and Dachev v. Funko, Inc. et al. | |||||||
Lessee, Lease, Description [Line Items] | |||||||
Number of additional putative class action lawsuits filed | 2 | ||||||
In re Funko, Inc. Derivative Litigation | |||||||
Lessee, Lease, Description [Line Items] | |||||||
Number of additional putative class action lawsuits filed | 1 | ||||||
Rubin v. Mariotti et al. and Fletcher v. Mariotti et al. | |||||||
Lessee, Lease, Description [Line Items] | |||||||
Number of additional putative class action lawsuits filed | 1 | 2 | |||||
King County v. Fundamental | |||||||
Lessee, Lease, Description [Line Items] | |||||||
Number of additional putative class action lawsuits filed | 7 | ||||||
Berkelhammer v. Funko, inc. et. al. | |||||||
Lessee, Lease, Description [Line Items] | |||||||
Number of additional putative class action lawsuits filed | 1 |
Segments - Additional Informati
Segments - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2021segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 1 |
Segments - Summary of Main Prod
Segments - Summary of Main Product Categories as Percent of Sales (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Schedule of Property and Equipment Net by Country [Line Items] | ||||
Net sales | $ 267,733 | $ 191,229 | $ 693,020 | $ 426,028 |
United States | ||||
Schedule of Property and Equipment Net by Country [Line Items] | ||||
Net sales | 191,289 | 140,935 | 490,993 | 317,348 |
Europe | ||||
Schedule of Property and Equipment Net by Country [Line Items] | ||||
Net sales | 58,873 | 35,538 | 150,683 | 71,677 |
Other International | ||||
Schedule of Property and Equipment Net by Country [Line Items] | ||||
Net sales | $ 17,571 | $ 14,756 | $ 51,344 | $ 37,003 |
Sales Revenue | Product Concentration Risk | Figures | ||||
Schedule of Property and Equipment Net by Country [Line Items] | ||||
Percent of sales | 76.90% | 75.90% | 78.50% | 78.30% |
Sales Revenue | Product Concentration Risk | Other | ||||
Schedule of Property and Equipment Net by Country [Line Items] | ||||
Percent of sales | 23.10% | 24.10% | 21.50% | 21.70% |
Sales Revenue | Product Concentration Risk | Pop! Branded Products | ||||
Schedule of Property and Equipment Net by Country [Line Items] | ||||
Percent of sales | 72.10% | 71.50% | 76.30% | 77.00% |
Sales Revenue | Product Concentration Risk | Loungefly Branded Products | ||||
Schedule of Property and Equipment Net by Country [Line Items] | ||||
Percent of sales | 13.70% | 14.10% | 13.10% | 12.50% |
Sales Revenue | Product Concentration Risk | Other | ||||
Schedule of Property and Equipment Net by Country [Line Items] | ||||
Percent of sales | 14.20% | 14.40% | 10.60% | 10.50% |
Segments - Summary of Net Sales
Segments - Summary of Net Sales and Long-Lived Assets (Detail) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Segment Reporting Information [Line Items] | ||
Total long-lived assets | $ 112,766 | $ 118,955 |
United States | ||
Segment Reporting Information [Line Items] | ||
Total long-lived assets | 67,618 | 72,813 |
United Kingdom | ||
Segment Reporting Information [Line Items] | ||
Total long-lived assets | 27,324 | 29,998 |
Vietnam and China | ||
Segment Reporting Information [Line Items] | ||
Total long-lived assets | $ 17,824 | $ 16,144 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense (benefit) | $ 5,939 | $ 1,420 | $ 12,814 | $ (1,139) |
Effective income tax rate | 20.30% |
Stockholders' Equity - Reconcil
Stockholders' Equity - Reconciliation of Changes in Stockholders' Equity (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | $ 322,445 | |||
Foreign currency translation (loss) gain, net of tax | $ (1,266) | $ 1,647 | (739) | $ (896) |
Net income (loss) | 18,375 | 15,597 | 50,405 | (5,144) |
Ending balance | 373,874 | 302,685 | 373,874 | 302,685 |
Common Stock | Class A common stock | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | 4 | 4 | 4 | 3 |
Shares issued | 0 | 0 | 0 | 1 |
Ending balance | 4 | 4 | 4 | 4 |
Common Stock | Class B common stock | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | 1 | 1 | 1 | 1 |
Redemption of common units of FAH, LLC | 0 | 0 | 0 | 0 |
Ending balance | 1 | 1 | 1 | 1 |
Additional paid-in capital | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | 239,269 | 210,735 | 216,141 | 204,174 |
Equity-based compensation | 3,658 | 2,456 | 9,869 | 7,494 |
Shares issued for equity-based compensation awards | 48 | 174 | 3,726 | 219 |
Shares withheld related to net share settlement of equity-based compensation awards | 0 | 0 | 0 | (101) |
Other | 0 | 0 | 200 | 0 |
Redemption of common units of FAH, LLC | 2,852 | 0 | 19,532 | 2,115 |
Establishment of liabilities under tax receivable agreement and related changes to deferred tax assets | 32 | 0 | (3,609) | (536) |
Ending balance | 245,859 | 213,365 | 245,859 | 213,365 |
Accumulated other comprehensive (loss) income | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | 2,048 | (807) | 1,718 | 791 |
Foreign currency translation (loss) gain, net of tax | (934) | 1,051 | (604) | (547) |
Ending balance | 1,114 | 244 | 1,114 | 244 |
Retained earnings | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | 44,730 | 5,731 | 24,403 | 20,442 |
Net income (loss) | 11,901 | 9,796 | 32,228 | (4,915) |
Ending balance | 56,631 | 15,527 | 56,631 | 15,527 |
Non-controlling interests | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | 69,346 | 67,968 | 80,178 | 79,733 |
Distributions to Continuing Equity Owners | (2,371) | (821) | (9,284) | (3,496) |
Other | 0 | 0 | 861 | 0 |
Redemption of common units of FAH, LLC | (2,852) | 0 | (19,532) | (2,115) |
Foreign currency translation (loss) gain, net of tax | (332) | 596 | (135) | (349) |
Net income (loss) | 6,474 | 5,801 | 18,177 | (229) |
Ending balance | $ 70,265 | $ 73,544 | $ 70,265 | $ 73,544 |
Stockholders' Equity - Reconc_2
Stockholders' Equity - Reconciliation of Changes in Class A and Class B Common Shares Outstanding (Detail) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Class A common stock | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance, common shares outstanding (in shares) | 39,245,000 | 35,465,000 | 35,657,000 | 34,918,000 |
Shares issued for equity-based compensation awards (in shares) | 12,000 | 21,000 | 419,000 | 85,000 |
Redemption of common units of FAH, LLC (in shares) | 492,000 | 0 | 3,673,000 | 483,000 |
Common shares outstanding (in shares) | 39,749,000 | 35,486,000 | 39,749,000 | 35,486,000 |
Class B common stock | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance, common shares outstanding (in shares) | 11,201,000 | 14,040,000 | 14,040,000 | 14,515,000 |
Redemption of common units of FAH, LLC (in shares) | 345,000 | 0 | 3,184,000 | 475,000 |
Common shares outstanding (in shares) | 10,856,000 | 14,040,000 | 10,856,000 | 14,040,000 |
Class A and Class B common shares outstanding | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Common shares outstanding (in shares) | 50,605,000 | 49,526,000 | 50,605,000 | 49,526,000 |
Non-controlling interests - Add
Non-controlling interests - Additional Information (Detail) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2019 |
Noncontrolling Interest [Line Items] | |||||||||
Income tax expense (benefit) | $ (5,939) | $ (1,420) | $ (12,814) | $ 1,139 | |||||
Funko Acquisition Holdings, L.L.C. | |||||||||
Noncontrolling Interest [Line Items] | |||||||||
Equity-based compensation | 3,658 | 2,438 | 9,869 | 7,384 | |||||
Income tax expense (benefit) | $ (5,257) | $ (911) | $ (11,050) | $ 2,318 | |||||
FAH, LLC | |||||||||
Noncontrolling Interest [Line Items] | |||||||||
Ownership percentage | 76.80% | 69.50% | |||||||
Class A common shares outstanding | |||||||||
Noncontrolling Interest [Line Items] | |||||||||
Common stock, shares outstanding (in shares) | 39,749,000 | 35,657,000 | 39,749,000 | 35,486,000 | 39,749,000 | 35,486,000 | 39,245,000 | 35,465,000 | 34,918,000 |
Class A common shares outstanding | FAH, LLC | |||||||||
Noncontrolling Interest [Line Items] | |||||||||
Common stock, shares outstanding (in shares) | 39,700,000 | 35,700,000 | 39,700,000 | 39,700,000 |
Earnings (loss) per Share - Sch
Earnings (loss) per Share - Schedule of Reconciliations of Numerators and Denominators Used to Compute Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Numerator: | ||||
Net income (loss) | $ 18,375 | $ 15,597 | $ 50,405 | $ (5,144) |
Less: net income (loss) attributable to non-controlling interests | 6,474 | 5,801 | 18,177 | (229) |
Net income (loss) attributable to Funko, Inc. | $ 11,901 | $ 9,796 | $ 32,228 | $ (4,915) |
Denominator: | ||||
Weighted-average shares of Class A common stock outstanding — basic (in shares) | 39,448,391 | 35,483,266 | 37,856,435 | 35,154,617 |
Add: Dilutive common units of FAH, LLC that are convertible into Class A common stock (in shares) | 227,537 | 249,718 | 227,500 | 0 |
Add: Dilutive Funko, Inc. equity compensation awards (in shares) | 2,120,455 | 170,754 | 1,994,936 | 0 |
Weighted-average shares of Class A common stock outstanding — diluted (in shares) | 41,796,383 | 35,903,738 | 40,078,871 | 35,154,617 |
Earnings (loss) per share of Class A common stock — basic (in dollars per share) | $ 0.30 | $ 0.28 | $ 0.85 | $ (0.14) |
Earnings (loss) per share of Class A common stock — diluted (in dollars per share) | $ 0.28 | $ 0.27 | $ 0.80 | $ (0.14) |
Earnings (loss) per Share - Add
Earnings (loss) per Share - Additional Information (Detail) - Class A common shares outstanding - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Anti-dilutive shares excluded from weighted-average in computation of diluted earnings per share (in shares) | 13.9 | 19.5 | 15 | 20.3 |
Funko Acquisition Holdings, L.L.C. | ||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Anti-dilutive shares excluded from weighted-average in computation of diluted earnings per share (in shares) | 12.3 | 15.6 | 13.7 | 15.8 |