Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 27, 2023 | Jun. 30, 2022 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
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 | ||
Trading Symbol | FNKO | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 755.9 | ||
Documents Incorporated by Reference | Portions of the registrant’s definitive Proxy Statement relating to its 2023 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2022 are incorporated herein by reference in Part III of this Annual Report on Form 10-K. | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001704711 | ||
Class A Common Stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 47,226,835 | ||
Class B Common Stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 3,293,140 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Auditor Information [Abstract] | |
Auditor Firm ID | 42 |
Auditor Name | Ernst & Young LLP |
Auditor Location | Seattle, Washington |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | |||
Net sales | $ 1,322,706 | $ 1,029,293 | $ 652,537 |
Cost of sales (exclusive of depreciation and amortization shown separately below) | 888,685 | 648,302 | 403,392 |
Selling, general, and administrative expenses | 398,272 | 244,331 | 181,234 |
Depreciation and amortization | 47,669 | 41,195 | 44,368 |
Total operating expenses | 1,334,626 | 933,828 | 628,994 |
(Loss) income from operations | (11,920) | 95,465 | 23,543 |
Interest expense, net | 10,334 | 7,167 | 10,712 |
Loss on extinguishment of debt | 0 | 675 | 0 |
Other expense, net | 787 | 2,708 | 1,043 |
(Loss) income before income taxes | (23,041) | 84,915 | 11,788 |
Income tax (benefit) expense | (17,801) | 17,061 | 2,025 |
Net (loss) income | (5,240) | 67,854 | 9,763 |
Less: net income attributable to non-controlling interests | 2,795 | 23,954 | 5,802 |
Net (loss) income attributable to Funko, Inc. | $ (8,035) | $ 43,900 | $ 3,961 |
(Loss) earnings per share of Class A common stock: | |||
Basic (in dollars per share) | $ (0.18) | $ 1.14 | $ 0.11 |
Diluted (in dollars per share) | $ (0.18) | $ 1.08 | $ 0.11 |
Weighted average shares of Class A common stock outstanding: | |||
Basic (in shares) | 44,554,788 | 38,392,390 | 35,270,795 |
Diluted (in shares) | 44,554,788 | 40,610,618 | 35,770,013 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | |||
Net (loss) income | $ (5,240) | $ 67,854 | $ 9,763 |
Other comprehensive (loss) income: | |||
Foreign currency translation (loss) gain, net of tax effect of $1,169, $163 and $(274) for the years ended December 31, 2022, 2021 and 2020, respectively | (4,695) | (683) | 1,415 |
Reclassification of foreign currency translation gain into net (loss) income | 0 | (96) | 0 |
Comprehensive (loss) income | (9,935) | 67,075 | 11,178 |
Less: Comprehensive income attributable to non-controlling interests | 1,781 | 23,815 | 6,290 |
Comprehensive (loss) income attributable to Funko, Inc. | $ (11,716) | $ 43,260 | $ 4,888 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | |||
Foreign currency translation gain (loss), tax | $ 1,169 | $ 163 | $ (274) |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 19,200 | $ 83,557 |
Accounts receivable, net | 167,895 | 187,688 |
Inventory | 246,429 | 166,428 |
Prepaid expenses and other current assets | 39,648 | 14,925 |
Total current assets | 473,172 | 452,598 |
Property and equipment, net | 102,232 | 58,828 |
Operating lease right-of-use assets | 71,072 | 53,466 |
Goodwill | 131,380 | 126,651 |
Intangible assets, net | 181,284 | 189,619 |
Deferred tax asset | 123,893 | 74,412 |
Other assets | 8,112 | 11,929 |
Total assets | 1,091,145 | 967,503 |
Current liabilities: | ||
Line of credit | 70,000 | 0 |
Current portion long-term debt, net of unamortized discount | 22,041 | 17,395 |
Current portion of operating lease liabilities | 18,904 | 14,959 |
Accounts payable | 67,651 | 57,238 |
Income taxes payable | 871 | 15,994 |
Accrued royalties | 69,098 | 58,158 |
Accrued expenses and other current liabilities | 112,832 | 121,267 |
Total current liabilities | 361,397 | 285,011 |
Long-term debt, net of unamortized discount | 153,778 | 155,818 |
Operating lease liabilities, net of current portion | 82,356 | 50,459 |
Deferred tax liability | 382 | 648 |
Liabilities under tax receivable agreement, net of current portion | 99,620 | 75,523 |
Other long-term liabilities | 3,923 | 3,486 |
Commitments and contingencies (Note 14) | ||
Stockholders' equity: | ||
Additional paid-in-capital | 310,807 | 252,505 |
Accumulated other comprehensive (loss) income | (2,603) | 1,078 |
Retained earnings | 60,015 | 68,050 |
Total stockholders' equity attributable to Funko, Inc. | 368,224 | 321,638 |
Non-controlling interests | 21,465 | 74,920 |
Total stockholders' equity | 389,689 | 396,558 |
Total liabilities and stockholders' equity | 1,091,145 | 967,503 |
Class A Common Stock | ||
Stockholders' equity: | ||
Common stock, value | 5 | 4 |
Class B Common Stock | ||
Stockholders' equity: | ||
Common stock, value | $ 0 | $ 1 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Class A Common Stock | ||
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) | 47,192,000 | 40,088,000 |
Common stock, shares outstanding (in shares) | 47,192,000 | 40,088,000 |
Class B Common Stock | ||
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) | 3,293,000 | 10,691,000 |
Common stock, shares outstanding (in shares) | 3,293,000 | 10,691,000 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Non- Controlling Interests | Class A Common Stock | Class A Common Stock Common Stock | Class B Common Stock | Class B Common Stock Common Stock |
Beginning balance (in shares) at Dec. 31, 2019 | 34,918 | 14,515 | |||||||
Beginning balance at Dec. 31, 2019 | $ 305,144 | $ 204,174 | $ 791 | $ 20,442 | $ 79,733 | $ 3 | $ 1 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Distribution to continuing equity owners | (3,576) | (3,576) | |||||||
Equity-based compensation | 10,116 | 10,116 | |||||||
Activity under equity-based compensation plans (in shares) | 226 | ||||||||
Activity under equity-based compensation plans | 118 | 118 | |||||||
Shares issued for purchase consideration (in shares) | 127 | ||||||||
Shares issued for purchase consideration | 2,221 | 2,221 | |||||||
Cumulative translation adjustment, net of tax | 1,415 | 927 | 488 | ||||||
Establishment of liabilities under tax receivable agreement and related changes to deferred tax assets | (536) | (536) | |||||||
Redemption of common units of FAH, LLC (in shares) | 513 | (475) | |||||||
Redemption of common units of FAH, LLC | 1 | 2,269 | (2,269) | $ 1 | |||||
Net (loss) income | 9,763 | 3,961 | 5,802 | ||||||
Ending balance (in shares) at Dec. 31, 2020 | 35,657 | 14,040 | |||||||
Ending balance at Dec. 31, 2020 | 322,445 | 216,141 | 1,718 | 24,403 | 80,178 | $ 4 | $ 1 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Distribution to continuing equity owners | (9,277) | (9,277) | |||||||
Equity-based compensation | 12,994 | 12,994 | |||||||
Activity under equity-based compensation plans (in shares) | 554 | ||||||||
Activity under equity-based compensation plans | 5,956 | 5,956 | |||||||
Cumulative translation adjustment, net of tax | (683) | (544) | (139) | ||||||
Establishment of liabilities under tax receivable agreement and related changes to deferred tax assets | (3,532) | (3,532) | |||||||
Redemption of common units of FAH, LLC (in shares) | 3,877 | (3,349) | |||||||
Redemption of common units of FAH, LLC | 0 | 20,746 | (20,746) | ||||||
Net (loss) income | 67,854 | 43,900 | 23,954 | ||||||
Ending balance (in shares) at Dec. 31, 2021 | 40,088 | 40,088 | 10,691 | 10,691 | |||||
Ending balance at Dec. 31, 2021 | 396,558 | 252,505 | 1,078 | 68,050 | 74,920 | $ 4 | $ 1 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Distribution to continuing equity owners | (10,709) | (10,709) | |||||||
Equity-based compensation | 16,591 | 16,591 | |||||||
Activity under equity-based compensation plans (in shares) | 533 | ||||||||
Activity under equity-based compensation plans | 1,936 | 1,936 | |||||||
Acquisition of non-controlling interest of TokenWave, LLC (in shares) | 71 | ||||||||
Acquisition of non-controlling interest of TokenWave, LLC | (5,513) | (4,781) | (732) | ||||||
Cumulative translation adjustment, net of tax | (4,695) | (3,681) | (1,014) | ||||||
Establishment of liabilities under tax receivable agreement and related changes to deferred tax assets | 761 | 761 | |||||||
Recapitalization of common units of FAH, LLC (in shares) | (910) | ||||||||
Recapitalization of common units of FAH, LLC | 0 | 5,873 | (5,873) | ||||||
Redemption of common units of FAH, LLC (in shares) | 6,500 | (6,488) | |||||||
Redemption of common units of FAH, LLC | 0 | 37,922 | (37,922) | $ 1 | $ (1) | ||||
Net (loss) income | (5,240) | (8,035) | 2,795 | ||||||
Ending balance (in shares) at Dec. 31, 2022 | 47,192 | 47,192 | 3,293 | 3,293 | |||||
Ending balance at Dec. 31, 2022 | $ 389,689 | $ 310,807 | $ (2,603) | $ 60,015 | $ 21,465 | $ 5 | $ 0 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating Activities | |||
Net (loss) income | $ (5,240) | $ 67,854 | $ 9,763 |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | |||
Depreciation, amortization and other | 47,919 | 40,056 | 46,742 |
Equity-based compensation | 16,591 | 12,994 | 10,116 |
Amortization of debt issuance costs and debt discounts | 902 | 1,118 | 1,352 |
Loss on debt extinguishment | 0 | 675 | 0 |
Deferred tax expense (benefit) | (17,414) | (361) | 3,323 |
Other | 5,244 | 1,403 | 1,952 |
Changes in operating assets and liabilities, net of amounts acquired: | |||
Accounts receivable, net | 19,075 | (56,648) | 20,077 |
Inventory | (82,214) | (107,166) | 2,845 |
Prepaid expenses and other assets | (7,263) | 3,700 | 12,273 |
Accounts payable | 11,043 | 26,933 | (13,303) |
Income taxes payable | (15,018) | 15,585 | (209) |
Accrued royalties | 9,082 | 17,633 | 5,906 |
Accrued expenses and other liabilities | (22,841) | 63,586 | 7,902 |
Net cash (used in) provided by operating activities | (40,134) | 87,362 | 108,739 |
Investing Activities | |||
Purchase of property and equipment | (59,148) | (27,759) | (18,482) |
Acquisitions, net of cash | (19,479) | 199 | 0 |
Other | 562 | 179 | 0 |
Net cash used in investing activities | (78,065) | (27,381) | (18,482) |
Financing Activities | |||
Borrowings on line of credit | 120,000 | 0 | 28,267 |
Payments on line of credit | (50,000) | 0 | (55,103) |
Debt issuance costs | (405) | (1,055) | (569) |
Proceeds from long-term debt, net | 20,000 | 180,000 | 0 |
Payment of long-term debt | (18,000) | (198,375) | (26,438) |
Contingent consideration | 0 | (2,000) | (1,500) |
Distributions to continuing equity owners | (10,710) | (9,277) | (3,575) |
Payments under tax receivable agreement | (7,718) | (1,715) | (4,639) |
Proceeds from exercise of equity-based options | 1,472 | 3,794 | 219 |
Net cash provided by (used in) financing activities | 54,639 | (28,628) | (63,338) |
Effect of exchange rates on cash and cash equivalents | (797) | (51) | 107 |
Net change in cash and cash equivalents | (64,357) | 31,302 | 27,026 |
Cash and cash equivalents at beginning of period | 83,557 | 52,255 | 25,229 |
Cash and cash equivalents at end of period | 19,200 | 83,557 | 52,255 |
Supplemental Cash Flow Information | |||
Cash paid for interest | 8,856 | 5,679 | 9,089 |
Income tax payments | 22,363 | 1,462 | 4,167 |
Establishment of liabilities under tax receivable agreement | 30,034 | 20,691 | 1,000 |
Issuance of equity instruments for acquisitions | 1,487 | 0 | 0 |
Tenant allowance | $ 17,236 | $ 0 | $ 269 |
Basis of Presentation and Descr
Basis of Presentation and Description of Business | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Description of Business | Basis of Presentation and Description of Business The consolidated financial statements include Funko, Inc. and its subsidiaries (together with its subsidiaries, 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. FAH, LLC owns 100% of Funko Holdings LLC ("FHL") and FHL owns 100% of Funko, LLC, a limited liability company formed in the state of Washington, which is its operating entity. The Company is a leading pop culture consumer products company that designs, sources, and distributes licensed pop culture products. The Company is headquartered in Everett, Washington. Funko, Inc. operates and controls all of FAH, LLC’s operations and, through FAH, LLC and its subsidiaries, conducts FAH, LLC’s business, as the sole managing member. Accordingly, the Company consolidates the financial results of FAH, LLC and reports a non-controlling interest in its consolidated financial statements representing the FAH, LLC interests held by certain holders of common units in FAH, LLC (the "Continuing Equity Owners"). |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Certain of the significant accounting policies are discussed within the note to which they specifically relate. Certain prior-year amounts have been reclassified to conform to the current year presentation. Use of Estimates The preparation of the Company’s 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. Cash Equivalents Cash equivalents include amounts due from third-party financial institutions for credit and debit card transactions. These transactions typically settle in less than 5 days and were $1.3 million and $1.5 million at December 31, 2022 and 2021, respectively. Concentrations of Business and Credit Risk The Company grants credit to its customers on an unsecured basis. The Company monitors the financial health of its customers and will take actions to mitigate a customer's credit risk if a negative financial forecast is expected. As of December 31, 2022 and 2021, the balance of accounts receivable consisted of 11% and 18%, respectively, of amounts owed from the largest customer for the given period. The collection of these receivables has been within the terms of the associated customer agreement. For the years ended December 31, 2022, 2021 and 2020, there was no individual customer that generated net sales over 10%. For the year ended December 31, 2022, 13% of sales were related to the largest license agreement with no other license agreements accounting for more than 10% of sales. For the year ended December 31, 2021, 26% of sales were related to the Company’s two largest license agreements (13% each) with no other license agreements accounting for more than 10% of sales. For the year ended December 31, 2020, 12% and 11% of sales were related to the Company’s two largest license agreements with no other license agreements accounting for more than 10% of sales. The Company maintains its cash within bank deposit accounts at high quality, accredited financial institutions. These amounts at times may exceed federally insured limits. The Company has not experienced any credit losses in such accounts and does not believe it is exposed to significant credit risk on cash. Inventory Inventory consists primarily of figures, plush, apparel, homewares, accessories, games, vinyl records and other finished goods, and is accounted for using the first-in, first-out (“FIFO”) method. Inventory costs include direct product costs and freight costs. The Company maintains reserves for excess and obsolete inventories to reflect the inventory balance at the lower of cost or net realizable value. The Company estimates obsolescence based on assumptions regarding future demand. This valuation requires us to make judgments, based on currently available information, about the likely method of disposition, such as through sales to customers, or liquidation, and expected recoverable value of each disposition category. Reserves for excess and obsolete inventories were $16.9 million and $4.7 million as of December 31, 2022 and 2021, respectively. Property and Equipment Property and equipment is stated at historical cost, net of accumulated depreciation, and, if applicable, impairment charges. Depreciation of property and equipment is recorded using the straight-line method over the shorter of the estimated useful life of the asset or the lease term. The estimated useful lives of our property and equipment are generally as follows: Asset Lives (in years) Tooling and molds 2 Furniture, fixtures, and warehouse equipment 2 to 7 Computer equipment, software and other 3 to 5 Leasehold improvements Lesser of useful life or term of lease The Company monitors long-lived assets for impairment indicators on an ongoing basis in accordance with U.S. GAAP. If impairment indicators exist, the Company will perform the required impairment analysis by comparing the undiscounted cash flows expected to be generated from the long-lived assets to the related net book values. If the net book value exceeds the undiscounted cash flows, an impairment loss is measured and recognized. An impairment loss is measured as the difference between the net book value and the fair value of the long-lived assets. Fair value is estimated based upon a combination of market and cost approaches, as appropriate. Changes in economic or operating conditions impacting these estimates and assumptions could result in the impairment of the Company's long-lived assets. Other Assets Other assets primarily comprise capitalized implementation costs from cloud computing arrangements, safeguarding assets and security deposits. The Company capitalizes eligible costs associated with cloud computing arrangements over the term of the arrangement, plus reasonably certain renewals, and intends to recognize those costs on a straight-line basis in the same line item in the consolidated statement of operations as the expense for fees associated with the cloud computing arrangement once the capitalized project is ready for intended use. Cloud computing arrangement costs, included in prepaid expenses and other current assets were $2.1 million and $1.4 million and other non-current assets were $3.0 million and $6.9 million as of December 31, 2022 and December 31, 2021, respectively. No amortization expense associated with the cloud computing arrangements was recorded in the years ended December 31, 2022, 2021, or 2020. The Company incurred an abandonment charge of $32.5 million during the year ended December 31, 2022, as it was determined the enterprise resource planning cloud computing arrangement was no longer feasible for its intended use. Cash flows related to capitalized implementation costs are presented in cash flows used in operating activities. Revenue Recognition and Sales Allowance Revenue from the sale of Company products is recognized when control of the goods is transferred to the customer, which is upon shipment or upon receipt of finished goods by the customer, depending on the contract terms. The Company routinely enters into arrangements with its customers to provide sales incentives, support customer promotions, and provide allowances for returns and defective merchandise. These sales adjustments require management to make estimates. In making these estimates, management considers all available information including the overall business environment, historical trends and information from customers, such as agreed upon customer contract terms as well as historical experience from the customer. The costs of these programs reduce gross sales in the period the related sale is recognized. The Company adjusts its estimates at least quarterly or when facts and circumstances used in the estimate process change; historically these adjustments have not been material. We have made an accounting policy election to exclude from revenue all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the Company from a customer (for example, sales, use, value-added, and certain excise taxes). We have elected to account for shipping and handling activities that occur after control of the related good transfers as fulfillment activities instead of assessing such activities as performance obligations. Accordingly, shipping and handling activities that are performed by the Company, whether before or after a customer has obtained control of the products, are considered fulfillment costs to satisfy our performance obligation to transfer the products, and are recorded as incurred within cost of sales. We have elected the practical expedient to not recognize a significant financing component for contracts that include payments terms of one year or less. We have also elected the practical expedient permitting expensing of costs to obtain a contract when the expected amortization period is one year or less. Shipping Revenue and Costs Shipping and handling costs include inbound freight costs and the cost to ship product to the customer and are included in cost of sales. Shipping fees billed to customers are included in net sales. Royalties We enter into agreements for rights to licensed trademarks, copyrights and likenesses for use in our products. These licensing agreements require the payment of royalty fees to the licensor based on a percentage of revenue. Many licensing agreements also require minimum royalty commitments. When royalty fees are paid in advance, we record these payments as a prepaid asset. If we determine that it is probable that the expected revenue will not be realized, a reserve is recorded against the prepaid asset for the non-recoverable portion. As of December 31, 2022 , we recorded a prepaid asset of $13.0 million, net of a reserve of $0.8 million. As of December 31, 2021, we recorded a prepaid asset of $4.7 million, net of a reserve of $0.7 million. We record a royalty liability as revenues are earned based on the terms of the licensing agreement. In situations where a minimum commitment is not expected to be met based on expected revenues, we will accrue up to the minimum amount when it is reasonably certain that revenues generated will not meet the minimum commitment. Royalty and license expense is recorded within cost of sales on the consolidated statements of income. Royalty expenses for the years ended December 31, 2022 , 2021 and 2020, were $213.1 million, $161.6 million and $105.0 million, respectively. Advertising and Marketing Costs Advertising and marketing costs are expensed when the advertising or marketing event takes place. These costs include the fees to participate in trade shows and Comic-Cons, as well as costs to develop promotional video and other online content created for advertising purposes. These costs are included in selling, general and administrative expenses and for the years ended December 31, 2022 , 2021 and 2020 were $26.7 million, $17.1 million, and $7.7 million, respectively. The Company enters into cooperative advertising arrangements with customers. The fees related to these arrangements are recorded as a reduction of net sales in the accompanying consolidated statements of income because the Company has determined it does not receive an identifiable benefit and cannot reasonably estimate the fair value of these arrangements. Product Design and Development Costs Product design and development costs are recognized in selling, general and administrative expenses in the consolidated statements of operations as incurred. Product design and development costs for the years ended December 31, 2022, 2021 and 2020, were $10.2 million, $6.8 million, and $5.1 million, respectively. Foreign Currency We have international sales and operating expenses that are denominated in local functional currencies. The functional currency of our international subsidiaries is the same as the local currency. Assets and liabilities of these subsidiaries are translated into U.S. dollars at period-end foreign exchange rates, and revenues and expenses are translated at average rates prevailing throughout the period. Translation adjustments are included in other comprehensive income (loss) on the consolidated statements of comprehensive income (loss). Transaction gains and losses including intercompany transactions denominated in a currency other than the functional currency of Funko, Inc. are included in other expense, net on our consolidated statements of operations. In connection with the settlement and remeasurement of intercompany balances, we recorded a $0.1 million gain, a nominal loss, and loss of $0.4 million for the years ended December 31, 2022, 2021 and 2020, respectively. The income tax effects related to the unrealized foreign currency component of other comprehensive (loss) income are reclassified to earnings only when the net investment is sold, or when a liquidation of the respective net investment in the foreign entity is substantially completed. Recently Adopted Accounting Standards In March 2022, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 121, Accounting for Obligations to Safeguard Crypto-Assets an Entity Holds for its Platform Users. Funko, LLC through its wholly-owned subsidiary TokenWave, LLC, operates the Droppp.io platform, to facilitate the buying and selling of its NFTs. The Company has recorded a $11.3 million safeguarding asset and corresponding liability, recorded in other current assets and other current liabilities in the consolidated balance sheets, respectively, based on the fair value of the platform users' accounts at December 31, 2022. This asset (and liability) is remeasured at each reporting period. The Company has not incurred a loss related to its safeguarding of user accounts for the year ended December 31, 2022. There were no other recently adopted accounting standards during the year ended December 31, 2022 that had a material effect on the financial statements. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions 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 represented 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. On October 6, 2022, the Company acquired the remaining membership interests of TokenWave LLC, through a combination of cash and stock consideration, which was accounted for as an equity transaction. On June 8, 2022, the Company acquired 100% of the membership interests in Mondo Collectibles, LLC (f/k/a Mondo Tees Buyer, LLC) (“Mondo”), a high-end pop culture collectibles company that creates vinyl records, posters, soundtracks, toys, apparel, books, games and other collectibles. This transaction represents an opportunity to expand the Company’s product offerings into vinyl records, posters and other high-end collectibles. The Company accounted for the acquisition as a business combination. The preliminary purchase consideration consists of $14.0 million in cash. The Company is still in the process of completing the allocation of the purchase price to the fair value of the assets and liabilities acquired, and the difference between the estimated and final values could be material. Goodwill of $5.1 million is calculated as the excess of the purchase price paid over the net assets acquired. The Company does not expect the goodwill as recognized, to be deductible for tax purposes. An intangible asset of $7.4 million, with a useful life of 10 years was recognized for the Mondo trade name. The activity of Mondo as included in the Company’s consolidated statements of operations from the acquisition date to December 31, 2022 was not material. The following table shows the preliminary purchase price allocation for the Mondo consideration and any fair value adjustment made through December 31, 2022 (in thousands): Assets (Liabilities) Acquired (Assumed) Cash $ 37 Accounts receivable 924 Inventory 2,648 Other current assets 2,593 Intangible assets 7,370 Goodwill 5,117 Current liabilities (4,685) Consideration transferred $ 14,004 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill represents the excess of the purchase price over the net amount of identifiable assets acquired and liabilities assumed in a business combination measured at fair value. The Company evaluates goodwill for impairment annually on October 1 of each year and upon the occurrence of triggering events or substantive changes in circumstances that could indicate a potential impairment by assessing qualitative factors or performing a quantitative analysis in determining whether it is more likely than not that the fair value of the net assets is below their carrying amounts. The Company has determined that it has one reporting unit for which discrete financial information is available and results are regularly reviewed by management. No impairment charges relating to goodwill were recorded in the years ended December 31, 2022, 2021 and 2020. The following table presents the balances of goodwill as of 2022 and 2021 (in thousands): Goodwill Balance as of January 1, 2021 $ 125,061 Acquisition 1,662 Foreign currency remeasurement (72) Balance as of December 31, 2021 $ 126,651 Acquisition 5,117 Foreign currency remeasurement (388) Balance as of December 31, 2022 $ 131,380 The Company’s long-lived asset groups, which includes intangible assets, property and equipment and operating lease right-of-use assets net of operating lease liabilities, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset group might not be recoverable. Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset (or asset group), a significant change in the extent or manner in which an asset (or asset group) is used, or any other significant adverse change that would indicate that the carrying amount of an asset or group of assets may not be recoverable. Intangible assets acquired in a business combination are recognized separately from goodwill and are initially recognized at their fair value at the acquisition date. Intangible assets acquired include intellectual property (product design), customer, licensor and supplier relationships, trade names, and noncompetition agreements. These are definite-lived assets and are amortized on a straight-line basis over their estimated useful lives. Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recoverable. Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used, or any other significant adverse change that would indicate that the carrying amount of an asset or group of assets may not be recoverable. As of December 31, 2022 and 2021, there were also $0.1 million in indefinite-lived assets not subject to amortization but tested for impairment. There were $0.2 million impairment charges relating to indefinite-lived intangible assets recorded in the years ended December 31, 2022 and no impairment charges were recorded in the years ended December 31, 2021 and 2020. The following table provides the details of identified intangible assets, by major class, for the periods indicated (in thousands): December 31, 2022 December 31, 2021 Estimated Useful Life (Years) Gross Carrying Amount Accumulated Amortization Intangible Assets, Net Gross Carrying Amount Accumulated Amortization Intangible Assets, Net Intangible assets subject Intellectual property 3 - 20 $ 115,331 $ (41,897) $ 73,434 $ 115,331 $ (36,060) $ 79,271 Trade names 10 - 20 90,728 (30,622) 60,106 83,358 (25,985) 57,373 Customer relationships 3 - 20 71,278 (28,520) 42,758 71,699 (24,912) 46,787 Licensor relationships 10 - 20 10,991 (6,145) 4,846 11,276 (5,186) 6,090 Noncompetition agreements 3 290 (290) — 290 (278) 12 Total $ 288,618 $ (107,474) $ 181,144 $ 281,954 $ (92,421) $ 189,533 Amortization expense for the years ended December 31, 2022, 2021 and 2020 was $15.4 million, $16.2 million, and $16.0 million, respectively. The future five-year amortization of intangibles subject to amortization at December 31, 2022 was as follows (in thousands): Amortization 2023 $ 15,531 2024 15,511 2025 15,511 2026 15,511 2027 14,362 Thereafter 104,718 Total $ 181,144 |
Accounts Receivable, Net
Accounts Receivable, Net | 12 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
Accounts Receivable, Net | Accounts Receivable, Net Accounts receivable, net, primarily represent customer receivables, recorded at invoiced amount, net of a sales allowance and an allowance for doubtful accounts. An allowance for doubtful accounts is determined based on various factors, including specific identification of balances at risk for not being collected, historical experience, existing economic conditions and supportable forecasted changes. The Company evaluates its general portion of the allowance for doubtful accounts based on historical loss information and applies reserve percentages based on aging schedule. Days past due is calculated from contractual due date of the trade receivable contract. The composition of the trade receivables is consistent with that used in developing the historical credit-loss percentages and evaluated to reflect current conditions and supportable forecasted changes. The trade receivables are generally due in 30 to 90 days. In addition to the general portion of the allowance for doubtful accounts, certain doubtful accounts are evaluated for a specific reserve. These accounts generally include significantly past due or other factors known where a substantial portion or all of the balance is deemed to be uncollectible. Receivables are written-off when all reasonable collection efforts have been exhausted and it is probable the balance will not be collected. Accounts receivable, net consisted of the following (in thousands): December 31, 2022 2021 Accounts receivable $ 175,484 $ 190,844 Less: Allowance for doubtful accounts (7,589) (3,156) Accounts receivable, net $ 167,895 $ 187,688 Accounts receivable includes a $1.5 million and $0.8 million tenant improvement receivable from a lessor as of December 31, 2022 and 2021. In addition, accounts receivable as of December 31, 2022 and 2021 includes an income tax receivable of $7.8 million and $0.3 million. The remaining balance is customer receivables. Bad debt expense was $6.1 million, $0.9 million and $2.4 million for the years ended December 31, 2022, 2021 and 2020, respectively. Activity in our allowance for doubtful accounts was as follows (in thousands): December 31, 2022 2021 Allowance for doubtful accounts - beginning $ 3,156 $ 3,580 Charged to costs 6,127 895 Write offs (1,694) (1,319) Allowance for doubtful accounts - ending $ 7,589 $ 3,156 |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 12 Months Ended |
Dec. 31, 2022 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following (in thousands): December 31, 2022 2021 Prepaid deposits for inventory and molds $ 2,500 $ 1,111 Prepaid royalties, net 12,985 4,746 Crypto asset safeguarding asset 11,271 — Other prepaid expenses and current assets 12,892 9,068 Prepaid expenses and other current assets $ 39,648 $ 14,925 |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Property and Equipment, Net Property and equipment, net consisted of the following (in thousands): December 31, 2022 2021 Tooling and molds $ 145,021 $ 119,915 Leasehold improvements 68,160 44,112 Computer equipment, software and other 15,315 13,007 Furniture, fixtures and warehouse equipment 24,714 12,177 Construction in progress 7,348 7,194 $ 260,558 $ 196,405 Less: Accumulated depreciation (158,326) (137,577) Property and equipment, net $ 102,232 $ 58,828 Depreciation expense for the years ended December 31, 2022, 2021 and 2020 was $32.2 million, $25.0 million, and $28.3 million, respectively. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Accrued Liabilities And Other Current Liabilities [Abstract] | |
Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following (in thousands): December 31, 2022 2021 Accrued payroll and compensation $ 25,146 $ 23,439 Accrued shipping & freight costs 21,698 42,649 Accrued sales taxes 1,377 1,978 Current liabilities under tax receivable agreement 9,567 7,362 Crypto asset safeguarding liability 11,271 — Other current liabilities 43,773 45,839 Accrued liabilities and other current liabilities $ 112,832 $ 121,267 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company’s financial instruments, other than those discussed below, include cash, 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. These tiers include Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability. Cash equivalents. As of December 31, 2022 and 2021, cash equivalents included $0.5 million and $56.9 million, respectively, of highly liquid money market funds, which are classified as Level 1 within the fair value hierarchy. Crypto asset safeguarding liability and corresponding asset. The crypto asset safeguarding liability and corresponding safeguarding asset are measured and recorded at fair value on a recurring basis using prices available in the market the Company determines to be the principal market at the balance sheet date. As of December 31, 2022, the estimated fair value of the crypto asset safeguarding liability and corresponding asset was $11.3 million, classified at Level 1 within the fair value hierarchy. Debt. The estimated fair values of the Company’s debt instruments, which are classified as Level 3 financial instruments, at December 31, 2022 and 2021, was approximately $177.5 million and $175.5 million, respectively. The carrying values of the Company’s debt instruments at December 31, 2022 and 2021, were $175.8 million and $173.2 million, respectively. The estimated fair value of the Company’s debt instruments primarily reflects assumptions regarding credit spreads for similar floating-rate instruments with similar terms and maturities and the Company's standalone credit risk. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Debt Debt consists of the following (in thousands): December 31, 2022 2021 Revolving Credit Facility $ 70,000 $ — Term Loan Facility 157,500 175,500 Equipment Finance Loan 20,000 — Debt issuance costs (1,681) (2,287) Total term debt 175,819 173,213 Less: current portion 22,041 17,395 Long-term debt, net $ 153,778 $ 155,818 Maturities of long-term debt for each of the next five years and thereafter are as follows (in thousands): Term Facilities 2023 $ 22,581 2024 22,850 2025 23,134 2026 108,935 Total $ 177,500 New Credit Facilities On September 17, 2021, the Credit Agreement Parties entered into a new credit agreement (as amended from time to time, the “New Credit Agreement”) with JPMorgan Chase Bank, N.A., PNC Bank, National Association, KeyBank National Association, Citizens Bank, N.A., Bank of the West, HSBC Bank USA, National Association, Bank of America, N.A., U.S. Bank National Association, MUFG Union Bank, N.A., and Wells Fargo Bank, National Association (collectively, the “Initial Lenders”) and JPMorgan Chase Bank, N.A. as administrative agent, 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. On April 26, 2022, the Credit Agreement Parties entered into Amendment No. 1 to the New Credit Agreement (the “First Amendment”) with the Initial Lenders and JPMorgan Chase Bank, N.A. as administrative agent, which allows for additional Restricted Payments (as defined in the First Amendment) using specified funding sources. On July 29, 2022, the Credit Agreement Parties entered into Amendment No. 2 to the New Credit Agreement (the “Second Amendment”) with the Initial Lenders and Goldman Sachs Bank USA (collectively, the “Lenders”) and JPMorgan Chase Bank, N.A. as administrative agent, which increases the New Revolving Credit Facility to $215.0 million and converts the New Credit Facility interest rate index from Borrower (as defined in the New Credit Agreement) option LIBOR to SOFR. 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 commenced 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) SOFR, EURIBOR, HIBOR, CDOR, Daily Simple SONIA and/or the Central Bank Rate, as applicable, plus (x) 2.50% per annum and (y) solely in the case of Term SOFR based loans 0.10% per annum 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 Term SOFR, EURIBOR, HIBOR, CDOR and Daily Simple SONIA rates are subject to a 0% 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 SOFR, 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 December 31, 2022 and 2021, the Company was in compliance with all of the covenants in its New Credit Agreement. At December 31, 2022 and 2021, the Company had $157.5 million and $175.5 million of borrowings outstanding under the New Term Loan Facility, respectively, and $70.0 million and no outstanding borrowings under the New Revolving Credit Facility, respectively. Outstanding borrowings under the New Revolving Credit Facility at December 31, 2022 are due within 30 days of each draw. At December 31, 2022 and 2021, the Company had $145.0 million and $100.0 million available under the New Revolving Credit Facility and Former Revolving Credit Facility, respectively. There were no outstanding letters of credit as of December 31, 2022 and 2021. Subsequent to December 31, 2022, our projections indicated that we would be unable to maintain compliance with the financial covenants under the New Credit Agreement as of March 31, 2023 and, on February 28, 2023, we entered into a further amendment (the “Third Amendment”) to the New Credit Agreement to, among other things, (i) modify the financial covenants under the New Credit Agreement for the period beginning on the date of the Third Amendment through the fiscal quarter ending December 31, 2023 (the “Waiver Period”), (ii) reduce the size of the New Revolving Credit Facility from $215.0 million to $180.0 million as of the date of the Third Amendment and thereafter to $150.0 million on December 31, 2023, which reduction shall be permanent after the Waiver Period, (iii) restrict the ability to draw on the New Revolving Credit Facility during the Waiver Period in excess of the amount outstanding on the date of the Third Amendment, (iv) increase the margin payable under the Credit Facilities during the Waiver Period to (a) 4.00% per annum with respect to any Term Benchmark Loan or RFR Loan (each as defined in the New Credit Agreement), and (b) 3.00% per annum with respect to any Canadian Prime Loan or ABR Loan (as defined in the New Credit Agreement), (iv) allow that any calculation of Consolidated EBITDA (each as defined in the New Credit Agreement) that includes the fiscal quarters during the Waiver Period may include certain agreed upon amounts for certain addbacks, (v) further limit our ability to make certain restricted payments, including the ability to pay dividends or make other distributions on equity interests, or redeem, repurchase or retire equity interests, incur additional indebtedness, incur additional liens, enter into sale and leaseback transactions or issue additional equity interests or securities convertible into or exchange for equity interests (other than the issuance of common stock) during the Waiver Period, (vi) require a minimum cash requirement of at least $10.0 million and (vii) require a mandatory prepayment of the New Revolving Credit Facility during the Waiver Period with any cash proceeds in excess of $25.0 million. Following the Waiver Period, beginning in the fiscal quarter ended March 31, 2024, the Third Amendment resets the maximum Net Leverage Ratio and the minimum Fixed Charge Coverage Ratio (each as defined in the New Credit Agreement) that must be maintained by the Credit Agreement Parties to 2.50:1.00 and 1.25:1.00, respectively, which were the ratios in effect under the New Credit Agreement prior to the Third Amendment. As of February 28, 2023, the Company had $157.5 million and $141.0 million in borrowings outstanding under the New Term Loan Facility and New Revolving Credit Facility, respectively. Former Credit Facilities On October 22, 2018, FAH, LLC and certain of its material domestic subsidiaries from time to time (collectively the “Credit Agreement Parties”) 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 Credit Agreement Parties amended the Former Credit Agreement to increase the Former Revolving Credit Facility to $75.0 million. On September 23, 2019, the Credit Agreement Parties 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 “Former Facility 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 Credit Agreement Parties to request an additional $25.0 million increase to the Former Term Loan Facility. On May 5, 2020 the Credit Agreement Parties 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 Credit Agreement Parties 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 Former Facility 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 Credit Agreement Parties' 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 FAH, LLC and its material domestic subsidiaries, subject to customary exceptions. In September 2021, all of the outstanding aggregate principal balance and accrued interest of $180.1 million on the Credit Agreement Parties' Former Term Loan Facility was repaid, and the Credit Agreement Parties recorded a $0.7 million loss on debt extinguishment as a result of the write-off of unamortized deferred financing fees. Equipment Finance Loan On November 25, 2022, Funko, LLC, Funko Games, LLC, Funko Acquisition Holdings, L.L.C., Funko Holdings LLC and Loungefly, LLC, (collectively, "Equipment Finance Credit Parties"), entered into a $20.0 million equipment finance agreement ("Equipment Finance Loan") with Wells Fargo Equipment Finance, Inc. The loan is to be repaid in 48 monthly equal installments starting January 15, 2023 utilizing an annual fixed interest rate of 5.71%. The Equipment Finance Loan is secured by certain identified assets held within our Buckeye, Arizona warehouse. At December 31, 2022, the Company had $20.0 million outstanding under the Equipment Finance Loan. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | LeasesThe Company has entered into non-cancellable operating leases for office, warehouse, and distribution facilities, with original lease periods expiring through 2032. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheets; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company combines lease and non-lease components for new and reassessed leases. Some operating leases also contain the option to renew for five years 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. For certain leases the Company receives lease incentives, such as tenant improvement allowances, and records those as adjustments to operating lease right-of-use assets and operating leases liabilities on the consolidated balance sheets and amortize the lease incentives on a straight-line basis over the lease term as an adjustment to rent expense. Rent expense, included in selling, general and administrative expenses on the consolidated statements of operations, was $24.5 million, $16.5 million and $15.3 million for the years ended December 31, 2022, 2021 and 2020, respectively. During the years ended December 31, 2022 and 2021, operating cash outflows relating to operating lease liabilities was $16.0 million and $14.4 million, respectively and operating lease right-of-use assets obtained in exchange for new operating lease obligations was $54.1 million, net of lease incentives obtained of $17.2 million and $4.0 million, with no lease incentives obtained, respectively. As of December 31, 2022 and 2021, the Company’s operating leases had a weighted-average remaining term of 7.4 years and 7.0 years, respectively and weighted-average discount rates of 5.76% and 6.22%, respectively. Excluded from the measurement of operating lease liabilities and operating lease right-of-use assets were certain warehouse and distribution contracts that either qualify for the short-term lease recognition exception and/or do not give the Company the right to control the warehouse and/or distribution facilities underlying the contract. During the year ended December 31, 2020, the Company recognized an impairment loss of $1.4 million related to the right of use lease asset in Bath, England. The related lease liability was remeasured and reduced by $0.9 million. The lease agreement was terminated in December 2021. In January 2020, the Company entered into a non-cancellable operating sub-lease for office space expiring in 2024. Rental income recognized for the years ended December 31, 2022, 2021 and 2020 was $0.4 million, $0.3 million and $0.3 million, respectively, included as a reduction of selling, general and administrative expenses on the consolidated statements of operations. The future payments on the Company’s operating lease liabilities as of December 31, 2022 were as follows (in thousands): 2023 $ 19,510 2024 17,678 2025 16,742 2026 17,053 2027 12,572 Thereafter 41,644 Total lease payments 125,199 Less: imputed interest (23,939) Total $ 101,260 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes (Loss) income before income taxes consisted of (in thousands): Year Ended December 31, 2022 2021 2020 Domestic $ (39,077) $ 72,758 $ 4,149 Foreign 16,036 12,157 7,639 (Loss) income before income taxes $ (23,041) $ 84,915 $ 11,788 Income Tax Expense (Benefit) 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 (loss). The components of the Company’s income tax expense (benefit) consisted of the following (in thousands): Year Ended December 31, 2022 2021 2020 Current income taxes: Federal $ (4,766) $ 12,894 $ (3,030) State and local 1,629 1,825 59 Foreign 2,750 2,703 1,673 Current income taxes $ (387) $ 17,422 $ (1,298) Deferred income taxes: Federal $ (11,227) $ (185) $ 2,585 State and local (5,945) (18) 206 Foreign (242) (158) 532 Deferred income taxes (17,414) (361) 3,323 Income tax (benefit) expense $ (17,801) $ 17,061 $ 2,025 A reconciliation of income tax expense (benefit) from operations computed at the U.S. federal statutory income tax rate to the Company’s effective income tax rate are as follows: Year Ended December 31, 2022 2021 2020 Expected U.S. federal income taxes at statutory rate 21.0 % 21.0 % 21.0 % State and local income taxes, net of federal benefit 20.2 1.7 2.5 Foreign taxes (9.9) 2.5 18.7 Foreign tax credit 11.7 — (9.3) Non-deductible expenses (2.1) (1.1) 1.6 Change in valuation allowance 47.2 2.3 5.4 Non-controlling interest 2.6 (6.0) (12.7) Share-based compensation (19.8) 0.1 5.1 Return to provision 4.9 1.5 (15.1) Other, net 1.5 (1.9) — Income tax (benefit) expense 77.3 % 20.1 % 17.2 % The Company’s annual effective tax rate in 2022 is different than the statutory rate of 21% primarily due to a partial release of the valuation allowance, the limitation of future share based compensation pursuant to Section 162(m) of the Internal Revenue Code (the "Code"), and 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's annual effective tax rate for 2021 and 2020 was 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. Deferred Income Taxes The significant items comprising deferred tax assets and liabilities is as follows (in thousands): December 31, 2022 2021 Deferred tax assets: Investment in partnership $ 93,923 $ 64,335 Tax Receivable Agreement liability 26,860 19,105 Stock-based compensation 5,402 6,197 Foreign Tax Credit 834 — Other carryforwards 826 — Gross deferred tax assets 127,845 89,637 Valuation allowance (3,952) (14,829) Deferred tax assets, net of valuation allowance 123,893 74,808 Deferred tax liabilities: Property and equipment (382) (701) Other — (343) Gross deferred tax liabilities (382) (1,044) Net deferred tax assets $ 123,511 $ 73,764 The Company evaluates its ability to realize deferred tax assets on a quarterly basis and establishes a valuation allowance when it is more likely than not that all or a portion of a deferred tax asset may not be realized. As of December 31, 2022 and 2021, the Company recognized a deferred tax asset of $93.9 million and $64.3 million, respectively, associated with the basis difference in its investment in FAH, LLC upon acquiring these LLC interests. However, a portion of the total basis difference will only reverse upon the eventual sale of its interest in FAH, LLC, which we expect would result in a capital loss. As of December 31, 2022 and 2021, the Company has a valuation allowance in the amount of $4.0 million and $14.8 million, respectively, against the deferred tax asset. The Company released $11.0 million valuation allowance during the year ended December 31, 2022, related to a discrete benefit on the outside basis deferred tax asset. Uncertain Tax Positions The Company regularly evaluates the likelihood of realizing the benefit from income tax positions that we have taken in various federal, state and foreign filings by considering all relevant facts, circumstances and information available. If the Company determines it is more likely than not that the position will be sustained, a benefit will be recognized at the largest amount that we believe is cumulatively greater than 50% likely to be realized. The following table summarizes changes in the amount of the Company’s unrecognized tax benefits for uncertain tax positions for the three years ended December 31, 2022, 2021 and 2020 (in thousands): Year Ended December 31, 2022 2021 2020 Unrecognized tax benefits at January 1 $ — $ 490 $ 490 Decreases for positions taken in current year — (490) — Unrecognized tax benefits at December 31 $ — $ — $ 490 Of the $0.5 million of unrecognized tax benefits as of December 31, 2020, $0.2 million would impact the effective tax rate if recognized. Interest and penalties related to income tax matters are classified as a component of income tax expense (benefit). As of December 31, 2022, and 2021, we have not recorded any interest or penalties as the amounts were not material. Unrecognized tax benefits are recorded in other long-term liabilities on the consolidated balance sheets. Other Matters The Company files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. The Company is subject to U.S. federal, state, and local income tax examinations by tax authorities for years after 2018 and subject to examination for all foreign income tax returns for fiscal 2022 and 2021. There was an open tax examination with the California Franchise Tax Board for the tax year 2019 at December 31, 2022. There were no open tax examinations at December 31, 2021. Tax Receivable Agreement The Company is party to the Tax Receivable Agreement with FAH, LLC and each of the Continuing Equity Owners and certain transferees of the Continuing Equity Owners that have been joined as parties to the Tax Receivable Agreement (such parties, "TRA Parties") that provides for the payment by the Company to the Continuing Equity Owners under certain circumstances. See Note 13, Liabilities under Tax Receivable Agreement. |
Liabilities under Tax Receivabl
Liabilities under Tax Receivable Agreement | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Liabilities under Tax Receivable Agreement | Liabilities under Tax Receivable Agreement The Company is party to the Tax Receivable Agreement with FAH, LLC and each of the TRA Parties that provides for the payment by the Company to the TRA Parties 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 for Class A common stock or cash, and (ii) certain additional tax benefits attributable to payments made under the Tax Receivable Agreement. FAH, LLC will have in effect an election under Section 754 of the Internal Revenue Code effective for each taxable year in which a redemption or exchange (including deemed exchange) of common units for cash or stock occurs. These tax benefit payments are not conditioned upon one or more of the TRA Parties maintaining a continued ownership interest in FAH, LLC. In general, the TRA Parties’ rights under the Tax Receivable Agreement are assignable, including to transferees of common units in FAH, LLC (other than the Company as transferee pursuant to a redemption or exchange of common units in FAH, LLC). The Company expects to benefit from the remaining 15% of the tax benefits, if any, that the Company may realize. The Company is not obligated to make any payments under the Tax Receivable Agreement until the tax benefits associated with the transaction that gave rise to the payment are realized. Amounts payable under the Tax Receivable Agreement are contingent upon, among other things, (i) the generation of future taxable income over the term of the Tax Receivable Agreement and (ii) future changes in tax laws. If the Company does not generate sufficient taxable income in the aggregate over the term of the Tax Receivable Agreement to utilize the tax benefits, then it would not be required to make the related Tax Receivable Agreement payments. During years ended December 31, 2022 and 2021, the Company acquired an aggregate of 6.5 million and 3.9 million common units of FAH, LLC, respectively, in connection with the redemption of common units, which resulted in an increase in the tax basis of our investment in FAH, LLC subject to the provisions of the Tax Receivable Agreement. As a result of these exchanges, during the years ended December 31, 2022 and 2021, the Company recognized an increase to its net deferred tax assets in the amount of $30.6 million and $17.2 million, respectively, and corresponding Tax Receivable Agreement liabilities, representing 85% of the aggregate tax benefits we expect to realize from the tax basis increases related to the redemption of FAH, LLC common units, after concluding it was probable that such Tax Receivable Agreement payments would be paid in the future based on our estimate of future taxable income. There were no transactions subject to the Tax Receivable Agreement for which the Company did not recognize the related liability during the years ended December 31, 2022, 2021 and 2020, as we concluded that it was probable that the Company would have sufficient future taxable income to utilize all of the related tax benefits. The following table summarizes changes in the amount of the Company’s Tax Receivable Agreement liability for the three years ended December 31, 2022, 2021 and 2020 (in thousands): Year Ended December 31, 2022 2021 2020 Beginning Balance $ 82,884 $ 62,318 $ 65,816 Additional liabilities for exchanges 30,034 20,691 1,000 Adjustment to remeasurement of liabilities 3,987 1,590 87 Payments under tax receivable agreement (7,718) (1,715) (4,585) Ending balance $ 109,187 $ 82,884 $ 62,318 The future payments on the Company’s tax receivable agreement liabilities as of December 31, 2022 are expected to be (in thousands): 2023 $ 9,567 2024 6,532 2025 6,651 2026 6,806 2027 6,978 Thereafter 72,653 Total $ 109,187 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
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. The Company is expected to incur $112.3 million in minimum guaranteed royalty payments under licensing arrangements, including $33.8 million in 2023, $42.3 million in 2024 and $36.2 million in 2025. 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, and up to one year’s severance pay beyond termination date. Debt The Company has entered into a New Credit Facility which includes a term loan facility and a revolving credit facility. The Company has also entered into an Equipment Finance Loan. See Note 10, Debt. 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. See Note 11, Leases. Liabilities under Tax Receivable Agreement The Company is party to the Tax Receivable Agreement with FAH, LLC and each of the TRA Parties that provides for the payment by the Company to the TRA Parties under certain circumstances. See Note 13, 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 original complaint alleged 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. The lawsuit sought, among other things, compensatory damages and attorneys’ fees and costs. Two additional complaints making substantially similar allegations 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 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; shortly thereafter, the Western District of Washington action was voluntarily dismissed. Lead plaintiffs filed a 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, and the Court granted all defendants’ motions to dismiss the Ferreira action on February 25, 2021, allowing the lead plaintiffs leave to amend the complaint. Lead plaintiffs filed an amended complaint on March 29, 2021, and all defendants moved to dismiss. On October 25, 2021, the Court issued an order granting defendants’ motion in part and denying the motion in part. On May 3, 2022, the parties agreed in principle to settle the litigation. The Court granted preliminary approval of the settlement on July 17, 2022, and granted final approval on November 7, 2022. The cost of settlement was paid by the Company’s director and officer liability insurance. Several stockholder 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. On May 9, 2022, another complaint, asserting substantially similar claims, was filed in the U.S. District Court for the Central District of California, captioned Smith v. Mariotti , et al. The Company’s response to the complaints in both the consolidated action and Smith v. Mariotti are scheduled to be submitted o n March 10, 2023. On June 11, 2021, a purported stockholder filed a related derivative action, captioned Silverberg v. Mariotti, et al. , in the Court of Chancery of the State of Delaware. On July 5, 2022, two purported stockholders filed an additional derivative action in the Court of Chancery, captioned Fletcher, et al. v. Mariotti . That complaint also asserts claims arising out of same issues and events as the Silverberg litigation and the derivative actions pending in the Central District of California. 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. The Company moved twice, and the Court twice granted the Company's motions to dismiss, the second time with prejudice. Plaintiffs appealed, and on November 1, 2021, the Court of Appeals reversed the trial court’s dismissal decision in most respects. On May 4, 2022, the Washington State Supreme Court denied the Company’s petition, and the case was remanded to the Superior Court for further proceedings. The Company filed its answer on September 19, 2022 and discovery is currently ongoing. 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 Company must respond to the Compliant in the federal action, now captioned Berkelhammer v. Funko, Inc. et al. , by March 13, 2023. The cases 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. On January 18, 2022, a purported stockholder filed a putative class action lawsuit in the Court of Chancery of the State of Delaware, captioned Shumacher v. Mariotti, et al. , relating to the Company’s corporate “Up-C” structure and bringing direct claims for breach of fiduciary duties against certain current and former officers and directors. On March 31, 2022, the defendants moved to dismiss the action. In response to defendants’ motion to dismiss. Plaintiff filed an Amended Complaint on May 25, 2022. The amendment did not materially change the claims at issue, and the Defendants again moved to dismiss on July 29, 2022. On December 15, 2022, Plaintiff opposed the Defendants’ motion to dismiss, and also moved for attorneys’ fees. Briefing on the motion to dismiss was completed on February 8, 2023; briefing on Plaintiff’s fee application is expected to be completed on March 10, 2023. 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 | 12 Months Ended |
Dec. 31, 2022 | |
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 for which is regularly reviewed by its Chief Operating Decision Maker (“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 table presents summarized product information as a percent of sales: Year ended December 31, 2022 2021 2020 Core Collectibles 75.5 % 79.8 % 80.8 % Loungefly Branded Products 19.1 % 14.7 % 14.7 % Other 5.4 % 5.6 % 4.5 % The following tables present summarized geographical information (in thousands): Year ended December 31, 2022 2021 2020 Net sales: United States $ 966,748 $ 743,846 $ 488,823 Europe 262,602 214,732 111,997 Other International 93,356 70,715 51,717 Total net sales $ 1,322,706 $ 1,029,293 $ 652,537 December 31, 2022 2021 Long-lived assets: United States $ 131,549 $ 81,022 Vietnam and China 28,811 16,701 United Kingdom 21,056 26,500 Total long-lived assets $ 181,416 $ 124,223 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party TransactionsThe Company sells products to Forbidden Planet, a U.K. retailer through its wholly owned subsidiary Funko UK, Ltd. One of the investors in Forbidden Planet is an employee of Funko UK, Ltd. and an executive officer. For the years ended December 31, 2022, 2021 and 2020, the Company recorded approximately $1.6 million, $0.8 million and $2.0 million, respectively, in net sales from business with Forbidden Planet. At December 31, 2022 and 2021, accounts receivable from Forbidden Planet were $0.2 million and $0.4 million on the consolidated balance sheets, respectively.In February 2019, in connection with the Forrest-Pruzan Acquisition, the Company assumed two leases of office space with Roll and Move, LLC and Roll and Move II LLC, both of which are owned by certain former owners of Forrest-Pruzan Creative LLC, one of whom remains an employee of the Company. In 2022, the Company leased another space with the same landlord. For the years ended December 31, 2022, 2021 and 2020, the Company recorded $0.3 million, $0.3 million and $0.2 million, of rental expense related to the leases, which was recorded in selling, general and administrative expenses in the Company’s consolidated statements of operations. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Employee Benefit PlansWe currently maintain the Funko 401(k) Plan, a defined contribution retirement and savings plan, for the benefit of our employees, including our named executive officers, who satisfy certain eligibility requirements. Our named executive officers are eligible to participate in the 401(k) Plan on the same terms as other full-time employees. The Code allows eligible employees to defer a portion of their compensation, within prescribed limits, on a pre-tax basis through contributions to the 401(k) Plan. Currently, we match contributions made by participants in the 401(k) Plan up to 4% of the employee earnings, and these matching contributions are fully vested as of the date on which the contribution is made. We believe that providing a vehicle for tax-deferred retirement savings though our 401(k) Plan, and making fully vested matching contributions, adds to the overall desirability of our compensation package and further incentivizes our employees, including our named executive officers, in accordance with our compensation policies. The Company’s employer matching contributions were $3.0 million, $1.8 million and $1.5 million for the years ended December 31, 2022, 2021 and 2020, respectively. |
Stockholder's Equity
Stockholder's Equity | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Stockholder's Equity | Stockholders’ Equity The Amended and Restated Certificate of Incorporation authorizes the issuance of up to 200,000,000 shares of Class A common stock, up to 50,000,000 shares of Class B common stock and 20,000,000 shares of preferred stock, each having a par value of $0.0001 per share. Shares of Class A common stock have both economic and voting rights. Shares of Class B common stock have no economic rights, but do have voting rights. Holders of shares of Class A common stock and Class B common stock are entitled to one vote per share on all matters presented to stockholders. The Company’s board of directors has the discretion to determine the rights, preferences, privileges, restrictions and liquidation preferences of any series of preferred stock. FAH, LLC Recapitalization The FAH LLC Agreement, among other things, appointed the Company as FAH, LLC’s sole managing member and reclassified all outstanding membership interests in FAH, LLC as non-voting common units. As the sole managing member of FAH, LLC, the Company controls the management of FAH, LLC. As a result, the Company consolidates FAH, LLC’s financial results and reports a non-controlling interest related to the economic interest of FAH, LLC held by the Continuing Equity Owners. The Amended and Restated Certificate of Incorporation and the FAH LLC Agreement requires FAH, LLC and the Company to, at all times, maintain (i) a one-to-one ratio between the number of shares of Class A common stock issued by the Company and the number of common units owned by the Company and (ii) a one-to-one ratio between the number of shares of Class B common stock owned by the Continuing Equity Owners and the number of common units owned by the Continuing Equity Owners (other than common units issuable upon the exercise of options and common units that are subject to time-based vesting requirements (the “Excluded Common Units”)). The Company may issue shares of Class B common stock only to the extent necessary to maintain the one-to-one ratio between the number of common units of FAH, LLC held by the Continuing Equity Owners (other than the Excluded Common Units) and the number of shares of Class B common stock issued to the Continuing Equity Owners. Shares of Class B common stock are transferable only together with an equal number of common units of FAH, LLC. Only permitted transferees of common units held by the Continuing Equity Owners will be permitted transferees of Class B common stock. The Continuing Equity Owners may from time to time at each of their options (subject, in certain circumstances, to time-based vesting requirements) require FAH, LLC to redeem all or a portion of their common units in exchange for, at the Company’s election, newly-issued shares of our Class A common stock on a one-for-one basis or a cash payment equal to a volume weighted average market price of one share of Class A common stock for each common unit redeemed, in each case in accordance with the terms of the FAH LLC Agreement; provided that, at the Company’s election, the Company may effect a direct exchange of such Class A common stock or such cash, as applicable, for such common units. The Continuing Equity Owners may exercise such redemption right for as long as their common units remain outstanding. Simultaneously with the payment of cash or shares of Class A common stock, as applicable, in connection with a redemption or exchange of common units pursuant to the terms of the FAH LLC Agreement, a number of shares of our Class B common stock registered in the name of the redeeming or exchanging Continuing Equity Owner will be cancelled for no consideration on a one-for-one basis with the number of common units so redeemed or exchanged. On May 3, 2022, the Company entered into a common unit subscription agreement with FAH, LLC pursuant to which the Company purchased 4,251,701 newly issued common units in exchange for a capital contribution of approximately $74.0 million (the “Capital Contribution”). Following the Capital Contribution, (i) the common units of FAH, LLC were recapitalized through a reverse unit split in order to maintain a one-to-one ratio between the number of common units owned by the Company and the number of outstanding shares of Class A common stock in accordance with the FAH LLC Agreement, and (ii) approximately 0.9 million outstanding shares of Class B common stock were cancelled. Equity-Based Compensation Funko, Inc. 2017 Incentive Award Plan . On October 23, 2017, the Company adopted the Funko, Inc. 2017 Incentive Award Plan (the “2017 Plan”). The Company reserved a total of 5,518,518 shares of Class A common stock for issuance pursuant to the 2017 Plan. Funko, Inc. 2019 Incentive Award Plan . Effective April 18, 2019, the Company adopted the Funko, Inc. 2019 Incentive Award Plan (the "2019 Plan"). We have also reserved for issuance an aggregate number of shares under the 2019 Plan equal to the sum of (i) 3,000,000 shares of our Class A common stock and (ii) an annual increase on the first day of each calendar year beginning on January 1, 2020 and ending on and including January 1, 2029, equal to the lesser of (A) 2% of the shares of Class A Common Stock outstanding as of the last day of the immediately preceding fiscal year on a fully-diluted basis and (B) such lesser number of shares of Class A common stock as determined by our board of directors. Total shares reserved for issuance under the 2019 plan was 4,111,526 as of December 31, 2022. The number of unissued common shares reserved for future grants under the 2017 Plan and 2019 Plan was 104,984 and 1,024,800, respectively as of December 31, 2022. A summary of stock option activity for the year ended December 31, 2022 is as follows: Funko, Inc. Weighted Aggregate Remaining (in thousands) (in thousands) (years) Outstanding at December 31, 2021 3,242 $ 14.54 $ 15,973 7.61 Granted 991 18.25 — Exercised (120) 12.33 1,042 Forfeited (253) 16.99 905 Outstanding at December 31, 2022 3,860 15.40 3,455 7.21 Options exercisable at December 31, 2022 2,314 $ 14.23 $ 2,239 6.20 Stock options awarded to employees under the 2017 Plan and 2019 Plan are generally granted with an exercise price equal to the closing market price of the Company’s common stock at the date of grant, vest over four years, and have ten years contractual terms. A summary of restricted stock unit activity for the year ended December 31, 2022 is as follows: Funko, Inc. Weighted Average Remaining (in thousands) (years) Unvested at December 31, 2021 2,141 $ 14.18 2.22 Granted 1,143 18.77 Vested (413) 9.39 Forfeited (152) 14.54 Unvested at December 31, 2022 2,719 $ 16.82 2.86 A summary of performance stock unit activity for the year ended December 31, 2022 is as follows: Funko, Inc. Weighted Average Remaining (in thousands) (years) Unvested at December 31, 2021 — $ — 0.00 Granted 67 17.09 Unvested at December 31, 2022 67 $ 17.09 2.00 Performance stock units achievement is at the discretion of the Compensation Committee of the Board of Directors. The number of units subject to future vesting is based on annual Company achieved factors, such as Net Sales and Adjusted EBITDA Margin. Unvested units are expected to vest at the determination date of December 31, 2024. Achievement is estimated at 100% of the units granted as of December 31, 2022. Options to purchase common units in FAH, LLC. In connection with the IPO, existing options to purchase Class A units in FAH, LLC were converted into 555,867 options to purchase common units in FAH, LLC. A summary of FAH, LLC stock option activity for the year ended December 31, 2022 is as follows: FAH, LLC Stock Weighted Aggregate Remaining (in thousands) (in thousands) (years) Outstanding at December 31, 2021 228 $ 0.05 $ 4,278 1.41 Exercised (67) 0.05 1,166 Cancelled (15) — Outstanding at December 31, 2022 146 0.05 1,590 0.41 Options exercisable at December 31, 2022 146 $ 0.05 $ 1,590 0.41 The following table presents information on stock option exercises (in thousands): Year ended December 31, 2022 2021 2020 Cash received for exercise price $ 1,472 $ 3,794 $ 219 Intrinsic value 1,042 2,543 957 Equity-based compensation expense . The Company measures and recognizes expense for its equity-based compensation granted to employees and directors based on the fair value of the awards on the grant date. The fair value of restricted stock units is based on the market price of Class A common stock on the date of grant. The fair value of option awards is estimated at the grant date using the Black-Scholes option pricing model that requires management to apply judgment and make estimates, including: • Volatility —this is estimated based primarily on historical volatilities of a representative group of publicly traded consumer product companies with similar characteristics • Risk-free interest rate —this is the U.S. Treasury rate as of the grant date having a term equal to the expected term of the award • Expected term —represents the estimated period of time until an award is exercised and was calculated based on the simplified method • Dividend yield —the Company does not plan to pay dividends in the foreseeable future For each of the options granted under the 2017 Plan and 2019 Plan, the following were the weighted-average of the option pricing model inputs: Year ended December 31, 2022 2021 2020 Expected term (years) 6.05 6.06 6.05 Expected volatility 63.6 % 48.6 % 45.6 % Risk-free interest rate 2.2 % 1.0 % 0.5 % Dividend yield — % — % — % The weighted-average fair value of stock options granted for the years ended December 31, 2022, 2021 and 2020 was $10.85, $9.26, and $1.90 per share, respectively. Equity-based compensation expense is recognized on a straight-line basis over the vesting period of the award. The Company records equity-based compensation to selling, general and administrative expense on the consolidated statements of operations. Equity-based compensation for the years ended December 31, 2022, 2021 and 2020 was $16.6 million, $13.0 million and $10.1 million, respectively. |
Non-controlling Interests
Non-controlling Interests | 12 Months Ended |
Dec. 31, 2022 | |
Noncontrolling Interest [Abstract] | |
Non-controlling Interests | Non-controlling Interests The Company is the sole managing member of FAH, LLC and as a result consolidates the financial results of FAH, LLC. The Company 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 or increase 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 (loss) income and comprehensive (loss) income are attributed between Funko, Inc. and noncontrolling interest holders based on each party’s relative economic ownership interest in FAH, LLC. As of December 31, 2022, 2021 and 2020, Funko, Inc. owned 47.2 million, 40.1 million and 35.7 million of FAH, LLC common units, respectively, representing a 91.6%, 77.3% and 69.5% economic ownership interest in FAH, LLC, respectively. Net (loss) income and comprehensive (loss) income of FAH, LLC excludes certain activity attributable to Funko, Inc., including $16.6 million, $13.0 million and $10.0 million of equity-based compensation expense for share-based compensation awards issued by Funko, Inc. for the years ended December 31, 2022, 2021 and 2020, respectively, and $20.5 million of income tax benefit, $14.3 million income tax expense and $0.4 million of income tax benefit for corporate, federal, state and local taxes attributable to Funko, Inc. for the years ended December 31, 2022, 2021 and 2020, respectively. |
Earnings per Share
Earnings per Share | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share Basic and Diluted (Loss) Earnings per Share Basic (loss) earnings per share of Class A common stock is computed by dividing net (loss) income available to Funko, Inc. by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted (loss) earnings per share of Class A common stock is computed by dividing net (loss) income available 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 (loss) earnings per share of Class A common stock: Year Ended December 31, 2022 Year Ended December 31, 2021 Year Ended December 31, 2020 (in thousands, except per share data) Numerator: Net (loss) income $ (5,240) $ 67,854 $ 9,763 Less: net income attributable to non-controlling interests 2,795 23,954 5,802 Net (loss) income attributable to Funko, Inc. — basic $ (8,035) $ 43,900 $ 3,961 Add : Reallocation of net income attributable to non- controlling interests from the assumed exchange of common units of FAH, LLC for Class A common stock — — — Net (loss) income attributable to Funko, Inc. — diluted $ (8,035) $ 43,900 $ 3,961 Denominator: Weighted-average shares of Class A common stock outstanding 44,554,788 38,392,390 35,270,795 Add: Dilutive common units of FAH, LLC that are convertible into Class A common stock — 227,500 304,327 Add: Dilutive Funko, Inc. equity compensation awards — 1,990,728 194,891 Weighted-average shares of Class A common stock outstanding 44,554,788 40,610,618 35,770,013 (Loss) earnings per share of Class A common stock — basic $ (0.18) $ 1.14 $ 0.11 (Loss) earnings per share of Class A common stock — diluted $ (0.18) $ 1.08 $ 0.11 For the years ended December 31, 2022, 2021 and December 31, 2020 an aggregate of 11.6 million, 14.7 million and 19.7 million of potentially dilutive securities, respectively, were excluded from the weighted-average in the computation of diluted (loss) earnings per share of Class A common stock because the effect would have been anti-dilutive. For the years ended December 31, 2022, 2021 and 2020 anti-dilutive securities included 7.0 million, 13.2 million and 15.8 million of common units of FAH, LLC that are convertible into Class A common stock, but were excluded from the computations of diluted (loss) earnings 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 (loss) earnings per share of Class B common stock under the two-class method has not been presented. |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent EventSubsequent to the year ended December 31, 2022, the Company approved an inventory reduction plan to improve U.S. warehouse operational efficiency. The products were determined to be stated at their net realizable value at December 31, 2022, but were subsequently approved for destruction, and the Company expects an incremental charge for the write-down of products identified to be recorded to cost of sales in the first half of 2023 to be in the range of $30.0 million to $36.0 million. |
Schedule I_ Condensed Financial
Schedule I: Condensed Financial Information of Registrant | 12 Months Ended |
Dec. 31, 2022 | |
Condensed Financial Information Disclosure [Abstract] | |
Schedule I: Condensed Financial Information of Registrant | Schedule I: Condensed Financial Information of Registrant FUNKO, INC. CONDENSED STATEMENTS OF OPERATIONS (PARENT COMPANY ONLY) Year Ended December 31, 2022 2021 2020 (in thousands) Intercompany revenue $ 564 $ 82 $ 307 Selling, general, and administrative expenses 16,941 13,163 10,269 Total operating expenses 16,941 13,163 10,269 Loss from operations (16,377) (13,081) (9,962) Interest (expense) income, net (168) 3 (36) Tax receivable agreement liability adjustment (3,987) (1,590) (87) Equity in net (loss) income of subsidiaries (8,040) 72,916 13,674 (Loss) income before income taxes (28,572) 58,248 3,589 Income tax (benefit) expense (20,537) 14,348 (372) Net (loss) income $ (8,035) $ 43,900 $ 3,961 See accompanying notes to condensed financial information Schedule I: Condensed Financial Information of Registrant (continued) FUNKO, INC. CONDENSED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (PARENT COMPANY ONLY) Year Ended December 31, 2022 2021 2020 (in thousands) Net (loss) income $ (8,035) $ 43,900 $ 3,961 Other comprehensive (loss) income: Foreign currency translation (loss) gain, net of tax effect of $1,169, $163 and $(274) for the years ended December 31, 2022, 2021 and 2020, respectively (3,681) (544) 927 Reclassification of foreign currency translation gain into net (loss) income $ — $ (96) $ — Comprehensive (loss) income attributable to $ (11,716) $ 43,260 $ 4,888 See accompanying notes to condensed financial information Schedule I: Condensed Financial Information of Registrant (continued) FUNKO, INC. CONDENSED BALANCE SHEETS (PARENT COMPANY ONLY) December 31, 2022 2021 (in thousands, except per share data) Assets Current assets: Cash and cash equivalents $ 911 $ 61,943 Income tax receivable 7,530 — Total current assets 8,441 61,943 Intercompany receivable 119,219 116,746 Deferred tax asset 123,893 74,464 Investment in subsidiaries 225,858 166,054 Total assets $ 477,411 $ 419,207 Liabilities and Stockholders' Equity Current liabilities: Tax payable $ — $ 14,684 Current portion of liabilities under tax receivable agreement 9,567 7,362 Total current liabilities 9,567 22,046 Liabilities under tax receivable agreement, net of current portion 99,620 75,523 Commitments and contingencies Stockholders' equity: Class A common stock, par value $0.0001 per share, 200,000 shares authorized; 47,192 shares and 40,088 shares issued and outstanding as of December 31, 2022 and 2021, respectively 5 4 Class B common stock, par value $0.0001 per share, 50,000 shares authorized; 3,293 shares and 10,691 shares issued and outstanding as of December 31, 2022 and 2021, respectively — 1 Additional paid-in-capital 310,807 252,505 Accumulated other comprehensive (loss) income (2,603) 1,078 Retained earnings 60,015 68,050 Total stockholders' equity 368,224 321,638 Total liabilities and stockholders' equity $ 477,411 $ 419,207 See accompanying notes to condensed financial information Schedule I: Condensed Financial Information of Registrant (continued) FUNKO, INC. CONDENSED STATEMENTS OF CASH FLOWS (PARENT COMPANY ONLY) Year Ended December 31, 2022 2021 2020 (in thousands) Operating Activities Net (loss) income $ (8,035) $ 43,900 $ 3,961 Adjustments to reconcile net (loss) income to net cash (used in) provided by Equity in net loss (income) of subsidiaries 8,040 (72,916) (13,674) Equity-based compensation 16,591 12,994 10,007 Deferred tax expense (benefit) (17,173) (203) 2,792 Tax receivable liability adjustment 3,987 1,590 87 Changes in operating assets and liabilities: Income tax receivable (7,530) 294 3,521 Due from related parties, net (984) 1,351 26,007 Prepaid expenses and other assets (11,019) — — Income taxes payable (14,684) 14,684 — Accrued expenses and other liabilities 11,190 (571) 304 Net cash (used in) provided by operating activities (19,617) 1,123 33,005 Investing Activities Capital contribution to FAH, LLC (73,980) — — Net cash (used in) investing activities (73,980) — — Financing Activities Tax distribution received from FAH, LLC 38,811 24,173 5,825 Tax receivable agreement payments (7,718) (1,715) (4,639) Proceeds from exercise of equity-based options 1,472 3,794 41 Net cash provided by financing activities 32,565 26,252 1,227 Net change in cash and cash equivalents (61,032) 27,375 34,232 Cash and cash equivalents at beginning of period 61,943 34,568 336 Cash and cash equivalents at end of period $ 911 $ 61,943 $ 34,568 Supplemental Cash Flow Information Income tax payments $ 18,999 $ 23 $ 2,116 Establishment of liabilities under tax receivable agreement 30,034 20,691 1,000 Issuance of equity instruments for acquisitions 1,487 — — See accompanying notes to condensed financial information Schedule I: Condensed Financial Information of Registrant (continued) FUNKO, INC. NOTES TO CONDENSED FINANCIAL INFORMATION (PARENT COMPANY ONLY) December 31, 2022 1. Organization Funko, Inc. (the “Parent Company”) was formed on April 21, 2017 as a Delaware corporation and is a holding company with no direct operations. The Parent Company's assets consist primarily of cash and cash equivalents, its equity interest in FAH, LLC, and certain deferred tax assets. The Parent Company's cash inflows are primarily from distributions and other transfers from FAH, LLC. The amounts available to the Parent Company to fulfill cash commitments are subject to certain restrictions in FAH, LLC’s Credit Facilities. See Note 10 to the Funko, Inc. consolidated financial statements, appearing elsewhere in this Form 10-K. 2. Basis of Presentation These condensed Parent Company financial statements should be read in conjunction with the consolidated financial statements of Funko, Inc. and its subsidiaries and the accompanying notes thereto, included in this Form 10-K. For purposes of this condensed financial information, the Parent Company's interest in FAH, LLC is recorded based upon its proportionate share of FAH, LLC's net assets (similar to presenting them on the equity method). The Parent Company is the sole managing member of FAH, LLC, and pursuant to the Amended and Restated LLC Agreement of FAH, LLC (the “LLC Agreement”), receives compensation in the form of reimbursements for all costs associated with being a public company. Intercompany revenue consists of these reimbursement payments and is recognized when the corresponding expense to which it relates is recognized. Certain intercompany balances presented in these condensed Parent Company financial statements are eliminated in the consolidated financial statements. For the years ended December 31, 2022, 2021, and 2020, the full amounts of intercompany revenue and equity in net (loss) income of subsidiaries in the Parent Company Statements of Operations were eliminated in consolidation. An intercompany receivable was owed to the Parent Company by FAH, LLC of $119.2 million and $116.7 million as of December 31, 2022 and 2021, respectively. On May 3, 2022, the Parent Company entered into a common unit subscription agreement with FAH, LLC pursuant to which the Parent Company purchased 4,251,701 newly issued common units in exchange for a capital contribution of approximately $74.0 million (the “Capital Contribution”). Following the Capital Contribution, (i) the common units of FAH, LLC were recapitalized through a reverse unit split in order to maintain a one-to-one ratio between the number of common units owned by the Parent Company and the number of outstanding shares of Class A common stock in accordance with the FAH LLC Agreement, and (ii) approximately 0.9 million outstanding shares of Class B common stock were cancelled. Related party amounts that were not eliminated in the consolidated financial statements include the Parent Company's liabilities under the tax receivable agreement, which totaled $109.2 million and $82.9 million as of December 31, 2022 and 2021, respectively. 3. Commitments and Contingencies The Parent Company is party to a tax receivable agreement that provides for the payment by the Parent Company to the TRA Parties of 85% of the amount of any tax benefits that the Parent Company actually realizes, or in some cases is deemed to realize, as a result of certain transactions. See Note 13 to the Funko, Inc. consolidated financial statements, appearing elsewhere in this Form 10-K, for more information regarding the Parent Company's tax receivable agreement. As described in Note 13 to the Funko, Inc. consolidated financial statements, appearing elsewhere in the Form 10-K, amounts payable under the tax receivable agreement are contingent upon, among other things, (i) generation of future taxable income of Funko, Inc. over the term of the tax receivable agreement and (ii) future changes in tax laws. As of December 31, 2022 and 2021, liabilities under the tax receivable agreement totaled $109.2 million and $82.9 million, respectively. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of the Company’s 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. |
Cash Equivalents | Cash EquivalentsCash equivalents include amounts due from third-party financial institutions for credit and debit card transactions. |
Concentrations of Business and Credit Risk | Concentrations of Business and Credit Risk The Company grants credit to its customers on an unsecured basis. The Company monitors the financial health of its customers and will take actions to mitigate a customer's credit risk if a negative financial forecast is expected. As of December 31, 2022 and 2021, the balance of accounts receivable consisted of 11% and 18%, respectively, of amounts owed from the largest customer for the given period. The collection of these receivables has been within the terms of the associated customer agreement. For the years ended December 31, 2022, 2021 and 2020, there was no individual customer that generated net sales over 10%. For the year ended December 31, 2022, 13% of sales were related to the largest license agreement with no other license agreements accounting for more than 10% of sales. For the year ended December 31, 2021, 26% of sales were related to the Company’s two largest license agreements (13% each) with no other license agreements accounting for more than 10% of sales. For the year ended December 31, 2020, 12% and 11% of sales were related to the Company’s two largest license agreements with no other license agreements accounting for more than 10% of sales. |
Inventory | InventoryInventory consists primarily of figures, plush, apparel, homewares, accessories, games, vinyl records and other finished goods, and is accounted for using the first-in, first-out (“FIFO”) method. Inventory costs include direct product costs and freight costs. The Company maintains reserves for excess and obsolete inventories to reflect the inventory balance at the lower of cost or net realizable value. The Company estimates obsolescence based on assumptions regarding future demand. This valuation requires us to make judgments, based on currently available information, about the likely method of disposition, such as through sales to customers, or liquidation, and expected recoverable value of each disposition category. |
Property and Equipment | Property and Equipment Property and equipment is stated at historical cost, net of accumulated depreciation, and, if applicable, impairment charges. Depreciation of property and equipment is recorded using the straight-line method over the shorter of the estimated useful life of the asset or the lease term. The estimated useful lives of our property and equipment are generally as follows: Asset Lives (in years) Tooling and molds 2 Furniture, fixtures, and warehouse equipment 2 to 7 Computer equipment, software and other 3 to 5 Leasehold improvements Lesser of useful life or term of lease The Company monitors long-lived assets for impairment indicators on an ongoing basis in accordance with U.S. GAAP. If impairment indicators exist, the Company will perform the required impairment analysis by comparing the undiscounted cash flows expected to be generated from the long-lived assets to the related net book values. If the net book value exceeds the undiscounted cash flows, an impairment loss is measured and recognized. An impairment loss is measured as the difference between the net book value and the fair value of the long-lived assets. Fair value is estimated based upon a combination of market and cost approaches, as appropriate. Changes in economic or operating conditions impacting these estimates and assumptions could result in the impairment of the Company's long-lived assets. |
Revenue Recognition and Sales Allowance | Revenue Recognition and Sales Allowance Revenue from the sale of Company products is recognized when control of the goods is transferred to the customer, which is upon shipment or upon receipt of finished goods by the customer, depending on the contract terms. The Company routinely enters into arrangements with its customers to provide sales incentives, support customer promotions, and provide allowances for returns and defective merchandise. These sales adjustments require management to make estimates. In making these estimates, management considers all available information including the overall business environment, historical trends and information from customers, such as agreed upon customer contract terms as well as historical experience from the customer. The costs of these programs reduce gross sales in the period the related sale is recognized. The Company adjusts its estimates at least quarterly or when facts and circumstances used in the estimate process change; historically these adjustments have not been material. We have made an accounting policy election to exclude from revenue all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the Company from a customer (for example, sales, use, value-added, and certain excise taxes). We have elected to account for shipping and handling activities that occur after control of the related good transfers as fulfillment activities instead of assessing such activities as performance obligations. Accordingly, shipping and handling activities that are performed by the Company, whether before or after a customer has obtained control of the products, are considered fulfillment costs to satisfy our performance obligation to transfer the products, and are recorded as incurred within cost of sales. We have elected the practical expedient to not recognize a significant financing component for contracts that include payments terms of one year or less. We have also elected the practical expedient permitting expensing of costs to obtain a contract when the expected amortization period is one year or less. Shipping Revenue and Costs Shipping and handling costs include inbound freight costs and the cost to ship product to the customer and are included in cost of sales. Shipping fees billed to customers are included in net sales. Royalties |
Advertising and Marketing Costs | Advertising and Marketing CostsAdvertising and marketing costs are expensed when the advertising or marketing event takes place. These costs include the fees to participate in trade shows and Comic-Cons, as well as costs to develop promotional video and other online content created for advertising purposes. The Company enters into cooperative advertising arrangements with customers. The fees related to these arrangements are recorded as a reduction of net sales in the accompanying consolidated statements of income because the Company has determined it does not receive an identifiable benefit and cannot reasonably estimate the fair value of these arrangements. |
Product Design and Development Costs | Product Design and Development CostsProduct design and development costs are recognized in selling, general and administrative expenses in the consolidated statements of operations as incurred. |
Foreign Currency | Foreign CurrencyWe have international sales and operating expenses that are denominated in local functional currencies. The functional currency of our international subsidiaries is the same as the local currency. Assets and liabilities of these subsidiaries are translated into U.S. dollars at period-end foreign exchange rates, and revenues and expenses are translated at average rates prevailing throughout the period. Translation adjustments are included in other comprehensive income (loss) on the consolidated statements of comprehensive income (loss). Transaction gains and losses including intercompany transactions denominated in a currency other than the functional currency of Funko, Inc. are included in other expense, net on our consolidated statements of operations. |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In March 2022, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 121, Accounting for Obligations to Safeguard Crypto-Assets an Entity Holds for its Platform Users. Funko, LLC through its wholly-owned subsidiary TokenWave, LLC, operates the Droppp.io platform, to facilitate the buying and selling of its NFTs. The Company has recorded a $11.3 million safeguarding asset and corresponding liability, recorded in other current assets and other current liabilities in the consolidated balance sheets, respectively, based on the fair value of the platform users' accounts at December 31, 2022. This asset (and liability) is remeasured at each reporting period. The Company has not incurred a loss related to its safeguarding of user accounts for the year ended December 31, 2022. There were no other recently adopted accounting standards during the year ended December 31, 2022 that had a material effect on the financial statements. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Estimated Useful Lives of Property and Equipment | The estimated useful lives of our property and equipment are generally as follows: Asset Lives (in years) Tooling and molds 2 Furniture, fixtures, and warehouse equipment 2 to 7 Computer equipment, software and other 3 to 5 Leasehold improvements Lesser of useful life or term of lease |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Purchase Price Allocations | The following table shows the preliminary purchase price allocation for the Mondo consideration and any fair value adjustment made through December 31, 2022 (in thousands): Assets (Liabilities) Acquired (Assumed) Cash $ 37 Accounts receivable 924 Inventory 2,648 Other current assets 2,593 Intangible assets 7,370 Goodwill 5,117 Current liabilities (4,685) Consideration transferred $ 14,004 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table presents the balances of goodwill as of 2022 and 2021 (in thousands): Goodwill Balance as of January 1, 2021 $ 125,061 Acquisition 1,662 Foreign currency remeasurement (72) Balance as of December 31, 2021 $ 126,651 Acquisition 5,117 Foreign currency remeasurement (388) Balance as of December 31, 2022 $ 131,380 |
Schedule of Identified Intangible Assets by Major Class | The following table provides the details of identified intangible assets, by major class, for the periods indicated (in thousands): December 31, 2022 December 31, 2021 Estimated Useful Life (Years) Gross Carrying Amount Accumulated Amortization Intangible Assets, Net Gross Carrying Amount Accumulated Amortization Intangible Assets, Net Intangible assets subject Intellectual property 3 - 20 $ 115,331 $ (41,897) $ 73,434 $ 115,331 $ (36,060) $ 79,271 Trade names 10 - 20 90,728 (30,622) 60,106 83,358 (25,985) 57,373 Customer relationships 3 - 20 71,278 (28,520) 42,758 71,699 (24,912) 46,787 Licensor relationships 10 - 20 10,991 (6,145) 4,846 11,276 (5,186) 6,090 Noncompetition agreements 3 290 (290) — 290 (278) 12 Total $ 288,618 $ (107,474) $ 181,144 $ 281,954 $ (92,421) $ 189,533 |
Schedule of Future Five Year Amortization of Intangible Assets | The future five-year amortization of intangibles subject to amortization at December 31, 2022 was as follows (in thousands): Amortization 2023 $ 15,531 2024 15,511 2025 15,511 2026 15,511 2027 14,362 Thereafter 104,718 Total $ 181,144 |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable, Net | Accounts receivable, net consisted of the following (in thousands): December 31, 2022 2021 Accounts receivable $ 175,484 $ 190,844 Less: Allowance for doubtful accounts (7,589) (3,156) Accounts receivable, net $ 167,895 $ 187,688 |
Schedule of Activity in Allowance for Doubtful Accounts | Activity in our allowance for doubtful accounts was as follows (in thousands): December 31, 2022 2021 Allowance for doubtful accounts - beginning $ 3,156 $ 3,580 Charged to costs 6,127 895 Write offs (1,694) (1,319) Allowance for doubtful accounts - ending $ 7,589 $ 3,156 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consisted of the following (in thousands): December 31, 2022 2021 Prepaid deposits for inventory and molds $ 2,500 $ 1,111 Prepaid royalties, net 12,985 4,746 Crypto asset safeguarding asset 11,271 — Other prepaid expenses and current assets 12,892 9,068 Prepaid expenses and other current assets $ 39,648 $ 14,925 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net | Property and equipment, net consisted of the following (in thousands): December 31, 2022 2021 Tooling and molds $ 145,021 $ 119,915 Leasehold improvements 68,160 44,112 Computer equipment, software and other 15,315 13,007 Furniture, fixtures and warehouse equipment 24,714 12,177 Construction in progress 7,348 7,194 $ 260,558 $ 196,405 Less: Accumulated depreciation (158,326) (137,577) Property and equipment, net $ 102,232 $ 58,828 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accrued Liabilities And Other Current Liabilities [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following (in thousands): December 31, 2022 2021 Accrued payroll and compensation $ 25,146 $ 23,439 Accrued shipping & freight costs 21,698 42,649 Accrued sales taxes 1,377 1,978 Current liabilities under tax receivable agreement 9,567 7,362 Crypto asset safeguarding liability 11,271 — Other current liabilities 43,773 45,839 Accrued liabilities and other current liabilities $ 112,832 $ 121,267 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Debt consists of the following (in thousands): December 31, 2022 2021 Revolving Credit Facility $ 70,000 $ — Term Loan Facility 157,500 175,500 Equipment Finance Loan 20,000 — Debt issuance costs (1,681) (2,287) Total term debt 175,819 173,213 Less: current portion 22,041 17,395 Long-term debt, net $ 153,778 $ 155,818 |
Schedule of Maturities of Long-term Debt | Maturities of long-term debt for each of the next five years and thereafter are as follows (in thousands): Term Facilities 2023 $ 22,581 2024 22,850 2025 23,134 2026 108,935 Total $ 177,500 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Schedule of Lessee, Operating Lease, Liability, Maturity | The future payments on the Company’s operating lease liabilities as of December 31, 2022 were as follows (in thousands): 2023 $ 19,510 2024 17,678 2025 16,742 2026 17,053 2027 12,572 Thereafter 41,644 Total lease payments 125,199 Less: imputed interest (23,939) Total $ 101,260 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Before Income Taxes | (Loss) income before income taxes consisted of (in thousands): Year Ended December 31, 2022 2021 2020 Domestic $ (39,077) $ 72,758 $ 4,149 Foreign 16,036 12,157 7,639 (Loss) income before income taxes $ (23,041) $ 84,915 $ 11,788 |
Schedule of Income Tax Expense | The components of the Company’s income tax expense (benefit) consisted of the following (in thousands): Year Ended December 31, 2022 2021 2020 Current income taxes: Federal $ (4,766) $ 12,894 $ (3,030) State and local 1,629 1,825 59 Foreign 2,750 2,703 1,673 Current income taxes $ (387) $ 17,422 $ (1,298) Deferred income taxes: Federal $ (11,227) $ (185) $ 2,585 State and local (5,945) (18) 206 Foreign (242) (158) 532 Deferred income taxes (17,414) (361) 3,323 Income tax (benefit) expense $ (17,801) $ 17,061 $ 2,025 |
Schedule of Reconciliation of Income Tax Expense | A reconciliation of income tax expense (benefit) from operations computed at the U.S. federal statutory income tax rate to the Company’s effective income tax rate are as follows: Year Ended December 31, 2022 2021 2020 Expected U.S. federal income taxes at statutory rate 21.0 % 21.0 % 21.0 % State and local income taxes, net of federal benefit 20.2 1.7 2.5 Foreign taxes (9.9) 2.5 18.7 Foreign tax credit 11.7 — (9.3) Non-deductible expenses (2.1) (1.1) 1.6 Change in valuation allowance 47.2 2.3 5.4 Non-controlling interest 2.6 (6.0) (12.7) Share-based compensation (19.8) 0.1 5.1 Return to provision 4.9 1.5 (15.1) Other, net 1.5 (1.9) — Income tax (benefit) expense 77.3 % 20.1 % 17.2 % |
Schedule of Deferred Tax Assets and Liabilities | The significant items comprising deferred tax assets and liabilities is as follows (in thousands): December 31, 2022 2021 Deferred tax assets: Investment in partnership $ 93,923 $ 64,335 Tax Receivable Agreement liability 26,860 19,105 Stock-based compensation 5,402 6,197 Foreign Tax Credit 834 — Other carryforwards 826 — Gross deferred tax assets 127,845 89,637 Valuation allowance (3,952) (14,829) Deferred tax assets, net of valuation allowance 123,893 74,808 Deferred tax liabilities: Property and equipment (382) (701) Other — (343) Gross deferred tax liabilities (382) (1,044) Net deferred tax assets $ 123,511 $ 73,764 |
Schedule of Income Tax Contingencies | The following table summarizes changes in the amount of the Company’s unrecognized tax benefits for uncertain tax positions for the three years ended December 31, 2022, 2021 and 2020 (in thousands): Year Ended December 31, 2022 2021 2020 Unrecognized tax benefits at January 1 $ — $ 490 $ 490 Decreases for positions taken in current year — (490) — Unrecognized tax benefits at December 31 $ — $ — $ 490 |
Liabilities under Tax Receiva_2
Liabilities under Tax Receivable Agreement (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Tax Receivable Agreement Liability | The following table summarizes changes in the amount of the Company’s Tax Receivable Agreement liability for the three years ended December 31, 2022, 2021 and 2020 (in thousands): Year Ended December 31, 2022 2021 2020 Beginning Balance $ 82,884 $ 62,318 $ 65,816 Additional liabilities for exchanges 30,034 20,691 1,000 Adjustment to remeasurement of liabilities 3,987 1,590 87 Payments under tax receivable agreement (7,718) (1,715) (4,585) Ending balance $ 109,187 $ 82,884 $ 62,318 The future payments on the Company’s tax receivable agreement liabilities as of December 31, 2022 are expected to be (in thousands): 2023 $ 9,567 2024 6,532 2025 6,651 2026 6,806 2027 6,978 Thereafter 72,653 Total $ 109,187 |
Segments (Tables)
Segments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Product Categories as Percent of Sales | The following table presents summarized product information as a percent of sales: Year ended December 31, 2022 2021 2020 Core Collectibles 75.5 % 79.8 % 80.8 % Loungefly Branded Products 19.1 % 14.7 % 14.7 % Other 5.4 % 5.6 % 4.5 % |
Schedule of Net Sales and Long-Lived Assets | The following tables present summarized geographical information (in thousands): Year ended December 31, 2022 2021 2020 Net sales: United States $ 966,748 $ 743,846 $ 488,823 Europe 262,602 214,732 111,997 Other International 93,356 70,715 51,717 Total net sales $ 1,322,706 $ 1,029,293 $ 652,537 December 31, 2022 2021 Long-lived assets: United States $ 131,549 $ 81,022 Vietnam and China 28,811 16,701 United Kingdom 21,056 26,500 Total long-lived assets $ 181,416 $ 124,223 |
Stockholder's Equity (Tables)
Stockholder's Equity (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Schedule of Stock Option Activity | A summary of stock option activity for the year ended December 31, 2022 is as follows: Funko, Inc. Weighted Aggregate Remaining (in thousands) (in thousands) (years) Outstanding at December 31, 2021 3,242 $ 14.54 $ 15,973 7.61 Granted 991 18.25 — Exercised (120) 12.33 1,042 Forfeited (253) 16.99 905 Outstanding at December 31, 2022 3,860 15.40 3,455 7.21 Options exercisable at December 31, 2022 2,314 $ 14.23 $ 2,239 6.20 A summary of FAH, LLC stock option activity for the year ended December 31, 2022 is as follows: FAH, LLC Stock Weighted Aggregate Remaining (in thousands) (in thousands) (years) Outstanding at December 31, 2021 228 $ 0.05 $ 4,278 1.41 Exercised (67) 0.05 1,166 Cancelled (15) — Outstanding at December 31, 2022 146 0.05 1,590 0.41 Options exercisable at December 31, 2022 146 $ 0.05 $ 1,590 0.41 |
Schedule of Restricted Stock Unit Activity | A summary of restricted stock unit activity for the year ended December 31, 2022 is as follows: Funko, Inc. Weighted Average Remaining (in thousands) (years) Unvested at December 31, 2021 2,141 $ 14.18 2.22 Granted 1,143 18.77 Vested (413) 9.39 Forfeited (152) 14.54 Unvested at December 31, 2022 2,719 $ 16.82 2.86 |
Schedule of Performance Stock Unit Activity | A summary of performance stock unit activity for the year ended December 31, 2022 is as follows: Funko, Inc. Weighted Average Remaining (in thousands) (years) Unvested at December 31, 2021 — $ — 0.00 Granted 67 17.09 Unvested at December 31, 2022 67 $ 17.09 2.00 |
Schedule of Unvested Common Unit Activity | The following table presents information on stock option exercises (in thousands): Year ended December 31, 2022 2021 2020 Cash received for exercise price $ 1,472 $ 3,794 $ 219 Intrinsic value 1,042 2,543 957 |
Schedule of Option Pricing Model Inputs | For each of the options granted under the 2017 Plan and 2019 Plan, the following were the weighted-average of the option pricing model inputs: Year ended December 31, 2022 2021 2020 Expected term (years) 6.05 6.06 6.05 Expected volatility 63.6 % 48.6 % 45.6 % Risk-free interest rate 2.2 % 1.0 % 0.5 % Dividend yield — % — % — % |
Earnings per Share (Tables)
Earnings per Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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 (loss) earnings per share of Class A common stock: Year Ended December 31, 2022 Year Ended December 31, 2021 Year Ended December 31, 2020 (in thousands, except per share data) Numerator: Net (loss) income $ (5,240) $ 67,854 $ 9,763 Less: net income attributable to non-controlling interests 2,795 23,954 5,802 Net (loss) income attributable to Funko, Inc. — basic $ (8,035) $ 43,900 $ 3,961 Add : Reallocation of net income attributable to non- controlling interests from the assumed exchange of common units of FAH, LLC for Class A common stock — — — Net (loss) income attributable to Funko, Inc. — diluted $ (8,035) $ 43,900 $ 3,961 Denominator: Weighted-average shares of Class A common stock outstanding 44,554,788 38,392,390 35,270,795 Add: Dilutive common units of FAH, LLC that are convertible into Class A common stock — 227,500 304,327 Add: Dilutive Funko, Inc. equity compensation awards — 1,990,728 194,891 Weighted-average shares of Class A common stock outstanding 44,554,788 40,610,618 35,770,013 (Loss) earnings per share of Class A common stock — basic $ (0.18) $ 1.14 $ 0.11 (Loss) earnings per share of Class A common stock — diluted $ (0.18) $ 1.08 $ 0.11 |
Schedule I_ Condensed Financi_2
Schedule I: Condensed Financial Information of Registrant (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Condensed Financial Information Disclosure [Abstract] | |
Schedule of Condensed Financial Statements | Year Ended December 31, 2022 2021 2020 (in thousands) Intercompany revenue $ 564 $ 82 $ 307 Selling, general, and administrative expenses 16,941 13,163 10,269 Total operating expenses 16,941 13,163 10,269 Loss from operations (16,377) (13,081) (9,962) Interest (expense) income, net (168) 3 (36) Tax receivable agreement liability adjustment (3,987) (1,590) (87) Equity in net (loss) income of subsidiaries (8,040) 72,916 13,674 (Loss) income before income taxes (28,572) 58,248 3,589 Income tax (benefit) expense (20,537) 14,348 (372) Net (loss) income $ (8,035) $ 43,900 $ 3,961 Year Ended December 31, 2022 2021 2020 (in thousands) Net (loss) income $ (8,035) $ 43,900 $ 3,961 Other comprehensive (loss) income: Foreign currency translation (loss) gain, net of tax effect of $1,169, $163 and $(274) for the years ended December 31, 2022, 2021 and 2020, respectively (3,681) (544) 927 Reclassification of foreign currency translation gain into net (loss) income $ — $ (96) $ — Comprehensive (loss) income attributable to $ (11,716) $ 43,260 $ 4,888 December 31, 2022 2021 (in thousands, except per share data) Assets Current assets: Cash and cash equivalents $ 911 $ 61,943 Income tax receivable 7,530 — Total current assets 8,441 61,943 Intercompany receivable 119,219 116,746 Deferred tax asset 123,893 74,464 Investment in subsidiaries 225,858 166,054 Total assets $ 477,411 $ 419,207 Liabilities and Stockholders' Equity Current liabilities: Tax payable $ — $ 14,684 Current portion of liabilities under tax receivable agreement 9,567 7,362 Total current liabilities 9,567 22,046 Liabilities under tax receivable agreement, net of current portion 99,620 75,523 Commitments and contingencies Stockholders' equity: Class A common stock, par value $0.0001 per share, 200,000 shares authorized; 47,192 shares and 40,088 shares issued and outstanding as of December 31, 2022 and 2021, respectively 5 4 Class B common stock, par value $0.0001 per share, 50,000 shares authorized; 3,293 shares and 10,691 shares issued and outstanding as of December 31, 2022 and 2021, respectively — 1 Additional paid-in-capital 310,807 252,505 Accumulated other comprehensive (loss) income (2,603) 1,078 Retained earnings 60,015 68,050 Total stockholders' equity 368,224 321,638 Total liabilities and stockholders' equity $ 477,411 $ 419,207 Year Ended December 31, 2022 2021 2020 (in thousands) Operating Activities Net (loss) income $ (8,035) $ 43,900 $ 3,961 Adjustments to reconcile net (loss) income to net cash (used in) provided by Equity in net loss (income) of subsidiaries 8,040 (72,916) (13,674) Equity-based compensation 16,591 12,994 10,007 Deferred tax expense (benefit) (17,173) (203) 2,792 Tax receivable liability adjustment 3,987 1,590 87 Changes in operating assets and liabilities: Income tax receivable (7,530) 294 3,521 Due from related parties, net (984) 1,351 26,007 Prepaid expenses and other assets (11,019) — — Income taxes payable (14,684) 14,684 — Accrued expenses and other liabilities 11,190 (571) 304 Net cash (used in) provided by operating activities (19,617) 1,123 33,005 Investing Activities Capital contribution to FAH, LLC (73,980) — — Net cash (used in) investing activities (73,980) — — Financing Activities Tax distribution received from FAH, LLC 38,811 24,173 5,825 Tax receivable agreement payments (7,718) (1,715) (4,639) Proceeds from exercise of equity-based options 1,472 3,794 41 Net cash provided by financing activities 32,565 26,252 1,227 Net change in cash and cash equivalents (61,032) 27,375 34,232 Cash and cash equivalents at beginning of period 61,943 34,568 336 Cash and cash equivalents at end of period $ 911 $ 61,943 $ 34,568 Supplemental Cash Flow Information Income tax payments $ 18,999 $ 23 $ 2,116 Establishment of liabilities under tax receivable agreement 30,034 20,691 1,000 Issuance of equity instruments for acquisitions 1,487 — — |
Basis of Presentation and Des_2
Basis of Presentation and Description of Business - Additional Information (Detail) - Funko Holdings LLC - Funko Acquisition Holdings, L.L.C. | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | |
Ownership percentage | 100% |
Funko LLC | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | |
Ownership percentage | 100% |
Significant Accounting Polici_4
Significant Accounting Policies - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Significant Accounting Policies [Line Items] | |||
Cash equivalents, receivables settlement term | 5 days | ||
Cash receivables | $ 1,300,000 | $ 1,500,000 | |
Inventory valuation reserves | 16,900,000 | 4,700,000 | |
Cloud computing arrangement costs, amortization | 0 | 0 | $ 0 |
Abandonment charge | 32,500,000 | ||
Prepaid royalties, net | 12,985,000 | 4,746,000 | |
Prepaid royalties, reserve for unrealized revenue | 800,000 | 700,000 | |
Royalty expense | 213,100,000 | 161,600,000 | 105,000,000 |
Selling, general, and administrative expenses | 398,272,000 | 244,331,000 | 181,234,000 |
Foreign currency transaction gain (loss) | 100,000 | 0 | (400,000) |
Crypto asset safeguarding asset | 11,271,000 | 0 | |
Safeguarding liability | 11,271,000 | 0 | |
Prepaid Expenses and Other Current Assets | |||
Significant Accounting Policies [Line Items] | |||
Cloud computing arrangement costs | 2,100,000 | 1,400,000 | |
Other Noncurrent Assets | |||
Significant Accounting Policies [Line Items] | |||
Cloud computing arrangement costs | 3,000,000 | 6,900,000 | |
Advertising and Marketing Costs | |||
Significant Accounting Policies [Line Items] | |||
Selling, general, and administrative expenses | 26,700,000 | 17,100,000 | 7,700,000 |
Product Design and Development Cost | |||
Significant Accounting Policies [Line Items] | |||
Selling, general, and administrative expenses | $ 10,200,000 | $ 6,800,000 | $ 5,100,000 |
Revenue, Rights Granted | Revenue from Rights Concentration Risk | Largest License Agreement | |||
Significant Accounting Policies [Line Items] | |||
Concentration risk percentage | 13% | ||
Revenue, Rights Granted | Revenue from Rights Concentration Risk | Two License Agreements | |||
Significant Accounting Policies [Line Items] | |||
Concentration risk percentage | 26% | ||
Revenue, Rights Granted | Revenue from Rights Concentration Risk | License Agreements Two | |||
Significant Accounting Policies [Line Items] | |||
Concentration risk percentage | 13% | ||
Revenue, Rights Granted | Revenue from Rights Concentration Risk | License Agreements One | |||
Significant Accounting Policies [Line Items] | |||
Concentration risk percentage | 13% | ||
Revenue, Rights Granted | Revenue from Rights Concentration Risk | Largest License Agreement One | |||
Significant Accounting Policies [Line Items] | |||
Concentration risk percentage | 12% | ||
Revenue, Rights Granted | Revenue from Rights Concentration Risk | Largest License Agreement Two | |||
Significant Accounting Policies [Line Items] | |||
Concentration risk percentage | 11% | ||
Largest Customer | Accounts Receivable | Credit Concentration Risk | |||
Significant Accounting Policies [Line Items] | |||
Concentration risk percentage | 11% | 18% |
Significant Accounting Polici_5
Significant Accounting Policies - Schedule of Estimated Useful Lives of Property and Equipment (Detail) | 12 Months Ended |
Dec. 31, 2022 | |
Tooling and molds | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful lives (in years) | 2 years |
Minimum | Furniture, fixtures, and warehouse equipment | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful lives (in years) | 2 years |
Minimum | Computer equipment, software and other | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful lives (in years) | 3 years |
Maximum | Furniture, fixtures, and warehouse equipment | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful lives (in years) | 7 years |
Maximum | Computer equipment, software and other | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful lives (in years) | 5 years |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Detail) - USD ($) $ in Thousands | Jun. 08, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 131,380 | $ 126,651 | $ 125,061 | |
Mondo Tees Buyer LLC | ||||
Business Acquisition [Line Items] | ||||
Percentage of voting interests acquired | 100% | |||
Cash consideration paid | $ 14,000 | |||
Goodwill | 5,117 | |||
Intangible assets | $ 7,370 | |||
Estimated useful life | 10 years |
Acquisitions - Summary of Asset
Acquisitions - Summary of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Jun. 08, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 131,380 | $ 126,651 | $ 125,061 | |
Mondo Tees Buyer LLC | ||||
Business Acquisition [Line Items] | ||||
Cash | $ 37 | |||
Accounts receivable | 924 | |||
Inventory | 2,648 | |||
Other current assets | 2,593 | |||
Intangible assets | 7,370 | |||
Goodwill | 5,117 | |||
Current liabilities | (4,685) | |||
Consideration transferred | $ 14,004 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Additional Information (Details) | 12 Months Ended | ||
Dec. 31, 2022 USD ($) unit | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Number of reporting units | unit | 1 | ||
Impairment charges | $ 0 | $ 0 | $ 0 |
Impairment of intangible assets indefinite-lived | $ 100,000 | $ 100,000 | |
Impairment of intangible asset indefinite lived excluding goodwill statement of income or comprehensive income extensible enumeration not disclosed flag | indefinite-lived assets | indefinite-lived assets | |
Intangible assets impairment charge | $ 200,000 | $ 0 | 0 |
Amortization expense | $ 15,400,000 | $ 16,200,000 | $ 16,000,000 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill [Roll Forward] | ||
Goodwill, Beginning balance | $ 126,651 | $ 125,061 |
Acquisition | 5,117 | 1,662 |
Foreign currency remeasurement | (388) | (72) |
Goodwill, Ending balance | $ 131,380 | $ 126,651 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Schedule of Identified Intangible Assets by Major Class (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 288,618 | $ 281,954 |
Accumulated Amortization | (107,474) | (92,421) |
Intangible Assets, Net | 181,144 | 189,533 |
Intellectual property | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 115,331 | 115,331 |
Accumulated Amortization | (41,897) | (36,060) |
Intangible Assets, Net | 73,434 | 79,271 |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 90,728 | 83,358 |
Accumulated Amortization | (30,622) | (25,985) |
Intangible Assets, Net | 60,106 | 57,373 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 71,278 | 71,699 |
Accumulated Amortization | (28,520) | (24,912) |
Intangible Assets, Net | 42,758 | 46,787 |
Licensor relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 10,991 | 11,276 |
Accumulated Amortization | (6,145) | (5,186) |
Intangible Assets, Net | $ 4,846 | 6,090 |
Noncompetition agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (Years) | 3 years | |
Gross Carrying Amount | $ 290 | 290 |
Accumulated Amortization | (290) | (278) |
Intangible Assets, Net | $ 0 | $ 12 |
Minimum | Intellectual property | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (Years) | 3 years | |
Minimum | Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (Years) | 10 years | |
Minimum | Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (Years) | 3 years | |
Minimum | Licensor relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (Years) | 10 years | |
Maximum | Intellectual property | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (Years) | 20 years | |
Maximum | Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (Years) | 20 years | |
Maximum | Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (Years) | 20 years | |
Maximum | Licensor relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (Years) | 20 years |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Schedule of Future Five Year Amortization of Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Amortization | ||
2023 | $ 15,531 | |
2024 | 15,511 | |
2025 | 15,511 | |
2026 | 15,511 | |
2027 | 14,362 | |
Thereafter | 104,718 | |
Intangible Assets, Net | $ 181,144 | $ 189,533 |
Accounts Receivable, Net - Addi
Accounts Receivable, Net - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Tenant improvement receivable from lessor | $ 1,500 | $ 800 | |
Income taxes receivable, current | 7,800 | 300 | |
Bad debt expense | $ 6,127 | $ 895 | $ 2,400 |
Minimum | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Period past due for trade accounts receivable | 30 days | ||
Maximum | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Period past due for trade accounts receivable | 90 days |
Accounts Receivable, Net - Sche
Accounts Receivable, Net - Schedule of Accounts Receivable, Net (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Receivables [Abstract] | |||
Accounts receivable | $ 175,484 | $ 190,844 | |
Less: Allowance for doubtful accounts | (7,589) | (3,156) | $ (3,580) |
Accounts receivable, net | $ 167,895 | $ 187,688 |
Accounts Receivable, Net - Sc_2
Accounts Receivable, Net - Schedule of Activity in Allowance for Doubtful Accounts (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Allowance For Doubtful Accounts [Roll Forward] | |||
Allowance for doubtful accounts - beginning | $ 3,156 | $ 3,580 | |
Charged to costs | 6,127 | 895 | $ 2,400 |
Write offs | (1,694) | (1,319) | |
Allowance for doubtful accounts - ending | $ 7,589 | $ 3,156 | $ 3,580 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets - Summary of Prepaid Expenses and Other Current Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Prepaid Expense and Other Assets, Current [Abstract] | ||
Prepaid deposits for inventory and molds | $ 2,500 | $ 1,111 |
Prepaid royalties, net | 12,985 | 4,746 |
Crypto asset safeguarding asset | 11,271 | 0 |
Other prepaid expenses and current assets | 12,892 | 9,068 |
Prepaid expenses and other current assets | $ 39,648 | $ 14,925 |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property and Equipment, Net (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 260,558 | $ 196,405 |
Less: Accumulated depreciation | (158,326) | (137,577) |
Property and equipment, net | 102,232 | 58,828 |
Tooling and molds | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 145,021 | 119,915 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 68,160 | 44,112 |
Computer equipment, software and other | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 15,315 | 13,007 |
Furniture, fixtures and warehouse equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 24,714 | 12,177 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 7,348 | $ 7,194 |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 32.2 | $ 25 | $ 28.3 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities - Schedule of Accrued Expenses and Other Current Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Accrued Liabilities And Other Current Liabilities [Abstract] | ||
Accrued payroll and compensation | $ 25,146 | $ 23,439 |
Accrued shipping & freight costs | 21,698 | 42,649 |
Accrued sales taxes | 1,377 | 1,978 |
Current liabilities under tax receivable agreement | 9,567 | 7,362 |
Safeguarding liability | 11,271 | 0 |
Other current liabilities | 43,773 | 45,839 |
Accrued liabilities and other current liabilities | $ 112,832 | $ 121,267 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Safeguarding liability | $ 11,271 | $ 0 |
Crypto asset safeguarding asset | 11,271 | 0 |
Secured debt | 20,000 | 0 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 500 | 56,900 |
Level 1 | Fair Value Measurements Recurring Basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Safeguarding liability | 11,300 | |
Crypto asset safeguarding asset | 11,300 | |
Funko Acquisition Holdings, L.L.C. | Level 3 | Estimate of Fair Value Measurement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated fair values of debt instruments | 177,500 | 175,500 |
Secured debt | $ 175,800 | $ 173,200 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Line of credit | $ 70,000 | $ 0 |
Term Loan Facility | 20,000 | 0 |
Debt issuance costs | (1,681) | (2,287) |
Total term debt | 175,819 | 173,213 |
Less: current portion | 22,041 | 17,395 |
Long-term debt, net | 153,778 | 155,818 |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Line of credit | 70,000 | 0 |
Term Loan Facility | ||
Debt Instrument [Line Items] | ||
Term Loan Facility | $ 157,500 | $ 175,500 |
Debt - Schedule of Maturities o
Debt - Schedule of Maturities of Long-term Debt (Detail) $ in Thousands | Dec. 31, 2022 USD ($) |
Debt Disclosure [Abstract] | |
2023 | $ 22,581 |
2024 | 22,850 |
2025 | 23,134 |
2026 | 108,935 |
Total | $ 177,500 |
Debt - Additional Information (
Debt - Additional Information (Detail) | 1 Months Ended | 12 Months Ended | |||||||||||
Feb. 27, 2023 USD ($) | Nov. 25, 2022 USD ($) | Sep. 17, 2021 USD ($) step_down | Sep. 23, 2019 USD ($) | Oct. 22, 2018 USD ($) | Sep. 30, 2021 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2023 USD ($) | Feb. 26, 2023 USD ($) | Jul. 29, 2022 USD ($) | Feb. 11, 2019 USD ($) | |
Debt Instrument [Line Items] | |||||||||||||
Number of spread | step_down | 2 | ||||||||||||
Secured debt | $ 20,000,000 | $ 0 | |||||||||||
Line of credit | 70,000,000 | 0 | |||||||||||
Letters of credit outstanding | 0 | 0 | |||||||||||
Interest rate decrease | 0.75% | ||||||||||||
Loss on extinguishment of debt | 0 | 675,000 | $ 0 | ||||||||||
SONIA Rate | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Interest rate margins | 2.50% | ||||||||||||
Prime Rate | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Interest rate margins | 1.50% | ||||||||||||
Step down percent | 0.25% | ||||||||||||
Interest rate | 0% | ||||||||||||
Revolving Credit Facility | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Line of credit | 70,000,000 | 0 | |||||||||||
New Term Loan Facility | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Secured debt | 157,500,000 | 175,500,000 | |||||||||||
Secured Debt | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Face amount | $ 180,000,000 | $ 235,000,000 | |||||||||||
Long term debt maturity percentage first and second year | 2.50% | 5% | |||||||||||
Debt instrument accordion feature | $ 25,000,000 | ||||||||||||
Long term debt maturity percentage third and fourth year | 10% | ||||||||||||
Long term debt maturities percentage fifth year | 12.50% | ||||||||||||
Repayments of long-term debt | $ 180,100,000 | ||||||||||||
Loss on extinguishment of debt | $ 700,000 | ||||||||||||
Secured Debt | Swing Rate | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Interest rate margins | 3% | ||||||||||||
Supplementary leverage ratio | 0.25% | ||||||||||||
Secured Debt | Base Rate | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Interest rate margins | 2% | ||||||||||||
Secured Debt | Euro Rate | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Interest rate | 1% | ||||||||||||
Line of Credit | Revolving Credit Facility | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Line of credit | $ 100,000,000 | $ 50,000,000 | $ 215,000,000 | $ 75,000,000 | |||||||||
Line of credit facility, available borrowing capacity | 145,000,000 | $ 100,000,000 | |||||||||||
Line of Credit | Revolving Credit Facility | Subsequent Event | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Line of credit | $ 215,000,000 | ||||||||||||
Line of Credit | Revolving Credit Facility | Third Amendment | Forecast | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Line of credit | $ 150,000,000 | ||||||||||||
Line of Credit | Revolving Credit Facility | Third Amendment | Subsequent Event | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Line of credit | $ 180,000,000 | ||||||||||||
Cash requirement, minimum | 10,000,000 | ||||||||||||
Mandatory repayment, proceeds threshold | $ 25,000,000 | ||||||||||||
Net leverage ratio | 2.50 | ||||||||||||
Debt Instrument fixed charge coverage ratio | 1.25 | ||||||||||||
Long-term debt, gross | $ 141,000,000 | ||||||||||||
Line of Credit | Revolving Credit Facility | Term Benchmark Loan Or RFR Loan | Subsequent Event | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Interest rate margins | 4% | ||||||||||||
Line of Credit | Revolving Credit Facility | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Interest rate margins | 0.10% | ||||||||||||
Line of Credit | Revolving Credit Facility | Prime Rate | Canadian Prime Loan Or ABR Loan | Subsequent Event | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Interest rate margins | 3% | ||||||||||||
Line of Credit | Secured Debt | Third Amendment | Subsequent Event | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Long-term debt, gross | $ 157,500,000 | ||||||||||||
Loans Payable | Equipment Finance Loan | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Interest rate | 5.71% | ||||||||||||
Long-term debt, gross | $ 20,000,000 | $ 20,000,000 | |||||||||||
Debt instrument term | 48 months |
Leases (Details)
Leases (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Leases [Abstract] | |||
Operating leases, renewal term | 5 years | ||
Rent expense | $ 24,500,000 | $ 16,500,000 | $ 15,300,000 |
Operating lease, payments | 16,000,000 | 14,400,000 | |
Right-of-use asset obtained in exchange for operating lease liability | 54,100,000 | 4,000,000 | |
Lease incentive | $ 17,200,000 | $ 0 | |
Weighted average remaining lease term | 7 years 4 months 24 days | 7 years | |
Weighted average discount rate, percent | 5.76% | 6.22% | |
Operating lease, impairment loss | 1,400,000 | ||
Operating lease, liability, period decrease | 900,000 | ||
Rental income | $ 400,000 | $ 300,000 | $ 300,000 |
Leases - Summary of Future Paym
Leases - Summary of Future Payments On Operating Lease Liabilities (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Leases [Abstract] | |
2023 | $ 19,510 |
2024 | 17,678 |
2025 | 16,742 |
2026 | 17,053 |
2027 | 12,572 |
Thereafter | 41,644 |
Total lease payments | 125,199 |
Less: imputed interest | (23,939) |
Total | $ 101,260 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Before Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ (39,077) | $ 72,758 | $ 4,149 |
Foreign | 16,036 | 12,157 | 7,639 |
(Loss) income before income taxes | $ (23,041) | $ 84,915 | $ 11,788 |
Income Taxes - Schedule of In_2
Income Taxes - Schedule of Income Tax Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current income taxes: | |||
Federal | $ (4,766) | $ 12,894 | $ (3,030) |
State and local | 1,629 | 1,825 | 59 |
Foreign | 2,750 | 2,703 | 1,673 |
Current income taxes | (387) | 17,422 | (1,298) |
Deferred income taxes: | |||
Federal | (11,227) | (185) | 2,585 |
State and local | (5,945) | (18) | 206 |
Foreign | (242) | (158) | 532 |
Deferred income taxes | (17,414) | (361) | 3,323 |
Income tax (benefit) expense | $ (17,801) | $ 17,061 | $ 2,025 |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation of Income Tax Expense from Operations Computed at U.S. Federal Statutory Income Tax Rate to Effective Income Tax Rate (Detail) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Expected U.S. federal income taxes at statutory rate | 21% | 21% | 21% |
State and local income taxes, net of federal benefit | 20.20% | 1.70% | 2.50% |
Foreign taxes | (9.90%) | 2.50% | 18.70% |
Foreign tax credit | 11.70% | 0% | (9.30%) |
Non-deductible expenses | (2.10%) | (1.10%) | 1.60% |
Change in valuation allowance | 47.20% | 2.30% | 5.40% |
Non-controlling interest | 2.60% | (6.00%) | (12.70%) |
Share-based compensation | (19.80%) | 0.10% | 5.10% |
Return to provision | 4.90% | 1.50% | (15.10%) |
Other, net | 1.50% | (1.90%) | 0% |
Income tax (benefit) expense | 77.30% | 20.10% | 17.20% |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | ||
Investment in partnership | $ 93,923 | $ 64,335 |
Tax Receivable Agreement liability | 26,860 | 19,105 |
Stock-based compensation | 5,402 | 6,197 |
Foreign Tax Credit | 834 | 0 |
Other carryforwards | 826 | 0 |
Gross deferred tax assets | 127,845 | 89,637 |
Valuation allowance | (3,952) | (14,829) |
Deferred tax assets, net of valuation allowance | 123,893 | 74,808 |
Deferred tax liabilities: | ||
Property and equipment | (382) | (701) |
Other | 0 | (343) |
Gross deferred tax liabilities | (382) | (1,044) |
Net deferred tax assets | $ 123,511 | $ 73,764 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Investment in partnership | $ 93,923 | $ 64,335 | ||
Deferred tax assets, valuation allowance | 3,952 | 14,829 | ||
Valuation allowance release | 11,000 | |||
Unrecognized tax benefits | $ 0 | $ 0 | $ 490 | $ 490 |
Unrecognized tax benefits that would impact effective tax rate | $ 200 |
Income Taxes - Schedule of Unre
Income Taxes - Schedule of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefits at January 1 | $ 0 | $ 490 | $ 490 |
Decreases for positions taken in current year | 0 | (490) | 0 |
Unrecognized tax benefits at December 31 | $ 0 | $ 0 | $ 490 |
Liabilities under Tax Receiva_3
Liabilities under Tax Receivable Agreement (Details) - USD ($) shares in Millions, $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Contingency [Line Items] | ||
Percentage of tax benefit paid to equity owner | 85% | |
Tax benefit percentage expected | 15% | |
FAH LLC | ||
Income Tax Contingency [Line Items] | ||
Equity issued in connection with acquisition prior to Transactions (in shares) | 6.5 | 3.9 |
Increase in net deferred tax assets | $ 30.6 | $ 17.2 |
Liabilities under Tax Receiva_4
Liabilities under Tax Receivable Agreement - Schedule of Liability Activity (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Liabilities Under Tax Receivable Agreement [Roll Forward] | |||
Beginning Balance | $ 82,884 | $ 62,318 | $ 65,816 |
Establishment of liabilities under tax receivable agreement | 30,034 | 20,691 | 1,000 |
Adjustment to remeasurement of liabilities | 3,987 | 1,590 | 87 |
Payments under tax receivable agreement | (7,718) | (1,715) | (4,585) |
Ending balance | $ 109,187 | $ 82,884 | $ 62,318 |
Liabilities under Tax Receiva_5
Liabilities under Tax Receivable Agreement - Schedule of Tax Receivable Agreement Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Income Tax Disclosure [Abstract] | ||||
2023 | $ 9,567 | |||
2024 | 6,532 | |||
2025 | 6,651 | |||
2026 | 6,806 | |||
2027 | 6,978 | |||
Thereafter | 72,653 | |||
Total | $ 109,187 | $ 82,884 | $ 62,318 | $ 65,816 |
Commitments and Contingencies (
Commitments and Contingencies (Detail) $ in Millions | 12 Months Ended | |||
Jul. 05, 2022 lawsuit | Jul. 06, 2020 lawsuit | Jun. 11, 2020 lawsuit | Dec. 31, 2022 USD ($) | |
Lessee, Lease, Description [Line Items] | ||||
Minimum royalty obligations, Total | $ 112.3 | |||
Minimum royalty obligations, 2023 | 33.8 | |||
Minimum royalty obligations, 2024 | 42.3 | |||
Minimum royalty obligations, 2025 | $ 36.2 | |||
Severance payment period | 1 year | |||
Operating leases, renewal term | 5 years | |||
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 | lawsuit | 1 | |||
Cassella v. Mariotti et al., Evans v. Mariotti et al., and Igelido v. Mariotti et al. | ||||
Lessee, Lease, Description [Line Items] | ||||
Number of additional putative class action lawsuits filed | lawsuit | 3 | |||
Fletcher, et al. v. Mariotti | ||||
Lessee, Lease, Description [Line Items] | ||||
Number of additional putative class action lawsuits filed | lawsuit | 2 | |||
Funko Acquisition Holdings, L.L.C. | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating leases, renewal term | 5 years |
Segments - Additional Informati
Segments - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2022 segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 1 |
Segments - Schedule of Product
Segments - Schedule of Product Categories as Percent of Net Sales (Detail) - Sales Revenue - Product Concentration Risk | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Core Collectibles | |||
Schedule of Property and Equipment Net by Country [Line Items] | |||
Percent of sales | 75.50% | 79.80% | 80.80% |
Loungefly Branded Products | |||
Schedule of Property and Equipment Net by Country [Line Items] | |||
Percent of sales | 19.10% | 14.70% | 14.70% |
Other | |||
Schedule of Property and Equipment Net by Country [Line Items] | |||
Percent of sales | 5.40% | 5.60% | 4.50% |
Segments - Schedule of Net Sale
Segments - Schedule of Net Sales and Long-Lived Assets (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | |||
Net sales | $ 1,322,706 | $ 1,029,293 | $ 652,537 |
Long-lived assets | 181,416 | 124,223 | |
United States | |||
Segment Reporting Information [Line Items] | |||
Net sales | 966,748 | 743,846 | 488,823 |
Long-lived assets | 131,549 | 81,022 | |
Europe | |||
Segment Reporting Information [Line Items] | |||
Net sales | 262,602 | 214,732 | 111,997 |
Other International | |||
Segment Reporting Information [Line Items] | |||
Net sales | 93,356 | 70,715 | $ 51,717 |
Vietnam and China | |||
Segment Reporting Information [Line Items] | |||
Long-lived assets | 28,811 | 16,701 | |
United Kingdom | |||
Segment Reporting Information [Line Items] | |||
Long-lived assets | $ 21,056 | $ 26,500 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Feb. 28, 2019 lease | Dec. 31, 2022 USD ($) investor | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Related Party Transaction [Line Items] | ||||
Rent expense | $ 24.5 | $ 16.5 | $ 15.3 | |
Forrest-Pruzan Creative LLC | ||||
Related Party Transaction [Line Items] | ||||
Number of leases of office space | lease | 2 | |||
Rent expense | $ 0.3 | 0.3 | 0.2 | |
Funko Acquisition Holdings, L.L.C. | Forbidden Planet | ||||
Related Party Transaction [Line Items] | ||||
Number of investor | investor | 1 | |||
Related party, net sales | $ 1.6 | 0.8 | $ 2 | |
Related party, accounts receivable | $ 0.2 | $ 0.4 |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |||
Maximum Percentage of employee earnings the employer contributes as a matching contribution in 401(k) plan | 4% | ||
Employer matching contributions, amount | $ 3 | $ 1.8 | $ 1.5 |
Stockholder's Equity - Addition
Stockholder's Equity - Additional Information (Detail) $ / shares in Units, $ in Millions | 12 Months Ended | ||||||
May 03, 2022 USD ($) shares | Apr. 18, 2019 shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Dec. 31, 2020 USD ($) $ / shares shares | Nov. 01, 2017 vote $ / shares shares | Oct. 23, 2017 shares | |
Class of Stock [Line Items] | |||||||
Shares authorized, annual increase, percent | 2% | ||||||
Award vesting period | 4 years | ||||||
Contractual terms | 10 years | ||||||
Options granted, weighted average grant date fair value (in dollars per share) | $ / shares | $ 10.85 | $ 9.26 | $ 1.90 | ||||
Equity-based compensation | $ | $ 16.6 | $ 13 | $ 10.1 | ||||
Unrecognized equity-based compensation expense | $ | $ 37 | ||||||
Equity-based compensation costs not yet recognized, remaining weighted average period | 2 years 9 months 18 days | ||||||
2017 Plan | |||||||
Class of Stock [Line Items] | |||||||
Common stock, shares reserved for future issuance (in shares) | 104,984 | ||||||
2017 Plan | Performance Stock Unit | |||||||
Class of Stock [Line Items] | |||||||
Estimated target achievement, percent | 100% | ||||||
2019 Plan | |||||||
Class of Stock [Line Items] | |||||||
Common stock reserved for issuance (in shares) | 4,111,526 | ||||||
Common stock, shares reserved for future issuance (in shares) | 1,024,800 | ||||||
Funko Acquisition Holdings, L.L.C. | |||||||
Class of Stock [Line Items] | |||||||
Equity-based compensation | $ | $ 16.6 | $ 13 | $ 10 | ||||
Funko Acquisition Holdings, L.L.C. | Non- Controlling Interests | FAH LLC | |||||||
Class of Stock [Line Items] | |||||||
Agreement stock ratio | 1 | ||||||
Common stock, shares outstanding (in shares) | 4,251,701 | ||||||
Payment to purchase interest | $ | $ 74 | ||||||
Amended and Restated Certificate of Incorporation | |||||||
Class of Stock [Line Items] | |||||||
Preferred stock, shares authorized (in shares) | 20,000,000 | ||||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | ||||||
IPO | Funko Acquisition Holdings, L.L.C. | Class A Units | |||||||
Class of Stock [Line Items] | |||||||
Options to purchase units converted to common units (in shares) | 555,867,000 | ||||||
Class A Common Stock | |||||||
Class of Stock [Line Items] | |||||||
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | |||||
Number of vote per share | vote | 1 | ||||||
Common stock, shares outstanding (in shares) | 47,192,000 | 40,088,000 | |||||
Common stock, shares issued (in shares) | 47,192,000 | 40,088,000 | |||||
Class A Common Stock | 2017 Plan | |||||||
Class of Stock [Line Items] | |||||||
Common stock reserved for issuance (in shares) | 5,518,518 | ||||||
Class A Common Stock | 2019 Plan | |||||||
Class of Stock [Line Items] | |||||||
Common stock reserved for issuance (in shares) | 3,000,000 | ||||||
Class A Common Stock | Funko Acquisition Holdings, L.L.C. | |||||||
Class of Stock [Line Items] | |||||||
Common stock, shares outstanding (in shares) | 47,200,000 | 40,100,000 | 35,700,000 | ||||
Class A Common Stock | Funko Acquisition Holdings, L.L.C. | Non- Controlling Interests | FAH LLC | |||||||
Class of Stock [Line Items] | |||||||
Agreement stock ratio | 1 | ||||||
Class A Common Stock | Amended and Restated Certificate of Incorporation | |||||||
Class of Stock [Line Items] | |||||||
Common stock, shares authorized (in shares) | 200,000,000 | ||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | ||||||
Class B Common Stock | |||||||
Class of Stock [Line Items] | |||||||
Common stock, shares authorized (in shares) | 50,000,000 | 50,000,000 | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | |||||
Number of vote per share | vote | 1 | ||||||
Common stock, shares outstanding (in shares) | 3,293,000 | 10,691,000 | |||||
Shares retired (in shares) | 900,000 | ||||||
Common stock, shares issued (in shares) | 3,293,000 | 10,691,000 | |||||
Class B Common Stock | Funko Acquisition Holdings, L.L.C. | Non- Controlling Interests | FAH LLC | |||||||
Class of Stock [Line Items] | |||||||
Agreement stock ratio | 1 | ||||||
Class B Common Stock | Amended and Restated Certificate of Incorporation | |||||||
Class of Stock [Line Items] | |||||||
Common stock, shares authorized (in shares) | 50,000,000 | ||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 |
Stockholder's Equity - Schedule
Stockholder's Equity - Schedule of Stock Option Activity (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Funko Acquisition Holdings, L.L.C. | ||
Stock Options | ||
Outstanding beginning (in shares) | 228 | |
Exercised (in shares) | (67) | |
Cancelled (in shares) | (15) | |
Outstanding ending (in shares) | 146 | 228 |
Options exercisable (in shares) | 146 | |
Weighted Average Exercise Price | ||
Outstanding beginning (in dollars per share) | $ 0.05 | |
Exercised (in dollars per share) | 0.05 | |
Outstanding ending (in dollars per share) | 0.05 | $ 0.05 |
Weighted Average Exercise Price, Options exercisable (in dollars per share) | $ 0.05 | |
Aggregate Intrinsic Value, Outstanding | $ 4,278 | |
Aggregate Intrinsic Value, Exercised | 1,166 | |
Aggregate Intrinsic Value, Outstanding | 1,590 | $ 4,278 |
Aggregate Intrinsic Value, Options exercisable | $ 1,590 | |
Remaining Contractual Life, Outstanding | 4 months 28 days | 1 year 4 months 28 days |
Remaining Contractual Life, Options exercisable | 4 months 28 days | |
2017 Plan | ||
Stock Options | ||
Outstanding beginning (in shares) | 3,242 | |
Granted (in shares) | 991 | |
Exercised (in shares) | (120) | |
Forfeited (in shares) | (253) | |
Outstanding ending (in shares) | 3,860 | 3,242 |
Options exercisable (in shares) | 2,314 | |
Weighted Average Exercise Price | ||
Outstanding beginning (in dollars per share) | $ 14.54 | |
Granted (in dollars per share) | 18.25 | |
Exercised (in dollars per share) | 12.33 | |
Forfeited (in dollars per share) | 16.99 | |
Outstanding ending (in dollars per share) | 15.40 | $ 14.54 |
Weighted Average Exercise Price, Options exercisable (in dollars per share) | $ 14.23 | |
Aggregate Intrinsic Value, Outstanding | $ 15,973 | |
Aggregate Intrinsic Value, Granted | 0 | |
Aggregate Intrinsic Value, Exercised | 1,042 | |
Aggregate Intrinsic Value, Forfeited | 905 | |
Aggregate Intrinsic Value, Outstanding | 3,455 | $ 15,973 |
Aggregate Intrinsic Value, Options exercisable | $ 2,239 | |
Remaining Contractual Life, Outstanding | 7 years 2 months 15 days | 7 years 7 months 9 days |
Remaining Contractual Life, Options exercisable | 6 years 2 months 12 days |
Stockholder's Equity - Schedu_2
Stockholder's Equity - Schedule of Stock Unit Activity (Detail) - 2017 Plan - $ / shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Restricted Stock Unit | ||
Funko, Inc. Restricted Stock Units | ||
Unvested (in shares) | 2,141 | |
Granted (in shares) | 1,143 | |
Vested (in shares) | (413) | |
Forfeited (in shares) | (152) | |
Unvested (in shares) | 2,719 | 2,141 |
Weighted Average Grant Date Fair Value | ||
Unvested (in dollars per share) | $ 14.18 | |
Granted (in dollars per share) | 18.77 | |
Vested (in dollars per share) | 9.39 | |
Forfeited (in dollars per share) | 14.54 | |
Unvested (in dollars per share) | $ 16.82 | $ 14.18 |
Remaining Contractual Life | 2 years 10 months 9 days | 2 years 2 months 19 days |
Performance Stock Unit | ||
Funko, Inc. Restricted Stock Units | ||
Unvested (in shares) | 0 | |
Granted (in shares) | 67 | |
Unvested (in shares) | 67 | 0 |
Weighted Average Grant Date Fair Value | ||
Unvested (in dollars per share) | $ 0 | |
Granted (in dollars per share) | 17.09 | |
Unvested (in dollars per share) | $ 17.09 | $ 0 |
Remaining Contractual Life | 2 years | 0 years |
Stockholder's Equity - Schedu_3
Stockholder's Equity - Schedule of Stock Option Exercises Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Equity [Abstract] | |||
Cash received for exercise price | $ 1,472 | $ 3,794 | $ 219 |
Intrinsic value | $ 1,042 | $ 2,543 | $ 957 |
Stockholder's Equity - Schedu_4
Stockholder's Equity - Schedule of Option Pricing Model Inputs (Detail) - 2017 Plan and 2019 Plan | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Class of Stock [Line Items] | |||
Expected term (years) | 6 years 18 days | 6 years 21 days | 6 years 18 days |
Expected volatility | 63.60% | 48.60% | 45.60% |
Risk-free interest rate | 2.20% | 1% | 0.50% |
Dividend yield | 0% | 0% | 0% |
Non-controlling Interests - Add
Non-controlling Interests - Additional Information (Detail) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Noncontrolling Interest [Line Items] | |||
Equity-based compensation | $ 16,600 | $ 13,000 | $ 10,100 |
Income tax (benefit) expense | $ (17,801) | $ 17,061 | $ 2,025 |
Class A Common Stock | |||
Noncontrolling Interest [Line Items] | |||
Common stock, shares outstanding (in shares) | 47,192 | 40,088 | |
Funko Acquisition Holdings, L.L.C. | |||
Noncontrolling Interest [Line Items] | |||
Ownership percentage | 91.60% | 77.30% | 69.50% |
Equity-based compensation | $ 16,600 | $ 13,000 | $ 10,000 |
Income tax (benefit) expense | $ (20,500) | $ 14,300 | $ (400) |
Funko Acquisition Holdings, L.L.C. | Class A Common Stock | |||
Noncontrolling Interest [Line Items] | |||
Common stock, shares outstanding (in shares) | 47,200 | 40,100 | 35,700 |
Earnings per Share - Schedule o
Earnings 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 | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Numerator: | |||
Net (loss) income | $ (5,240) | $ 67,854 | $ 9,763 |
Less: net income attributable to non-controlling interests | 2,795 | 23,954 | 5,802 |
Net (loss) income attributable to Funko, Inc. | (8,035) | 43,900 | 3,961 |
Add: Reallocation of net income attributable to non- controlling interests from the assumed exchange of common units of FAH, LLC for Class A common stock | 0 | 0 | 0 |
Net (loss) income attributable to Funko, Inc. — diluted | $ (8,035) | $ 43,900 | $ 3,961 |
Denominator: | |||
Weighted-average shares of Class A common stock outstanding — basic (in shares) | 44,554,788 | 38,392,390 | 35,270,795 |
Add: Dilutive common units of FAH, LLC that are convertible into Class A common stock (in shares) | 0 | 227,500 | 304,327 |
Add: Dilutive Funko, Inc. equity compensation awards (in shares) | 0 | 1,990,728 | 194,891 |
Weighted-average shares of Class A common stock outstanding — diluted (in shares) | 44,554,788 | 40,610,618 | 35,770,013 |
Earnings per share of Class A common stock — basic (in dollars per share) | $ (0.18) | $ 1.14 | $ 0.11 |
Earnings per share of Class A common stock — diluted (in dollars per share) | $ (0.18) | $ 1.08 | $ 0.11 |
Earnings per Share - Additional
Earnings per Share - Additional Information (Detail) - Class A Common Stock - shares shares in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 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) | 11.6 | 14.7 | 19.7 |
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) | 7 | 13.2 | 15.8 |
Subsequent Event (Details)
Subsequent Event (Details) - Subsequent Event $ in Millions | 2 Months Ended |
Mar. 01, 2023 USD ($) | |
Minimum | |
Subsequent Event [Line Items] | |
Inventory write-down | $ 30 |
Maximum | |
Subsequent Event [Line Items] | |
Inventory write-down | $ 36 |
Schedule I_ Condensed Financi_3
Schedule I: Condensed Financial Information of Registrant - Condensed Statements of Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | |||
Intercompany revenue | $ 1,322,706 | $ 1,029,293 | $ 652,537 |
Selling, general, and administrative expenses | 398,272 | 244,331 | 181,234 |
Total operating expenses | 1,334,626 | 933,828 | 628,994 |
(Loss) income from operations | (11,920) | 95,465 | 23,543 |
Interest (expense) income, net | 10,334 | 7,167 | 10,712 |
Tax receivable agreement liability adjustment | 3,987 | 1,590 | 87 |
(Loss) income before income taxes | (23,041) | 84,915 | 11,788 |
Income tax (benefit) expense | (17,801) | 17,061 | 2,025 |
Net (loss) income | (5,240) | 67,854 | 9,763 |
Parent Company | |||
Segment Reporting Information [Line Items] | |||
Intercompany revenue | 564 | 82 | 307 |
Selling, general, and administrative expenses | 16,941 | 13,163 | 10,269 |
Total operating expenses | 16,941 | 13,163 | 10,269 |
(Loss) income from operations | (16,377) | (13,081) | (9,962) |
Interest (expense) income, net | (168) | 3 | (36) |
Tax receivable agreement liability adjustment | (3,987) | (1,590) | (87) |
Equity in net (loss) income of subsidiaries | (8,040) | 72,916 | 13,674 |
(Loss) income before income taxes | (28,572) | 58,248 | 3,589 |
Income tax (benefit) expense | (20,537) | 14,348 | (372) |
Net (loss) income | $ (8,035) | $ 43,900 | $ 3,961 |
Schedule I_ Condensed Financi_4
Schedule I: Condensed Financial Information of Registrant - Condensed Statements of Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | |||
Net (loss) income | $ (5,240) | $ 67,854 | $ 9,763 |
Other comprehensive (loss) income: | |||
Comprehensive (loss) income attributable to Funko, Inc. | (11,716) | 43,260 | 4,888 |
Parent Company | |||
Segment Reporting Information [Line Items] | |||
Net (loss) income | (8,035) | 43,900 | 3,961 |
Other comprehensive (loss) income: | |||
Foreign currency translation (loss) gain, net of tax effect of $1,169, $163 and $(274) for the years ended December 31, 2022, 2021 and 2020, respectively | (3,681) | (544) | 927 |
Reclassification of foreign currency translation gain into net (loss) income | 0 | (96) | 0 |
Comprehensive (loss) income attributable to Funko, Inc. | $ (11,716) | $ 43,260 | $ 4,888 |
Schedule I_ Condensed Financi_5
Schedule I: Condensed Financial Information of Registrant - Condensed Statements of Comprehensive Income (Loss) (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | |||
Foreign currency translation gain (loss), tax | $ 1,169 | $ 163 | $ (274) |
Parent Company | |||
Segment Reporting Information [Line Items] | |||
Foreign currency translation gain (loss), tax | $ 1,169 | $ 163 | $ (274) |
Schedule I_ Condensed Financi_6
Schedule I: Condensed Financial Information of Registrant - Condensed Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||||
Cash and cash equivalents | $ 19,200 | $ 83,557 | ||
Total current assets | 473,172 | 452,598 | ||
Deferred tax asset | 123,893 | 74,412 | ||
Total assets | 1,091,145 | 967,503 | ||
Current liabilities: | ||||
Total current liabilities | 361,397 | 285,011 | ||
Liabilities under tax receivable agreement, net of current portion | 99,620 | 75,523 | ||
Commitments and contingencies | ||||
Stockholders' equity: | ||||
Additional paid-in-capital | 310,807 | 252,505 | ||
Accumulated other comprehensive (loss) income | (2,603) | 1,078 | ||
Retained earnings | 60,015 | 68,050 | ||
Total stockholders' equity | 389,689 | 396,558 | $ 322,445 | $ 305,144 |
Total liabilities and stockholders' equity | 1,091,145 | 967,503 | ||
Class A Common Stock | ||||
Stockholders' equity: | ||||
Common stock, value | 5 | 4 | ||
Class B Common Stock | ||||
Stockholders' equity: | ||||
Common stock, value | 0 | 1 | ||
Parent Company | ||||
Current assets: | ||||
Cash and cash equivalents | 911 | 61,943 | ||
Income tax receivable | 7,530 | 0 | ||
Total current assets | 8,441 | 61,943 | ||
Intercompany receivable | 119,219 | 116,746 | ||
Deferred tax asset | 123,893 | 74,464 | ||
Investment in subsidiaries | 225,858 | 166,054 | ||
Total assets | 477,411 | 419,207 | ||
Current liabilities: | ||||
Tax payable | 0 | 14,684 | ||
Current portion of liabilities under tax receivable agreement | 9,567 | 7,362 | ||
Total current liabilities | 9,567 | 22,046 | ||
Liabilities under tax receivable agreement, net of current portion | 99,620 | 75,523 | ||
Commitments and contingencies | ||||
Stockholders' equity: | ||||
Additional paid-in-capital | 310,807 | 252,505 | ||
Accumulated other comprehensive (loss) income | (2,603) | 1,078 | ||
Retained earnings | 60,015 | 68,050 | ||
Total stockholders' equity | 368,224 | 321,638 | ||
Total liabilities and stockholders' equity | 477,411 | 419,207 | ||
Parent Company | Class A Common Stock | ||||
Stockholders' equity: | ||||
Common stock, value | 5 | 4 | ||
Parent Company | Class B Common Stock | ||||
Stockholders' equity: | ||||
Common stock, value | $ 0 | $ 1 |
Schedule I_ Condensed Financi_7
Schedule I: Condensed Financial Information of Registrant - Condensed Balance Sheets (Narrative) (Details) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Class A Common Stock | ||
Segment Reporting Information [Line Items] | ||
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 outstanding (in shares) | 47,192,000 | 40,088,000 |
Common stock, shares issued (in shares) | 47,192,000 | 40,088,000 |
Class B Common Stock | ||
Segment Reporting Information [Line Items] | ||
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 outstanding (in shares) | 3,293,000 | 10,691,000 |
Common stock, shares issued (in shares) | 3,293,000 | 10,691,000 |
Schedule I_ Condensed Financi_8
Schedule I: Condensed Financial Information of Registrant - Condensed Statements of Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating Activities | |||
Net (loss) income | $ (5,240) | $ 67,854 | $ 9,763 |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | |||
Equity-based compensation | 16,591 | 12,994 | 10,116 |
Deferred tax expense (benefit) | (17,414) | (361) | 3,323 |
Tax receivable liability adjustment | (3,987) | (1,590) | (87) |
Changes in operating assets and liabilities, net of amounts acquired: | |||
Prepaid expenses and other assets | (7,263) | 3,700 | 12,273 |
Income taxes payable | (15,018) | 15,585 | (209) |
Accrued expenses and other liabilities | (22,841) | 63,586 | 7,902 |
Net cash (used in) provided by operating activities | (40,134) | 87,362 | 108,739 |
Investing Activities | |||
Net cash used in investing activities | (78,065) | (27,381) | (18,482) |
Financing Activities | |||
Net cash provided by (used in) financing activities | 54,639 | (28,628) | (63,338) |
Net change in cash and cash equivalents | (64,357) | 31,302 | 27,026 |
Cash and cash equivalents at beginning of period | 83,557 | 52,255 | 25,229 |
Cash and cash equivalents at end of period | 19,200 | 83,557 | 52,255 |
Supplemental Cash Flow Information | |||
Income tax payments | 22,363 | 1,462 | 4,167 |
Establishment of liabilities under tax receivable agreement | 30,034 | 20,691 | 1,000 |
Issuance of equity instruments for acquisitions | 1,487 | 0 | 0 |
Parent Company | |||
Operating Activities | |||
Net (loss) income | (8,035) | 43,900 | 3,961 |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | |||
Equity in net loss (income) of subsidiaries | 8,040 | (72,916) | (13,674) |
Equity-based compensation | 16,591 | 12,994 | 10,007 |
Deferred tax expense (benefit) | (17,173) | (203) | 2,792 |
Tax receivable liability adjustment | 3,987 | 1,590 | 87 |
Changes in operating assets and liabilities, net of amounts acquired: | |||
Income tax receivable | (7,530) | 294 | 3,521 |
Due from related parties, net | (984) | 1,351 | 26,007 |
Prepaid expenses and other assets | (11,019) | 0 | 0 |
Income taxes payable | (14,684) | 14,684 | 0 |
Accrued expenses and other liabilities | 11,190 | (571) | 304 |
Net cash (used in) provided by operating activities | (19,617) | 1,123 | 33,005 |
Investing Activities | |||
Capital contribution to FAH, LLC | (73,980) | 0 | 0 |
Net cash used in investing activities | (73,980) | 0 | 0 |
Financing Activities | |||
Tax distribution received from FAH, LLC | 38,811 | 24,173 | 5,825 |
Tax receivable agreement payments | (7,718) | (1,715) | (4,639) |
Proceeds from exercise of equity-based options | 1,472 | 3,794 | 41 |
Net cash provided by (used in) financing activities | 32,565 | 26,252 | 1,227 |
Net change in cash and cash equivalents | (61,032) | 27,375 | 34,232 |
Cash and cash equivalents at beginning of period | 61,943 | 34,568 | 336 |
Cash and cash equivalents at end of period | 911 | 61,943 | 34,568 |
Supplemental Cash Flow Information | |||
Income tax payments | 18,999 | 23 | 2,116 |
Establishment of liabilities under tax receivable agreement | 30,034 | 20,691 | 1,000 |
Issuance of equity instruments for acquisitions | $ 1,487 | $ 0 | $ 0 |
Schedule I_ Condensed Financi_9
Schedule I: Condensed Financial Information of Registrant - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
May 03, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Segment Reporting Information [Line Items] | |||||
Penalties and interest accrued | $ 109,187 | $ 82,884 | $ 62,318 | $ 65,816 | |
Percentage of tax benefit paid to equity owner | 85% | ||||
Class B Common Stock | |||||
Segment Reporting Information [Line Items] | |||||
Common stock, shares outstanding (in shares) | 3,293,000 | 10,691,000 | |||
Shares retired (in shares) | 900,000 | ||||
Parent Company | |||||
Segment Reporting Information [Line Items] | |||||
Intercompany receivable | $ 119,219 | $ 116,746 | |||
Penalties and interest accrued | $ 109,200 | $ 82,900 | |||
Percentage of tax benefit paid to equity owner | 85% | ||||
Funko Acquisition Holdings, L.L.C. | FAH LLC | Non- Controlling Interests | |||||
Segment Reporting Information [Line Items] | |||||
Common stock, shares outstanding (in shares) | 4,251,701 | ||||
Payment to purchase interest | $ 74,000 | ||||
Agreement stock ratio | 1 | ||||
Funko Acquisition Holdings, L.L.C. | Class B Common Stock | FAH LLC | Non- Controlling Interests | |||||
Segment Reporting Information [Line Items] | |||||
Agreement stock ratio | 1 |