FNKO - Earnings call transcript Q1 2021

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Operator

Good afternoon. And welcome to Funko's Conference Call to discuss Financial Results for the First Quarter of 2021. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. Please be advised that reproduction of this call in whole or in part is not permitted without written authorization from the company.

call recorded. this reminder, a is being As I turn the to Mr. call over will now of to Investor Director Avenia-Tapper, Ben Relations get started. Please proceed.

Ben Avenia-Tapper

good Mariotti, Andrew Thank today Officer. Fall and afternoon. on Financial us you, the Jung, are Chief Brian President; Chief Perlmutter, Officer; Executive and Jennifer With call

of targets and about begin, judgment we our we current and these to best results statements subject the and many today, company course our represent other financial to call from results. uncertainties management statements that expect. results during remind forward-looking Before conference everyone will its of Well, as like the future cause actual to what performance differ I'd materially actual this discuss are results that forecast regarding risks and could

In earnings during most risks release. that are addition important factors future highlighted today's affect our described in that and call, press we may reports the our results SEC any recent to

the to supplemental In to financial refer and that the addition, be directly we information measures, today. their earnings will measures can non-GAAP earlier and found discussion. us financial we X-K release most in Reconciliations comparable gap press during released financial

investors All Relations will this a plus these presentation consult the call our visual turn with now of follow to website, Brian. along discussion that on items available I are can Investor investor.funko.com. to over

Brian Mariotti

today. joining afternoon, Good for And us thank everyone. you

happy in of largest a QX was history. uncertainty period steps pandemic. deliver pleased very returning I to to were the navigate update. growth Funko's a strong marks provide start I'm in the After are to we to an the different year year We this about top-line Today, the ago to QX. A due to talking time, at unprecedented taking which

brands, see to geographies. channels, and our products, have is We across strong consumer broad-based which strength driving demand, continued

anticipated outperformance sales well year. expected First quarter than versus increasing direct own to as Europe, recovery within in as in an The sales ahead came than expectations reflects higher consumer primarily channel. prior of XX% net our earlier

adjusted by EBITDA a points of positive a we profitability, Importantly, to connect reinforced highlighted to that our strength ahead culture and Funko's improve over business ability continue well world. basis QX platform pop margins cost controls and the fan last was the year. number of with of drove across indicators across plan and the base careful the XXX

expanding power QX brands across have fans just resonate continue as the year around not Loungefly pop growth extend XX% stronger. globe versus we and highlighting our we of more a as drive platform and been XX% allowed channel than continue solid as and a branded and In geographies. to products specialty Pop reinforcing well also we our of grew accessory, with as but domestic our our grew Our culture our pop traffic in year-over-year, fan never base, retail continued recovery across partners. see take to These strategy success In relationship to bag, as business us over increased our led plush also the of games. hold XXXX, many connect Loungefly.com. with largest non-figure and have ago, the across quarter, our to XX% while diversity Europe, diversification strength a continue quarter, the reach the by our products, broader the saw channels, of with wallet, product channels. Loungefly efforts

That's years now two X% and Our direct-to-consumer up overall just ago. of business grew represents over business. from XX% the XXX% year-over-year,

increased our pop solid to continued to connect net alone in the XX% the see successful fan our quarter. our over experience. perspective, direct-to-consumer e-commerce as sales momentum customer In elevate our From saw market mass our consumer and customer European remains to and a sales base, regional single our to We fact, our expand channels. third-party largest efforts XXXX. U.S. sites and reflecting culture, offerings strength demand turn both on fans across Funko We've equivalent our with robust increasingly sites, broaden to in e-commerce, as generated product U.S.

to seeing both signs sooner show a of In channels the recovery While anticipated. than that's we're demand Europe, recovery consumer specialty and initially we U.S. beginning stronger

many demand countries QX performance restrictions. to believe in the still As a Europe substantial especially ahead We website, strains under result, for dynamic. growing remains the expectations, launched in in encouraged From the XXXX. Funko. well ahead see region, in reflects We sales improving our channel of recently third-party Funko a and e-commerce drove quarter. Europe XX% were but solid channel perspective, environment markets the With came and runway over our retail

We are strongly growth. perspective positioned long-term sustained drive to from operational a strategic, financial and

connect our such, entering in the we with NFT our increase broad As expand to me consumer market, to which most on expansion thrilled to recent total initiatives against appeal opportunity. fans. platform which TAM be compelling to and executing addressable us our our our We're another remain provides brings focused market,

acquisition pop fanbase, some merging include a collectibles. can Funko product onto NFT and with Funko appeal popular we've into strategic an and a the NFT of last existing of are significant. the the between product announced with accessible digital digital of a us the entry with we our will most will powerful to we the TokenWave, provide platform opportunity experience synergies an collector. between and our and is portfolio stake become our and fans bring Digital Equally our As month, collectors physical extend NFT versions provide to crossover our very The By collectors physical entirely with to figures accelerated NFT's platform. majority new space collectible physical our bring fanbase. way digital, the

represent partners, market partner. new to a licensing For an solution with exciting turnkey trusted we a enter our

in NFTs Collected royalty initial on additional to transaction. the rights point to secondary markets, an a at payment We to sold week again physical are a property $XXX. price Funko only each exclusive starting purchase charge. launch Once the licensing figure featuring our also a planning June, each of receive rarest be and will free of score only new and with on will NFT Funko partners receiving out, available a

runs TokenHead, the and network a provides mobile specifically NFT blockchain to which and secure a chose built provides with buying, our convenient selling trading for we valuing displaying Network launch is leading on Importantly, for and NFTs collections. a platform for WAX NFTs. best-in-class efforts. WAX partners and us

NFTs NFTs. to WAX and new vIRL cycle will view Life been us Real Importantly, venture. the or recognize new provides products enable and to We exclusive Virtual the is the our We any Technology, enthusiasm around physical significant other which high. have link like this ultra-rare

with of building sustainable, small, starting a profitable. goal low costs keeping and that measured is are business entry our We approach and taking a a

the is look the As our positioned to we XXXX, long-term success. with we feel remainder for business strong ahead start and to of pleased are year confident that the particularly

continues expansion, innovation, product drive growth. and platform, team international culture diversification, focused Our remains on and our to pop community core initiatives strategic Funko's around

uncertain, somewhat are remains see easing macroenvironment demand restrictions and the globally. U.S. While we to in the consumer encouraged signals strengthening

recovery, Given seeing earlier are our for of regions, than the some and year. we key are across raising anticipated channels we outlook the full our

progress to We of at look results. our shareholders and approximately updated greatly when million EBITDA forward $XXX she of on appreciate range keeping XX.X%. million, expect our the of our partners, throughout XX% will you fans Jen previous support midpoint the We to our our more to sales financial reviews on achieve to adjusted share of year. outlook guidance the $XX margins million and details and $XXX net

the to turn to I'll our discuss call Now initiatives. over Andrew strategic

Andrew Perlmutter

Brian. Thanks,

We're strategic to are Our initiatives. against by and our progress record delight excited quarter the start to our year innovation strong continuing to deliver teams are first our our making to testament around results world. key fans upon the build ongoing the

four me you pillars. growth Let update on major our

unique in maximizing driving new First, using targeting our and evergreen fan as content ways. well business. specific by as our underpenetrated new our fans. across groups extending creating core that products reach core with creative growth resonate genres We're We're our and in

to uniquely ability properties Funko in which of leverage our Our content, evergreen to sales growth manner QX. drive continues nostalgic up XX% in made and

this new introducing and that also releases, target our video to market emphasize is bases continue remainder ability next sizable African with slate strengthens while will important game and success with new over with genres fan the to we An the properties. significant television ingredient evergreen the and then the content As increased the of favorites, year, exciting have opportunities. under-penetrated properties evergreen to

For momentum grow the compelling ability We Funko's year. been new anime, and example, since opportunities put reach we it has us fan as last particularly our stake sports bases provides compelling and we've as unique to identified and ultimately music building and with opportunity because a the ground view ecosystem. in this

truly you And been what innovation lifeblood the As has makes know, Funko. of it's this business thrive. always

formats pop the pandemic, example, comic gas. and out books. taken of they've new albums such rolling not During off we By as foot the pop are way pop our

the sports and are announced Gold are distinct a Gold, Figure Vinyl music where we designed the We currently penetrated. also fanbase recently launch platform. to to under of appeal figures

Importantly, our with introductions opportunity to expand retail our provide with these key footprint an product us partners.

strategic second Our is diversification. initiative product

year-over-year channels. within a retail expanding as multiple to portfolio, footprint both Brian brand continue youth our the broad-based In to within continued We our products across broadening our new and grow exciting distribution brand collectible our as we've Europe. innovation Loungefly XX% see able and runway customer and and expanding our drive grew direct-to-consumer continues As offerings, across growth demographic mass base and we broadening third-party business introducing been substantial and expansion to over younger appealing the to driven and collectibles. by non-figure our market, games diversify by through reach domestically product mentioned, categories, strength in to extend by youth partners. Loungefly both e-commerce our our a categories category, our

of Over traditional Snapsies will our the focused Freddy's. like of our the Five properties on Nights supporting we excitement be building of at recent year, course and around some launch

and QX continue than through Turning share to Marvel our traction edition a by popular was year, than gaining this more continue growth remainder market. driven including the strong games, gain retail partners. positioned category. Battleworld, XX our more the expanded portfolio titles second of With well are of of the we new distribution in for in we XX% slated to to

initiative the third of our Our expansion business. is DTC

Over year, fans. global significantly more our and digital with meaningful our we drive engagement us have enhanced enabling past direct the capabilities, to

Europe, where our pleased in We work and as as we bear funds calm. recently well from U.S. see investments as hard meaningful we gain launched traction fruit Europe the to are

our Importantly, through experience we've been to from strengthen purchase. engagement initial customer able

to DTC stages. still is While initiative early in we make its great progress our date,

and of back-end building the and programs, our important depth making loyalty are on on We expanding website, the and for tiered fan app rewards enhancing product improvements. our tools breadth including engagement, offerings capabilities the additional

DTC And tremendous XX% of there's over our to years grown we've today. runway from mentioned, Brian still business ahead. sales ago, believe X% two As just we

effort. expansion international Our our strategic final area of focus is

landscape on in our for In the invest Outside focused where particular distribution, variances disruption have to strategically brand of making our objectives. from new Australia, brands progress Zealand, the we're Europe, culture. where broadening less opportunity. streamlining regions Asia-Pacific Canada broadening excellent QX on we profitable believe While we presence. America. our Latin pop continues operations to we and the see establishing Europe, the Loungefly we product New In global and strong continue our thoughtfully pandemic, where against to wide Within saw strategic we our are emphasis region, growth partnerships through games channel will in we're recovery, affinity expanding see with

we I look to of to through the and take year. progress as us are now front you in and you on excited call execute the updated the through forward turn opportunities financials the expectations. XXXX over Jen will to keeping We

Jennifer Jung

number primarily good within And broad base better of performance the are grew from and year. regions comparisons XX% of ongoing $XXX,XXX were XX% $XX consumer Andrew. sales overall strength as The afternoon, admits XXX, XX% by in accelerating reflecting and pandemic The sales improving net highlighted sales of increased Net Europe channels. Thanks, of report increase quarter, pleased $XXX million our year-over-year unless demand quarter Net channels. XX%. well and to brands, across million, consumer markets. was to first increased international property expectations our to results was headwinds to strong products, while growth everyone. a geographies an in demand, key driven the active U.S. in an All several in QX XX%, other and BXC We're otherwise our stated. properties per which reflects than anticipated performance as prior increase relative active Europe by over results X%

million Other primarily of the our products, in sales performing category XX% a $XX increased please list quarter, our grew the million. top basis, net Loungefly-branded figures to XX% reflecting to quarter. accompanying see sales the For presentation. properties product $XXX QX in earnings of in the to On strength XX% which

grew our our game, strong saw pop-branded strength accessory both of double-digit in category. domestically Sales with we products growth Europe. plush and and within Additionally, XX%,

versus margin an costs. gross and by The was increase an freight primarily XXX increase improve of quarter offset and XX.X%, QX favorable improvement First sales in product margins reflect basis XXXX. year-over-year mix points partially shipping

As leveraged anticipated million SG&A XXX XX.X% a a to coming by the slightly percentage of higher to due in sale at than X% versus XXXX. performance the in XX.X% $XX points basis SG&A we dollars increased over quarter. in

In Moving P&L, increased strong expanded to QX share XX.X% through to down to line. XXX $XX diluted our adjusted basis per to flow adjusted points earnings substantially million, $X.XX. EBITDA EBITDA and the performance increased the top-line bottom margin adjusted

quarter revolver, and total quarter of represents during an $XXX our on million flow equivalents $XX strong QX operating last with Turning total down We XX% balance million compared year. liquidity growth and That debt quarter. cash business versus of up the of The cash to cash cash improvement nearly sales $XXX the million million of ended XX%. $XX.X year the totaled XX% we ended the million, a XX% $XX ago. at under with and generated of quarter-end representing to of of availability of million. $XX sheet flow, Inventory

for XXXX, half we demand over the dynamic. macro has In to we driving we the of year half, contemplated relative As more than anticipated already a guidance strengthening remain sooner earnings at the performance expect the the year-end in expectation outlook, we begun look half second first remainder to sales first consumer environment in environment low double call. had full remains digits our the normalized our demand Because sales our mid second on to growth half provided unchanged.

million For $XXX outlook year $XX sales to our line at we now expect that of about million we the million. contract for raising midpoint full by top XXXX, $XXX are and

as margin We mix. our direct-to-consumer continue business to distribution expect well gross increase in in XXXX driven as strengthen to by an and regional

the increase we balance adjusted basis of expected the XX% XX.X% of margin high-single mid compared of increase in to expect to the be basis sequentially SG&A representing the in to For XXX quarter XXX year points EBITDA year Full an a on each to dollar to is XXXX. range digit. to

per of We based on diluted We net appreciate this adjusted tax to based of and of adjusted income diluted to $XX $XX share count expect of blended XX% million your $X.XX average rate share million on million. afternoon. time $X.XX earnings a $XX.X weighted

Now take glad Brian, Andrew and I will be to your questions.

Operator

the [Operator Instructions] of Your Murphy line Sandler. first Erinn Piper question comes from from

Unidentified Analyst

This Jennifer afternoon. A great on the Good quarters. great thanks. Great, here. of speak you on Curt for questions with to Congrats couple gentlemen. Erinn, is and

rate that does where reshape the First P&L penetration long-term the DTC off, you see of do and how profitability? overtime,

Jennifer Jung

you? Hey, this are Jen, Curt, is how

Unidentified Analyst

great. Doing

Jennifer Jung

to and we've that. the build We penetration on year to been Good. in really past about XX% over feel what with able continue focus going achieve great that continue to to it quarter. DTC, to the We're growing

As And beyond. we have as we expect we're about strategies. to But progress Andrew that grow mentioned, and really on priority. but we it's one focus it to look the be we it good of continue to feel continuing our a made, long-term

Unidentified Analyst

on And NFT you use affecting the And great. then profile Awesome, top-line acquisition, of that that margin long-term? how just the do what's business? guys

Brian Mariotti

it margin profit obviously, approach. be physical Jen a and obviously new I business. mean, take businesses, is go. going going let conservative measured chime it's products to very very than I'll higher have Yeah, traditional our we We're view a in. the a what to But

one a a we're And on this as I business the a much obviously, excited cautious profitability. revenues, material if into the are strategy But very effect won't because and effect about having philosophy an maybe, being of two. it mean margins, to in very get this have continues our think, space. with grow, our I our we ultimately up year whole. we probably Now it and end you're on could

Unidentified Analyst

Got it. for me. more just Great. And one then

of terms revenue could where seeing overtime you're what a to speak you can guide as building? content Just today, and in be original that

Brian Mariotti

or been successes quarters. right. ours, last good And had four three in think It's we've real the focus of I a some

has of top when quarter. [ph] years from IP. zero basically we our in each IP either just outside significant That's progress every ten own from ago, own revenue been or and couple the top just the Our ten a

how will So we to on grow strategize continue business. to that

is which of one Paka, our original lining, a is outlets on which IP [ph] So exchange a to Japanese a on basis. inspired continue quarter-over-quarter

and brand significant there. our think Pop And we to continue We obviously Pop there's Protectors like Funko-styled products, our room more Cases.

We have initiative well. obviously Snapsies our as

So And focus to continue we're quarter-after-quarter. it growing, we'll this we a definitely resources certainly putting put and see on to that.

Unidentified Analyst

for you me. so it thank much. That's Awesome,

Brian Mariotti

Yep. for Good. Thanks talking.

Operator

the Your next Jefferies Wissink line from comes of Steph from question

Stephanie Wissink

in afternoon, of Curt's Thank have you about engagement terms the your yeah. I opportunity. question with on in couple talking Good are Your opportunity out the engagement. bit Talk fan? platform kind to of what opportunity, addition over significant, about everyone. DTC Brian, a next up a But of to NFT been revenue years. you're little has thinking you. follow it the about expanding your

Brian Mariotti

Yeah, people question. many so had to exciting what's I engage. with different many have the is so linking licensors. excited We've and This are great NFT's digital the together. with different conversations ways I a about are. retailers, There There's about request had physical retailers I and mean, Andrew ways what so out. mean, to that's get conversations they

could about our pot cards, NFT enthusiasts feel a that. a having Just and dropping way. a free, look we physical away. pop event is is the And keeping culture strategy we that think participate of finding a Diego before an into this there's a Funko, it's that that in and know a Pog retailers quick our the to has get between content to And we're the all to bought or very the Con have events. think content, one collaboration pops they're for like of programs link drop Funko cross-pollination They cash just vice It's just to up interactive, San keeping it's And free rare numbered, keeping and physical Funko value proposition. cross long-term like There's actual and never to exciting. physical I in sign give already if grab. embedded versa. with get NFT And to it NFT so it's really think NFT link content, Freddy see before. some is content buying NFT and as days never And not very them space on money might many really Because the it ways hand-in-hand there, well that and not Because It's licenses, they the different NFT week-to-week that. an I robust. to the starts basis, through all of ecosystem. and example, whether [ph] not with strategy, make products ways varied the engage wearing you price measured fans do, product people to People account. a fun, the to into what in approach product who secondary a there's out the unique product. NFF We fan we're NFT that's to Comic gets just There's consider to for real in so our for market This we sound T-shirt collectors an connections it that it it the fans is fundamentals just ever that low we long-term ways it going fresh, engaging licenses, which happen that are physical - it from bought finding diversity make base. people many that in to us we're interact. been It to But a take excited, a point going with content, is think. an space a a have goes who've grab. super is ways want

Stephanie Wissink

engaging by you talk developing? now, is market? to among Just Europe Brian, DTC? you patterns your bit I you're as that a up you opening a about common are that. think just on consumers could little DTC And with how but follow seeing exposure any

Brian Mariotti

seeing see advantage about environment formats years most Funko different Obviously, new a the of that buying feels basket, and trying our our down. we're XX coming they're We just Yeah. trusted again, better about limited, just than customer I was exclusive. they're me we new earlier that's be sometimes of ahead, obviously, in flash think she's to is a nearly And adding Funko average the understands we've We website, more our a base. bit rest and North She's But the special than regular She the almost - there. our I mere And partners. fan other buying and it's that and they leading pandemic and It's along the engage anybody. than size. crashing Europe of, seeing years. Europe exclusive, accomplished heavy, things think that partners. and that you'll the charge, to that wonderful different real of expected. now brought our that in driven a work people dropped two while out than to completely customer is we to testament ways the proud continue shut doing Gepford definitely the job retail been think rushing with in line. items few we're to other out still one And is oftentimes what little journey investment a used that for than consumer. I Johanna the we're And everyday for - to of in direct now create America. shell then done what ways come limited took was basket people And And business something would to on oftentimes are selling to minutes. be item get get What

Stephanie Wissink

Thank you very helpful.

Operator

JPMorgan. from Tami Zacharia from comes question next Your

Tami Zacharia

Hi, questions. much my taking so you thank for

spent you what all, first about bit So acquisition? if cash earnings accretion, TokenWave a the for and And ownership? this revenue expect share what little the was much you from of year? question of How acquisition do kind is, percentage my can at

Brian Mariotti

answer I yeah. can any But I part. answer Generally that partners. strategic

Jennifer Jung

At about as in the It's revenue relatively price, new The as are. stake acquisition company. really this the we was well purchase point, a for aren't that any much XX% disclosing company. we

As conservatively. Brian to - things was talking speaking taking cautiously very earlier. and We're

So at that perfectly Funko. this within it's our makes for point, That sense excited platform fits June we're on for launch working really it it. great at we're about and a our strategy, and it us

Tami Zacharia

super it? That's Got helpful.

that mean significant for of would you from year sort NFT include guidance revenues. this basically, So doesn't the any have contribution

Jennifer Jung

Correct.

Tami Zacharia

Okay, got it.

how And think question of rising is so impact thoughts on of on this my and And the year? cost those the second freight? resin, margins about any you

Brian Mariotti

was question - you first the that said was There resin? that

Tami Zacharia

Correct?

Brian Mariotti

don't we let part I'll of but Yeah, answer in the product. Jen it. use our second resin

Just applicable to of be wouldn't we any make our sure you necessarily so understand. don't here. products We resin don't that in use

Tami Zacharia

helpful. Super Yes. it. Got

Jennifer Jung

we last the as call. some definitely headwinds, out And our shipping, called for earnings on saw we

We see thought but headwinds, to expected headwinds. noted we could actually we those that we offset also

at the headwinds. - our this and those offset we're throughout we in have those are some So that's overall to we great taking But expect our able do does reflect And time. margin other measures seeing QX to XXXX. being we some margin continue strides shipping

Tami Zacharia

so and luck. Got it. Thank Perfect. best you of much,

Brian Mariotti

you. Thank

Tami Zacharia

you. Thank

Operator

next [Operator D.A. Linda comes Instructions] from question line from Your the Davidson. of Weiser

Linda Weiser

sell. comment think prior of talked things that. you comment, you I And like brick-and-mortar gain lot in could pandemic. those. know kind opportunities what and of kind expansions distribution you've about like update is Could you you on of if had seems that there's happened some - Best section just even what could I wondering the about to I Buy was distribution And your was of noticed Walmart, I I you? wondering on you It us are with like big opportunity. not accomplished? talked and if how a Hi,

Andrew Perlmutter

Yeah, that take for question. Andrew. can the is one. This I Thanks

that I start product that at So our diversification new we When well. partners see think with we about are existing we excited strategy, with where to you're retail talk going are. bear really our to as fruit and

mass both growing If you are lending a to diversification product space specifically, at the take additional core the and look at business, retail. channel, the

this we channel, So, take channels the look sports if and will space, supported a see promotional initiative. as anime that fully and initiative have, by in existing year, increases shelf well that that are and you as music mass you in at both the other

we more So be about that. couldn't excited

to also that, into. grown in we're that addition growth In categories seeing other have we

For continuing example, some even of things things, collectibles, in seeing shelf we're expansion, youth we're expansion. that we're where games that, our apparel like expansion good see games, to and seeing that category,

So we're retailers retailers. that. particular about floor those bridges excited We're within building growing, space always to new

think you I mentioned Best Buy.

And continuing new with Best refine store. got are those just We working place. in programs to Buy. they've We're a team in

success with our So a lot seeing good channel. we're the getting to of channels. know drug many the new team. But of at we're seeing We're expansions

continuing foot got we've our on and to gas down So the we're build

Brian Mariotti

wins like I with Linda, Europe big the with talk like well Carrefour. retailers in Yeah, as

all We continue over very we're just stores. to of in different where their their all now markets penetrate France-focused. It's Europe

So brick-and-mortar wins is lot of a in space. the there

Linda Weiser

your of you next in to expansion. Europe obviously And would markets? expand are be you I then internationally? starting to come and your new is - targets strengthen international And to around. going Are your into here up next mean, terms Great. be some what looking things international

Brian Mariotti

obviously, on now Poland, there. terms sales We've new teams different focusing Russia is a other to is some period way region leadership is of got specifically. team The are on But in are a and by in that definitely. focus Germany there Yeah, some great yeah, under really long penetrated. a short that of very these breaking of time. another focus Europe in out come countries in country has

strengthen of doing now. what really We're the So all countries. well we're the is in doing Nordics different

high definitely So of but in there Nordics are absolutely really level continuing build are CE that growth the Europe, in three the is and right humming brand interest and throughout Germany, a now. to

Linda Weiser

you thank Great, very much. Good luck.

Brian Mariotti

it. Appreciate

Jennifer Jung

Thanks Linda.

Andrew Perlmutter

Thank you.

Operator

Our the Markets of comes from from BMO Garrett Capital question Johnson next line

Garrett Johnson

specific like? be need And input chloride Hey, production? kind power those to increase on prices up price of pricing to looking polyvinyl follow if are - good guess if wanted your do or cost afternoon. costs, the that's affecting to to you question. need And what those How you and I what I and cover we have?

Brian Mariotti

Garrett, our China, raw Vietnam, not any we into use PVC pushed. when The choice a year. vinyl of been over goods to product price able Yeah, our volume. cost But to cross in to we've just it better-funded a resin, each bit comes we little And increase five And kind pure us aligning always amazing enabled we of is volume definitely amount of every have don't as lower our in overcome with manufacturing. of actually have increase years goods stronger, any out of and cost factories to materials. and migrated of larger, due had we

So space right container we're strong there's Obviously, containers there. some really headwinds a and position pricing. in with

of And really some that's only in terms terms thing facing delays, but that's right really cost us goods. now of the in

Garrett Johnson

Okay, Thank you. all right.

Brian Mariotti

Yeah.

Operator

And I this show time. management? any no further remarks questions closing at for there Are

Jennifer Jung

for We appreciate Thank your you it. today. time everybody really

Operator

this Thank today's your conclude you participation. for and conference. does gentlemen, Ladies

now may all disconnect. You

Funko (FNKO) 7 May 212021 Q1 Earnings call transcript