Funko(FNKO)2025-03-13 20:35Financial Performance - Consolidated net sales for the year ended December 31, 2024, were $1,049.85 million, a decrease from $1,096.09 million in 2023, and $1,322.71 million in 2022 [414]. - The net loss attributable to Funko, Inc. for 2024 was $14.72 million, compared to a net loss of $154.08 million in 2023 [414]. - The company reported a loss per share of Class A common stock of $0.28 for 2024, consistent with the loss per share of $3.19 in 2023 [414]. - The company experienced a comprehensive loss of $16.21 million in 2024, compared to a comprehensive loss of $151.66 million in 2023 [418]. - The net loss for the year ended December 31, 2024, was $15.07 million, compared to a net loss of $164.44 million in 2023 and a net loss of $5.24 million in 2022 [534]. - Funko, Inc. reported a net loss of $15.07 million for the year ended December 31, 2024, compared to a net loss of $164.44 million in 2023 and $5.24 million in 2022, indicating a significant reduction in losses year-over-year [555]. - The basic loss per share of Class A common stock was $(0.28) for 2024, down from $(3.19) in 2023 and $(0.18) in 2022, reflecting improved performance despite ongoing losses [555]. Revenue and Sales - Total net sales for the year ended December 31, 2024, were $1,049.85 million, a decrease of 4.2% from $1,096.09 million in 2023 and a decline of 20.6% from $1,322.71 million in 2022 [534]. - Core Collectible sales accounted for $804.41 million in 2024, slightly up from $803.18 million in 2023, but down from $998.44 million in 2022 [534]. - The Company recorded net sales of $681.99 million in the United States for 2024, down from $755.62 million in 2023 and $966.32 million in 2022 [534]. Expenses and Costs - The cost of sales for 2024 was $615.32 million, down from $763.09 million in 2023, indicating a reduction in costs [414]. - Total operating expenses for 2024 were $1,036.86 million, a decrease from $1,199.91 million in 2023 [414]. - The company reported depreciation and amortization expenses of $62,583,000 in 2024, up from $57,389,000 in 2023 [427]. - Advertising and marketing costs increased to $51.6 million in 2024 from $31.3 million in 2023, reflecting a strategic push in marketing efforts [450]. - Product design and development costs were $6.8 million in 2024, down from $8.0 million in 2023, suggesting a potential shift in R&D focus [452]. Assets and Liabilities - Total assets decreased from $798,585,000 in 2023 to $707,254,000 in 2024, a decline of approximately 11.4% [421]. - Current assets fell from $336,816,000 in 2023 to $287,059,000 in 2024, representing a decrease of about 14.8% [421]. - Long-term debt decreased from $130,986,000 in 2023 to $100,303,000 in 2024, a reduction of about 23.5% [421]. - Accounts receivable decreased from $130,831,000 in 2023 to $119,882,000 in 2024, a decline of approximately 8.5% [421]. - Inventories decreased from $119,458,000 in 2023 to $92,580,000 in 2024, representing a decrease of about 22.5% [421]. - Total long-lived assets decreased to $134.996 million as of December 31, 2024, from $160.586 million in 2023 [534]. Debt and Interest - As of December 31, 2024, the company had $172.2 million of variable rate debt outstanding under its Credit Facilities, including $112.2 million under the Term Loan Facility and $60.0 million under the Revolving Credit Facility [384]. - A 1% increase or decrease in the effective interest rate would result in an approximate $1.1 million change in interest expense over the next 12 months [384]. - The company’s interest expense for 2024 was $20.58 million, down from $27.97 million in 2023 [414]. - The total term debt decreased from $153.1 million in 2023 to $122.8 million in 2024, a reduction of approximately 19.7% [482]. - The Revolving Credit Facility borrowings decreased from $120.5 million in 2023 to $60.0 million in 2024, a reduction of approximately 50% [490]. - The weighted average interest rate on outstanding borrowings under the Revolving Credit Facility decreased from 9.45% in 2023 to 6.71% in 2024 [490]. Tax and Regulatory Compliance - The company’s operations are subject to compliance with various data privacy laws, including GDPR and CCPA, which could result in fines up to €20 million or 4% of total global annual turnover for violations [249][250]. - The company may face limitations in using certain tax attributes if it undergoes an "ownership change," which could adversely impact its financial condition and operating results [246]. - The Company established a full valuation allowance of $123.2 million against its deferred tax assets as of December 31, 2023, indicating challenges in realizing tax benefits [455]. - The Company’s annual effective tax rate for 2024 is (43.4)%, significantly lower than the statutory rate of 21% due to valuation allowance and foreign taxes [503]. Legal Matters - The Company has accrued a liability of $14.75 million related to a settlement in a class action lawsuit as of December 31, 2024 [524]. - The consolidated complaint in the securities litigation alleges violations of the Securities Act, seeking compensatory damages and attorneys' fees [524]. - The Company is currently involved in ongoing legal proceedings, but does not believe these will materially affect its financial condition [529]. Equity and Stock - The Company has authorized the issuance of up to 200 million shares of Class A common stock, 50 million shares of Class B common stock, and 20 million shares of preferred stock [537]. - The Company recognized equity-based compensation expenses of $13.6 million, $10.5 million, and $16.6 million for the years ended December 31, 2024, 2023, and 2022, respectively [549]. - The weighted-average fair value of stock options granted was $4.90, $6.71, and $10.85 per share for the years ended December 31, 2024, 2023, and 2022, respectively [548]. - The Company reported an intrinsic value of $915,000 for stock option exercises in 2024, with cash received for exercise price totaling $1.41 million [547]. - As of December 31, 2024, there was $25.0 million of total unrecognized equity-based compensation expense expected to be recognized over a remaining weighted-average period of 2.7 years [550].