Funko Provides Additional COVID-19 Business Update
April 02 2020 - 5:00PM
Business Wire
Funko, Inc. ("Funko,” or the “Company”) (Nasdaq: FNKO), a
leading pop culture consumer products company, today announced that
due to the uncertainty of the COVID-19 crisis, it is taking the
following actions to enhance its financial flexibility:
- Beginning on April 5th, Funko will furlough a significant
portion of its employees. Affected employees will maintain their
health benefits, and subject to local regulations, will also be
able to access unemployment benefits;
- Implementing salary reductions across the executive team as
well as members of upper level management;
- Executing reductions in operating expenses and non-product
development capital expenditures; and
- Proactively managing working capital, including reducing
incoming inventory to align with anticipated sales.
In addition to these actions, Funko is evaluating further
options to increase flexibility and retain liquidity. Since
December 31, 2019, the Company repaid all outstanding borrowings on
its $75 million revolving credit facility and subsequently drew
down approximately $29 million. As of March 31, 2020, the Company
expects to have over $50 million of cash on hand and $46 million of
availability on its revolving credit facility.
“During this uncertain and unprecedented time, it is essential
we take actions to best position Funko for our employees, partners
and shareholders,” stated Brian Mariotti, Chief Executive Officer.
“We are making difficult decisions that we believe will put us in a
position of strength to navigate this crisis and support the
long-term health of our Company.”
About Funko
Headquartered in Everett, Washington, Funko is a leading pop
culture consumer products company. Funko designs, sources and
distributes licensed pop culture products across multiple
categories, including vinyl figures, action toys, plush, apparel,
housewares and accessories for consumers who seek tangible ways to
connect with their favorite pop culture brands and characters.
Learn more at https://funko.com/, and follow us on Twitter
(@OriginalFunko) and Instagram (@OriginalFunko).
Financial Disclosure Advisory
The Company reports its financial results in accordance with
U.S. generally accepted accounting principles. All financial data
in this press release is preliminary and represents the most
current information available to the Company’s management, as
financial closing procedures for the quarter ended March 31, 2020
are not yet complete. These estimates are not a comprehensive
statement of the Company’s financial results for the quarter ended
March 31, 2020 and actual results may differ materially from these
estimates as a result of the completion of normal quarter-end
accounting procedures and adjustments, including the execution of
the Company’s internal control over financial reporting, the
completion of the preparation and review of the Company’s financial
statements for the quarter ended March 31, 2020 and the subsequent
occurrence or identification of events prior to the formal issuance
of the first quarter financial results.
Forward Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. All statements contained in this press release that do not
relate to matters of historical fact should be considered
forward-looking statements, including statements regarding our
anticipated financial results for the first quarter of 2020, the
anticipated impact of the COVID-19 outbreak on our business, and
our ability to cut costs and mitigate disruption. These
forward-looking statements are based on management’s current
expectations. These statements are neither promises nor guarantees,
but involve known and unknown risks, uncertainties and other
important factors that may cause our actual results, performance or
achievements to be materially different from any future results,
performance or achievements expressed or implied by the
forward-looking statements, including, but not limited to, the
following: risks related to the ongoing COVID-19 outbreak; our
ability to execute our business strategy; our ability to maintain
and realize the full value of our license agreements; the ongoing
level of popularity of our products with consumers; changes in the
retail industry and markets for our consumer products; our ability
to maintain our relationships with retail customers and
distributors; our ability to compete effectively; fluctuations in
our gross margin; our dependence on content development and
creation by third parties; our ability to manage our inventories;
our ability to develop and introduce products in a timely and
cost-effective manner; our ability to obtain, maintain and protect
our intellectual property rights or those of our licensors;
potential violations of the intellectual property rights of others;
risks associated with counterfeit versions of our products; our
ability to attract and retain qualified employees and maintain our
corporate culture; our use of third-party manufacturing; risks
associated with our international operations; changes in effective
tax rates or tax law; foreign currency exchange rate exposure; the
possibility or existence of global and regional economic downturns;
our dependence on vendors and outsourcers; risks relating to
government regulation; risks relating to litigation, including
products liability claims and securities class action litigation;
any failure to successfully integrate or realize the anticipated
benefits of acquisitions or investments; reputational risk
resulting from our e-commerce business and social media presence;
risks relating to our indebtedness and our ability to secure
additional financing; the potential for our electronic data or the
electronic data of our customers to be compromised; the influence
of our significant stockholder, ACON, and the possibility that
ACON’s interests may conflict with the interests of our other
stockholders; risks relating to our organizational structure;
volatility in the price of our Class A common stock; and risks
associated with our internal control over financial reporting.
These and other important factors discussed under the caption “Risk
Factors” in our annual report on Form 10-K for the year ended
December 31, 2019 and our other filings with the Securities and
Exchange Commission could cause actual results to differ materially
from those indicated by the forward-looking statements made in this
press release. Any such forward-looking statements represent
management’s estimates as of the date of this press release. While
we may elect to update such forward-looking statements at some
point in the future, we disclaim any obligation to do so, even if
subsequent events cause our views to change. These forward-looking
statements should not be relied upon as representing our views as
of any date subsequent to the date of this press release.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200402005804/en/
Investor Relations: Andrew Harless Funko Investor
Relations investorrelations@funko.com
Media: Jessica Piha-Grafstein Funko Public Relations
jessicap@funko.com
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