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.”
This isn't good.
I don't pretend to be an expert on the best measures a company can take to survive this, but this reads like a smart, strategic approach to weather an unimaginable storm. Funko is an fantastic company that is a necessary part of geekdom; I hope their plans keep the company going / solvent through this awfulness.
