Funko Initiates Leadership Changes to Strengthen Operations and Business Performance

Rhea-AI Summary

Funko, Inc. (NASDAQ: FNKO) announced key leadership changes aimed at enhancing operations and shareholder value. Brian Mariotti returns as CEO, succeeding Andrew Perlmutter, who transitions to President. Jennifer Fall Jung steps down as CFO, with Scott Yessner appointed interim CFO. A search for a permanent CFO is underway, and a new COO role is being created. The Board emphasizes that these changes focus on operational improvements and strategic growth, with no issues related to financial integrity reported. This represents a proactive approach to strengthen Funko's market position and drive profitability.

Positive

• Brian Mariotti returns as CEO, bringing leadership stability.
• Focus on operational improvements and profitable growth.
• Engagement of Steve Nave as a consultant to drive strategic execution.

Negative

• Transition in CFO role may lead to temporary uncertainty.
• Creation of COO position indicates potential operational challenges.

EVERETT, Wash.--(BUSINESS WIRE)-- Funko, Inc. (“Funko” or “the Company”) (Nasdaq: FNKO), a leading pop culture lifestyle brand, today announced a series of leadership changes to strengthen the Company’s operations, drive enhanced returns for stockholders and best position Funko to capture the significant opportunities ahead. These changes include:

• Brian Mariotti, Chief Creative Officer, board member and former Chief Executive Officer of Funko, has been appointed Chief Executive Officer, effective immediately. Mr. Mariotti succeeds Andrew Perlmutter, who is stepping down as CEO and will become President, effective immediately. As President, Mr. Perlmutter will focus primarily on growing the Company’s brands and will remain on the Board of Directors. Mr. Mariotti has a mandate from the Board to identify operational improvements while continuing to drive profitable growth.
• Jennifer Fall Jung is stepping down as Chief Financial Officer, effective immediately. The Board has initiated a search to identify the Company’s next permanent CFO. Scott Yessner will serve as interim CFO until Ms. Fall Jung’s successor is identified. Mr. Yessner has been engaged through Tatum, a global talent services firm, and brings a 20-year track record of helping companies during transformative periods.
• The Board is also creating a new role of Chief Operating Officer and will work to identify a world class executive to fill that role and lead the Company’s operational improvements. The Board has retained a leading executive search firm to assist in the search for the permanent CFO and the COO.
• The Company has engaged Steve Nave as a consultant to the Company, effective immediately, and he will work full-time alongside the management team to drive strategic and operational execution. Mr. Nave brings decades of leadership experience in retail, consumer and e-commerce with a track record of leading companies through significant growth. He held several executive leadership positions with Walmart.com and Bluestem Brands, including serving as Walmart.com’s Chief Financial Officer, Chief Operating Officer and Chief Executive Officer followed by serving as the Chief Executive Officer of Bluestem Brands.

“The Board is taking swift and decisive action to strengthen operations and drive improved results for our stockholders,” said Charles Denson, Chairman of the Board. “We are grateful to Brian for stepping back in as CEO during this important time, and the Board is focused on identifying a COO who will work with him to execute on operational enhancements across the organization. We will also work with urgency to identify a permanent CFO with significant financial expertise and leadership experience. The Board believes the actions being taken today will enable the Company to deliver on its near and long-term strategic and financial goals.”

“This is an important time for Funko, and my belief in the Company’s promise and vision are as strong as ever,” said Mr. Mariotti. “Funko has a diverse and valuable portfolio of products with strong demand from our loyal, engaged and growing fan base. We are making critical investments across our business, including within the operations and leadership of our warehouse to improve our customer experience and maximize growth opportunities as our business scales. We recognize there is more work to be done so that we can capitalize on our unique value proposition. I look forward to collaborating with the new members of the leadership team, as we focus on making the necessary operational and strategic changes to deliver value for our stockholders.”

Jesse Jacobs, Funko director and Co-founder and Partner of TCG, which owns approximately 25% of the Company, added, “The Board made these changes to strengthen the Company and deliver value for all Funko stockholders. My colleagues at TCG and I remain confident in the long-term potential of the Company.”

The Company noted that the announced leadership transitions are not related to any issues with respect to the integrity of the Company’s financial statements or accounting policies and practices.

About Brian Mariotti

Brian Mariotti served as Funko, lnc.'s Chief Creative Officer since January 2022, prior to which Mr. Mariotti served as Chief Executive Officer and has been a member of the Funko, Inc. board of directors since its formation in April 2017. Prior to the formation of Funko, Inc., Mr. Mariotti served as the Chief Executive Officer of FAH, LLC and as a member of FAH, LLC's board of directors since October 2015. Mr. Mariotti also served as Chief Executive Officer of Funko, LLC since he acquired the business with a small group of investors in 2005.

About Funko

Headquartered in Everett, Washington, Funko is a leading pop culture lifestyle brand. 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 www.funko.com, and follow us on Twitter (@OriginalFunko) and Instagram (@OriginalFunko).

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 anticipated leadership changes and related benefits, the Company’s ability to deliver value for all stockholders, and strategic priorities. 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: our ability to attract and retain qualified employees and maintain our corporate culture; risks related to the impact of COVID-19 and the current macroeconomic environment on our business, financial results and financial condition; our ability to execute our business strategy; our ability to compete effectively; fluctuations in our gross margin; our ability to manage our inventories; any failure to successfully integrate or realize the anticipated benefits of acquisitions, investments or organizational changes; risks relating to our indebtedness and our ability to secure additional financing; and the influence of our significant stockholder, TCG, and the possibility that TCG’s interests may conflict with the interests of our other stockholders. These and other important factors discussed under the caption “Risk Factors” in our quarterly report on Form 10-Q for the quarter ended September 30, 2022 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/20221205005807/en/

Investor Relations:

investorrelations@funko.com

Media:

pr@funko.com

Source: Funko, Inc.

FAQ

What leadership changes were announced by Funko on October 2023?

Funko announced Brian Mariotti as the new CEO, Andrew Perlmutter as President, and Jennifer Fall Jung stepping down as CFO with Scott Yessner as interim CFO.

What is the potential impact of Funko's leadership changes on its stock performance?

The leadership changes aim to strengthen operations and drive improved returns for stockholders, potentially positively influencing stock performance.

Why did Funko create a new COO role?

The new COO role is intended to enhance operational improvements and ensure effective execution of the company’s strategic initiatives.

Is there any concern regarding Funko's financial integrity following the leadership changes?

The Board stated that the leadership transitions are not related to any issues with the integrity of the company’s financial statements.