Kartoon Studios Inc. recently announced its financials for the third quarter.
Andy Heyward, chief executive of the Beverly Hills entertainment and media company, said with a resolution to the Hollywood writers and actors strikes, Kartoon Studios’ Vancouver-based animation workshop Mainframe Studios was seeing orders coming in for a meaningful number of new series.
“We anticipate these forthcoming orders will positively impact revenue in upcoming quarters, allowing the company to resume the growth trajectory that it had been experiencing prior to the strikes,” Heyward said.
The Writers Guild of America went on strike in early May against the Hollywood studios, with the Screen Actors Guild-American Federation of Television and Radio Artists going on strike in mid-July. The writers reached a new deal at the end of September while the actors reached a settlement in early November.
Even though Kartoon Studios and its related companies and subsidiaries aren’t part of WGA or SAG, the strikes had a noticeable impact on the entire industry in the third quarter, with a marked decrease in spending and new content orders, Heyward said.
In 2022, Kartoon Studios acquired Mainframe Studios when it bought Canada’s WOW Unlimited Media. Mainframe is a division of the company.
Mainframe Studios has built a reputation as one of the premier content suppliers to Netflix Inc., Disney+, YouTube, Hulu LLC, Mattel Inc., Spin Master Corp., and others, Heyward said.
During the third quarter, the company delivered its longstanding animated version of “Barbie” to Netflix, shortly after the blockbuster success of the live-action “Barbie” movie from Warner Bros Studios came out in July. It also delivered its “Unicorn Academy” series produced for Spin Master, a Toronto children’s entertainment and toy maker, which debuted as the No. 1 animated series on Netflix, Heyward continued.
Among other shows made by the company are “Shaq’s Garage,” starring former NBA star Shaquille O’Neal and “Warren Buffett’s Secret Millionaires Club” featuring the famed investor as he teaches a group of kids about financial literacy.
Kartoon Studios reported on Nov. 17 a net loss of $15.5 million (-44 cents a share) for the quarter ending Sept. 30, compared with a net loss of $11.2 million (-35 cents) in the same period a year earlier. Revenue decreased by 49% from the third quarter of the prior year to $10.1 million.
Still, Heyward said his confidence in the business’ trajectory remains strong.
“We are seeing promising signs that point towards a meaningful increase in revenue as we move into next year and beyond,” he said in a statement.
He said the influx of orders for animated series at the Mainframe production business will prove to be a driver for Kartoon Studios’ future growth.
“Our commitment to financial discipline remains unwavering as we rigorously manage our expenses, with a focus on efficiency and effectiveness,” he said.
