Andrew Heyward, chief executive of Kartoon Studios, provided an update on the company’s finances this month.

Heyward said the second quarter revenues of the Beverly Hills-based animated content creator and distributor were impacted by the ongoing Writers Guild of America strike, compounded by streaming services retooling their business models. 

“This strike-driven ‘reset’ resulted in reduced spending across the entire entertainment industry with new content orders coming to a near halt,” Heyward said in the update posted at the Kartoon Studios website on Aug. 14. 

For the second quarter, Kartoon reported a net loss of $15.2 million (-47 cents a share) for the period ending June 30, compared with a net loss of $13.3 million (-42 cents) in the same period of the previous year. Revenue fell by about 50% from the second quarter of the prior year to $11 million. 

The company and its subsidiaries, including Mainframe Studios in Vancouver, British Columbia, has not signed contracts with the Writers Guild or the Screen Actors Guild, which went out on strike on July 14, so orders for animated content has begun to pick up, Heyward said in the update.

Kartoon has a number of significant series expected to greenlight imminently from Mainframe’s customers, including Mattel Inc. in El Segundo, The Walt Disney Co. in Burbank, Netflix Inc. in Los Gatos, Spin Master in Toronto and others, he added.

“We expect this positive trend to continue and believe the revenue decline we experienced has been timing related,” Heyward continued. “We anticipate the forthcoming orders will positively impact revenue in future quarters, allowing the company to resume its steady and continuing growth trajectory.”  

Heyward said that although the markets Kartoon Studios serves remain challenging, he is encouraged by the outlook for the business and anticipates improved revenue in the second half of the year as content orders for the Mainframe production business resume. 

But at the same time, he added, the company remains focused on managing expenses. 

“We expect that our recent initiatives to streamline the organization will be more fully realized in the second half of the year, as we move toward profitability,” Heyward said.

Expense reductions include personnel costs, production spending, and lease and vendor expenses, the company said.