Kartoon Studios Provides Business Update for the Second Quarter of 2023

BEVERLY HILLS, Calif., Aug. 14, 2023 (GLOBE NEWSWIRE) -- Kartoon Studios (NYSE American:TOON) today provided a business update for the second quarter of 2023.

Andy Heyward, Chairman & CEO of Kartoon Studios, stated, “While revenues grew for the 6-months ended June 30, 2023, sales for the three-month period were effected by an industry-wide slowdown of program orders by broadcasters and streaming networks, impacting our Mainframe Studios subsidiary. This slowdown was largely due to the anticipation of and the actual Writers Guild of America (WGA) and Screen Actors Guild (SAG) strikes in Hollywood, compounded by the streaming services retooling their models. This strike-driven ‘reset,’ resulted in reduced spending across the entire entertainment industry with new content orders coming to a near halt.   Although the strike is ongoing, neither Kartoon Studios nor its subsidiaries are signatories of WGA or SAG. As a result, orders have begun to pick back up, and we have a number of significant series expected to greenlight imminently, from Mainframe’s diverse base of customers, including Mattel, Disney, Netflix, Hulu, Spin Master, and others. We expect this positive trend to continue and believe the revenue decline we experienced has been timing related. We anticipate the forthcoming orders will positively impact revenue in future quarters, allowing the Company to resume its steady and continuing growth trajectory.  Animation is a timeless and reliable performer that is a staple for broadcasters and streamers alike. Our subsidiary, Mainframe Studios, has built a well-earned reputation as one of the premier suppliers to Netflix, Disney+, YouTube, Hulu, Mattel, Spin Master, and others, which we are very confident will continue, as they deliver reliable and top-performing brands, including Barbie, Coco Melon, and the upcoming Unicorn Academy, among others.”

“In the meantime, our wholly owned distribution platform, Kartoon Channel!, is performing extremely well by all metrics, having recorded 82% year-over-year improvement in the 1^st half of 2023, as we have seen steady increases in both subscribers and minutes watched, with noteworthy ‘stickiness’ to the growing brands of Stan Lee’s Superhero Kindergarten, Rainbow Rangers, and the recently launched Shaq’s Garage. Kartoon Channel! viewer rankings continue to outperform all of its major competitors in the Apple app store, with 4.9 out of 5 stars, besting Disney+, Netflix Kids, YouTube, and others, as the brand takes root and grows. As a result, Kartoon Studios is now less dependent on third-party networks for distributing our content. It is also important to note that while many of our competitors have been chasing subscribers over profits, in contrast, we have taken a more measured approach and our growing streaming business is very near profitability, as we build out what we are confident will become an extraordinarily valuable and lasting global asset.”