Kartoon Studios Reports Strong Progress and Provides Business Update for the Fourth Quarter and Full Year of 2023

Projected Growth and Cost Saving Initiatives Driving Company Towards Profitability as Animated Characters, Catalogue of Animated Episodes, and Broadcast Assets, All Grow

Under New CFO, Q4 2023 Direct Operating Costs Reduced by Over 70% Year-Over-Year and 54% Sequentially, While Identifying Over $3.5 Million in Additional Annualized Cost Savings Across the Company, to be Implemented in 2024

Kartoon Channel!'s Streaming Business Operating at Break-Even Operating Income, Setting it Apart from Many Leading Competitors, with Continuing Growth and Anticipated Improvement Throughout 2024

Kartoon Channel!’s Paid Subscriber Base Grew 19% in Full Year 2023 Compared to Full Year 2022

Production Arm, Mainframe Studios’ Growing Sales Pipeline and Newly Greenlit Projects Projected to Generate More Than $40 Million in Revenue; Experiencing Robust Recovery Post Industry-Wide Streamer Disruptions and Actors and Writers Strikes

Beacon Media Group, the Company’s Kids and Family Media Agency, Bucks Industry Trends Achieving 16% Quarterly Growth Compared to Q4 2022, Marking Highest Quarterly Revenue Since 2021

Significant Initiatives Underway to Propel Stan Lee Brand and Implement AI Across the Organization

BEVERLY HILLS, Calif., April 09, 2024 (GLOBE NEWSWIRE) -- Kartoon Studios (NYSE American: TOON) today provided a business update for the fourth quarter and year ended December 31, 2023.

Andy Heyward, Chairman & CEO of Kartoon Studios, stated, “2023 was a transformative year for the Company as we laid the foundation for long-term growth and sustainable profitability. Under the strict discipline of our new CFO, Brian Parisi, a former unit CFO of the NFL, we have dramatically reduced our expenses by driving operational efficiencies, while having already identified an additional $3.5 million of annualized cost savings expected to be realized by the Company beginning in 2024. Specifically, under Brian’s leadership, we have cut direct operating costs in Q4 2023 by over 70% compared to the same period last year, and sequentially by more than 54% versus the third quarter of 2023. The entire media industry experienced disruptions in 2023, from the writers and actors strikes, as well as a major reset among streaming companies. Nevertheless, we are confident we are now back on a growth trajectory, as evidenced by the traction we’re gaining in each of our subsidiaries. Specifically, newly greenlit projects are projected to generate over $40 million of revenue within our Canadian production arm, Mainframe Studios, while the sales pipeline is growing rapidly. At the same time, Kartoon Channel!’s paid subscriber base continues to grow, providing us with high margin recurring revenue. Importantly, Kartoon Channel! achieved break-even operating income at the end of 2023, and growth has continued as we move into 2024 with anticipated improvement going forward. We are especially proud of this accomplishment given the short time since we launched this business in 2020 and the fact that many of the leading streaming services are still operating with significant losses. Moreover, our Beacon Media Group subsidiary has resumed solid growth and, in Q4 2023, achieved its highest quarter revenue since 2021. Lastly, we look forward to unveiling key initiatives underway that we believe will propel the growth of the Stan Lee Universe, as well as the implementation of AI across our organization to drive revenues and enhance operating efficiency.”