NEW YORK — The Harvey Entertainment Co. said Friday that its net loss widened 17% to $2.4 million in the first quarter as revenues fell 34.7% to $562,000.
Harvey attributed its weak financials to limited operations “as a result of working capital constraints and the strategic review process ongoing throughout the first quarter of 1999 under the interim management services of Global Media Management Group.”
Last month, after several suitors made several plays for the company driven by a stable of licensed characters like Baby Huey, Richie Rich and Little Audrey, Harvey announced an agreement to be bought by a group headed by Roger A. Burlage and the Kushner-Locke Co. for $11.5 million in cash and $5.5 million in Kushner-Locke stock.
As part of that agreement, Burlage, an entertainment-executive veteran, joined the company to head up a permanent management team.
Harvey said its sales slide for the quarter ended March 31 also reflected a lack of revenues from filmed entertainment, as well as fluctuations in the timing and accounting treatment of merchandising licenses.
The bottom line absorbed an additional loss, estimated at $250,000, for the live-action, direct-to-video feature “Baby Huey’s Great Easter Adventure,”‘ which was released in March, and a $300,000 reserve against doubtful licensing and merchandising receivables.
Looking forward, Burlage said: “While our new strategy will take the next few quarters to begin to be fully implemented, I am confident we can turn the company around.”