[ PW Home ] [ Bestsellers ] [ Subscribe ] [ Search ]
|
| |
 | News |
Cash Crunch Hits NewStar Media
Jim Milliot -- 5/1/00
NewStar Media is experiencing a severe working capital shortage, and unless it can find additional funding, the company will not be able to continue operations, the publisher reported in its 10-k filing with the SEC. NewStar finished 1999 with a net loss of $10.8 million, compared to a loss of $4.9 million in 1998. Revenues fell 31.6%, to $10.8 million. The company also ended the year with negative cash flow of $7 million and as of April 11, NewStar was not in compliance with certain tests in its loan agreement with Chase Bank. The company is seeking waivers from Chase, and while it has received waivers in the past, it had not received the needed waivers at the time of its SEC filing.
A bright spot for the company was its publishing division, where sales rose 4.3%, to $7.2 million. The increase was due to improvement in its print book operation, which reported revenues of $509,000, compared to net returns of $93,000 in 1998. Sales of audio books fell to $6.8 million from $7 million. NewStar said the decline in audio revenues was attributable to its plan to release fewer, higher-quality titles as well as a decision to expand into nontraditional markets, a move that did not meet expectations.
The company has also had problems selling audio books through its Web site, audiouniverse.com. Launched last June, the site "has had limited activity," the filing notes.
NewStar's filmed entertainment segment had a poor year, with revenues falling to $3.6 million in 1999 from $8.9 million.
The publishing division, which is now being run by John Hunt (News, Mar. 13), plans to release approximately 100 audio books this year, compared to 150 in 1998. No new print books are scheduled to be published this year; NewStar has a backlist of about 50 titles. As a result of the downsizing of the company, NewStar now has 35 employees, compared to 47 at the same time last year.
The filing also elaborates slightly on the company's agreement with Michael Viner and Deborah Raffin to give the Dove founders about 300 titles (News, Apr. 17). The deal settles all outstanding litigation with Viner and Raffin, including an obligation by NewStar to pay the two $900,000 that had been accrued under their termination agreement.
Back To News
---> |
Search | Bestsellers | News | Features | Children's Books | Bookselling
Interview | Industry Update | International | Classifieds | Authors On the Highway
About PW | Subscribe
|
Copyright 2000. Publishers Weekly. All rights reserved.
|
