N@N

4Kids Entertainment Reports 2010 Second Quarter Results

^{Published on 2010-08-16 05:11:21 - Market Wire}
 

NEW YORK--([ BUSINESS WIRE ])--4Kids Entertainment, Inc. (Pink Sheets: KIDE), the global childrena™s entertainment and merchandise licensing company, today announced financial results for the second quarter ended June 30, 2010.

"4Kids had a difficult second quarter as revenue across our separate business segments came in below expectations"

Net revenues for the three months ended June 30, 2010 totaled $2.5 million, compared to $3.6 million for the same period in 2009. The Companya™s net loss attributable to 4Kids Entertainment for the three months ended June 30, 2010 was $(6.5) million, or $(0.48) per diluted share, as compared to a net loss of $(13.8) million, or $(1.04) per diluted share, for the same period in 2009.

For the six months ended June 30, 2010, net revenues totaled $6.7 million, compared to $12.9 million for the same period in 2009. The Companya™s net loss attributable to 4Kids Entertainment for the six months ended June 30, 2010 was $(9.9) million, or $(0.74) per diluted share, as compared to a net loss of $(15.8) million, or $(1.19) per diluted share, for the same period in 2009.

As of June 30, 2010, the Company had approximately $4.3 million in cash and $11.4 million in investment securities at their fair market value.

As the Company has previously announced, the Company is continuing to explore its strategic alternatives. The Special Committee of the Board of Directors consisting of our four independent directors is presently in discussions with several companies which may be looking to invest in 4Kids or acquire all or a portion of the Companya™s business. There can be no assurance that any transaction will result from these discussions.

a4Kids had a difficult second quarter as revenue across our separate business segments came in below expectations," said Alfred R. Kahn, Chairman and Chief Executive Officer of 4Kids Entertainment, Inc. "The Company, however, did benefit in the second quarter from various strategic cost cutting measures implemented over the past year. Our second quarter 2010 SG&A expenses were down by 27%, or $3.0 million, to $8.1 million, as compared to the second quarter of 2009. We will be immediately focusing on further reducing our cost structure to bring it in line with our revenue projections," continued Kahn.

"At the end of the second quarter, we concluded our negotiations with The CW Network on a revised agreement which should be more favorable to the Company going forward. We have just started our advertising and promotion campaign for the rebranding of our five-hour Saturday morning block on The CW. We are calling it aToonzai on CW 4Kidsa™ to emphasize that our network is the destination where kids can see leading Japanese animated series. The aToonzaia™ lineup will feature new episodes of Yu-Gi-Oh! 5D's and Dragon Ball Z Kai, as well as longtime favorites such as Sonic X, Dinosaur King and classic Yu-Gi-Oh!. Our TV ratings were up these past few weeks and we are hopeful that our ratings momentum will continue this fall," said Kahn.

aWe also continue to work on growing our licensing operation, which historically has been our strongest business and has driven past performance for our other segments. We are hopeful that we can develop sufficient revenue streams from some of our new properties which will contribute meaningfully to our bottom line in the coming years," concluded Kahn.

About 4Kids Entertainment, Inc.

With U.S. headquarters in New York City, regional offices for its trading card business in San Diego, California and international offices in London, 4Kids Entertainment, Inc. (Pink Sheets: KIDE) is a global organization devoted to the creation, development, production, broadcasting, distribution, licensing and manufacturing of childrena™s entertainment products.

Through its subsidiaries, 4Kids produces animated television series and films, distributes 4Kidsa™ produced or licensed animated television series for the domestic and international television and home video markets, licenses merchandising rights worldwide to 4Kidsa™ owned or represented properties, operates Websites to support 4Kidsa™ owned or represented properties, and produces and markets collectible trading card games. Additionally, the Company programs and sells the national advertising time in aTheCW4Kidsa five-hour Saturday morning block on The CW television network.

Additional information is available on the [ www.4KidsEntertainment.com ] corporate Website and at the [ www.4Kids.tv ] game station site.

The information contained in this press release, other than historical information, consists of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may involve risks and uncertainties that could cause actual results to differ materially from those described in such statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Important factors beyond the Company's control, including general economic conditions, consumer spending levels, competition from toy companies, motion picture studios and other licensing companies, the uncertainty of public response to the Company's properties and other factors could cause actual results to differ materially from the Company's expectations.

(Financial tables below)