4Kids Entertainment Reports 2009 Third Quarter Results

http://www.businesswire.com/news/home/20091109005316/en

NEW YORK--(Business Wire)--
4Kids Entertainment, Inc. (NYSE: KDE), the global children`s entertainment and
merchandise licensing company, today announced financial results for the third
quarter ended September 30, 2009.

Recent Company Highlights:

* Received $9.8 million from the sale of the Teenage Mutant Ninja Turtles
property by Mirage Studios to Nickelodeon in October 2009
* Licensing agreement with NFL Properties and NFL Players to produce a football
collectible trading card game with a digital card online component, to coincide
with the 2010 NFL season
* Chaotic video game shipping on November 17, 2009 throughout North America and
will be available for all major gaming consoles, including PlayStation 3,
Nintendo Wii, and Microsoft Xbox

Net revenues for the three months ended September 30, 2009 totaled $7.3 million,
compared to $17.8 million for the same period in 2008. The Company`s net loss
attributable to 4Kids Entertainment for the three months ended September 30,
2009 was $(5.0) million, or $(0.37) per diluted share, as compared to a net loss
of $(5.3) million, or $(0.40) per diluted share, for the same period in 2008.
The Company`s results reflect the adoption of authoritative guidance from the
FASB requiring losses attributable to non-controlling interests of the Company
to be excluded in their entirety from the computation of the Company`s net
losses beginning in 2009.

For the nine months ended September 30, 2009, net revenues totaled $21.9
million, compared to $49.4 million for the same period in 2008. The Company`s
net loss attributable to 4Kids Entertainment for the nine months ended September
30, 2009 was $(20.8) million, or $(1.56) per diluted share, as compared to a net
loss of $(17.2) million, or $(1.31) per diluted share, for the same period in
2008.

"Business conditions remained challenging for the company during the third
quarter as reflected in our results. However, we closed on two deals over the
last six weeks which we believe are big positives for 4Kids. The sale of the
Teenage Mutant Ninja Turtles property to Nickelodeon not only compensated 4Kids
for the early termination of its representation agreement but also provided the
Company with a substantial infusion of cash. Our NFL trading card game license
also provides the Company with an opportunity to use our online platform for a
new trading card game," stated Alfred R. Kahn, Chairman and Chief Executive
Officer, 4Kids Entertainment.

"We are encouraged by the increase in our television ratings thus far for the
2009-2010 broadcast season, compared with the same period during the 2008-2009
broadcast season. We are hopeful that sales of toys and games and licensed
merchandise in the coming holiday season will be stronger than last year`s sales
numbers and that the Company`s fourth quarter licensing revenue will likewise
benefit," 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. (NYSE: KDE) is a global organization devoted to the
creation, development, production, broadcasting, distribution, licensing and
manufacturing of children`s entertainment products.

Through its subsidiaries, 4Kids produces animated television series and films,
distributes 4Kids` produced or licensed animated television series for the
domestic and international television and home video markets, licenses
merchandising rights worldwide to 4Kids` owned or represented properties,
operates Websites to support 4Kids` owned or represented properties, and
produces and markets collectible trading card games. Additionally, the Company
programs and sells the national advertising time in "TheCW4Kids" 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.

4KIDS ENTERTAINMENT, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

SEPTEMBER 30, 2009 and DECEMBER 31, 2008

(In thousands of dollars, except share data)

ASSETS: September 30, 2009 December 31, 2008
Current assets: (Unaudited)
Cash and cash equivalents $ 3,573 $ 13,503
Accounts receivable - net 9,808 22,818
Inventories - net 5,153 4,241
Prepaid income taxes 127 137
Prepaid expenses and other current assets 3,807 1,876
Deferred income taxes 139 127
Total current assets 22,607 42,702

Property and equipment - net 3,402 4,287
Long term investments 14,179 21,617
Accounts receivable - noncurrent, net 255 655
Film and television costs - net 16,899 16,661
Other assets - net (includes related party amounts of $7,816 and $6,638, respectively) 17,370 14,652
Total assets $ 74,712 $ 100,574

LIABILITIES AND EQUITY:
Current liabilities:
Due to licensors $ 6,507 $ 5,651
Accounts payable and accrued expenses 13,618 16,202
Deferred revenue 1,551 3,270
Total current liabilities 21,676 25,123

Deferred rent 356 460
Total liabilities 22,032 25,583

Commitments and contingencies
4Kids Entertainment, Inc. shareholders` equity
Preferred stock, $.01 par value - authorized, 3,000,000 shares; none issued - -
Common stock, $.01 par value - authorized, 40,000,000 shares; 154 152
issued, 15,411,099 and 15,246,579 shares; outstanding 13,352,053 and

13,227,019 shares in 2009 and 2008, respectively
Additional paid-in capital 66,991 65,107
Accumulated other comprehensive loss (14,237 ) (17,396 )
Retained earnings 42,711 63,504
95,619 111,367
Less cost of 2,059,046 and 2,019,560 treasury shares in 2009 and 2008, respectively 36,434 36,376
Total shareholders` equity of 4Kids Entertainment, Inc. 59,185 74,991
Noncontrolling interests (6,505 ) -
Total equity 52,680 74,991
Total liabilities and equity $ 74,712 $ 100,574

4KIDS ENTERTAINMENT, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008

(In thousands of dollars, except share data)

Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008

Net revenues:
Service revenue $ 5,736 $ 10,534 $ 20,077 $ 34,620
Product revenue 1,534 7,250 1,786 14,743
Total net revenues 7,270 17,784 21,863 49,363

Costs and expenses:
Selling, general and administrative 11,022 13,937 33,763 39,892
Production service costs 482 1,710 2,503 5,245
Cost of sales of trading cards 1,547 3,447 2,811 6,360
Amortization of television and film costs 1,438 1,864 3,695 5,269
Amortization of 4Kids TV broadcast fee - 3,041 - 12,150
Total costs and expenses 14,489 23,999 42,772 68,916

Loss from operations (7,219 ) (6,215 ) (20,909 ) (19,553 )

Interest income 178 689 925 2,096
Impairment on investment securities (71 ) - (169 ) -
Loss on sale of investment securities - - (7,250 ) -
Total other (expense) income 107 689 (6,494 ) 2,096

Loss before income taxes (7,112 ) (5,526 ) (27,403 ) (17,457 )

Benefit from income taxes - - - -

Noncontrolling interest - 251 - 251

Net loss (7,112 ) (5,275 ) (27,403 ) (17,206 )

Net loss attributable to noncontrolling interests 2,109 - 6,610 -

Net loss attributable to 4Kids Entertainment, Inc. $ (5,003 ) $ (5,275 ) $ (20,793) $ (17,206 )

Per share amounts:

Basic loss per share attributable to 4Kids Entertainment Inc. common shareholders $ (0.37 ) $ (0.40 ) $ (1.56 ) $ (1.31 )

Diluted loss per share attributable to 4Kids Entertainment Inc. common shareholders $ (0.37 ) $ (0.40 ) $ (1.56 ) $ (1.31 )

Weighted average common shares
outstanding - basic 13,352,053 13,153,508 13,286,726 13,166,281

Weighted average common shares
outstanding - diluted 13,352,053 13,153,508 13,286,726 13,166,281

Investors:
KCSA Strategic Communications
Todd Fromer / Garth Russell
212-896-1215 / 212-896-1250
tfromer@kcsa.com / grussell@kcsa.com
or
Media:
4Kids Entertainment
Barry Stagg, 646-822-4257
bstagg@4kidsent.com

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