4Kids Entertainment, Inc. (NYSE: KDE), a global provider of children's entertainment and merchandise licensing, today announced financial results for the quarter ended June 30, 2007.

Net revenues in the second quarter of 2007 totaled $12.0 million from continuing operations as compared to $16.7 million for the same period last year. The Company's net loss for the quarter ended June 30, 2006 was $(2.2) million, or $(0.17) per diluted share (consisting of a loss from continuing operations for the second quarter of 2007 of $(2.2) million, or $(0.17) per diluted share) as compared to net income of approximately $34,000, or $0.00 per diluted share, in the second quarter of 2006 (consisting of a loss from continuing operations for the second quarter of 2006 of $(0.6) million, or $(0.05) per diluted share and income from discontinued operations of $0.7 million or $0.05 per diluted share). The diluted weighted average common shares outstanding for the quarter ended June 30, 2007 was 13,195,054 shares compared with 13,090,901 shares for the quarter ended June 30, 2006. The Company reported the results of Summit Media, its media buying subsidiary, as a discontinued operation since its operation ceased in June 2006.

For the six months ended June 30, 2007, net revenues totaled $26.9 million compared to $35.9 million from the same period last year. The Company's net loss for the six months ended June 30, 2007 was $(2.4) million, or $(0.18) per diluted share (consisting of loss from continuing operations of $(2.4) million, or $(0.18) per diluted share), as compared to net income for the six months ended June 30, 2006 of $1.6 million, or $0.12 per diluted share (consisting of income from continuing operations of $1.0 million, or $0.08 per diluted share and income from discontinued operations of $0.6 million, or $0.04 per diluted share). The diluted weighted average common shares outstanding for the six months ended June 30, 2007 were 13,189,199 shares compared with 13,370,177 shares for the six months ended June 30, 2006.

?Although we are disappointed by the Company's overall financial results for the second quarter of 2007, the Company continued to take the necessary steps to build for the future? said Alfred R. Kahn, 4Kids Entertainment's Chairman and Chief Executive Officer. ?In the first half of the year, we invested over $3 million in the Company's digital assets, our 4Kids.TV website, our new trading card company, TC Digital Games LLC and our new website company, TC Websites LLC which is building out the www.chaoticgame.com website. We are also encouraged by the performance of the ?Teenage Mutant Ninja Turtles' property in the first half of 2007 spurred on by the successful theatrical release of the new Turtles movie, 'TMNT' in March 2007?, said Kahn.

?We are excited about the much anticipated launch of the Chaotic card game and website, www.chaoticgame.com, which we expect will occur this October. We are also looking forward to the new 2007 ? 2008 4Kids TV season on Fox when we will be broadcasting new episodes of Chaotic and Viva Piñata as well as launching the popular Dinosaur King animated series from Sega. We anticipate that some of our newer properties will begin to contribute to our revenues in the second half of the year joining our core properties, including ?Yu-Gi-Oh!', ?Teenage Mutant Ninja Turtles', ?Cabbage Patch Kids' and ?The Dog',? concluded Kahn.

About 4Kids Entertainment

Headquartered in New York City with an international office in London, 4Kids Entertainment, Inc. (NYSE: KDE), is a global provider of children's entertainment and merchandise licensing. 4Kids, through its wholly owned subsidiaries, provides domestic and international merchandise licensing; product development; television, film, music and home video production and distribution; and Web site development. For further information, please visit the Company's Web sites at www.4KidsEntertainment.com and www.4Kids.TV.

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
JUNE 30, 2007 and DECEMBER 31, 2006
(In thousands of dollars, except share data)
 
Assets 20072006
Current assets: (Unaudited )
Cash and cash equivalents $ 18,796 $ 18,066
Investments 86,849 92,910
Total cash, cash equivalents and investments 105,645 110,976
 
Accounts receivable - net 18,469 27,944
Prepaid income taxes 5,689 5,924
Prepaid expenses and other current assets 4,843 3,916
Current assets from discontinued operations 372 326
Deferred income taxes 799 707
Total current assets 135,817 149,793
 
Property and equipment - net 2,573 2,126
 
Other assets:
Accounts receivable - noncurrent, net 295 138
Investment in unconsolidated affiliate 3,983 2,702
Film and television costs - net 15,279 14,827
Non-current assets from discontinued operations 926 1,333
Deferred income taxes - noncurrent 3,897 1,733
Other assets ? net 9,587 8,743
Total assets $ 172,357 $ 181,395
 
LIABILITIES AND STOCKHOLDERS' EQUITY:
 
Current liabilities:
Due to licensors $ 6,085 $ 6,536
Accounts payable and accrued expenses 9,463 14,317
Current liabilities from discontinued operations 20 20
Deferred revenue 3,181 5,014
Total current liabilities 18,749 25,887
 
Deferred rent 676 771
 
Total liabilities 19,425 26,658
 
Commitments and contingencies
Stockholders' equity
Preferred stock, $.01 par value - authorized, 3,000,000 shares; none issued ? ?

Common stock, $.01 par value - authorized, 40,000,000 shares; issued, 14,968,987 and 14,933,218 shares; outstanding 13,210,782 and 13,183,218 shares in 2007 and 2006, respectively

149 149
Additional paid-in capital 63,445 62,859
Accumulated other comprehensive income 1,491 1,329
Retained earnings 121,231 123,649
186,316 187,986
Less cost of 1,758,205 and 1,750,000 treasury shares in 2007 and 2006, respectively 33,384 33,249
152,932 154,737
Total liabilities and stockholders' equity $ 172,357 $ 181,395

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© Business Wire - 2007

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4KIDS ENTERTAINMENT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
THREE AND SIX MONTHS ENDED JUNE 30, 2007 AND 2006
(In thousands of dollars, except share data)
 
Three Months EndedSix Months Ended
June 30,June 30,
2007200620072006
 
Net revenues $ 12,009 $ 16,672 $ 26,940 $ 35,925
 
Costs and expenses:
Selling, general and administrative 10,176 10,285 19,139 18,562
Production service costs 1,788 3,155 3,568 6,031
Amortization of television and film costs 1,444 1,371 3,131 3,017
Amortization of 4Kids TV broadcast fee 3,825 4,874 8,244 9,682
Total costs and expenses 17,233 19,685 34,082 37,292
 
Loss from operations (5,224 ) (3,013 ) (7,142 ) (1,367 )
 
Interest income 1,480 1,009 2,567 1,896
 
(Loss) income before income taxes (3,744 ) (2,004 ) (4,575 ) 529
 
Benefit from income taxes (1,598 ) (1,382 ) (2,275 ) (477 )
 

Loss from unconsolidated operations ? net of a tax benefit

(67 ) ? (118 ) ?
 
 
(Loss) income from continuing operations (2,213 ) (622 ) (2,418 ) 1,006
 
Income from discontinued operations ? 656 ? 576
 
Net (loss) income $ (2,213