4Kids Entertainment Announces Second Quarter Results

Business Wire, August 14, 2001

Business Editors

NEW YORK--(BUSINESS WIRE)--Aug. 14, 2001

4Kids Entertainment, Inc. (NYSE: KDE), today announced results for the second quarter ended June 30, 2001.

Net revenues for the second quarter of 2001 totaled $9,148,269, compared with $23,398,277 in the second quarter of 2000. Net income for the quarter was $3,259,459, or $0.24 per common share diluted, compared with net income of $10,177,591 or $0.78 per common share diluted, for the second quarter of 2000. The diluted weighted average common shares outstanding for the second quarter ended June 30, 2001 were 13,326,392, compared with 13,071,556 for the same period a year ago.

Net revenues for the six months ended June 30, 2001 were $21,411,977, compared with net revenues of $44,097,796 in the first half of 2000. Net income for the first six months of 2001 totaled $8,548,952, or $0.64 per common share diluted, compared with net income of $19,507,590, or $1.49 per common share diluted, for the same period last year. The diluted weighted average common shares outstanding for the six months ended June 30, 2001 were 13,279,593 compared with 13,079,634 for the prior year's comparable period.

During the second quarter, the Company committed to positioning, marketing and developing properties relating to the entertainment sector. Cubix: Robots for Everyone debuted on August 11, 2001 on Kids WB! "We expect that our alliances with Kids' WB!, Trendmasters for toys, 3DO for videogames, and Burger King will help make Cubix a highly visible property among kids," commented Al Kahn. The Cubix property, which includes toys, some of which are already in stores, is being supported by a five-week promotion with Burger King, which will run from August 27 through September 30, 2001.

Commenting on the second quarter, Al Kahn, Chief Executive Officer, said, "The decline in this quarter's merchandise licensing revenues reflects the continuing transition of Pokemon from a worldwide fad into a worldwide brand. In maintaining our commitment to the longevity of Pokemon as a children's brand, this fall, 4Kids and Nintendo intend to launch 52 new episodes of "Pokemon: Johto League Champions" on Kids' WB!, In addition, Nintendo recently released the Pokemon Crystal video game and we expect to release the home video of the third Pokemon Movie, `Pokemon 3' by the end of this month," said Kahn.

"This is a very exciting time for 4Kids Entertainment, because we have developed a number of properties for television and merchandising that we expect will contribute to our bottom line in the last half of this year. We are excited to have acquired the merchandise and television rights for Yu-Gi-Oh!, a high-profile children's property, for the world outside Asia. Yu-Gi-Oh!, which has sold more than 3 billion cards and 7 million video games in Japan, is scheduled to air on Kids' WB! beginning September 15, 2001. Tama and Friends, another new Japanese property in the 4Kids portfolio, is expected to air in syndication beginning fall 2001. Combined, we expect that these two Japanese properties will appeal to a broad age group, thus giving us an opportunity to capture a wide children's audience," commented Al Kahn.

"We anticipate that this will be a defining year for 4Kids Entertainment. With $100 million in net cash, we believe that we are well-positioned to execute our initiatives, which today include supporting our new and existing properties and identifying and acquiring quality content for children," concluded Al Kahn.

About 4Kids:

Headquartered in New York City with international offices 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 and product development, television, film, music and home video production and distribution, media buying and planning and website development. For further information, please visit the company's Web site at www.4kidsEnt.com.

This press release contains forward-looking statements. Due to the fact that the Company faces competition from toy companies, motion picture studios and other licensing companies, and the uncertainty of public response to the Company's properties, actual results or outcomes may differ materially from any such forward looking statements.

This release and prior releases are available on the Company's Worldwide Web site at www.4KidsEnt.com.

You may register to receive 4Kids Entertainment's future press releases or to download a complete Digital Investor Kit(TM) including press releases, regulatory filings and corporate materials by clicking on the "Digital Investor Kit(TM)" icon at www.kcsa.com.

                       4Kids Entertainment, Inc.
                     Summary Financial Information
              For the Second Quarter and Six Months Ended
                        June 30, 2001 and 2000
                              (Unaudited)


                 For the Three Months Ended   For the Six Months Ended
                 ---------------------------  ------------------------
                      June 30,     June 30,    June 30,     June 30,
                        2001         2000        2001         2000
                 ---------------------------  ------------------------
NET REVENUES       $9,148,269   $23,398,277   $21,411,977  $44,097,796

EXPENSES            4,856,890     7,482,799     9,719,482   13,001,526
NET INCOME          3,259,459   $10,177,591     8,548,952  $19,507,590
PER SHARE AMOUNTS
 Basic earnings
  per share             $0.27         $0.86         $0.71        $1.64
 Diluted earnings
  per share             $0.24         $0.78         $0.64        $1.49
Weighted average
 common shares
  outstanding -
  basic            12,104,694    11,877,860    12,092,594   11,867,808
Weighted average
  common shares
   outstanding -
   diluted         13,326,392    13,071,556    13,279,593   13,079,634