4Kids Entertainment Reports Second Quarter Results; Net Revenues Increase 185%, Net Income Rises 200%

Business Wire, August 13, 2003

Business Editors

NEW YORK--(BUSINESS WIRE)--Aug. 13, 2003

4Kids Entertainment, Inc. (NYSE: KDE) today announced net revenues for the second quarter ended June 30, 2003 climbed 185% to $23.4 million from $8.2 million in the same period last year. Net income for the quarter was $3.6 million, or $0.26 per diluted share, compared to net income of $1.2 million, or $0.09 per diluted share, in the year-earlier period, an increase of 200%.

For the six months ended June 30, 2003, net revenues rose 193% to $44.3 million from $15.1 million in the same period last year. Net income for the six-month period was $6.6 million, or $0.47 per diluted share, compared to net income of $2.8 million, or $0.20 per diluted share, in the same period a year earlier, an increase of 136%.

Al Kahn, Chairman and Chief Executive Officer, said, "Second quarter results reflect continuing momentum in our licensing segment as retail sales of Yu-Gi-Oh!(TM) products remain strong. Teenage Mutant Ninja Turtles(TM) toys are also performing well at retail, adding significantly to our licensing revenues."

Commenting on the FoxBox, 4Kids' four hours of programming on Saturday mornings on the Fox Network, Al Kahn said, "While FoxBox ratings have been below expectations, the FoxBox has created additional revenue opportunities for 4Kids in merchandise licensing, home video and music publishing. These additional revenue sources, such as the Teenage Mutant Ninja Turtles toy line, were one of the primary reasons for the lease of the FoxBox programming block. We will be launching a new FoxBox season on September 6 with exciting new shows, including Shaman King, Sonic X(TM) and Funky Cops as well as new episodes of returning shows Teenage Mutant Ninja Turtles(TM), Kirby: Right Back At Ya!(TM) and Ultimate Muscle: The Kinnikuman Legacy(TM)," said Kahn.

"We had a strong second quarter and are very pleased with the performance of our properties. Yu-Gi-Oh! and Pokemon(R) continue to be among the most highly rated kids shows on network television. While Yu-Gi-Oh! products continue to drive our licensing revenues, Teenage Mutant Ninja Turtles products have gained substantial momentum at retail since their introduction earlier this year. We also expect Pokemon licensed products to sell increased volumes at retail on the strength of the new Pokemon Ruby and Pokemon Sapphire video games, which introduced 130 new Pokemon characters during the first quarter," concluded Kahn.

About 4Kids Entertainment

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; product development; television, film, music and home video production and distribution; media buying and planning; and Web site development. For further information, visit the company's website at www.4KidsEntertainment.com.

This press release contains forward-looking statements. Due to the fact that the Company faces competition from toy companies, television networks, 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.4KidsEntertainment.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. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands of dollars, except share data)
----------------------------------------------------------------------

                           Three Months Ended      Six Months Ended
                         June 30,    June 30,    June 30,     June 30,
                           2003        2002        2003         2002
                       ----------- ----------- ----------- -----------


NET REVENUES           $    23,369 $     8,178 $    44,347 $    15,139

COSTS AND EXPENSES:
 Selling, general and
  administrative             8,174       5,018      15,417       9,486
 Production service
  costs                      1,989         354       3,982         477
 Amortization of
  television and film
  costs and Fox
  broadcast fee              7,388       1,162      14,504       1,382
                       ----------- ----------- ----------- -----------
   Total costs and
    expenses                17,551       6,534      33,903      11,345
                       ----------- ----------- ----------- -----------

INCOME FROM OPERATIONS       5,818       1,644      10,444       3,794

INTEREST INCOME                259         315         583         792
                       ----------- ----------- ----------- -----------

INCOME BEFORE INCOME TAX
 PROVISION                   6,077       1,959      11,027       4,586

INCOME TAX PROVISION         2,432         732       4,412       1,805
                       ----------- ----------- ----------- -----------
NET INCOME             $     3,645 $     1,227 $     6,615 $     2,781
                       =========== =========== =========== ===========

PER SHARE AMOUNTS:
 Basic earnings per
  common share         $      0.28 $      0.10 $      0.50 $      0.22
                       =========== =========== =========== ===========

 Diluted earnings per
  common share         $      0.26 $      0.09 $      0.47 $      0.20
                       =========== =========== =========== ===========

 Weighted average
  common shares
  outstanding - basic   13,139,891  12,590,791  13,137,450  12,583,566
                       =========== =========== =========== ===========

 Weighted average
  common shares
  outstanding - diluted 13,987,627  13,653,166  13,943,629  13,646,168
                       =========== =========== =========== ===========