4Kids Entertainment Reports First Quarter Results
--May 10, 2004--4Kids Entertainment, Inc. (NYSE: KDE - News) today announced net revenues for the first quarter ended March 31, 2004 were $22.5 million, compared to $21.0 million in the same period last year. Net income for the quarter was $3.2 million, or $0.22 per diluted share, compared to net income of $3.0 million or $0.21 per diluted share, in the year-earlier period. The diluted weighted average common shares outstanding for the three months ended March 31, 2004 were 14,722,344 shares compared with 13,899,630 shares for the prior year.
Al Kahn, Chairman and Chief Executive Officer, said, "Q1 results reflect ongoing momentum in our licensing segment primarily from continued strong retail sales of Yu-Gi-Oh!(TM) products and the growing success of Teenage Mutant Ninja Turtles(TM) toys and licensed products in the marketplace. In addition, during the quarter we began recognizing revenue contributions from new licensing programs including the American Kennel Club (AKC) and the recent re-launch of the Cabbage Patch Kids(TM) at their original 16 inch size that was so popular in the 1980s.
"FoxBox(TM), 4Kids' four hours of programming on Saturday mornings on the Fox Network, continues to drive licensing revenues for the company. We are preparing for the launch of Winx Club(TM), 4Kids' first property targeting the girls market. The new series, which will make its FoxBox(TM) debut on June 19, 2004, has already attracted significant interest from several major licensees, including Mattel, which will serve as the master toy licensee for Winx Club(TM). We are further encouraged by the sustained strength of Yu-Gi-Oh! (TM) throughout the first quarter and look forward to the release by Warner Bros. of the first Yu-Gi-Oh! (TM) feature film in August 2004" said Kahn.
"We have repurchased 150,000 shares of our common stock under the current authorization of 750,000 shares granted by the Board of Directors in 2003 and we will continue to be active buyers of our stock in the open market. With no debt and cash and investments of $140.4 million at March 31, 2004, we are well-positioned to support our existing properties and to launch our exciting new properties. 4Kids'continuing success in diversifying its revenue base makes us optimistic about the company's prospects for the remainder of 2004." concluded Kahn.
About 4Kids Entertainment: Headquartered in New York City with international offices in London, 4Kids Entertainment, Inc. (NYSE: KDE - News) 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, please visit the company's Web site atwww.4KidsEntertainment.com.
The information contained in this press release, other than historical information, consists of forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. 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.
This release and prior releases are available on the Company's Worldwide Web site at www.4KidsEntertainment.com
Tables follow:
-0-
4KIDS ENTERTAINMENT, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
MARCH 31, 2004 AND DECEMBER 31, 2003
(In thousands of dollars, except share data)
ASSETS 2004 2003
(UNAUDITED)
CURRENT ASSETS:
Cash and cash equivalents $123,854 $95,136
Investments 16,538 24,443
---------- ----------
Total cash and investments 140,392 119,579
Accounts receivable - Net 25,924 37,143
Prepaid Fox broadcast fee, net of
accumulated amortization of $41,592
and $36,447 in 2004 and 2003,
respectively 6,908 8,688
Prepaid income taxes 105 2,670
Prepaid expenses and other current assets 1,506 1,690
Deferred income taxes 445 --
---------- ----------
Total current assets 175,280 169,770
PROPERTY AND EQUIPMENT - NET 3,225 3,350
OTHER ASSETS:
Accounts receivable - noncurrent, net 3,795 2,662
Investment in equity securities 726 726
Film and television costs - net 8,870 8,183
Deferred income taxes - noncurrent 3,226 2,575
Other assets - net 9,482 6,014
---------- ----------
TOTAL ASSETS $204,604 $193,280
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Due to licensors $18,367 $11,835
Media payable 909 2,178
Accounts payable and accrued expenses 12,760 9,706
Deferred revenue 7,627 8,070
Deferred income taxes -- 52
---------- ----------
Total current liabilities 39,663 31,841
DEFERRED RENT 1,079 952
---------- ----------
Total liabilities 40,742 32,793
---------- ----------
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, 13,965,943 and 13,965,343
shares in 2004 and 2003, respectively 140 140
Additional paid-in capital 53,040 52,798
Accumulated other comprehensive income 881 693
Retained earnings 110,023 106,856
---------- ----------
164,084 160,487
Less- cost of 10,000 treasury shares 222 --
---------- ----------
163,862 160,487
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $204,604 $193,280
========== ==========
4KIDS ENTERTAINMENT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
THREE MONTHS ENDED MARCH 31, 2004 AND 2003
(In thousands of dollars, except share data)
Three Months Ended
March 31, March 31,
2004 2003
NET REVENUES $ 22,467 $ 20,978
---------- ----------
COSTS AND EXPENSES:
Selling, general and administrative 8,514 7,316
Production service costs 1,963 1,920
Amortization of television and film
costs and Fox broadcast fee 6,994 7,116
---------- ----------
Total costs and expenses 17,471 16,352
---------- ----------
INCOME FROM OPERATIONS 4,996 4,626
INTEREST INCOME 285 324
---------- ----------
INCOME BEFORE INCOME TAXES 5,281 4,950
INCOME TAXES 2,114 1,980
---------- ----------
NET INCOME $ 3,167 $ 2,970
========== ==========
PER SHARE AMOUNTS:
Basic earnings per common share $ 0.23 $ 0.23
========== ==========
Diluted earnings per common share $ 0.22 $ 0.21
========== ==========
Weighted average common shares
outstanding - basic 13,967,614 13,135,008
========== ==========
Weighted average common shares
outstanding - diluted 14,722,344 13,899,630
========== ==========
--------------------------------------------------------------------------------
Contact:
For 4Kids Entertainment, Inc.
KCSA
Todd Fromer / Michael Cimini
(212) 896-1215 / (212) 896-1233
[email protected] / [email protected]
Al Kahn, Chairman and Chief Executive Officer, said, "Q1 results reflect ongoing momentum in our licensing segment primarily from continued strong retail sales of Yu-Gi-Oh!(TM) products and the growing success of Teenage Mutant Ninja Turtles(TM) toys and licensed products in the marketplace. In addition, during the quarter we began recognizing revenue contributions from new licensing programs including the American Kennel Club (AKC) and the recent re-launch of the Cabbage Patch Kids(TM) at their original 16 inch size that was so popular in the 1980s.
"FoxBox(TM), 4Kids' four hours of programming on Saturday mornings on the Fox Network, continues to drive licensing revenues for the company. We are preparing for the launch of Winx Club(TM), 4Kids' first property targeting the girls market. The new series, which will make its FoxBox(TM) debut on June 19, 2004, has already attracted significant interest from several major licensees, including Mattel, which will serve as the master toy licensee for Winx Club(TM). We are further encouraged by the sustained strength of Yu-Gi-Oh! (TM) throughout the first quarter and look forward to the release by Warner Bros. of the first Yu-Gi-Oh! (TM) feature film in August 2004" said Kahn.
"We have repurchased 150,000 shares of our common stock under the current authorization of 750,000 shares granted by the Board of Directors in 2003 and we will continue to be active buyers of our stock in the open market. With no debt and cash and investments of $140.4 million at March 31, 2004, we are well-positioned to support our existing properties and to launch our exciting new properties. 4Kids'continuing success in diversifying its revenue base makes us optimistic about the company's prospects for the remainder of 2004." concluded Kahn.
About 4Kids Entertainment: Headquartered in New York City with international offices in London, 4Kids Entertainment, Inc. (NYSE: KDE - News) 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, please visit the company's Web site atwww.4KidsEntertainment.com.
The information contained in this press release, other than historical information, consists of forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. 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.
This release and prior releases are available on the Company's Worldwide Web site at www.4KidsEntertainment.com
Tables follow:
-0-
4KIDS ENTERTAINMENT, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
MARCH 31, 2004 AND DECEMBER 31, 2003
(In thousands of dollars, except share data)
ASSETS 2004 2003
(UNAUDITED)
CURRENT ASSETS:
Cash and cash equivalents $123,854 $95,136
Investments 16,538 24,443
---------- ----------
Total cash and investments 140,392 119,579
Accounts receivable - Net 25,924 37,143
Prepaid Fox broadcast fee, net of
accumulated amortization of $41,592
and $36,447 in 2004 and 2003,
respectively 6,908 8,688
Prepaid income taxes 105 2,670
Prepaid expenses and other current assets 1,506 1,690
Deferred income taxes 445 --
---------- ----------
Total current assets 175,280 169,770
PROPERTY AND EQUIPMENT - NET 3,225 3,350
OTHER ASSETS:
Accounts receivable - noncurrent, net 3,795 2,662
Investment in equity securities 726 726
Film and television costs - net 8,870 8,183
Deferred income taxes - noncurrent 3,226 2,575
Other assets - net 9,482 6,014
---------- ----------
TOTAL ASSETS $204,604 $193,280
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Due to licensors $18,367 $11,835
Media payable 909 2,178
Accounts payable and accrued expenses 12,760 9,706
Deferred revenue 7,627 8,070
Deferred income taxes -- 52
---------- ----------
Total current liabilities 39,663 31,841
DEFERRED RENT 1,079 952
---------- ----------
Total liabilities 40,742 32,793
---------- ----------
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, 13,965,943 and 13,965,343
shares in 2004 and 2003, respectively 140 140
Additional paid-in capital 53,040 52,798
Accumulated other comprehensive income 881 693
Retained earnings 110,023 106,856
---------- ----------
164,084 160,487
Less- cost of 10,000 treasury shares 222 --
---------- ----------
163,862 160,487
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $204,604 $193,280
========== ==========
4KIDS ENTERTAINMENT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
THREE MONTHS ENDED MARCH 31, 2004 AND 2003
(In thousands of dollars, except share data)
Three Months Ended
March 31, March 31,
2004 2003
NET REVENUES $ 22,467 $ 20,978
---------- ----------
COSTS AND EXPENSES:
Selling, general and administrative 8,514 7,316
Production service costs 1,963 1,920
Amortization of television and film
costs and Fox broadcast fee 6,994 7,116
---------- ----------
Total costs and expenses 17,471 16,352
---------- ----------
INCOME FROM OPERATIONS 4,996 4,626
INTEREST INCOME 285 324
---------- ----------
INCOME BEFORE INCOME TAXES 5,281 4,950
INCOME TAXES 2,114 1,980
---------- ----------
NET INCOME $ 3,167 $ 2,970
========== ==========
PER SHARE AMOUNTS:
Basic earnings per common share $ 0.23 $ 0.23
========== ==========
Diluted earnings per common share $ 0.22 $ 0.21
========== ==========
Weighted average common shares
outstanding - basic 13,967,614 13,135,008
========== ==========
Weighted average common shares
outstanding - diluted 14,722,344 13,899,630
========== ==========
--------------------------------------------------------------------------------
Contact:
For 4Kids Entertainment, Inc.
KCSA
Todd Fromer / Michael Cimini
(212) 896-1215 / (212) 896-1233
[email protected] / [email protected]
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