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4Kids' Losses Mount in Second Quarter

The licensing and production company 4Kids Entertainment has announced that it lost US$5.5 million in the period from April to June 30, even as revenues during those three months were up almost 40 percent. 4Kids is in charge of the North American home video releases and television broadcasts of Yu-Gi-Oh! and, more recently, Dinosaur King. As a result of the announcement, 4Kids' shares lost 5.9% of their value, and were trading at US$8.39 at the close of business on Monday. They have since climbed slightly to US$8.75. Net losses for the first half of the year now stand at almost US$12 million.

According to 4Kids CEO Alfred Kahn, the losses were caused by the high costs of launching the Chaotic trading card game, as well as an increase in general administrative expenses. At the same time, licensing revenues from 4Kids' other series, including Yu-Gi-Oh!, were weaker than expected. Nonetheless, he feels that once the Chaotic game fully ramps up, and once 4Kids launches its two blocks of Saturday morning children's television programming on The CW Network and on Fox, prospects for the rest of the year and the first half of 2009 will be brighter.