News

4Kids Undergoing Explosive Growth, Pokemon Still Kicking

4Kids Entertainment released its earnings report on March 28th, claiming a twelve million dollar increase in net revenue. As the licensor of two of the biggest fads in recent history, their growth is not surprising. Notable, though, is their continued support of the Pokémon brand.

"Pokémon continues to be among the top rated network kids television series. The new Pokémon Ruby and Pokémon Sapphire videogames that were released in mid-March are already top sellers, demonstrating the continued vitality of the Pokémon brand," says Al Kahn, Chairman and Chief Executive Officer of 4Kids Entertainment.

With Yu-Gi-Oh! and the continued vitality of Pokémon in its pocket, 4Kids looks to have a banner year in 2003.

---

Full Press Release:

4Kids Entertainment, Inc. (NYSE: KDE), today announced results for the fourth quarter and year ended December 31, 2002.For fiscal year 2002, 4Kids Entertainment net revenues increased 28% to $53,140,000 from $41,538,000 in 2001. Net income for the year was $6,990,000, or $0.51 per diluted share, versus $12,244,000, or $0.92 per diluted share, reported in the prior fiscal year.The diluted weighted average common shares outstanding for the year ended December 31, 2002 were 13,726,642 shares compared with 13,381,073 shares for the prior year.At December 31, 2002, the Company's cash and short term investment position, after deducting royalties due to licensors and advertising media payable, was $74.8 million, or approximately $5.45 per diluted share.
Net revenues in the fourth quarter ended December 31, 2002, were $25,901,000, compared to $10,250,000 in the year-earlier period. Fourth quarter net income was $2,246,000, or $0.16 per diluted share, compared to $2,200,000, or $0.16 per diluted share, in the same period from the previous year. Commenting on the results, Al Kahn, Chairman and Chief Executive Officer, said, "2002 was a transformational year for 4Kids. While our margins and net income were negatively impacted by costs associated with the new ventures undertaken in 2002, significant progress has been made. We successfully launched FoxBox, 4Kids' four hours of programming on Saturday mornings on the Fox Network and developed several new and promising business initiatives in the areas of home video, music publishing and technology for kids. In 2002, Yu-Gi-Oh! emerged as the top children's network television program for boys and Yu-Gi-Oh! related merchandise helped drive strong revenue growth, especially in the fourth quarter. In 2003, we expect continued strength from Yu-Gi-Oh! and for our new business initiatives to contribute to the Company's results."

With respect to Pokémon, Mr. Kahn noted, "Pokémon continues to be among the top rated network kids television series. The new Pokémon Ruby and Pokémon Sapphire videogames that were released in mid-March are already top sellers, demonstrating the continued vitality of the Pokémon brand." With regard to the FoxBox, Mr. Kahn commented, "The Company's fourth quarter results reflect a significant share of the FoxBox fee for the 2002-2003 broadcast season and FoxBox ad revenues. Fourth quarter results, however, do not reflect any meaningful contribution from merchandise licensing, home video sales, international broadcast licenses and other ancillary revenues from properties appearing on the FoxBox. For example, Teenage Mutant Ninja Turtles has attracted worldwide interest from licensees. The recently introduced Playmates toy line for the property is already a top seller at retail. We expect that many of the revenue streams from FoxBox properties will begin to benefit the Company in 2003 and beyond."

Mr. Kahn stated, "FoxBox ratings for the fourth quarter were at the lower end of the Company's projections. However, in the first quarter of 2003, new series such as Teenage Mutant Ninja Turtles and the Cramp Twins have improved the FoxBox's ratings. We remain optimistic that the ratings improvement can be built upon as our newest shows gain traction with kids." "We are optimistic that 2003 will be a strong year for 4Kids Entertainment," concluded Mr. Kahn.