4Kids Entertainment, Inc.

(Exact name of registrant as specified in its charter)

New York

(State or other jurisdiction of
incorporation or organization)

13-2691380

(I.R.S. Employer
Identification No.)

1414 Avenue of the Americas
New York, New York 10019
(212) 758-7666

(Address, including zip code, and telephone number, including area code,
of registrant’s principal executive offices)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition

On August 9, 2007, the Company issued a press release reporting its financial results for the quarter ended June 30, 2007. A copy of the press release is attached hereto as Exhibit 99.1.

This information is furnished pursuant to Item 2.02 of Form 8-K and such information, including the press release, shall not be deemed to be “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934 or otherwise subject to the liabilities of that section, unless we specifically incorporate it by reference in a document filed under the Securities Act of 1933 or the Securities and Exchange Act of 1934.

Item 9.01 Financial Statements, Pro Forma Financial Information and Exhibits.

Exhibit Description

99.1 Press release issued by 4Kids Entertainment, Inc. dated August 9, 2007

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: August 9, 2007

4 KIDS ENTERTAINMENT, INC.

BY: /s/ Bruce R. Foster

Bruce R. Foster
Executive Vice President, Chief Financial Officer

EX-99 2 pressrealkcsa63007.htm PRESS RELEASE DATED AUGUST 9, 2007

INVESTOR CONTACTS:

Todd Fromer / Garth Russell

KCSA Worldwide

(212) 896-1215 / (212) 896-1250

tfromer@kcsa.com / grussell@kcsa.com

4Kids Entertainment Reports Second Quarter 2007 Results

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NEW YORK, August 9, 2007 – 4Kids Entertainment, Inc. (NYSE: KDE), a global provider of children’s entertainment and merchandise licensing, today announced financial results for the quarter ended June 30, 2007.

Net revenues in the second quarter of 2007 totaled $12.0 million from continuing operations as compared to $16.7 million for the same period last year. The Company’s net loss for the quarter ended June 30, 2006 was $(2.2) million, or $(0.17) per diluted share (consisting of a loss from continuing operations for the second quarter of 2007 of $(2.2) million, or $(0.17) per diluted share) as compared to net income of approximately $34,000, or $0.00 per diluted share, in the second quarter of 2006 (consisting of a loss from continuing operations for the second quarter of 2006 of $(0.6) million, or $(0.05) per diluted share and income from discontinued operations of $0.7 million or $0.05 per diluted share) . The diluted weighted average common shares outstanding for the quarter ended June 30, 2007 was 13,195,054 shares compared with 13,090,901 shares for the quarter ended June 30, 2006. The Company reported the results of Summit Media, its media buying subsidiary, as a discontinued operation since its operation ceased in June 2006.

For the six months ended June 30, 2007, net revenues totaled $26.9 million compared to $35.9 million from the same period last year. The Company’s net loss for the six months ended June 30, 2007 was $(2.4) million, or $(0.18) per diluted share (consisting of loss from continuing operations of $(2.4) million, or $(0.18) per diluted share), as compared to net income for the six months ended June 30, 2006 of $1.6 million, or $0.12 per diluted share (consisting of income from continuing operations of $1.0 million, or $0.08 per diluted share and income from discontinued operations of $0.6 million, or $0.04 per diluted share). The diluted weighted average common shares outstanding for the six months ended June 30, 2007 were 13,189,199 shares compared with 13,370,177 shares for the six months ended June 30, 2006.

“Although we are disappointed by the Company’s overall financial results for the second quarter of 2007, the Company continued to take the necessary steps to build for the future” said Alfred R. Kahn, 4Kids Entertainment’s Chairman and Chief Executive Officer. “In the first half of the year, we invested over $3 million in the Company’s digital assets, our 4Kids.TV website, our new trading card company, TC Digital Games LLC and our new website company, TC Websites LLC which is building out the www.chaoticgame.com website. We are also encouraged by the performance of the ‘Teenage Mutant Ninja Turtles’ property in the first half of 2007 spurred on by the successful theatrical release of the new Turtles movie, 'TMNT' in March 2007”, said Kahn.

“We are excited about the much anticipated launch of the Chaotic card game and website, www.chaoticgame.com, which we expect will occur this October. We are also looking forward to the new 2007 – 2008 4Kids TV season on Fox when we will be broadcasting new episodes of Chaotic and Viva Piñata as well as launching the popular Dinosaur King animated series from Sega. We anticipate that some of our newer properties will begin to contribute to our revenues in the second half of the year joining our core properties, including ‘Yu-Gi-Oh!’, ‘Teenage Mutant Ninja Turtles’, ‘Cabbage Patch Kids’ and ‘The Dog’,” concluded Kahn.

About 4Kids Entertainment

Headquartered in New York City with an international office 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; and Web site development. For further information, please visit the Company's Web sites at www.4KidsEntertainment.com and www.4Kids.TV.

The information contained in this press release, other than historical information, consists of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. 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.

(Tables follow)

# # #

4KIDS ENTERTAINMENT, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

JUNE 30, 2007 and DECEMBER 31, 2006

(In thousands of dollars, except share data)

Assets	2007			2006
Current assets:	(Unaudited		)
Cash and cash equivalents	$	18,796			$	18,066
Investments		86,849				92,910
Total cash, cash equivalents and investments		105,645				110,976

Accounts receivable - net		18,469				27,944
Prepaid income taxes		5,689				5,924
Prepaid expenses and other current assets		4,843				3,916
Current assets from discontinued operations		372				326
Deferred income taxes		799				707
Total current assets		135,817				149,793

Property and equipment - net		2,573				2,126

Other assets:
Accounts receivable - noncurrent, net		295				138
Investment in unconsolidated affiliate		3,983				2,702
Film and television costs - net		15,279				14,827
Non-current assets from discontinued operations		926				1,333
Deferred income taxes - noncurrent		3,897				1,733
Other assets – net		9,587				8,743
Total assets	$	172,357			$	181,395

LIABILITIES AND STOCKHOLDERS’ EQUITY:

Current liabilities:
Due to licensors	$	6,085			$	6,536
Accounts payable and accrued expenses		9,463				14,317
Current liabilities from discontinued operations		20				20
Deferred revenue		3,181				5,014
Total current liabilities		18,749				25,887

Deferred rent		676				771

Total liabilities		19,425				26,658

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, 14,968,987 and 14,933,218 shares; outstanding 13,210,782 and 13,183,218 shares in 2007 and 2006, respectively		149				149
Additional paid-in capital		63,445				62,859
Accumulated other comprehensive income		1,491				1,329
Retained earnings		121,231				123,649
		186,316				187,986
Less cost of 1,758,205 and 1,750,000 treasury shares in 2007 and 2006, respectively		33,384				33,249
		152,932				154,737
Total liabilities and stockholders’ equity	$	172,357			$	181,395

4KIDS ENTERTAINMENT, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

THREE AND SIX MONTHS ENDED JUNE 30, 2007 AND 2006

(In thousands of dollars, except share data)

		Three Months Ended						Six Months Ended
		June 30,						June 30,
		2007			2006			2007			2006

Net revenues	$	12,009		$	16,672		$	26,940		$	35,925

Costs and expenses:
Selling, general and administrative		10,176			10,285			19,139			18,562
Production service costs		1,788			3,155			3,568			6,031
Amortization of television and film costs		1,444			1,371			3,131			3,017
Amortization of 4Kids TV broadcast fee		3,825			4,874			8,244			9,682
Total costs and expenses		17,233			19,685			34,082			37,292

Loss from operations		(5,224	)		(3,013	)		(7,142	)		(1,367	)

Interest income		1,480			1,009			2,567			1,896

(Loss) income before income taxes		(3,744	)		(2,004	)		(4,575	)		529

Benefit from income taxes		(1,598	)		(1,382	)		(2,275	)		(477	)

Loss from unconsolidated operations –		(67	)		—			(118	)		—
net of a tax benefit

(Loss) income from continuing operations		(2,213	)		(622	)		(2,418	)		1,006

Income from discontinued operations		—			656			—			576

Net (loss) income	$	(2,213	)	$	34		$	(2,418	)	$	1,582

Per share amounts:
Basic (loss) earnings per common share
Continuing Operations	$	(0.17	)	$	(0.05	)	$	(0.18	)	$	0.08
Discontinued Operations		—			0.05			—			0.04
Basic (loss) earnings per common share	$	(0.17	)	$	0.00		$	(0.18	)	$	0.12

Diluted (loss) earnings per common share
Continuing Operations	$	(0.17	)	$	(0.05	)	$	(0.18	)	$	0.08
Discontinued Operations		—			0.05			—			0.04
Diluted (loss) earnings per common share	$	(0.17	)	$	0.00		$	(0.18	)	$	0.12

Weighted average common shares
outstanding - basic		13,195,054			13,090,901			13,189,199			13,083,937

Weighted average common shares
outstanding - diluted		13,195,054			13,090,901			13,189,199			13,370,177