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 November 9, 2007, the Company issued a press release reporting its financial results for the quarter ended September 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 November 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: November 9, 2007

4 KIDS ENTERTAINMENT, INC.

BY: /s/ Bruce R. Foster

Bruce R. Foster
Executive Vice President, Chief Financial Officer

EX-99 2 pressrelease11907.htm PRESS RELEASE DATED NOVEMBER 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 Third Quarter 2007 Results

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

Net revenues in the third quarter of 2007 totaled $12.2 million from continuing operations as compared to $17.6 million for the same period in 2006. The Company’s net loss for the quarter ended September 30, 2007 was $(4.2) million, or $(0.31) per diluted share (consisting of a loss from continuing operations of $(4.2) million, or $(0.31) per diluted share) as compared to a net loss of approximately $(265,000), or $(0.02) per diluted share, in the same period in 2006 (consisting of a loss from continuing operations for the third quarter of 2006 of $(231,000), or $(0.02) per diluted share and a loss from discontinued operations of $(34,000), or $(0.00) per diluted share). The diluted weighted average common shares outstanding for the quarter ended September 30, 2007 was 13,211,222 shares compared with 13,100,477 shares for the same period in 2006. The Company has reported the results of Summit Media, its media buying subsidiary, as a discontinued operation since its operation ceased in June 2006.

For the nine months ended September 30, 2007, net revenues totaled $39.1 million from continuing operations compared to $53.5 million for the same period in 2006. The Company’s net loss for the nine months ended September 30, 2007 was $(6.6) million, or $(0.50) per diluted share (consisting of loss from continuing operations of $(6.6) million, or $(0.50) per diluted share), as compared to net income for the nine months ended September 30, 2006 of $1.3 million, or $0.10 per diluted share (consisting of income from continuing operations of $775,000, or $0.06 per diluted share, and income from discontinued operations of $542,000, or $0.04 per diluted share). The diluted weighted average common shares outstanding for the nine months ended September 30, 2007 were 13,196,621 shares compared with 13,373,422 shares for the same period in 2006.

Al Kahn, Chairman and CEO of 4Kids Entertainment, stated, “While we are disappointed by the financial results so far this year, we believe that we have taken important steps to strengthen our business for 2008 and beyond. On October 24, 2007, we released the highly anticipated Chaotic Trading Card Game to comic and hobby stores nationwide and launched the public beta version of the Chaotic website, www.chaoticgame.com. We expect sales of the Chaotic Trading Card Game to the comic and hobby channel to contribute to revenues in the fourth quarter. Beginning in the first quarter of 2008, the Chaotic Trading Card Game will be distributed to the mass market. Chaotic represents a

potentially dramatic shift in our business model as we will be able to add the gross revenues and profits from the distribution and sale of trading cards to the revenues from our share of the royalties that we receive in our traditional licensing business.”

“In addition, on October 3, 2007, we announced a new five-year broadcast deal with The CW Network, under which we will provide children's programming on Saturday mornings from 7 a.m. until 12 p.m. beginning in the 2008-09 broadcast season. We believe this deal will drive greater exposure for our hit properties and provide us with the opportunity to build ratings and increase advertising revenues over the long-term. Our strong balance sheet enables us to be pursue opportunities that we expect will increase shareholder value,” 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

SEPTEMBER 30, 2007 and DECEMBER 31, 2006

(In thousands of dollars, except share data)

Assets	2007			2006
Current assets:	(Unaudited		)
Cash and cash equivalents	$	28,420			$	18,066
Investments		64,855				92,910
Total cash, cash equivalents and investments		93,275				110,976

Accounts receivable - net		17,704				27,944
Prepaid income taxes		5,820				5,924
Prepaid expenses and other current assets		4,654				3,916
Current assets from discontinued operations		372				326
Deferred income taxes		787				707
Total current assets		122,612				149,793

Property and equipment - net		2,745				2,126
Long term investments		10,000				—
Accounts receivable - noncurrent, net		255				138
Investment in unconsolidated affiliate		2,798				2,702
Film and television costs - net		15,719				14,827
Non-current assets from discontinued operations		926				1,333
Deferred income taxes - noncurrent		6,943				1,733
Other assets – net		10,515				8,743
Total assets	$	172,513			$	181,395

LIABILITIES AND STOCKHOLDERS’ EQUITY:

Current liabilities:
Due to licensors	$	9,090			$	6,536
Accounts payable and accrued expenses		10,867				14,317
Current liabilities from discontinued operations		—				20
Deferred revenue		3,002				5,014
Total current liabilities		22,959				25,887

Deferred rent		654				771

Total liabilities		23,613				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, 14,969,737 and 14,933,218 shares; outstanding 13,211,532 and 13,183,218 shares in 2007 and 2006, respectively		149				149
Additional paid-in capital		63,456				62,859
Accumulated other comprehensive income		1,598				1,329
Retained earnings		117,081				123,649
		182,284				187,986
Less cost of 1,758,205 and 1,750,000 treasury shares in 2007 and 2006, respectively		33,384				33,249
		148,900				154,737
Total liabilities and stockholders’ equity	$	172,513			$	181,395

4KIDS ENTERTAINMENT, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006

(In thousands of dollars, except share data)

		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2007			2006			2007			2006

Net revenues	$	12,183		$	17,562		$	39,123		$	53,487

Costs and expenses:
Selling, general and administrative		10,487			9,278			29,626			27,840
Production service costs		1,482			3,225			5,050			9,256
Amortization of television and film costs		1,546			1,759			4,677			4,776
Amortization of 4Kids TV broadcast fee		5,482			5,490			13,726			15,172
Total costs and expenses		18,997			19,752			53,079			57,044

Loss from operations		(6,814	)		(2,190	)		(13,956	)		(3,557	)

Interest income		1,254			1,114			3,821			3,010

Loss before income taxes		(5,560	)		(1,076	)		(10,135	)		(547	)

Benefit from income taxes		(2,471	)		(845	)		(4,746	)		(1,322	)

Loss from unconsolidated operations –
net of a tax benefit		(1,061	)		—			(1,179	)		—

(Loss) income from continuing operations		(4,150	)		(231	)		(6,568	)		775

(Loss) income from discontinued operations		—			(34	)		—			542

Net (loss) income	$	(4,150	)	$	(265	)	$	(6,568	)	$	1,317

Per share amounts:
Basic (loss) earnings per common share
Continuing operations	$	(0.31	)	$	(0.02	)	$	(0.50	)	$	0.06
Discontinued operations		—			—			—			0.04
Basic (loss) earnings per common share	$	(0.31	)	$	(0.02	)	$	(0.50	)	$	0.10

Diluted (loss) earnings per common share
Continuing operations	$	(0.31	)	$	(0.02	)	$	(0.50	)	$	0.06
Discontinued operations		—			—			—			0.04
Diluted (loss) earnings per common share	$	(0.31	)	$	(0.02	)	$	(0.50	)	$	0.10

Weighted average common shares
outstanding - basic		13,211,222			13,100,477			13,196,621			13,089,511

Weighted average common shares
outstanding - diluted		13,211,222			13,100,477			13,196,621			13,373,422