4Kids Posts Q2 Results

NEW YORK: Revenues at 4Kids Entertainment in the second quarter dropped from $3.6 million to $2.5 million, the company announced today, while its net loss also fell, from $13.8 million a year ago to $6.5 million.

The reduction in the net loss was attributed to extensive cost-cutting measures—SG&A (selling, general and administrative) expenses were down by 27 percent in the quarter. However, “4Kids had a difficult second quarter as revenue across our separate business segments came in below expectations," said chairman and CEO Al Kahn. "We will be immediately focusing on further reducing our cost structure to bring it in line with our revenue projections."

Kahn continued, "At the end of the second quarter, we concluded our negotiations with The CW Network on a revised agreement which should be more favorable to the company going forward. We have just started our advertising and promotion campaign for the rebranding of our five-hour Saturday morning block on The CW. We are calling it Toonzai on CW 4Kids to emphasize that our network is the destination where kids can see leading Japanese animated series…. We also continue to work on growing our licensing operation, which historically has been our strongest business and has driven past performance for our other segments. We are hopeful that we can develop sufficient revenue streams from some of our new properties which will contribute meaningfully to our bottom line in the coming years."

4Kids says it is continuing to explore its alternatives, with a special committee currently in discussions with several firms interested in acquiring all or part of the company.