4Kids lost $3.5 million in its first quarter, representing deterioration from the $2 million loss in its Q1 a year ago.  Sales were $4.2 million, down from $9.3 million a year ago. 

Revenues were challenged in a number of areas.  The company reported “substantially no revenue” from the Chaotic TCG in Q1, and acknowledged that “over-all lack of demand for the Chaotic property” required 4Kids to grant $300,000 in allowances and promotional markdowns on Chaotic during Q1.  Other drop-offs included reductions in licensing on Monster Jam and AKC Properties; the elimination of Teenage Mutant Ninja Turtles revenues as a result of the sale of the property; reduced international sales of Dinosaur King and Yu-Gi-Oh! TV shows; and reductions in advertising on its TV show and Websites, including makegoods from Q4.

CEO Al Kahn told listeners that the company would announce 12 new properties in 2009, including five at Licensing Show in June.  4Kids has already announced that it’s acquired Dragon Ball Z Kai, and is in the market for additional anime properties. 

Kahn is also trying to renegotiate 4Kids’ deal with CW.  4Kids will launch a new anime programming block called Toonzai on the network this fall (see “4Kids Adds Dragon Ball Z Kai”)

The company, which has been for sale since last summer (see “4Kids Looks at a Sale”), reported that it had entered into an exclusive negotiating period with a purchaser that would pay a premium over the publicly traded stock price. 

4Kids is in danger of having its stock delisted by the New York Stock Exchange because its market cap is too low (see “Delisting Warnings”).  Kahn did not offer any hope in the company’s conference call that he would be able to get the company’s stock price up in time to avoid the delisting. If the company’s stock is delisted from the NYSE, it would trade on pink sheets.