LOS ANGELES--(BUSINESS WIRE)-- EMAK Worldwide, Inc. (OTC: EMAK), a leading marketing services firm, today announced preliminary (pre-audit) results for the fiscal year ended December 31, 2008.

Based on the Company's preliminary financial results, total revenue is expected to be approximately $150 million for the fiscal year 2008, approximately eight percent lower than fiscal year 2007. More than half of the decline in revenue is attributed to lower revenue in its European operations. EBITDA before charges and non-cash expenses is expected to be approximately $2.5 million for the fiscal year 2008, a substantial improvement over the EBITDA loss of $560,000 in fiscal year 2007.

Net loss for 2008 is expected to be approximately $2.5 million, compared with a net loss of $7.6 million in fiscal year 2007. EMAK's turnaround efforts are evident in its improved bottom-line results on higher-margin revenues. The Company ended any pursuit of empty revenues, cut its overhead to match its level of business and cut its public-company costs. Even in these recessionary times, its U.S.-based agencies are showing improvement, with a stabilized promotional products business and a growing agency services business.

The Company ended the year with a sound balance sheet, including approximately $6.0 million in cash and cash equivalents, and no debt.

EMAK's European clients have made drastic reductions in the volume and frequency of their promotional programs from their level four years ago, due to restrictive industry standards that began in the U.K. and subsequently spread across Europe. As discussed in previous disclosures, EMAK's European operations have had the single largest negative impact on overall corporate performance in recent years. Fiscal 2008 represents the fourth consecutive year that the region has produced losses due to deteriorating market and industry conditions.

The Logistix (U.K.) and Mega agencies were acquired in 2001 and 2004, respectively, for a combined approximate $18 million. The Company employs a highly talented group of individuals in Europe and considered a wide range of operational and strategic alternatives in the region in an effort to reshape the agencies. In September 2007, EMAK initiated a restructuring plan aimed at improving profitability. In spite of these actions and continued investment of capital and resources, net losses in the region are expected to represent EMAK's entire full year net loss in 2008, following 2007 when the region's net loss also accounted for all of EMAK's net loss.

After making the decision to close the London office of Logistix (U.K.) in the third quarter of 2008, EMAK's management and Board of Directors determined that the market opportunity has diminished too severely to continue subsidizing these insolvent operations. EMAK's remaining European operations in France, Germany and Holland will seek voluntary liquidations under applicable laws and are expected to cease operations over the course of the next six months. Affected employees total 17, or approximately five percent of EMAK's employees worldwide.

EMAK's improvements in technology and upgraded systems enable its U.S. and Asian-based account teams to continue to service global clients uninterrupted from its offices in Los Angeles and Hong Kong. The team servicing Equity Marketing's largest client will remain unchanged following the European exit.

EMAK's agencies Equity Marketing, Logistix (U.S.), Neighbor and Upshot will lead the charge for continuing profitable growth in the coming years. The Company will provide more detailed information for its financial results, the anticipated financial impact of its actions in Europe and its outlook for 2009 when it reports its audited financials in March.

About EMAK Worldwide, Inc.

EMAK Worldwide, Inc. is the parent company of a family of marketing services agencies including Equity Marketing, Logistix, Neighbor and Upshot. Its agencies are experts in “consumer activation” by offering strategy-based marketing programs that directly impact consumer behavior. The agencies provide strategic planning and research, consumer insight development, entertainment marketing, design and manufacturing of custom promotional products, kids marketing, event marketing, shopper marketing and environmental branding. The Company's blue-chip clients include Burger King Corporation, Frito-Lay, Kellogg, Kohl's, Kraft, Macy's, Miller Brewing Company and Procter & Gamble, among others. Headquartered in Los Angeles, EMAK has offices in Chicago, Amsterdam, Frankfurt, Paris and Hong Kong. More information about EMAK Worldwide is available on the Company's website at www.emak.com.

Certain expectations and projections regarding the future performance of EMAK Worldwide, Inc. discussed in this news release are forward-looking and are made under the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These expectations and projections are based on currently available competitive, financial and economic data along with the Company's operating plans and are subject to future events and uncertainties. Management cautions the reader that the following factors, among others, could cause the Company's actual consolidated results of operations and financial position in 2009 and thereafter to differ significantly from those expressed in forward-looking statements: the Company's dependence on a single customer; the significant quarter-to-quarter variability in the Company's revenues and net income; the Company's dependence on the popularity of licensed entertainment properties and the ability to license, develop and market new products; the Company's dependence on foreign manufacturers; the Company's need for additional working capital; the negative results of litigation, governmental proceedings or environmental matters; and the potential negative impact of past or future acquisitions. The Company undertakes no obligation to publicly release the results of any revisions to forward-looking statements, which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. The risks highlighted herein should not be assumed to be the only items that could affect the future performance of the Company.

Source: EMAK Worldwide, Inc.

EMAK Worldwide, Inc.
Media and investor inquiries:
Michael Sanders
SVP and Chief Financial Officer
323-932-4324