4Kids Entertainment Reports Third Quarter 2006 Results.

NEW YORK -- 4Kids Entertainment, Inc. (NYSE: KDE), a global provider of children's entertainment and merchandise licensing, today announced financial results for the quarter ended September 30, 2006.

Net revenues in the third quarter of 2006 totaled $17.6 million from continuing operations as compared to $19.5 million for the same period last year. The Company's net loss for the quarter ended September 30, 2006 was $(265,000), or $(0.02) per diluted share (consisting of a loss from continuing operations for the third quarter of $(231,000), or $(0.02) per diluted share and a loss from discontinued operations of $(34,000), or $0.00 per diluted share), as compared to net income of $2.0 million, or $0.15 per diluted share, for the third quarter of 2005 (consisting of income from continuing operations of $1.8 million, or $0.14 per diluted share and income from discontinued operations of $180,000, or $0.01 per diluted share). The diluted weighted average common shares outstanding for the quarter ended September 30, 2006 were 13,100,477 shares as compared with 13,424,913 shares for the quarter ended September 30, 2005. Since the Company's media buying subsidiary, The Summit Media Group, Inc., ceased operations as of June 30, 2006, the Company reports Summit's results as a discontinued operation.

For the nine months ended September 30, 2006, net revenues totaled $53.5 million from continuing operations compared to $57.1 million for the same period last year. The Company's net income for the nine months ended September 30, 2006 was $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), as compared to net income for the nine months ended September 30, 2005 of $4.6 million, or $0.33 per diluted share (consisting of income from continuing operations of $4.2 million, or $0.31 per diluted share and income from discontinued operations of $359,000, or $0.02 per diluted share). The diluted weighted average common shares outstanding for the nine months ended September 30, 2006 were 13,373,422 shares compared with 13,651,572 shares for the nine months ended September 30, 2005.

Alfred R. Kahn, 4Kids Entertainment's Chairman and Chief Executive Officer, said, "During the third quarter, our revenues declined by $2.0 million compared with the same period in 2005. The Company's lower revenues in the third quarter of 2006 resulted principally from declines in merchandise licensing revenues from our more established properties, Yu-Gi-Oh![TM] and Teenage Mutant Ninja Turtles[TM]. The Company has not yet realized any of the expected merchandise licensing revenues from its new properties, Viva Pi[+ or -]ata[TM] and Chaotic[TM]. In addition, we did not realize any revenues in the third quarter of 2006 from the long term extension of the Cabbage Patch Kids[TM] master toy agreement that was signed with Play Along, a division of Jakks Pacific in October, 2006." said Kahn.

"We look forward to 2007 when our promising new properties, "Viva Pi[+ or -]ata" and "Chaotic," are expected to be among the significant contributors to the Company's revenues. Next week, Microsoft will release the first "Viva Pi[+ or -]ata" videogame exclusively for Xbox 360. In January 2007, "Chaotic," our new animated TV series featuring cards imprinted with codes that enable the cards to be digitally uploaded to the "Chaotic" website, returns to 4Kids TV[TM] with new episodes. We also expect the "Chaotic" trading card game to be available at retail by late spring 2007 along with the "Chaotic" website. The Company should also benefit from the scheduled March 23, 2007 theatrical release by Warner Bros. and The Weinstein Company of TMNT, the highly-anticipated CG-animated movie featuring the Teenage Mutant Ninja Turtles. We further anticipate that significant savings from our cost-cutting initiatives will begin to impact the bottom-line beginning in the fourth quarter of 2006 and continuing into 2007," said Kahn.

"With $116.3 million in total cash and investments and no debt, we continue to be well situated to take advantage of opportunities to expand our content and distribution and build 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; media planning and buying; and Web site development. For further information, please visit the Company's Web site at www.4KidsEntertainment.com.

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.

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