4Kids Entertainment Reports Loss

NEW YORK, March 16: For the
quarter that ended December 31, 2006, 4Kids Entertainment recorded a net loss
of $2.3 million, as compared with a profit of $500,000 in the same period in
the prior year, on net revenues of $18.3 million, down from $23.5 million.

For the year ended
December 31, 2006, net revenues totaled $71.8 million, as compared to $80.6
million for 2005. The loss for 2006 was $1.0 million, compared to a profit of
$5.1 million in 2005.

Alfred R. Kahn, 4Kids
Entertainment's chairman and CEO, commented: "Our financial results for
2006 were disappointing with the company losing $1.7 million from continuing
operations. Net revenues were down for the year as a result of decreased
licensing revenue from the Teenage Mutant Ninja Turtles and Yu-Gi-Oh! properties and a decline in ad sales revenues from 4Kids TV. We also
incurred substantial severance and other related costs in 2006."

Kahn continued: "The
company started a number of important initiatives in 2006 that we are hopeful
will benefit the company beginning in 2007,” citing the alliance with Microsoft
for Viva Pinata, the launch of
a trading card company, TC Digital Games, and the launch of the Chaotic property. “We believe that the trading card
company and the Chaotic website will also provide the company with platforms
upon which to launch future properties and will enhance the company's ability
to compete in the digital universe."

He added, "We also
implemented a number of cost-cutting initiatives aimed at reducing overall expenses
including negotiating a multiyear extension of our agreement with FOX to
broadcast 4Kids TV through the 2007-2008 season.”