4Kids Posts Loss

NEW YORK, May 10: With revenues down 23 percent in the first
quarter to $14.9 million, 4Kids Entertainment has recorded a loss of $200,000,
versus its $1.5 million profit last year.

“Our first quarter results were positively impacted by
licensing revenues associated with the successful theatrical release of the new
Teenage Mutant Ninja Turtles movie, TMNT,
on March 23 and by our recognition of the 2007 minimum guarantee under the
Cabbage Patch Kids master toy license agreement,” commented chairman and CEO Alfred
R. Kahn. “However, the increases in Turtles and Cabbage Patch Kids licensing
revenue were not sufficient to offset decreased revenues year-over-year from
our mature properties such as Yu-Gi-Oh! and Winx Club and lower than expected contributions to revenue from our
newer properties. During the first quarter, we also began to see some of the
effects of last year's cost-cutting initiatives with total costs and expenses
for the quarter down by approximately $750,000 even after taking into account
approximately $700,000 in costs incurred in the first quarter of 2007
attributable to our new trading card company, TC Digital Games and our new
website venture, TC Websites. Looking to the future, we are excited by the
upcoming release of the “Chaotic” trading card game to comic and hobby stores
in late June and by the launch of its companion website, www.chaoticgame.com. Unlike previous trading card
properties that we represented as a licensing agent, “Chaotic” cards will be
produced by TC Digital Games and, therefore, we will receive a higher
percentage of revenue from “Chaotic” card sales. We will also be announcing
several new animated series that will be part of our line-up for the 2007-2008
broadcast season.”