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Public and Investor Relations, Corporate and Marketing Communications

FOR:                         4Kids Entertainment, Inc.

KCSA                       Todd Fromer / Garth Russell
CONTACTS:            (212) 896-1215 / (212) 896-1250
                                  tfromer@kcsa.com / grussell@kcsa.com

4Kids Entertainment Reports Second Quarter 2006 Results

NEW YORK, August 9, 2006 – 4Kids Entertainment, Inc. (NYSE: KDE), a global provider of children’s entertainment and merchandise licensing, today announced financial results for the quarter ended June 30, 2006.

Net revenues in the second quarter of 2006 totaled $16.7 million from continuing operations as compared to $18.3 million for the same period last year. The Company’s net income for the quarter ended June 30, 2006 was $34,000 (consisting of a loss from continuing operations for the second quarter of 2006 of $(0.6) million, or $(0.05) per diluted share and income from discontinued operations of $0.7 million or $0.05 per diluted share) as compared to net income of $0.6 million, or $0.05 per diluted share, in the second quarter of 2005 (consisting of income from continuing operations for the second quarter of 2005 of $0.6 million, or $0.05 per diluted share and income from discontinued operations of $13,000 or $0.00 per diluted share) . The diluted weighted average common shares outstanding for the quarter ended June 30, 2006 was 13,372,045 shares compared with 13,700,291 shares for the quarter ended June 30, 2005. The Company’s media buying subsidiary, The Summit Media Group, Inc., ceased operations as of June 30, 2006 with Summit’s results, including $1.8 million of revenue arising from a settlement of litigation, being reported as a discontinued operation.

For the six months ended June 30, 2006, net revenues totaled $35.9 million compared to $37.6 million from the same period last year. The Company’s net income for the six months ended June 30, 2006 was $1.6 million, or $0.12 per diluted share (consisting of income from continuing operations of $1.0 million, or $0.08 per diluted share and income from discontinued operations of $0.6 million, or $0.04 per diluted share), as compared to net income for the six months ended June 30, 2005 of $2.6 million, or $0.19 per diluted share for the six months ended June 30, 2005 (consisting of income from continuing operations of $2.4 million, or $0.18 per diluted share and income from discontinued operations of $0.2 million, or $0.01 per diluted share). The diluted weighted average common shares outstanding for the six months ended June 30, 2006 were 13,370,177 shares compared with 13,766,632 shares for the six months ended June 30, 2005.

Alfred R. Kahn, 4Kids Entertainment’s Chairman and Chief Executive Officer, said, “We had mixed results in the second quarter. While we experienced gains in revenues attributable to our Yu-Gi-Oh!, Cabbage Patch Kids and The Winx Club brands, these gains were offset by declines in revenues from the Teenage Mutant Ninja Turtles and the American Kennel Club properties. The Company recorded additional revenue of approximately $2.8 million for the “Yu-Gi-Oh!” property during the three and six months ended June 30, 2006, resulting from changes in the manner in which sales are calculated by a licensee for purposes of computing the amount of certain marketing fees due to the Company from such licensee.This quarter’s results were negatively impacted by approximately $2.2 million in one-time charges consisting of $1.7 million in severance costs and approximately $0.5 million in a write off of software development costs.

“We look forward to the introduction of our promising new properties, Viva Piñata and Chaotic, as part of our exciting new fall lineup for 4Kids TV™. Viva Piñata, our first collaboration with Microsoft, will be supported by Microsoft’s planned fourth quarter, 2006 release of the initial Viva Piñata videogame exclusively for Xbox 360. Chaotic, the series based on the trading card game featuring cards imprinted with codes that enable the cards to be digitally uploaded to the Chaotic website, also will debut on 4Kids TV™ in late September. The Chaotic website will launch late in the year with the introduction of the Chaotic trading card game at retail expected to take place in spring 2007", said Kahn.

The Company will also add the Yu-Gi-Oh! brand to its Saturday morning lineup with the Yu-Gi-Oh! Capsule Monsters series making its debut on 4Kids TV™ in September. Teenage Mutant Ninja Turtles® Fast Forward, the new fifth season of the television series set 99 years into the future, will return to 4Kids TV™ this fall. It is expected that the Turtle property will benefit from the upcoming Turtles movie to be released by Warner Bros. and The Weinstein Company in March 2007. These series join the Company’s other returning programming on 4Kids TV™: The Winx Club, Bratz and GI Joe Sigma Six.

“This past quarter, we also continued to make important strides in strengthening our property portfolio,” Kahn added. “Our worldwide licensing and marketing agreement with The Jim Henson Company provides us with the unique opportunity to license new artwork and concepts from the renowned puppeteer and filmmaker.”

Kahn concluded, “We look forward to improved future performance stemming from the introduction of some exciting, new properties and the re-invigoration of some of our older properties. We anticipate that our cost-cutting initiatives will result in significant savings beginning in the fourth quarter of 2006 and continuing into 2007. With more than $113.5 million in total cash and investments and no long-term debt, we continue to evaluate opportunities to expand our content and distribution and build shareholder value.”

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.

Tables follow:

4KIDS ENTERTAINMENT, INC. AND SUBSIDIARIES
 
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2006 AND DECEMBER 31, 2005
(In thousands of dollars, except share data)

Assets	2006		2005
Current assets:		(Unaudited)
Cash and cash equivalents	$	12,926	$	35,142
Investments		100,600		78,383
Total cash and investments		113,526		113,525
Accounts receivable - net		22,902		32,193
Prepaid 4Kids TV broadcast fee, net of accumulated amortization
of $100,396 and $90,714 in 2006 and 2005, respectively		3,716		6,606
Prepaid income taxes		2,877		2,312
Prepaid expenses and other current assets		2,905		1,683
Current assets from discontinued operations		1,918		2,316
Deferred income taxes		466		466
Total current assets		148,310		159,101
Property and equipment - net		2,119		2,853
Other assets:
Accounts receivable - noncurrent, net		3,473		891
Film and television costs - net		15,027		12,208
Deferred income taxes - noncurrent		1,516		1,971
Other assets - net		7,409		6,914
Total assets	$	177,854	$	183,938
Liabilities and Stockholders' Equity
Current liabilities:
Due to licensors	$	5,011	$	13,503
Accounts payable and accrued expenses		10,622		9,239
Current liabilities from discontinued operations		654		1,486
Deferred revenue		4,952		5,297
Total current liabilities		21,239		29,525
Deferred rent		902		1,016
Total liabilities		22,141		30,541
Commitments and contingencies
Stockholders' equity
Preferred stock, $.01 par value - authorized, 3,000,000 shares; none issued		--		--
Common stock, $.01 par value - authorized, 40,000,000 shares;
issued, 14,843,893 and 14,826,643 shares; outstanding 13,093,893 and
13,076,643 shares in 2006 and 2005, respectively		148		148
Additional paid-in capital		61,655		61,415
Accumulated other comprehensive income		922		428
Retained earnings		126,237		124,655
		188,962		186,646
Less- cost of 1,750,000 treasury shares in 2006 and 2005		33,249		33,249
		155,713		153,397
Total liabilities and stockholders' equity	$	177,854	$	183,938

4KIDS ENTERTAINMENT, INC. AND SUBSIDIARIES
 
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
THREE AND SIX MONTHS ENDED JUNE 30, 2006 AND 2005
(In thousands of dollars, except share data)

	Three Months Ended June 30,					Six Months Ended June 30,
	2006			2005		2006			2005
Net revenues	$	16,672		$	18,324	$	35,925		$	37,608
Costs and expenses:
Selling, general and administrative		10,285			8,299		18,562			16,493
Production service costs		3,155			1,986		6,031			4,122
Amortization of television and film cost		1,371			1,762		3,017			3,845
Amortization of 4Kids TV broadcast fee		4,874			5,971		9,682			10,558
Total costs and expenses		19,685			18,018		37,292			35,018
(Loss) income from operations		(3,013	)		306		(1,367	)		2,590
Interest income		1,009			753		1,896			1,400
(Loss) income before income taxes		(2,004	)		1,059		529			3,990
(Benefit) provision for income taxes		(1,382	)		441		(477	)		1,574
(Loss) income from continuing operations		($ 622	)	$	618	$	1,006		$	2,416
Income from discontinued operations	$	656		$	13	$	576		$	179
Net income	$	34		$	631	$	1,582		$	2,595
Per share amounts:
Basic (loss) earnings per common share
Continuing Operations		($ 0.05	)	$	0.05	$	0.08		$	0.18
Discontinued Operations	$	0.05		$	0.00	$	0.04		$	0.01
Basic earnings per common share	$	0.00		$	0.05	$	0.12		$	0.19
Diluted (loss) earnings per common share
Continuing Operations		($ 0.05	)	$	0.05	$	0.08		$	0.18
Discontinued Operations	$	0.05		$	0.00	$	0.04		$	0.01
Diluted earnings per common share	$	0.00		$	0.05	$	0.12		$	0.19
Weighted average common shares
outstanding - basic		13,090,901			13,248,711		13,083,937			13,315,162
Weighted average common shares
outstanding - diluted		13,372,045			13,700,291		13,370,177			13,766,632