Company projects 25% of Genius Products, LLC revenue will be from non-Weinstein content partners by year-end 2007 and 50% by year-end 2008

SANTA MONICA, Calif.—November 21, 2006—Genius Products, Inc. (OTC BB: GNPI) today announced results for its third quarter ended September 30, 2006. The significant business milestones accomplished during the third quarter have positioned the Company, through Genius Products, LLC (the “Distributor”) as one of the fastest growing leading independent distributors of home entertainment content in the United States.

“We view the third quarter of 2006 as the Company’s most important to date based on the closing of our strategic transaction with The Weinstein Company (TWC), the announcement of major content partnerships including ESPN, World Wrestling Entertainment (WWE) and Discovery Kids, and achieving record revenues of $134.5 million,” said Stephen K. Bannon, Chairman. “The recent content agreements continue to significantly strengthen our position in the market and have reaffirmed our strategy to focus on four fundamental content “Verticals”: Sports; Family/Faith; Lifestyle; and Independent Film. Our commitment to our retail partners and content providers continues to be based on collaboration and thought leadership. We believe this strategy will continue to attract additional content providers and allow our current partners to maximize their home entertainment revenue and profit.

”Based on the recent momentum in this area we are confident we will hit our stated pro forma 2006 gross revenue target of $370 million. In addition, because of the strong momentum with new content providers, the recently announced Blockbuster alliance and the anticipation of new content providers that will be announced shortly we raised our 2007 gross revenue range to $700 - $800 million,” continued Mr. Bannon” In addition, we believe our new product portfolio as well as our anticipated new content partnerships will result in approximately 25% of gross revenues by year-end 2007 and 50% by year-end 2008 being derived from non-Weinstein Company content providers.”

As previously announced, on July 21, 2006, Genius Products, Inc. completed its strategic transaction with TWC pursuant to which it launched a venture named Genius Products, LLC (the “Distributor”) to exploit the exclusive U.S. home video distribution rights to feature film and direct-to-video releases owned or controlled by TWC. From December 5, 2005 through the closing,Genius Products, Inc. operated under an interim distribution agreement with TWC and recorded the results from titles it released for TWC on its financial statements. After closing, substantially all of the revenue and expenses, as well as the results from releasing TWC product, are reflected in the financial statements of the Distributor. The Company will record its 30% share of the Distributor's profit or loss as equity in net earnings (losses) from Distributor.

The third quarter results reflect the operations of the Company under its interim distribution agreement with TWC for the 21 days ending July 21 and its 30% share of Genius Products, LLC’s net loss for the 71 days ending September 30, 2006. For ease of comparison to the previous quarter, the results of Genius Products, Inc. presented in this release reflect consolidation of the Genius Products, LLC financial statements with the Genius Products, Inc. financial statements, which is pro forma for the effect of TWC Holdings converting its Class W Units into 70% of the common stock of Genius Products, Inc., which increases the shares outstanding to effect for TWC’s 70% interest. Investors should refer to Exhibit 99.1 of the quarterly report which includes the financial statements of the Distributor which we believe will provide a better understanding of the financial performance of the operation.

"During the quarter, we continued to successfully execute our growth strategy by leveraging our relationship with TWC and greatly diversifying our content portfolio,” commented Trevor Drinkwater, President and Chief Executive Officer. “We are very excited about the growth opportunities related to the new distribution agreements we signed with ESPN, World Wrestling Entertainment, Discovery Communications and ImaginAsian. The economic model associated with these new agreements is consistent with our stated objective to significantly improve revenue and margins. We have also been successful in diversifying our product offering and now have a significant library to exploit through the sale of both the physical and the electronic version.”

Pro Forma Financial Results

The financial results discussed below are the pro forma results reflecting the consolidation of the financial statements of the Distributor with Genius Products, Inc. The 2005 historical results and prior quarterly results discussed below are the actual results of Genius Products, Inc.

Third quarter results reflect a significant improvement in revenues and gross profit largely as a result of releases from the TWC relationship and early success from the Company’s recently announced content relationships.

Gross revenues increased to $134.5 million for the three months ending September 30, 2006, up 316% compared to full year 2005 gross revenue of $32.3 million.

Sales returns, discounts and allowances were $35.7 million for the third quarter of 2006, compared to $2.1 million for the third quarter of 2005. This increase coincides with the increase in overall gross revenues. Sales returns, discounts and allowances increased to 26.6% of gross revenues in the third quarter of 2006 compared to 20.1% and 25.9% of gross revenues for the comparable period last year and the second quarter of 2006, respectively.

Gross profit for the third quarter 2006 improved to $28.2 million or 28.5% of net revenues, compared to a gross profit of $2.4 million, or 29.0% of gross revenues, for the comparable period last year. The improvement was primarily due to higher net revenues coupled with the culmination of the shift away from the historic Genius Products value business.

Sales and marketing expenses, which are primarily recoupable expenses, increased to $23.7 million in the third quarter of 2006 from $609,000 in the comparable period last year primarily due to the increased level of expenses incurred in connection with releasing TWC titles.

General and administrative expenses increased to $9.4 million in the third quarter of 2006 compared to $2.5 million in the third quarter of 2005 primarily due to increased salaries, rent, general and administrative expenses associated with the TWC transaction and the resulting ramp-up of infrastructure of $1.7 million and non-cash compensation expense related to rule FAS 123(R) of $3.1 million. Excluding these expenses, G&A totaled $4.6 million in the third quarter 2006 or 4.7% of net revenues.

The third quarter 2006 net loss of $5.1 million included non-cash compensation expense related to FAS 123(R) of $3.1 million, depreciation, amortization, and taxes totaling $0.6 million, net interest income of $0.2 million and one-time non-recurring general and administrative expenses of $1.7 million relating to the TWC transaction and the resulting ramp-up of infrastructure. Excluding these items, the Company recorded adjusted net income on a non-GAAP basis of $0.2 million for the third quarter 2006. A reconciliation of GAAP net loss to adjusted net income, a non-GAAP measure, is provided in the attached tables. The Company believes that certain non-GAAP measures, when presented in conjunction with comparable GAAP (Generally Accepted Accounting Principles) measures, are useful because that information is an appropriate measure for evaluating the Company’s operating performance. Internally, the Company uses this non-GAAP information as an indicator of business performance, and evaluates management’s effectiveness with specific reference to these indicators. These measures should be considered in addition to, and not as a substitute for, measures of financial performance prepared in accordance with GAAP.

Genius Products, Inc. Actual Results

The discussions in this section reflect the Company’s operations for the 21 day period ending July 21, 2006, the period prior to the closing of the TWC transaction. For the 71-day period from July 22 through September 30 (post Closing), the Company accounted for its investment in the Distributor on its financial statements using the equity method of accounting. Under the equity method of accounting, only its investment in and amounts due to and from the Distributor are included in its consolidated balance sheet. On its statement of operations, the Company recorded its 30% share of the Distributor's profit or loss as equity in net earnings (losses) from Distributor. After the Closing, substantially all of the Company’s revenue and expenses are reflected in the financial statements of the Distributor. The Company did not compare the results of operations for the 21-day period ending July 21, 2006 with the three and nine months ended September 30, 2005 due to the fact that the time periods involved are not comparable, and the prior year periods consisted entirely of non-TWC product.

Total gross revenues for the 21 days ended July 21, 2006 were $21.7 million. Sales returns, discounts and allowances were $4.3 million for the 21 days ended July 21, 2006. This resulted primarily from the increase in sales from the video release of TWC's “The Matador” and “The Libertine”.

General and administrative expenses were $2.2 million during the 21 days ending July 21, 2006. General and administrative expenses primarily relate to payroll, rent, and transaction costs. Investment banking, audit and legal fees of $1.4 million for the 21 days ending July 21, 2006 related to the closing of the transaction with The Weinstein Company. General and administrative expenses also include warrants and options expense associated with compensation to certain employees and outside consultants of $0.2 million during the 21 days ending July 21, 2006. General and administrative expenses were 12.7% net revenues for the 21 days ending July 21, 2006.

Sales and marketing expenses were $5.9 million during the 21 days ending July 21, 2006. Sales and marketing is primarily attributable to the advertising campaigns for the video release of TWC's “Scary Movie 4” which was released on August 15, 2006.

During the 71-day period from July 22 through September 30, the Company’s 30% interest in the net loss of the Distributor was $1.9 million.

For the 3 months ended September 30, 2006, the Company’s loss before extraordinary item was $3.1 million.

As part of the purchase accounting associated with the closing of the TWC transaction, Genius Products, Inc. recognized an extraordinary gain in the third quarter of 2006 of $50 million based on the difference between the fair market value of assets contributed and the net book value, reduced for the portion of the gain associated with the retained economic interest in the Distributor.

For the 3 months ended September 30, 2006, the Company’s net income was $47.0 million.

Strategic Achievements

The company, through the Distributor, announced the addition of several major content partnerships in sports, family and independent film categories including:

ESPN Home Entertainment – Genius Products, LLC entered into an exclusive distribution agreement with ESPN and through Genius Products, LLC (the “Distributor”) is expected to distribute a minimum of 15 titles per year through 2011 including ESPN Original Entertainment titles such as “3”, “Four Minutes”, “The Junction Boys”, “Playmakers”, “Through the Fire”, “Tilt”, and the upcoming “Ali Rap”, along with major branded programs from SportsCentury, ESPN Classic, ESPN Outdoors, X Games, ABC Sports, and college sports titles (please refer to the 8-K filed on July 11, 2006).

World Wrestling Entertainment, Inc. – Genius Products, LLC entered into a multi-year agreement with World Wrestling Entertainment, Inc. (WWE), to be the exclusive home entertainment distributor of all WWE DVD titles, effective November 1, 2006. New releases will include content from WWE's 90,000-hour video library, the largest of its kind in the world, featuring content from RAW®, SmackDown!® and ECW® (Extreme Championship Wrestling(TM)), pay-per-view events, including WrestleMania, and past and present Superstar profiles, among others.

The first title to be distributed features one of WWE's greatest legends, BORN TO CONTROVERSY: THE RODDY PIPER(TM) STORY (November 14, 2006, street date), THE SPECTACULAR LEGACY OF THE AWA® (November 21, 2006, street date) and the RAW brand's pay-per-view, WWE CYBER SUNDAY(TM) 2006 (December 5, 2006, street date). Genius will release a minimum of 25 new titles in 2007, with additional plans to exploit WWE's DVD catalog of more than 100 titles.

Discovery Communications, Inc. – Genius Products, LLC has entered into an agreement with Discovery Communications, Inc. (DCI) to be the exclusive home entertainment distributor of Discovery Kids programming. Genius plans an aggressive rollout of the Discovery Kids properties beginning in February 2007, delivering a minimum of 16 titles per year. Properties for release on DVD include KENNY THE SHARK, TUTENSTEIN and FLIGHT 29 DOWN, as seen on the Discovery Kids Channel and PAZ and SAVE-UMS from Ready Set Learn!(TM), the preschool block that airs on TLC and Discovery Kids Channel.

ImaginAsian Entertainment, Inc. – Genius Products, LLC has entered into a multi-year agreement with ImaginAsian Entertainment, Inc. to be the exclusive home entertainment distributor for ImaginAsian's expanding portfolio of Asian-genre motion pictures and television programs. The first two films in the repertoire include Green Chair, one of 2005's most acclaimed Korean films, directed by veteran South Korean director Park Chul-soo, and the critically-acclaimed Vietnamese American feature film Journey from the Fall, written and directed by Ham Tran and produced by Lam Nguyen.

Blockbuster, Inc. – Genius Products, LLC will act as the exclusive distributor to The Weinstein Company (TWC) in executing and servicing TWC's historic strategic alliance with Blockbuster. TWC has entered into a four-year exclusive alliance, which provides Blockbuster exclusive rental rights to TWC's theatrical and direct-to-video movies, beginning Jan. 1, 2007. Under the terms of the agreement, TWC and Blockbuster will share rental revenues from TWC's theatrical and direct-to-video titles. Genius Products, LLC, TWC's exclusive home entertainment distributor, will provide distribution services to TWC in connection with the deal. Some of the first films available for rent exclusively at Blockbuster will include: "Bobby," "School for Scoundrels," "The Protector," "Shut Up & Sing," "Miss Potter," "Grindhouse," "The Nanny Diaries," "Arthur and The Invisibles."

We expect that the Blockbuster deal will position Genius Products, LLC for predictable rental revenue streams over the term of the agreement and will greatly expand its ability to maximize performance of its non-theatrical release slate.

Operational Achievements and Outlook

-- Closed the strategic transaction with TWC on July 21, 2006 providing Genius Products, LLC with the exclusive U.S. home video distribution rights for virtually all TWC's filmed entertainment and direct-to-video product (please refer to the 8-K filed on July 26, 2006)

-- Released four TWC theatrical titles on DVD: “The Matador”, “The Libertine”, “Scary Movie 4” and “Lucky Number Slevin”, and 9 IFC (Independent Film Channel) theatrical titles on DVD including, “Manderlay”, “CSA: The Confederate States of America”, “Sorry Haters” and “Lonesome Jim”

-- Released two TWC direct-to-video titles including “Kill Zone”, a Dragon Dynasty title and Bridezillas

-- Expanded the Board of Directors of Genius Products, Inc. from four to six members with the addition of two TWC executives, Larry Madden, Executive Vice President and CFO of TWC, and Irwin Reiter, Executive Vice President of Accounting and Financial Reporting of TWC

“The significant business milestones we accomplished during the third quarter has positioned Genius Products, through the Distributor, as one of the fastest growing independent distributors of home entertainment content in the United States,” stated Trevor Drinkwater, President and Chief Executive Officer. “Having closed our relationship with TWC on July 21, 2006, we laid a powerful foundation for our future and significantly expanded our retail relationships with industry giants, such as Wal-Mart, Best Buy, Blockbuster and Target. We also continued to successfully expand our position in the market by introducing new brands and winning new content providers as long-term partners across our four fundamental content verticals. We believe the Genius Products, LLC solid infrastructure, sufficient capital and seasoned management team will enable us to capitalize on the progress we have made so far and maintain our impressive growth momentum into the future.”

"Our solid partnership with TWC and the new relationships position Genius Products for profitable growth in the fourth quarter and beyond,” remarked John Mueller, Executive Vice President and Chief Financial Officer. “The ramp-up and transactions costs related to the TWC transaction are now virtually behind us and we are thrilled about expanding our operating margins and building long-term value for our shareholders.”

The Company accounts for its investment in Genius Products LLC (the “Distributor”) on its financial statements using the equity method of accounting. Under the equity method of accounting, only its investment in and amounts due to and from the equity investee are included in its consolidated balance sheet. On its statement of operations, the Company records its 30% share of the Distributor’s profit or loss as equity in net earnings (losses) from Distributor. Commencing after July 21, the closing date of the TWC transaction, substantially all of the Company’s results from its own business and from releasing TWC product are reflected in the financial statements of the Distributor. The Company has included separate financial statements of the Distributor in a note to its financial statements (for additional information please review our quarterly report on Form 10-Q filed on November 20, 2006).

The Company's executives will host an investor conference call to discuss the third quarter of 2006 results on November 21, 2006, at 6:00 a.m. PT (9:00 a.m. ET). Investors are invited to listen to Genius Products' conference call by dialing 800-299-7928 and using the passcode 26616968. International callers can dial 617-614-3926 and enter the same passcode. There will also be a simultaneous webcast available on the Investor Relations page at geniusproducts.com.

A replay of the call will be available until Tuesday, December 5, 2006, and can be accessed by dialing 888-286-8010 from the U.S., or 617-801-6888 for international callers, and using the passcode 68430660. A replay webcast will also be available on the Investor Relations page.

About Genius Products, Inc.

Genius Products, Inc. (OTCBB: GNPI News), together with The Weinstein Company, own Genius Products, LLC, a leading independent home-entertainment distribution company that produces, licenses, and distributes a valuable library of motion pictures, television programming, family, lifestyle and trend entertainment on DVD and other emerging platforms through its expansive network of retailers throughout the U.S. Genius handles the distribution, marketing and sales for such brands as Asia Extreme(TM), Baby Genius®, Dragon Dynasty(TM), Dimension Films, ESPN®, IFC®, NBC News®, Sundance Channel Home Entertainment®, Wellspring(TM) and The Weinstein Company®. Genius Products, Inc. is the managing member of Genius Products, LLC, in which it holds a 30% equity interest.

Use of Non-GAAP Financial Information

Adjusted net income as presented in this press release and management's audio presentation is a non-GAAP financial measure that represents GAAP net income excluding the effects of a variety of charges and credits that are required to be included in a GAAP presentation, including non-cash compensation expense related to FAS 123(R), depreciation, amortization, taxes, interest income, interest expense, TWC transaction-related expenses including legal, accounting and tax advisory fees and expenses associated with the ramp-up of operations including recruitment, consulting, software and occupancy costs. Adjusted net income may differ from non-GAAP measures used by other companies and is not a measurement under GAAP. Management believes the adjusted net income presentation enhances an overall understanding of Genius Products’ financial performance from operations, and it is used by management for that purpose. The Company believes adjusted net income and per share adjusted net income provide useful information to investors about the Company’s financial performance because it eliminates the effects of period to period changes in non-cash compensation expenses, depreciation, amortization, interest income, interest expense, taxes and non-recurring expenses associated with the TWC transaction and the resulting ramp-up of operations, all of which the Company believes are not reflective of the underlying performance of its ongoing operations. Measures similar to adjusted net income are also widely used by the Company and other companies in the industry to evaluate and price potential acquisition candidates. In addition, the Company presents these measures because the Company believes they are frequently used by analysts, investors and other interested parties in evaluating companies such as Genius Products. Since Genius Products has historically reported non-GAAP results to the investment community, management believes the inclusion of these non-GAAP financial measures provides consistency in its financial reporting.

There are limitations inherent in non-GAAP financial measures such as adjusted net income in that they exclude a variety of charges and credits that are required to be included in a GAAP presentation, and do not therefore present the full measure of Genius Products recorded costs against its revenue. Management compensates for these limitations in non-GAAP measures by also evaluating performance based on traditional GAAP financial measures. Accordingly, investors should consider these non-GAAP results together with GAAP results, rather than as an alternative to GAAP basis financial measures.

Safe Harbor Statement

Except for historical matters contained herein, the matters discussed in this press release are forward-looking statements. The forward-looking statements reflect assumptions and involve risks and uncertainties that may affect Genius Products’ business, forecasts, projections and prospects, and cause actual results to differ materially from those in these forward-looking statements. These forward-looking statements include, but are not limited to, statements relating to our profitability and revenues in 2006 or beyond, increased sales volume and improved profitability, our anticipated growth of revenues, our ability to forecast returns, our ability to successfully position ourselves as a leading home entertainment distributor, the number of anticipated releases per year, the anticipated timing and financial performance of new releases including “3”, “Four Minutes”, “The Junction Boys”, “Playmakers”, “Through the Fire”, “Tilt”, “Ali Rap”, including releases from SportsCentury, ESPN Classic, ESPN Outdoors, X Games, ABC Sports, and college sports titles, “Lassie”, “Ong Bak 2”, “The Protector”, “Born to Fight”, “Kill Zone”, “Seven Swords”, Dragon Squad”, BKN titles such as “Christmas Carol”, “Ali Baba and the Forty Thieves” and “Kong Return to the Jungle” and TWC titles such as “The Matador”, “The Libertine”, “Lucky Number Slevin”, “Feast”, “Clerks II”, and “Pulse” and any other statements relating to such new release that are not historical statements of fact. Actual results could vary for many reasons, including but not limited to, our ability to continue to attract and keep experienced management, acquire and keep valuable content or expand the distribution partnership, the unpredictability of audience demand, the success of TWC titles at box office and the popularity of our titles on DVD, especially TWC and ESPN titles, our ability to perform under the terms of our agreement with our content providers, especially with TWC and ESPN, our ability to continue to manage our significant growth, the effect of technological change and the availability of alternative forms of entertainment, our ability to maximize our operating leverage. Other such risks and uncertainties include the matters described in Genius Products’ filings with the Securities and Exchange Commission. Genius Products assumes no obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of this press release.

(Financial Tables HERE. )

Notes to Supplemental Unaudited Pro Forma Consolidated Financial Information

Represents the Genius Products, Inc. unaudited balance sheet as of September 30, 2006.

Represents the Distributor unaudited balance sheet as of September 30, 2006.

Represents the consolidation of Genius Products, Inc. and the Distributor as if TWC exercised its right to convert its interest into the common equity of Genius Products, Inc.

Represents the goodwill for the transaction.

Represents the Genius Products, Inc. unaudited statement of operations for the three and nine months ended September 30, 2006.

Represents the Distributor unaudited statement of operations for the 71 days ended September 30, 2006 giving effect to the Transaction as closing on July 21, 2006.

Represents the adjustment to consolidate the pro forma Genius Products, Inc. and Distributor statement of operations for the three and nine months ended September 30, 2006.

Represents the adjustment to eliminate intangible asset amortization related to the transaction.

Represents the adjustment to eliminate the earnings from investee.

Represents the additional shares to be issued to TWC upon conversion of their 70% interest in the Distributor into the common equity of Genius Products, Inc.

Contact:

Integrated Corporate Relations
John Mills / Anne Rakunas, 310-954-1100

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