SOURCE: Joystar, Inc.

November 15, 2006 07:20 ET

Joystar Announces Results for Third Quarter

Gross Travel Bookings Increase 322% Year-Over-Year; Revenues Increase 263% Year-Over-Year

ALISO VIEJO, CA -- (MARKET WIRE) -- November 15, 2006 -- Joystar, Inc. (OTCBB: JYSR), one of the nation's largest and fastest growing leisure travel networks and leading seller of cruises and vacation packages, today announced results for the third quarter ended September 30, 2006.

William Alverson, Chairman and CEO, commented, "With two full years of operations now under our belt, we have achieved our goal of firmly establishing Joystar as a leader in the rapidly emerging host agency business model and the partner of choice for travel entrepreneurs nationwide. We feel the host agency business model is more promising now than ever.

"Our goal is to build the largest leisure travel agency in the world. To accomplish this, we have fueled our organic growth by creating innovative programs designed to attract and retain the industry's best and brightest travel sellers.

"We believe the decisions we are making right now will have a positive impact on future shareholder value. Our strategy, right or wrong, may be viewed by some as sacrificing short term results. For example, in June, we made the decision to offer our most popular fee-based membership for free to all experienced travel agents.

"The decision had a direct impact on this quarter's profitability. We believe by offering a real business opportunity for free to serious travel entrepreneurs, we will be able to grow our agency network virally, and capture a larger piece of the complex travel distribution channel. We will continue to straddle short term results with long view opportunities if there is potential to create a billion dollar business.

"Our aggressive travel agent recruitment efforts resulted in new membership increases for the third sequential quarter. During the period, 616 travel agents conducted their due diligence and made the informed decision to join our network. This number represents a measurable increase from 536 new members and 374 new members in the second and first quarters respectively.

"Since joining our senior management in June, Sandra D'Arcy, our COO, has focused on fine tuning our business. As a result, we were able to reduce general and administrative expenses 27% to $799,466 for the three months ended September 30, 2006, from $1,017,684 in the previous quarter ended June 30, 2006.

"Because over 55% of our gross bookings and revenue come from our cruise business, the sequential growth in our travel agent network combined with the sequential reduction of expenses has allowed us to effectively offset the seasonal fluctuations in the demand for leisure travel products and services inherent to the industry.

"Generally, leisure travel bookings are highest in the first quarter of the year as everyone plans and books their spring, summer and winter vacations. Bookings gradually decrease over the next three quarters. This seasonal decline in traditional leisure travel bookings is exacerbated by the fact that an estimated 70% to 80% of all cruises are booked in the first quarter followed by two quarters of steep declines and increasing again the fourth quarter.

"Although we expect continued significant increase in our cruise business, our goal for 2007 and beyond is to grow our tour and land-based vacation business to represent 75% of total gross bookings and revenue.

"To this end, we are currently negotiating with major vacation suppliers to increase our commissions to the levels we have attained with our major cruise suppliers. We are very confident we can achieve our goals with the consumer-oriented marketing initiatives and lead generation programs for our travel agent partners. Everything we do is with the success of our travel agents in mind."

Discussion of Results For Three Months and Nine Months Ended September 30, 2006:

Gross Travel Bookings

Gross travel bookings for the three months ended September 30, 2006 increased 322% to $16,220,000 compared to $5,040,091 for the three months ended September 30, 2005.

Gross travel bookings for the nine months ended September 30, 2006 increased 408% to $49,276,487 compared to $9,683,752 for the nine months ended September 30, 2005.

Revenues

Revenues for the three months ended September 30, 2006 increased 263% to $2,114,540 compared to $581,326 for the three months ended September 30, 2005.

Revenues for the nine months ended September 30, 2006 increased 542% to $6,850,791 compared to $1,066,965 for the nine months ended September 30, 2005.

The increase in both gross travel bookings and revenues are due to continued substantial growth of our travel agent network and higher preferred supplier commission levels.

Revenue Margins

Revenue margins (defined as net revenue as a percentage of gross bookings) for the nine months ended September 30, 2006 increased to 14% compared to 11.5% for the nine months ended June 30, 2005. Increases in our fee-based membership coupled with overrides from certain premier supplier partners attributed to the year-over-year increase in revenue margin.

We expect revenue margins to continue to increase as we negotiate higher commissions and overrides with more and more travel suppliers.

Profitability/loss

Net loss for the three months ended September 30, 2006 was $47,484 compared to a net loss of $999,214 for the three months ended September 30, 2005.

Liquidity

At September 30, 2006 the Company had a cash balance of $1,131,030 compared to a cash balance of $218,948 at December 31, 2005.

Year to Date 2006 Highlights:

--  In June 2006, Joystar announced that 19-year travel industry veteran
    Sandra D'Arcy was named Chief Operating Officer.  Before joining Joystar,
    Mrs. D'Arcy spent ten years in the top operational position at travel
    industry giant Hotels.com.  As Executive Vice President reporting to the
    CEO, she interfaced with all aspects of travel operations including sales,
    marketing, human resources, finance, accounting, and vendor resource
    management.  The Company plans leverage Sandra's extensive skills to
    enhance its technology and service offerings to the professional travel
    agent community as well as grow Joystar beyond its current model and scope
    of operations.
    
--  Joystar's Block Group Cruise Space program grew to over 20,000 cabins
    across 12 major cruise lines.  Joystar travel agents and their clients can
    take advantage of inventories, favorable pricing, availability and
    amenities that may not be available through other sales channels.
    
--  Joystar's gross bookings reached an annualized run rate of over $65
    million.  High-margin cruises and vacation packages represent 90% of the
    Company's sales with a large portion of the growth coming from its group
    and incentive travel division.
    
--  Joystar signed a distribution agreement with Amadeus, a global leader
    in technology and distribution solutions for the travel and tourism
    industry.  The relationship provides Joystar's network of travel agency
    partners and clients with access to more than 95% of the world's scheduled
    airline seats; 56,700 hotel properties; 42 car rental companies and other
    provider groups including cruise, ferry, rail, insurance and tour
    operators.
    
--  Joystar listed as "Host with The Most" by James Shillinglaw, Editor-in-
    Chief of leading travel industry trade, Agent @ Home Magazine.
    
--  Joystar recognized as a Carnival Cruise Lines, Celebrity and Royal
    Caribbean Cruise Lines Key Account; a Regent Seven Seas Cruises Top
    account; a Cunard Inner Circle Agency; a Princess I-Excel Agency.  These
    preferred supplier relationships give Joystar access to top account
    commission levels and special promotions.
    
--  Joystar recognized for its YTD sales performance and inducted into
    Norwegian Cruise Line's Captain's Club Agency program.  Benefits of the
    expanded relationship include top account commission levels and special
    promotions.
    
--  Joystar signed an agreement with Holland America Line offering the
    Company top account commission levels and special promotions.  Joystar's
    relationship with the cruise line continues under the banner of a Holland
    America Centurion Agency.
    
--  Joystar rewarded with an increase in commission levels and special
    promotions by Oceania Cruises. Joystar is one of Oceania's valued travel
    agency partners and is considered a top producer.
    
--  Joystar achieved exclusive Club 500 status with Funjet Vacations based
    on sales production through the Company's network of professional sellers
    of travel. Funjet Vacation is the flagship brand of the Mark Travel
    Corporation.
    
--  Joystar formed a strategic partnership with Bedsonline to promote the
    company's 20,000 plus hotel and accommodation types.  The program includes
    national account commission levels, automation and marketing initiatives.
    
--  Joystar attains Platinum Apple status with Apple Vacations.
    
--  Joystar receives Star Award from Sandals for 2006 production levels.
    
--  Joystar recognized by Travel Impressions, a wholly owned subsidiary of
    American Express, as "Best of the Best" travel agency partner.
    
--  Joystar acknowledged as "Top 200" travel agencies by Classic
    Vacations, a subsidiary of Expedia, Inc.
    
Notes & Definitions:

Gross Bookings -- Total retail value of transactions booked for agency transactions, recorded at the time of booking. Bookings include the total price due, including taxes, fees and other charges, and are generally not reduced for cancellations and refunds.

* 2005 amounts have been revised, primarily to reflect adjusted gross bookings and revenue allocations for certain points of sale to conform to our presentation of 2006 periods. There was no impact on total gross bookings and consolidated revenue as a result of these changes.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future performance. These forward-looking statements are based on management's expectations as of November 14, 2006 and assumptions which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. The use of words such as "anticipates," "estimates," "expects," "intends," "plans" and "believes," among others, generally identify forward-looking statements. However, these words are not the exclusive means of identifying such statements. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements and may include statements relating to future revenues, expenses, margins, profitability, net income, earnings per share and other measures of results of operation and the prospects for future growth of Joystar, Inc.'s business.

Actual results and the timing and outcome of events may differ materially from those expressed or implied in the forward-looking statements for a variety of reasons, including, among others: Joystar, Inc.'s ability to effectively update, automate and integrate disparate financial and accounting systems and approaches among its brands and businesses; the accuracy, integrity, security and redundancy of systems, including financial and accounting systems, and networks of Joystar, Inc.; reliance on newly implemented systems supporting our financial planning and projections; adverse changes in our relationships with travel suppliers or GDS partners; adverse changes in senior management; the rate of growth of the internet and online travel; changes in the competitive environment, the e-commerce industry and broadband access; declines or disruptions in the travel industry (including those caused by decreased consumer and business spending, adverse weather, bankruptcies, health risks, war, terrorism and/or general economic downturns); changing laws, rules and regulations and legal uncertainties relating to our business; Joystar, Inc.'s ability to expand successfully in different markets; possible charges resulting from, among other events, integration and process review activities, platform migration and shared services efforts; failure to realize cost efficiencies; the successful completion of any pending corporate transactions and the integration of current and future acquired businesses; and other risks detailed in Joystar, Inc.'s public filings with the SEC, including Joystar, Inc.'s most recent quarterly report on Form 10-Q and its annual report on Form 10-K for the year ended December 31, 2005, which identify important risk factors that could cause actual results to differ from those contained in forward-looking statements, including, but not limited to risks associated with our ability to (i) increase revenues, (ii) obtain profitability, and (iii) obtain additional financing, changes in general economic and business conditions (including in the online business and financial information industry), actions of our competitors, the extent to which we are able to develop new services and markets for our services, risks in connection with acquisitions, the time and expense involved in such development activities, the level of demand and market acceptance of our services and changes in our business strategies.

Except as required by law, Joystar, Inc. undertakes no obligation to update any forward-looking or other statements in this press release, whether as a result of new information, future events or otherwise.

About Joystar, Inc.

Joystar, Inc. (www.joystar.com, www.vacationcompare.com, www.myjoystar.com, www.joystarcruises.com) is the one of the nation's largest and fastest-growing leisure travel agency networks and a leading seller of cruises and vacations. The Company sells complex travel products including cruises, vacation packages and group travel through its rapidly growing national sales force of virtual travel agents and online affiliates. Joystar offers comprehensive business opportunities that combine innovative technology, marketing opportunities and expert support services to the Company's independent agencies and travel agents.

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