eLoyalty Announces Third Quarter 2010 Results

 -- Grew ICS Managed Services Backlog(2) to a record of $48.1 million-- Achieved significant Business Unit profitability-- Built strong visibility going into Q4 2010 and Fiscal Year 2011

eLoyalty provides guidance for Services revenue only. Product revenue fromthe sale of third-party software and hardware can fluctuate substantiallybetween periods and is not a primary focus of the Company's business.

eLoyalty enables its customers to achieve breakthrough results withrevolutionary analytics and implementation of advanced VoIP applications.eLoyalty's principal offerings include the Behavioral Analytics™ Serviceand Integrated Contact Solutions (ICS).

(1) eLoyalty presents Adjusted Earnings, a non-GAAP measure that representscash earnings performance, excluding the impact of non-cash expenses andexpense reduction activities, because management believes that AdjustedEarnings provide investors with a better understanding of the results ofeLoyalty's operations. Management believes that Adjusted Earnings reflecteLoyalty's resources available to invest in its business and strengthen itsbalance sheet. In addition, expense reduction activities can varysignificantly between periods on the basis of factors that management doesnot believe reflect current-period operating performance. Although similaradjustments for expense reduction activities may be recorded in futureperiods, the size and frequency of these adjustments cannot be predicted.The Adjusted Earnings measure should be considered in addition to, not as asubstitute for or superior to, operating income, cash flows or othermeasures of financial performance prepared in accordance with GAAP.