3SOF

Hi David, yes in Italy today is holiday...Labour Party...even if the comunists were squeezed up (finally!!) in the last election just two weeks ago. 

David, any update from your research tool?
cheers
O.

OPMR: Q1 EPS (32c) vs 1c Misses (11c) Est; Guidance In-Line with Consensus
Tuesday , May 06, 2008 16:03ET

QUARTER RESULTS
Optimal Group, Inc (OPMR) reported Q1 results ended March 2008. Q1 Revenues were $31.25M; +3.92% vs yr-ago; MISSING revenue consensus by -18.41%. Q1 EPS was (32c); -3,300.00% vs yr-ago; MISSING earnings consensus by -190.91%.


GUIDANCE

FY-08 Revenue Outlook [$230 - $250M]: For 2008, the Company currently anticipates consolidated revenues in the range of $230-250 million The FY-08 revenue forecast is in-line with current consensus estimates.

more detailed:

Optimal Group Announces First Quarter 2008 Results
Tuesday , May 06, 2008 16:01ET

MONTREAL, QUEBEC, May 6, 2008 (Marketwire via COMTEX) -- Optimal Group Inc. (NASDAQ:OPMR) today announced its financial results for the first quarter ended March 31, 2008. All references are in U.S. dollars.

Revenues for the first quarter ended March 31, 2008 consisted of revenues from both the Optimal Payments segment and the WowWee segment (acquired on November 7, 2007). The WowWee segment operates in an industry that is seasonal by nature and where a significant portion of revenues and corresponding cash flow are typically generated in the second half of the year.

Revenues for the first quarter ended March 31, 2008 were $31.3 million (which includes approximately $4.9 million related to the WowWee segment; due to seasonality, the first quarter is typically the weakest quarter of the year for this segment) compared to $30.1 million for the first quarter ended March 31, 2007.

Net loss in the first quarter ended March 31, 2008 was $8.0 million or $0.32 per share compared to a net loss of $5.7 million or $0.24 per share in the first quarter ended March 31, 2007. The level of net loss in the first quarter is directly attributable to the seasonally low level of revenue generated by the WowWee segment. Generally, the first quarter is the period of lowest shipments and revenues in the WowWee segment and the industry in which it operates and, therefore, will result in weak financial results due to fixed costs that are incurred.

EBITDA for the quarter ended March 31, 2008 was a loss of $2.7 million or $0.11 per share compared to EBITDA of $2.8 million or $0.12 per diluted share for the comparable period in 2007.

EBITDA is a non-GAAP (generally accepted accounting principles) financial measure calculated as earnings before investment income, taxes, depreciation and amortization and excludes the impact of impairment loss, non-controlling interest, stock-based compensation, discontinued operations and legal settlements. A reconciliation of Optimal's EBITDA is included in Annex A.

Optimal's consolidated balance sheet remains strong. At March 31, 2008, the Company had cash and cash equivalents, short-term investments (including amounts held in reserve) and settlement assets net of customer reserves and security deposits, of $42.3 million or $1.64 per issued and outstanding share; working capital, excluding cash and short-term investments held as reserves, of $11.9 million; and shareholders' equity of $193.9 million, or $7.49 per issued and outstanding share. The Company continues to evaluate potential acquisition opportunities and expects to grow the WowWee segment by executing on internal growth initiatives and by actively pursuing complementary acquisitions.

Stock Buyback

On November 6, 2007, Optimal announced its intention to renew its stock buyback program. In accordance with applicable Canadian tender offer rules, the Company may authorize the purchase of not more than 5% of its outstanding shares on a basis that is exempt from the legal requirement to make a formal offer to all shareholders. Accordingly, the number of shares that may be purchased for cancellation under the Company's buyback program over a 12-month period is limited to 1,300,000 shares, or approximately 5% of the 26,036,548 shares outstanding as at November 14, 2007.

Since November 21, 2007, the Company has purchased and cancelled 157,060 shares under its stock buyback program, including 103,660 shares purchased and cancelled during the first quarter 2008. All purchases under the buyback program have been made subject to the "safe harbor" daily volume limitations prescribed by applicable United States federal securities laws.

Preliminary Outlook for 2008

For 2008, the Company currently anticipates consolidated revenues in the range of $230-250 million with consolidated EBITDA in the range of $10-12 million. However, the Company remains cautious in the face of a weak economy, challenging retail environment and the difficulties affecting companies that manufacture in China. Due to the seasonality of the WowWee segment and the industry in which it operates, these anticipated results should be viewed as preliminary. Management anticipates that greater clarity relating to its operations and financial results will occur as the year progresses.

For its WowWee segment, based on current trends (and given the seasonal nature of the business), the Company anticipates year over year revenue growth for 2008 of approximately 25-30% with revenue in the range of $130-140 million. As at April 30, 2008, orders for product in the WowWee segment were approximately 25% ahead of the same date last year. Also, the Company continues to significantly invest to execute upon its growth strategies for the WowWee segment which may compress operating margins for 2008.

During the first quarter of 2008, the Company continued to implement its strategies for the WowWee segment. It continues to make significant investments in its sales and distribution, as well as marketing and promotion. The Company is also actively building out its online presence, enhancing the consumer's ability to experience and explore the Company's products through the Internet. As well, the Company is pursuing a program of developing and distributing products based on licensed properties. For 2008, the WowWee segment has developed the broadest and most dynamic product offerings in its history. These products have begun to be shipped in the second quarter of 2008.

For its Optimal Payments segment, the Company anticipates 2008 revenues to be essentially flat to slightly decreased year over year and in the range of $100-110 million. This can be attributed to lower merchant volumes from normal attrition and discontinuing business with unprofitable merchant accounts.

Optimal Payments continues to streamline its operations and to pursue a strategy of organic growth for its business to better leverage its existing capacity and infrastructure. In doing so, it has eliminated unprofitable business lines with the goal of generating consistent and ongoing cash flow and maximizing efficiency. While Optimal Group continues to operate in the payments segment, the Company has from time to time received expressions of interest from certain third parties interested in acquiring the payments business and has allowed investigation and review to be conducted.

QuoteDavid, any update from your research tool?

Let me check ... nope, at least, not yet.

As you posted, Q1 2008 results were out last night:

• Optimal Group Announces First Quarter 2008 Results
Marketwire (Tue 4:01pm)

Management stressed a lot (three times in the press release) that results were very affected by WowWee's seasonality, with the 1st quarter being the weakest. WowWee sold just $4.9 M in Q1 of the $135 M expected in full year 2008.

Three more interesting notes from the press release:

1 - Company has been buying back its own shares:

«Since November 21, 2007, the Company has purchased and cancelled 157,060 shares under its stock buyback program, including 103,660 shares purchased and cancelled during the first quarter 2008.»

2 - WowWee is growing from the year ago levels:

«As at April 30, 2008, orders for product in the WowWee segment were approximately 25% ahead of the same date last year.»

3 - There's a hint that OPMR may sell its Optimal Payments division:

«While Optimal Group continues to operate in the payments segment, the Company has from time to time received expressions of interest from certain third parties interested in acquiring the payments business and has allowed investigation and review to be conducted.»

I still need to listen to the conference call, but won't have time to do it before the opening bell. But I'll write about it in tomorrow's update.

I like what I see in OPMR and I'll keep holding for the long term.

We'll have to be very patient with OPMR, because it seems 2008 will be an investment year in WowWee, which will probably compress margins.

Hopefully I'll lose this habit of getting in too early, as that poses a number of risks (and perhaps a lot of wasted time).

Anyway, OPMR's investment story hasn't changed and I'm very positive in WowWee's products and technology over the long term.

I'll attach an informative analysis of yesterday's results, made by B. Riley & Co.

I believe it would be a great development if OPMR were to sell its payments division, change its name to WowWee and completely focus in this business segment. It looks like that's in the cards and the payments division alone is estimated to be worth $2 - $3 a share.

Update:

OPMR technical layout is bearish for all time frames, and it continues to deteriorate in the short term.
Despite its fundamental prospects, we don't want to be holding it if another down swing starts, so we'll set a protective stop level a few cents below its recent lows.

Trading Plan:
HOLD OPMR with a stop @ $2.58

Update:

Just a quick chart update, OPMR failed to breakout the descending resistance and it's trading near the lows. Our stop is set a few cents below, so we'll be probably dropping this position, the market will decide.

Trading Plan:
HOLD OPMR with a stop @ $2.58

OPMR was stopped @ $2.58