Optimal Geomatics Inc.
TSX VENTURE : OPG

Optimal Geomatics Inc.

March 11, 2008 08:00 ET

Optimal Geomatics Reports First Quarter Financial Results

Achieves significant reduction in net loss

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 11, 2008) - Optimal Geomatics Inc. (TSX VENTURE:OPG) ("Optimal") announces its financial results for the first fiscal quarter ending January 31, 2008.

Financial information for the quarter and comparatives for 2007 is reported in Canadian dollars.

Business Highlights include:

- Significant reduction in our operating loss and net loss.

- Management of the energy and civil infrastructure markets aligned under our US-based management team forming one focused mapping group serving our customers.

- Purchase of CADD software for license to current and future customers. The software provides customers with improved efficiency and management of their design functions.

Colum Caldwell, President & CEO of Optimal Geomatics, commented, "Management has made good progress in this quarter addressing our efficiencies and effectiveness. We continue to review our strategic and operational options on an on-going basis."

Financial Results

Revenue for the first quarter ended January 31, 2008 was $3.7 million, a 1% increase compared to revenue of $3.6 million for the comparable period in 2007, and a decrease of 3% when compared to the prior quarter. Gross margin for the three month period ending January 31, 2008 was 22%, a decrease as compared to the gross margin of 29% for the comparable three month period in 2007. The operating loss was $270 thousand for the first quarter of 2008 as compared to an operating loss of $729 thousand for the comparable quarter of 2007. The net loss for the quarter ended January 31, 2008 was $45 thousand or $(0.00) per common share, compared with net loss of $532 thousand or $(0.01) per common share (basic and diluted) for the three months ended January 31, 2007.

Gross margin for the three month period ending January 31, 2008 was 22%, down from the gross margin for the comparable three month period in 2007 of 29%. The decrease in gross margin was due to several factors including margin compression due to the weakness of the US dollar which is our primary revenue currency, reduced margins on certain contracts and a general increase in direct labor costs, partially offset by a decrease in indirect operating costs.

The year-over-year decrease in net loss was primarily due to a change in revenue mix, the decrease in gross margin, a significant decrease in operating expenses and the foreign exchange gain.

As at January 31, 2008, Optimal had cash and cash equivalents of $2.4 million with net working capital of $2.1 million, compared to cash and cash equivalents of $3.1 million with net working capital of $2.4 million as at October 31, 2007. The decrease in working capital was primarily due to the increase in all categories of current assets and deferred revenue, partially offset by the increase in accounts payable and accrued liabilities, notes payable and the current portion of lease obligations.

Financial Outlook

The market for our products and services continues to provide us with growth opportunities. In 2008, management will focus on providing our customers with superior services and products on a cost-effective and timely basis. Our objective continues to be to reduce our operating loss and return our operating cash flow to a positive balance. We will continue to sell our enhanced product offering to our market base.

Quarterly Teleconference Call:

Optimal will hold its first quarter 2008 teleconference call on Tuesday, March 11, 2008 at 8:00am PDT (11:00am EDT). To participate dial 604-899-1159 for Vancouver participants and 416-883-0139 outside Vancouver, then dial pass code 41285#. Alternatively, you can listen to the playback by visiting our website after the call at www.optimalgeo.com.

About Optimal Geomatics Inc.:

Optimal Geomatics, a geospatial mapping company, provides engineering and geospatial professionals with customized products designed to meet their mapping needs.

Optimal Geomatics specializes in the science and technology of gathering, analyzing, interpreting, distributing, and using geographic information. Optimal applies the disciplines of aerial surveying, mapping, remote sensing, geographic information systems (GIS), and global positioning systems (GPS) to translate remotely-acquired raw imagery into intelligent digitally-mapped data for use according to the application involved, such as land management, environmental information management and engineering design.



Summary of Financial Information

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Consolidated Balance Sheets January 31, October 31,
2008 2007
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Assets
Cash $ 2,436,503 $ 3,099,743
Accounts receivable 3,620,496 3,351,121
Inventory 14,139 8,195
Work in progress 159,737 152,317
Prepaid expense 378,004 185,880
Property & equipment 1,925,046 1,981,762
Deferred acquisition costs - 36,959
Other long-term assets 6,482 6,482
Intangible assets 471,083 240,044
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Total Assets $ 9,011,490 $ 9,062,503
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Liabilities & Shareholders Equity
Accounts payable and accrued liabilities $ 1,778,625 $ 1,727,479
Deferred revenue 588,016 624,458
Notes payable 2,060,242 1,932,781
Obligation under capital leases 326,318 342,334
Share capital & subscriptions 23,231,543 23,231,543
Contributed surplus 775,263 772,589
Accumulated other comprehensive income 307,076 441,566
Deficit (20,055,593) (20,010,247)
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Total Liabilities & Shareholders Equity $ 9,011,490 $ 9,062,503

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Consolidated Statements of Operations 3 months ending January 31
2008 2007
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Revenues $ 3,650,027 $ 3,602,863
Cost of sales 2,852,597 2,572,301
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Gross profit 797,430 1,030,562
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Expenses
Administration 451,196 895,331
Marketing & sales 298,545 549,719
Research & development 64,723 64,888
Amortization 253,081 249,638
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1,067,545 1,759,576
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Operating loss 270,115 729,014

Other expenses (income)
Foreign exchange gain (251,981) (210,841)
Interest expense (income) 28,559 13,351
Loss (gain) on equipment disposal 915 -
Other income (2,262) -
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(224,769) (197,490)
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Net Loss for the Period $ 45,346 $ 531,524
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Net loss per share:
Basic and diluted $ 0.00 $ 0.01
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Weighted Average Common Shares Outstanding
Basic and diluted 61,387,398 61,387,398
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Forward-Looking Statements:

This document may contain forward-looking statements. These statements present management's expectations, beliefs, plans and objectives regarding future events and conditions and, as such, involve inherent risks and uncertainties. Actual results could be significantly different from those projected.

These forward-looking statements are not guarantees of future performance and actual results could differ materially as a result of changes to Optimal's plans and the impact of factors, risks and uncertainties, known and unknown, to which Optimal's business is subject. The forward-looking statements in this news release speak only as the date hereof. Readers are also referred to risk factors and uncertainties described in filings made by Optimal from time to time with securities regulators.

For additional financial information: http://www.optimalgeo.com/financials.html

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy of this news release.

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