Shuffle Master, Inc. (NDAQ:SHFL) shares dropped more than 15% on yesterday after the company said it expects fiscal first quarter earnings to fall "significantly" below last years results due to lower revenues and higher costs associated with their February 1st Stargames acquisition. Other factors contributing to the windfall included the short-term impact from ending its Asia representative deal with Elixir Group Ltd. on February 4th, a $1.7 million revenue deferral related to a shipment to a Macau customer, and slower-than-expected rollout of multiplayer electronic table games.

Why are we concerned with a company that is under performing? Well, according to the company: "As a result of the near-term uncertainty associated with the factors discussed above, including, but not limited to, operational improvements in the company’s multi-player electronic table game business, including the evaluation of broader distribution relationships and the evaluation of various strategic alternatives for certain business segments, management has decided to temporarily suspend guidance for fiscal 2007." Shuffle Master CEO Mark Yoseloff said that the company would be evaluating all of their business segments in an effort to maximize long-term revenue growth, improve gross margins, and reduce operating costs. Restructurings can often provide opportunities to investors - particularly if they end up spinning off one of these segments. With shares near their 52-week low on what could be "short-term" windfalls, this is certainly a stock to keep an eye on!

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