CHARTWELL REPORTS CONTINUED GROWTH
Chartwell Technology Inc. TSX-VEN: CWH
Calgary, Canada, March 6, 2003, Chartwell Technology Inc. (TSX-VEN: CWH) a leading
provider of gaming systems and entertainment content to the online gaming industry,
announces financial results for the first quarter ended January 31, 2003 and
fiscal year ended October 31, 2002.
First Quarter 2003 Results
Revenues: For the first quarter ended January 31, 2003, revenue rose 315% to
$1,691,476 compared to $407,343 in the same period of 2002. License fee revenues
rose 250% to $1,183,308 compared to $337,902 in the same prior year period.
The balance of revenues were made up of software set up fees of $480,500 and
interest and other revenues of $27,668.
Expenses: Expenses for the quarter rose to $1,343,863 compared to $1,184,189
in the same quarter of 2002. This 14% increase was attributed to higher software
development costs relating to the Company's casino software as well as development
of new bingo and poker software for expansion into new gaming verticals. Consistent
with its expansion into new regulated markets, the Company also increased expenditures
toward its eventual certification in targeted jurisdictions. General and administrative
expenses for the quarter were $423,201, a decrease of 11% over the same period
of the prior year.
Gain: The first quarter of 2003 was Chartwell's most profitable quarter to date
with net income of $347,613 or $0.03 per share compared to a loss of $776,846
or $0.06 per share for the corresponding quarter of the prior year.
"Strong revenue growth from established gaming clients, particularly in
Europe, continues to have a very positive effect on our financial performance,"
states Darold H. Parken, President and CEO of Chartwell. "Our mandate has
been to deliver solid revenue growth across a core of branded customers and
we are pleased to report that we are meeting those objectives." Mr. Parken
adds, " Given that our recurring license fee revenues continue to increase
as a component of total revenues and our firm control over expenses, we are
confident in our goal of achieving profitability this fiscal year."
Fiscal Year 2002 Results
Revenues: Revenues increased to $3,737,994 for the year ended October 31, 2002,
compared with $3,232,354 for the prior year an increase of 16%. Operating revenues
consisted of software set-up fees and software licensing fees. Software licensing
fees for the year ended October 31, 2002 were $2,646,766 compared to $908,876
in the prior year, an increase of 191%. Software set-up fees for the year were
$789,197 compared to $1,928,696 in 2001, a decrease of 59%. Interest and other
revenues for the fiscal year ended October 31, 2002 were $302,031, compared
to $394,782 of the prior year.
Expenses: Expenses increased from $4,068,321 during the fiscal year ended October
31, 2001, to $5,169,276 in 2002. The software development component of expenses
increased to $2,651,335 during the fiscal year ended October 31, 2002, compared
to $2,013,601 for 2001, representing an increase of 32%, due to an expansion
of our product offering. General and administrative expenses increased $234,147
(11%) from $2,065,710 during the fiscal year ended October 31, 2001, to $2,299,857
in 2002. Higher general and administrative expenses reflect increased sales
and marketing efforts.
Loss: Net loss from continuing operations increased $595,315, from $835,697
during the year ended October 31, 2001 to $1,431,282 for the fiscal year ended
October 31, 2002 ($0.11 per share).
Despite the challenges experienced by many of our competitors over the past
year, Chartwell actually saw positive growth during 2002, with revenues increasing
16% over the previous year", states Mr. Parken. "An important indicator
of our long-term potential is the substantial growth we achieved in the recurring
portion of revenue," he continues. "We are pleased to report that
recurring software license revenues now comprise approximately 70% of our total
revenue stream." These recurring software license fees amounted to $2,646,766
in 2002 representing an increase of 191% over the previous year."
Throughout the last year Chartwell continued to invest in new products and platforms
that will provide access to new gaming markets and add significant new revenue
streams. Correspondingly, expenses during 2002 rose to $5,169,276 representing
a 27% increase over the previous year. The largest single area of expense growth
during 2002 was in software development, which rose by 32% due to the expansion
of our programming team and the development of new gaming products and features.
New Products and Platforms
Chartwell was one of the first companies to provide a complete no-download casino
suite with its first Java-based product. Since entering the market in 1999,
Chartwell has continued to maintain its leading position in no-download technology
with the release of its V4.0 Flash-based casino during the past year.
Chartwell will soon be launching its latest product initiative, multi-player
poker. With a global poker player market numbering in the millions, Chartwell
is poised to tap into this relatively new gaming revenue stream. "Many
of our current licensees have a player base that is eager to try our latest
product offering," states Darcy Krogh, Chartwell's Vice President of Business
Development, "and we are now in the final stages of testing before rolling
out this exciting new gaming product which includes five popular poker games
with full tournament functionality."
Java-enabled wireless devices such as cellular phones are increasingly popular
as gaming platforms and Chartwell has been a leader in bringing casino style
games to this rapidly growing market. "As a follow-up to our earlier launch
with a major cellular phone manufacturer, we are actively pursuing new deals
that will bring our games to users of a multitude of Java-enabled handsets,"
states Mr. Krogh.
Chartwell will also soon be releasing the download version of its casino suite,
which will give players the option of saving the client-side application to
their computer desktop. "While this latest addition to our product portfolio
is not revolutionary in concept, it was a logical step in rounding out our product
offering to address all player preferences and platforms," states Mr. Krogh.
Looking Ahead
The 2003 International Casino Exhibition (ICE), held in London in January, was
further confirmation of Chartwell's market strategy. ICE is one of the world's
largest gaming industry trade shows where Chartwell's products and services
garnered an unprecedented level of interest, fueled largely by a gaming friendly
European market, and the much-anticipated regulation of the online gaming environment
in the U.K. The ICE venue also allowed Chartwell to unveil its kiosk-based gaming
system, which promises to provide access to new gaming channels and add considerable
revenue streams in the months and years ahead.
Chartwell looks to continued growth of its branded client base and to deploying
new games and features that it has invested in over the past year to achieve
its objective of providing our clients with every game for every platform. Sales
of our wireless gaming system will not only provide an additional revenue stream
for the Company but will also enhance Chartwell's position as the leader in
cutting edge technologies. Chartwell's Poker, Bingo and Kiosk gaming products
offer many new market opportunities and are expected to be strong contributors
to revenue growth.
About Chartwell
Chartwell Technology Inc. specializes in the development of leading edge gaming
applications and entertainment content for the Internet and wireless platforms.
Chartwell's Java and Flash based software products and games are designed for
deployment in gaming, entertainment, advertising and promotional applications.
Chartwell does not participate in the online gaming business of its clients.
Chartwell's team of highly trained professionals is committed to delivering
the highest quality software and maintaining its leading edge through continuous
development and unparalleled customer support.
Chartwell invites you to preview and play our games at: www.chartwelltechnology.com
For further information, please contact: Chartwell Technology Inc.
Darold H Parken, President David Bajwa, Investor Relations
(877) 261-6619 or (403) 261-6619 (877) 699-4180 or (604) 669-4180
dhp@chartwelltechnology.com info@chartwelltechnology.com
The TSX Venture Exchange does not accept responsibility for the adequacy or
accuracy of this release.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: The statements contained herein which are not historical fact are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements, including, but not limited to, certain delays in testing and evaluation of products, regulation of the online gaming industry, and other risks detailed from time to time in Chartwell's filings with the Securities & Exchange Commission. We assume no responsibility for the accuracy and completeness of these statements and are under no duty to update any of the forward-looking statements contained herein to conform these statements to actual results. This is not an offer to sell or a solicitation of an offer to purchase any securities.