|Calgary, Canada, February 2, 2004, Chartwell Technology Inc. (TSX-VEN: CWH) a leading provider of gaming software systems and entertainment content to the online and mobile gaming industry, is pleased to announce financial results for the year ended October 31, 2003.|
Highlights of the year included:
' Revenue of $7.3M compared with $3.7M in 2002;
' Operating income of $1.9M and net income of $1.6M compared with a net loss of $(1.4M) in 2002;
' Earnings per share of $0.11 compared with a net loss per share of ($0.11) in 2002;
' Software license fees of $6.3M compared to $2.6M in 2002;
' Cash flow from operations of $1.4M compared to a negative cash flow of $(1.2M) in 2002;
' Working capital of $6.7M compared to $6.0M in 2002;
' Remained debt free.
Revenue growth and consistent profitability were the key characteristics of Chartwell's 2003 financial performance.
'We are pleased to report that we met our fiscal 2003 financial objectives on all fronts', states Don Gleason, CFO. 'We concluded the year with significant revenue growth, achieved profitability in four successive quarters and generated $0.11 in earnings per share. With a solid financial foundation,
an expanded product offering and a growing customer base we have a strong platform from which to continue to expand our business and extend this momentum into fiscal 2004'.
Revenue for the three months ended October 31, 2003 was $1,748,400, an increase of 29% compared to $1,346,902 in the same period of 2002. For the twelve months ended October 31, 2003 revenue was $7,353,141, an increase of 97% compared to $3,737,994 for the previous year. Growth continues to be attributable to the quarter over quarter increase in license fees from the installed base of clients. License fee revenue for the fourth quarter of 2003 was $1,847,097 compared to $1,144,948 for the same period of the previous year, representing an increase of 61%. For the twelve months ending October 31, 2003 license fee revenue totaled $6,300,335 compared to $2,646,766, an increase of 138% compared to the previous year.
Total operating expenses excluding foreign exchange gains or losses, for the three month period totaled $1,163,248 compared to $1,420,049 for the same period of 2002. For the twelve months ended October 31, 2003 total operating expenses were $5,467,103 compared to $5,255,071 for the previous year. Software development and support costs, which represent the Company's largest expenditure area, increased 23% over the prior year as resources were added to meet product development and customer support initiatives. These costs included the deferral of $530,248 of development costs relating to the building of new products. For the three months and twelve months ended October 31, 2003, general and administrative expenses decreased 9% and 22% respectively compared to the same periods of 2002.
The continued decline of the US dollar compared to its Canadian counterpart and the corresponding revaluation of US monetary assets resulted in foreign currency losses for the three months and twelve months ending October 31, 2003 of $209,728 and $795,186, respectively. There were no comparative losses for the same period of 2002.
Net income for the fourth quarter was $895,424 compared with a loss of $(72,415) for the corresponding period of the previous year. Net income for the twelve months ending October 31, 2003 was $1,610,852 or $0.11 per share compared to a loss of ($1,431,282) or ($0.11) per share for the previous year. Net income in the fourth quarter was positively impacted by the recognition of $520,000 in future tax assets relating primarily to prior period losses. At October 31, 2003, $1,067,287 of realizable future tax assets remain available to be applied against future income tax expense.
Chartwell continues to maintain a solid financial base from which to execute its growth strategy. At October 31, 2003, Chartwell had $5,178,010 in cash, cash equivalents and short term investments, working capital of $6,752,155 and remains debt free.
Mr. Steve Latham, a Director of the Company, has been granted an option to purchase 100,000 common shares. The options were granted for a five year term pursuant to the Company's Stock Option Plan.
Chartwell Technology Inc. specializes in the development of leading edge gaming applications and entertainment content for the Internet and wireless platforms and other remote access devices. 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 our company at: www.chartwelltechnology.com and demo our games at
www.playerselectcasino.com www.playerselectpoker.com www.playerselectbingo.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) 669-4180 or (604) 669-4180