|Calgary, Canada, March 30, 2004, Chartwell Technology Inc. (TSX-VEN: CWH) a leading provider of gaming software systems and entertainment content to the online and remote gaming industry, announces financial results for the first quarter ended January 31, 2004. |
Highlights of the quarter included:
' Revenue of $2.3M compared with $1.7M during the same period in fiscal 2003;
' Operating income of $604K or $0.04 per share and net income of $559K or $0.04 per share compared with operating and net income $348K or $0.03 per share during the same period in fiscal 2003;
' Software license fees of $1.9M compared to $1.2M during the same period in fiscal 2003;
' Cash flow from operations of $821K compared to ($35K) during the same period in fiscal year 2003;
' Working capital of $7.4M.
'We have consistently provided earnings over the last five quarters and our continued growth in sustainable recurring license fees gives us the means to accelerate our growth during fiscal 2004', says Don Gleason, Chief Financial Officer. 'We are continuing to expand our portfolio of games and through new delivery channels like mobile we expect to broaden our customer base and drive incremental revenue for the remainder of the year.'
Revenue for the three months ended January 31, 2004 was $2,340,345, an increase of 38% compared to $1,691,476 in the same period of 2003. Software license fee revenue for the first quarter of 2004 increased by 64% to $1,939,199 compared to $1,183,308 for the same period of the previous year. License fee revenue continues to show quarter over quarter growth and accounted for 83% of the Company's revenue compared to 70% in the first quarter of 2003.
Total operating expenses, excluding the positive effect of foreign exchange gains, for the three months ended January 31, 2004, increased by 32% to $1,777,878 compared to $1,343,863 for the same period of 2003. Software development and customer support costs, which account for 55% of operating costs, increased by 12% to $972,240 compared to $871,853 for the same period of 2003. General and administrative expenses, which include all costs relating to sales, marketing, business development and corporate support personnel, totaled $771,705 compared to $423,201 for the same period of 2003. The overall increase in expenses is primarily due to salary and benefit costs resulting from the addition of development, support and marketing personnel over the course of the last year.
For the three months ended January 31, 2004, the Company reported a foreign exchange gain of $41,430. There was no comparative gain or loss in the first quarter of 2003. Although revenue is received in U.S. dollars the Company carries a minimum amount of U.S currency thereby mitigating the impact on earnings of a continued decline in the U.S. dollar.
Net income for the first quarter of 2004 increased by 61% to $559K or $0.04 per share compared with $348K or $0.03 per share for the corresponding period of the previous year. The increase was attributable to the larger growth in revenue than in expenses.
Liquidity and Capital Resources
At January 31, 2004, Chartwell had $5,968,249 in cash, cash equivalents and short term investments, working capital of $7,337,586 and remains debt free. Cash flow from operations was $820,786 compared to ($34,919) for the comparative period in 2003. Operating cash flow was positive due to increased cash generated from earnings, a reduction in accounts receivable due to increased collections and other working capital items.
For the three months ended January 31, 2004, the Company generated proceeds of $115,360 from the exercise of stock options. There were no other financing activities. Cash used in investing activities was $1,715,748 compared to proceeds of $676,751 in the first quarter of 2003. This was due to the purchase of short term investments and capital assets in the amounts of $1,530,313 and $185,435 respectively.
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 and play our games at: www.chartwelltechnology.com
For further information, please contact:
Chartwell Technology Inc.
Don Gleason, Chief Financial Officer
David Bajwa, Investor Relations
(877) 261-6619 or (403) 261-6619 (email@example.com firstname.lastname@example.org
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.