Chartwell Announces Record Revenue & Continued Profitability
By staff
- Revenue growth of 40%, Net Income of $0.05 per share -

Calgary, Canada, June 17, 2004, Chartwell Technology Inc. (TSX:CWH) a leading provider of gaming software systems and entertainment content to the online and remote gaming industry, announces unaudited financial results for the second quarter ended April 30, 2004.

Highlights of the quarter included:

Revenue of $2,725K compared with $1,946K during the same period in fiscal 2003;

Net earnings of $792K or $0.05 per diluted share compared with net earnings of $153K or $0.01 per diluted share during the same period in fiscal 2003;

Working capital of $8,369K compared to $6,587K during the same period in fiscal 2003;

The opening of our London based European sales, marketing and business development office;

Commenced trading on the Toronto Stock Exchange on May 3, 2004.

“This has been a strong financial quarter for Chartwell, consistent with our financial objectives for 2004”, states Don Gleason, Chief Financial Officer. “We achieved record revenues, posted our sixth consecutive quarter of profitability and increased our working capital and cash position while continuing to invest in key areas of our business. The establishment of our European operation in London, our rollout of new products and platforms and our strong balance sheet will enable us to carry this financial momentum through the remainder of fiscal 2004”.

Three Months Ended April 30, 2004

Revenue and earnings momentum continued into the second quarter ended April 30, 2004. Compared to the same period of 2003, revenue increased 40%, operating income increased 31%, earnings increased 418% and earnings per share diluted increased 400%.

Total revenue increased to $2,725K from $1,946K in the comparative quarter in 2003. Recurring license fee revenue is continuing to show quarter over quarter growth with second quarter fees approximately 39% higher than the previous quarter. The large increase in revenue is due to continued growth within our traditional customer base and the revenue contribution of new licensees.

Income from operations increased to $706K from $537K in the comparative quarter of 2003.

Net earnings increased to $792K from $153K in the comparative quarter of 2003. Net earnings are positively influenced by the recognition of future tax assets which are used to minimize current tax expense. Basic and diluted earnings per share increased to $0.06 and $0.05 respectively from $0.01 in the comparative quarter of 2003.

Six Months Ended April 30, 2004

Compared to the same six month period of 2003, revenue increased 39%, operating income increased 43%, earnings increased 170% and earnings per share diluted increased 125%.

Total revenue increased to $5,065K from $3,638K in the comparative six month period in 2003. License fees increased by 68% to $4,639K from $2,760K in the comparative six month period of 2003. Recurring license fees have consistently shown quarter over quarter growth over the last 12 months.

Income from operations increased to $1,268K from $885K in the comparative six month period of 2003. The increase is due to a larger growth in revenue than in expenses.

Net earnings increased to $1,351K from $500K in the comparative six month period of 2003. Basic and diluted earnings per share increased to $0.10 and $0.09 respectively from $0.04 in the comparative six month period of 2003.

Balance Sheet

The Company continued to strengthen its balance sheet. At April 30, 2004, Chartwell had no debt, total cash (including short term investments) of $6,452K and $8,369K in working capital.

Operating cash flow for the second quarter of 2004 was $198K and was positive due to increased cash generated from earnings, which was partially offset by an increase in accounts receivable. Cash provided by financing was $510K and cash used in investing was $322K.

Business Initiatives

During the second quarter of 2004 the Company delivered on two significant business initiatives.

1. Established a European Corporate Presence.

In keeping with the Company’s European market focus, Chartwell opened an office in London, U.K. in March. The London office will enhance the Company’s sales, marketing and business development initiatives and will be responsible for increasing Chartwell’s corporate presence and expansion into the strategic European market.

2. TSX Listing

On May 3, 2004 Chartwell commenced trading its shares on the Toronto Stock Exchange and delisted its shares from the TSX Venture Exchange. The TSX listing will provide the Company with increased visibility and greater market recognition. Investor and customer interest in Chartwell continues to grow.

About Chartwell

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, CFO

David Bajwa, Investor Relations

(877) 261-6619 or

(403) 261-6619 (877) 669-4180 or (604) 669-4180

dgleason@chartwelltechnology.com info@chartwelltechnology.com

The Toronto Stock Exchange has not reviewed and 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.

 
 
 
 
 
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