CHARTWELL TECHNOLOGY INC.
TSX : CWH

CHARTWELL TECHNOLOGY INC.

September 14, 2009 20:37 ET

Chartwell Announces Financial Results for the Three and Nine Months Ended July 31, 2009

CALGARY, ALBERTA--(Marketwire - Sept. 14, 2009) - Chartwell Technology Inc. ("Chartwell" or the "Company") (TSX:CWH), a leading provider of gaming software systems to the online and remote gaming industry, announces unaudited financial results for the three and nine months ended July 31, 2009.

Business highlights for the third quarter of 2009:

- Advanced four new licensees toward deployment; one of which deployed late in the third quarter, with the remaining three to deploy in the fourth quarter.

- Renewed long time customer Gala Coral group for another three year term.

- Received preliminary approval for a license in Alderney in preparation for the launch of the Chartwell Gaming Platform, which will host all our proprietary and third party content for licensing.

- Negotiated agreements with multiple third party content providers, including Novomatic games from Astra Games Limited for unique gaming content.

- Completed the development of two new table games and enhancements to three other table games.

- Received software certification for Isle of Man, one of the major online gaming jurisdictions.

Three months ended July 31, 2009

Revenue for this year's third quarter was $3.8 million compared to $6.1 million for the same period a year earlier. The period over period decrease in revenue was a result of the expiry of two single term software licenses referred to in prior releases and a weakened economy in our key markets. Total expenses before income taxes were $5.1 million in the third quarter of this year and $5.3 million in the same quarter of last year. Foreign exchange losses incurred this quarter as a result of the strengthening Canadian dollar were offset by lower software development and support expenses.

Net loss for the third quarter was $0.9 million, a loss per share of $0.05 as compared to a net income of $0.6 million and earnings per share of $0.04 (basic) and $0.03 (fully diluted) in the same quarter of the prior fiscal year. EBITDA declined from $1.3 million in the third quarter of fiscal 2008, to $(0.7) million in the third quarter of fiscal 2009. Cash flow from operations before working capital adjustments declined from $0.9 million in the comparative quarter to cash used in operations of $(0.6) million in the third quarter of 2009.

During the quarter software development and support expense totalled $2.8 million compared to $3.0 million for the same period of fiscal 2008. While the Company continued to reduce costs associated with its Poker product, a shift in resources was necessary for the accelerated development of the Company's Casino product and gaming platform, which included our licensing applications and software certification in Alderney. The majority of costs related to obtaining the Alderney Gambling License were incurred prior to the preliminary approval referred to above, and were recognized in the third quarter of 2009.

Sales and marketing expenses totalled $0.6 million in for the third quarter of 2009 and 2008, commensurate with consistent activity levels in both periods.

General and administrative expense was $0.9 million in the third quarter of fiscal 2009 compared to $0.9 million a year earlier. Though the expense totals were similar to the same period of the prior year, the current quarter had increases in salary costs which were offset by declines in telecommunication and filing fee costs.

"The seasonally slow third quarter was compounded by overall economic weakness," said Alan Richter, CFO of Chartwell. "Through this period however, we have demonstrated our commitment to future growth by expanding our base of licensees, aggressively developing new content internally, and broadening our service and product portfolio through the imminent launch of the Chartwell Gaming Platform. This state of the art gaming platform will host our proprietary and third party content, will be most cost efficient to Chartwell and will provide seamless integration to our customer base moving forward." Mr. Richter adds "The majority of our new client signings did not launch during the quarter and accordingly did not contribute to revenue in our third quarter. We expect these new clients to be deployed in the current quarter. While we manage our business through this difficult economic environment we will continue to carefully manage expenses without compromising customer satisfaction and Company growth."

Balance sheet strength

The Company continued to maintain a strong balance sheet. At July 31, 2009 the Company had $19.5 million of cash and short-term investments compared to $19.9 million at April 30, 2009.

Regulatory compliance

Chartwell is committed to regulatory compliance. We are now licensed or certified to offer our software in all major jurisdictions in the online gaming industry. This list includes the United Kingdom, Gibraltar, Malta, Isle of Man, and Alderney.

About Chartwell

Chartwell specializes in the development of leading-edge gaming systems and content for the regulated online gaming industry. Chartwell is certified or licensed in all of the leading regulated gaming markets and provides its full service capabilities in all regulated markets. Chartwell does not participate in the online gaming business for its own account. 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 and gaming applications at www.chartwelltechnology.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Certain statements contained herein may constitute forward-looking statements. These statements relate to future events or our future performance. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. The launch of the Chartwell Gaming Platform and the deployment of new customers assumes we will receive the timely cooperation of contractual counterparties, and that demand for our Platform and products will continue. We believe that the expectations reflected in the forward-looking statements are reasonable based upon management's current views but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. These statements speak only as of the date hereof. No assurance can be given that actual results, performance or achievement expressed in, or implied by these forward-looking statements will occur, or if they do, that any benefits may be derived from them. Past results and information provided by third party sources considered to be accurate have been applied in drawing a conclusion or making a forecast or projection set out in the forward-looking information.

Our actual results could differ materially from those anticipated in these forward-looking statements as a result of factors that may include, but are not limited to: the continuing financial market uncertainty, the impact of government regulation and laws affecting international operations, the impact of price competition, loss of business or credit risks associated with current and prospective major customers, general industry and market conditions and growth rates, currency rate fluctuations, the impact of consolidations in the online gaming industry and other risks detailed from time to time in Chartwell's Annual Information Form and Management's Discussion and Analysis, both of which may be found at www.sedar.com.

The TSX does not accept responsibility for the adequacy or accuracy of this release.

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