June 12, 2009 17:38 ET

Chartwell Announces Financial Results for the Three Months Ended April 30, 2009

CALGARY, ALBERTA--(Marketwire - June 12, 2009) - Chartwell Technology Inc. ("Chartwell" or the "Company") (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 three months ended April 30, 2009.

Business highlights for the second quarter of 2009:

- Renewal of Eurobet and bwin to multi-year contract extensions.

- Signed two new software license agreements yet to be announced.

- Completed the development of three new Casino games and completed enhancements to three Casino table games.

- Completed software development and infrastructure construction for the new Games Distribution System ("GDS") platform.

Three months ended April 30, 2009

Revenue for this year's second quarter was $4.6 million compared to $7.0 million for the same period a year earlier. The period over period decrease in revenue was a result of two single term software licenses which expired and a general increased level of industry competition and a weakened economy in our key markets. Total expenses before income taxes were virtually the same as the second quarter of 2008 as slightly higher software development and support expenses were offset by reduced stock based compensation expense.

Net loss for the second quarter was $0.6 million, a loss per share of $0.03 as compared to a net income of $1.1 million or $0.05 per share (basic and fully diluted) in the same quarter of the prior fiscal year. EBITDA declined from a positive $2.2 million in the second quarter of fiscal 2008, to a negative $0.2 million in the second quarter of fiscal 2009. Cash flow from operations before working capital adjustments declined from $2.0 million in the comparative quarter to cash used in operations of $0.1 million in the second quarter of 2009.

Software development and support expense was $3.1 million in the second quarter compared to $2.8 million for the same period of fiscal 2008. The increased expense comes from an overall increase in software development staff focusing on the completion of Chartwell's new GDS and on adding new gaming content and features to the Company's gaming suite. In order to expand the Company's product and services suite, we invested significant time and money in establishing our Alderney gaming license, which we expect to receive in the third quarter of fiscal 2009 and which will provide the basis for the launch of our new GDS platform. The GDS platform represents a state of the art software and hardware platform with the capability to deliver any and all third-party gaming content seamlessly and in the most cost effective manner for traditional operators and database companies seeking to enter the online gaming market.

Sales and marketing expenses were $0.7 million in the second quarter of 2009 as opposed to $0.6 million in the second quarter of 2008.

General and administrative expense was $0.9 million in the second quarter of fiscal 2009 compared to $1.0 million a year earlier. The decrease was due to certain expenses in the second quarter of the prior year that did not recur in the second quarter of 2008.

"While we have experienced reduced revenue in fiscal 2009 when compared to a record quarter in 2008, we are on track to replace that lost revenue from both new clients we have signed and from new products and service capabilities which have been developed and integrated," said Alan Richter, CFO of Chartwell. "We are committed to our strategy of improving the depth and breadth of our product and services offerings and we believe that our considerable expenditure of time and resources in those areas will produce positive returns this year."

Balance sheet strength

The Company continued to maintain a strong balance sheet. At April 30, 2009 the Company had $19.9 million of cash and short-term investments compared to $21.2 million at January 31, 2009.

About Chartwell

Chartwell specializes in the development of leading-edge gaming applications and entertainment content for the Internet and remote 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 our company and gaming applications at

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. A return to profitability is dependent upon our ability to increase revenue and to maintain current expense levels. 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

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

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