Chartwell Announces Record Revenue and Continued Profitability; Revenue Growth of 40%, Net Income of $0.05 Per Share.CALGARY Calgary (kăl`gərē), city (1991 pop. 710,677), S Alta., Canada, at the confluence of the Bow and Elbow rivers. The largest city in Alberta and the fastest-growing major city in Canada, Calgary is a corporate, transportation, and financial , Alberta Alberta (ălbûr`tə), province (2001 pop. 2,974,807), 255,285 sq mi (661,188 sq km), including 6,485 sq mi (16,796 sq km) of water surface, W Canada. -- Chartwell Technology Chartwell Technology is gaming software developer focused largely on the online bingo market. The company is based in Calgary, Vancouver, and is publicly traded on the Toronto Stock Exchange under the ticker symbol "CWH". Inc. (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :CWH CWH Coastal Western Hemlock (botany) CWH Cup With Handle (stock market watchlist) CWH Computer World Hosting CWH Complementary Walsh-Hadamard (coding scheme) ) 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 di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. 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 London, city, Canada London, city (1991 pop. 303,165), SE Ont., Canada, on the Thames River. The site was chosen in 1792 by Governor Simcoe to be the capital of Upper Canada, but York was made capital instead. London was settled in 1826. based European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. sales, marketing and business development office; - Commenced trading on the Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. on May 3, 2004. "This has been a strong financial quarter for Chartwell, consistent with our financial objectives for 2004", states Don Gleason Glea·son , Herbert John Known as "Jackie." 1916-1987. American entertainer best remembered for his portrayal of Ralph Kramden on the television comedy The Honeymooners (1952-1957). , 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 Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. 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 re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. license fee revenue is continuing to show quarter over quarter growth with second quarter fees approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 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 In a graphical environment, to hide an application that is currently displayed on screen. For example, in Windows and Mac, the application's window is removed from the screen and represented by an icon on the Windows Taskbar. In the Mac, the icon is placed in the Dock. See Win Minimize windows. current tax expense. Basic and diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of 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 Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. 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 accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying . 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 TSX Venture Exchange Originally called the Canadian Venture Exchange (CDNX), this was a result of the merger of the Vancouver and Alberta stock exchanges. The goal of TSX Venture Exchange is to provide venture companies with effective access to capital while protecting investors. . 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 Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the and wireless platforms and other remote access devices. Chartwell's Java Java (jä`və), island (1990 pop. 107,525,520), c.51,000 sq mi (132,090 sq km), Indonesia, S of Borneo, from which it is separated by the Java Sea, and SE of Sumatra across Sunda Strait. and Flash based Refers to devices that use flash memory for storage such as digital music players and digital cameras. Contrast with disk based. See flash memory and USB drive. software products and games are designed for deployment Installing, setting up, testing and running. This military term, which means the placement of troops and equipment in the field, is widely used with computers as an alternate to the word "implementation. in gaming, entertainment, advertising and promotional applications. Chartwell does not participate in the online gaming See 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 To see ahead of time. Page layout and word processing programs often have a preview function that lets you see how all the pages will appear before they are printed. In the days of character-based interfaces, a preview was absolutely necessary to see how different fonts would look or how and play our games at: www.chartwelltechnology.com Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995: The statements contained herein which are not historical fact are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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 solicitation In criminal law, the act of asking, inducing, or directing someone to commit a crime. The person soliciting another becomes an accomplice to the crime. The term also refers to the act of obtaining bribes, as well as to the crime of a prostitute who offers sexual of an offer to purchase any securities.
CHARTWELL TECHNOLOGY INC.
Consolidated Balance Sheets
(In Thousands of CAD dollars)
(unaudited)
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As at As at
April 30, October 31,
2004 2003
(unaudited)
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ASSETS
Current assets:
Cash and cash equivalents $ 3,189 $ 3,465
Short term investments 3,263 1,713
Accounts receivable 2,172 1,992
Prepaid expenses & deposits 205 149
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8,829 7,318
Due from related parties 175 191
Capital assets 564 339
Goodwill 812 -
Deferred software development costs 706 531
Future Income tax asset 508 520
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$ 11,593 $ 8,899
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LIABILITIES AND SHAREHOLDERS EQUITY
Current liabilities:
Accounts payable and
accrued liabilities $ 332 $ 217
Current portion of obligations
under capital lease 16 6
Deferred revenue 112 343
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460 566
Obligations under capital lease 29 3
Shareholders' equity:
Share capital 16,234 14,810
Deficit (5,129) (6,480)
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11,105 8,330
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$ 11,593 $ 8,899
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CHARTWELL TECHNOLOGY INC.
Consolidated Statements of Income and Deficit
(In Thousands of CAD dollars, except per share information)
(unaudited)
Three months ended Six months ended
April 30 April 30
2004 2003 2004 2003
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Revenue:
Software development
fees $ $ 343 $ 357 $ 823
Software license fees 2,699 1,577 4,639 2,760
Interest and other 26 27 69 55
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2,725 1,946 5,065 3,638
Expenses:
Software development
and support 986 971 1,959 1,843
General and
administrative 979 388 1,750 811
Depreciation and
amortization 53 22 88 44
Amortization of
deferred software
development costs - 28 - 55
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2,019 1,409 3,797 2,753
Income from operations 706 537 1,268 885
Foreign currency
losses (gains) (78) 384 (119) 384
Contracts acquired
on acquisition 25 - 25 -
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Net income before taxes 759 153 1,363 500
Income taxes:
Income tax expense 257 - 477 -
Future income
tax recovery (290) - (465) -
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(33) - 12 -
Net income 792 153 1,351 500
Deficit, beginning
of period (5,921) (7,743) (6,480) (8,091)
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Deficit, end of period $ (5,129) $ (7,591) $ (5,129) $ (7,591)
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Net earnings per
share basic $ 0.06 $ 0.01 $ 0.10 $ 0.04
Net earnings per
share diluted $ 0.05 $ 0.01 $ 0.09 $ 0.04
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Weighted-average
number of shares
- basic 13,920 13,504 13,794 13,495
Weighted-average
number of shares
- diluted 15,608 13,504 15,481 13,495
CHARTWELL TECHNOLOGY INC
Consolidated Statements of Cash Flow
(In Thousands of CAD dollars)
(Unaudited)
Three months ended Six months ended
April 30 April 30
2004 2003 2004 2003
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Cash provided by
(used in):
Operations:
Funds from operations:
Net income $ 792 $ 153 $ 1,351 $ 500
Depreciation and
amortization 53 22 88 44
Unrealized foreign
exchange losses (78) 253 (119) 253
Interest income
capitalized (2) (2) (4) (4)
Amortization of
deferred software
development costs - 28 - 55
Future income
tax recovery (33) - 12 -
Contracts acquired
on acquisition 25 - 25 -
Deferred set-up
costs - - 92
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757 454 1,352 940
Change in non-cash
working capital:
Accounts receivable (533) (116) (180) (656)
Due from related
parties - 20 -
Prepaid expenses (53) (9) (56) (44)
Deferred revenue 3 (40) (232) 31
Accounts payable
and accrued
liabilities 23 (46) 115 (62)
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(559) (211) (333) (732)
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198 243 1,019 209
Financing:
Issue of shares 472 25 588 25
Repayment of
lease obligations 38 (2) 36 (3)
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510 23 624 22
Investments:
Purchase of short
term investments (20) 791 (1,550) 1,499
Purchase of capital
assets (127) (7) (313) (38)
Deferred software
development costs (175) - (175) -
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(322) 784 (2,038) 1,461
Effect of foreign
exchange rate changes
on cash and cash
equivalents 78 (253) 119 (253)
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78 (253) 119 (253)
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Increase (decrease)
in cash 464 797 (276) 1,438
Cash, beginning
of period 2,725 2,344 3,465 1,704
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Cash, end of period $ 3,189 $ 3,142 $ 3,189 $ 3,142
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Supplemental cash
flow information:
Cash interest
received $ 24 $ 25 $ 65 $ 51
Cash interest
paid 1 1 1 1
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The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. |
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