CHARTWELL RELEASES LATEST NUMBERS
18 September 2009
Canadian software provider feeling the pain
of a tough market
Calgary-based online gambling software provider
Chartwell Technology has released its financial results
for the three and nine months periods ending July 31,
showing sharply lower revenues and foreign exchange
losses.
Revenue for the third quarter 2009 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 $900 000, a loss per share of $0.05 as compared to a
net income of $600 000 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 $700 000
in the third quarter of fiscal 2009. Cash flow from
operations before working capital adjustments declined
from $900 000 in the comparative quarter to cash used in
operations of $600 000 in the third quarter of 2009.
During the quarter software development and support
expenses 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 licensing
applications and software certification in Alderney.
Sales and marketing expenses totalled $600 000 for
the third quarter of 2009 and 2008, commensurate with
consistent activity levels in both periods.
“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.”
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.”
Chartwell 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.
Business highlights
for the third quarter of 2009 included:
*Four new
licensees advanced toward deployment; one of which
deployed late in the third quarter, with the remaining
three to deploy in the fourth quarter.
*Gala Coral
group renewed its contract 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 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 (see previous InfoPowa report).
*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.
Online Casino News Courtesy of
Infopowa
More news here.
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