Chartwell Announces Financial Results for the Three Months

Chartwell Technology Inc., a leading provider of games, gaming systems and platform for the regulated online casino gaming industry, announces unaudited financial results for the three months ended April 30, 2010.

Total revenue for this year's second quarter was $3.1 million compared to $4.2 million for the same period a year earlier. This decline in revenue is primarily due to the decline in the EUR and GBP against the Canadian dollar. Total expenses before income taxes declined to $4.1 million from $4.3 million despite the fact that the Company incurred a foreign exchange loss of $350,000 in the quarter.

Net loss for the second quarter was $0.9 million, a loss per share of $0.05 as compared to a net loss from comparable, continued operations of $27,000 or $0.01 per share in the same quarter of the prior fiscal year. Cash flow from operations was $0.4 million in the second quarter of 2010 as compared to cash used in operations of $0.5 million the year earlier.

Software development and support expense was $2.2 million in the second quarter compared to $2.5 million for the same period of fiscal 2009. The Company recorded the benefit of Scientific Research and Experimental Development (SRED) tax credits of $0.3 million in the quarter which reduces the overall cost of software development. Total cost of software development and support before the SRED credit was comparable between the second quarter of 2010 and 2009 as the Company shifts the role of support and professional services to our European office from our Calgary head office.

Sales and marketing expenses were comparable at $0.5 million in both the second quarter of 2010 and 2009.

General and administrative expense was $0.9 million in the second quarter of fiscal 2010 compared to $0.8 million a year earlier. The increase is due in part to additional eGaming regulatory licensing fees.

"Foreign exchange differences created significant headwind to our financial results this quarter. We continue however to execute our strategy of delivering the industry's most exciting and innovative gaming content, systems and platform and our product release this quarter is evidence of that" said Alan Richter, CFO of Chartwell Technology. "Significant advancements in our overall systems and game development are reflected in our recent client announcement of Australian brand Centrebet Ltd. and our nomination by industry specialists eGaming Review for two awards, Innovation in RNG Casino Software and RNG Casino Software Supplier of the Year."