Chartwell Optimistic Despite Q3 Revenue Drop16th September 2009 7:43 am GMT
As the company prepares for the launch of its new Alderney-based gaming platform, Canada's Chartwell Technology has reported revenues of CAD$3.8 million for the third quarter of 2009, a 38% drop on the same period last year, due to the expiry of two single term software licenses earlier this year as well as the continued impact of the weakened economy.
Software development and support expenses amounted to $2.8 million during the quarter, a 7% drop on the previous year, despite a reduction in costs associated with the company's poker product. This was offset by a shift in resources necessary for the accelerated development of the company's casino product and gaming platform, including licensing applications and software certification in Alderney.
Sales and marketing costs amounted to $0.6 million during the period, consistent with the previous period, while general and administrative expenses also remained flat at $0.9 million, with increases in salary costs offsetting declines in telecommunication and filing fee costs.
Total expenses before income taxes amounted to $5.1 million, down marginally year-on-year, while foreign exchange losses incurred during the quarter as a result of the strengthening of the Canadian dollar were offset by lower software development and support expenses.
As a result the company incurred a net loss for the quarter of $0.9 million, versus a net income of $0.6 million last year.
"The seasonally slow third quarter was compounded by overall economic weakness," said Alan Richter, Chartwell's Chief Financial Officer. "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.
"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," added Richter.
As at July 31st the company continued to maintain a strong balance sheet with cash and short-term investments of $19.5 million.
Shares in Chartwell Technology Inc (Co. Profile) (TSX:CWH) will commence trading at CAD1.35 per share later today in Toronto.