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Aware, Inc. Reports Third Quarter 2009 Financial Results
Revenues for the third quarter of 2009 were
The Company reports its net income and basic and diluted net income per share in accordance with U.S. generally accepted accounting principles (GAAP), and additionally, on a non-GAAP basis. Non-GAAP net income, where applicable, excludes the effect of stock-based compensation expense. The Company uses the non-GAAP information internally to evaluate its operating performance and believes these non-GAAP measures are useful to investors as they provide additional insight into the underlying operating results. However, non-GAAP measures are not stated in accordance with, should not be considered in isolation from, and are not a substitute for, GAAP measures. A reconciliation of GAAP to non-GAAP results has been provided in the attached financial tables.
The GAAP net loss for the third quarter of 2009 was
The non-GAAP net loss for the third quarter of 2009, excluding the effect of stock-based compensation, was
Note: Aware's conference call will be broadcast live over the Internet today,
About Aware
Aware is a leading technology and software supplier for the telecommunications and biometrics industries. For more than ten years, Aware has pioneered innovations at telecommunications standards-setting organizations and has developed and marketed DSL silicon intellectual property and test and diagnostics products. Its StratiPHY IP product line supports DSL standards, including ADSL2+ and VDSL2, and has been broadly licensed to leading semiconductor companies. Telecom equipment vendors and phone companies use Aware's DSL test and diagnostics modules and Dr. DSL® software to help provision DSL circuits globally. Aware is also a veteran of the biometrics industry, providing biometric and imaging software components used in government systems worldwide since 1992. Aware's interoperable, standard-compliant, field-proven imaging products are used in a number of applications, from border management to criminal justice to medical imaging.
Safe Harbor Warning
Portions of this release contain forward-looking statements regarding future events and are subject to risks and uncertainties, such as estimates or projections of future revenue and earnings and the growth of the DSL and biometrics markets. Aware wishes to caution you that there are factors that could cause actual results to differ materially from the results indicated by such statements. General factors include, but are not limited to: our quarterly results are unpredictable and may fluctuate significantly; our business is subject to rapid technological change; we face intense competition from a wide range of competitors; current economic conditions, including the credit crisis affecting the financial markets; our intellectual property is subject to limited protection; our ability to obtain or enforce patents could be affected by new laws, regulations or rules; and our business may be affected by government regulations. DSL factors include, but are not limited to: our DSL licensing and DSL test and diagnostic businesses depend upon a limited number of customers; there has been and may continue to be a cyclical demand for DSL chipsets; the success of our DSL licensing and test and diagnostics products businesses requires telephone companies to install DSL service in volume; our test and diagnostic hardware and software products could have quality problems; we depend on a single source contract manufacturer for the manufacture of our DSL hardware products; and we are dependent on single source suppliers for components in our DSL hardware products. Biometric factors include, but are not limited to: market acceptance of our biometric technologies and products; changes in contracting practices of government or law enforcement agencies; the failure of the biometrics market to experience continued growth; announcements or introductions of new technologies or products by our competitors; failures or problems in our biometric software products; delays in the adoption of new industry biometric standards; growth of proprietary biometric systems which do not conform to industry standards; our ability to sell services contracts in a manner that is consistent with our business model; our ability to deliver service contract milestones; and our dependence on third party contractors and consultants to deliver certain services contract milestones. We refer you to the documents Aware files from time to time with the
Aware, StratiPHY, and Dr. DSL are trademarks or registered trademarks of
AWARE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
Revenue:
Product sales $4,661 $3,939 $11,332 $11,811
Contract revenue 1,005 2,014 3,725 5,313
Royalties 554 437 1,500 1,310
--- --- ----- -----
Total revenue 6,220 6,390 16,557 18,434
Costs and expenses:
Cost of product sales (1) 857 528 2,413 1,976
Cost of contract revenue (1) 717 1,365 2,534 3,512
Research and development (1) 3,175 2,945 9,344 9,984
Selling and marketing (1) 1,251 1,141 3,517 3,297
General and administrative (1) 1,383 1,315 3,812 3,793
----- ----- ----- -----
Total costs and expenses 7,383 7,294 21,620 22,562
Loss from operations (1,163) (904) (5,063) (4,128)
Interest income 31 244 217 942
-- --- --- ---
Loss before provision for income
taxes (1,132) (660) (4,846) (3,186)
Provision for income taxes 1 3 5 16
-- -- -- --
Net loss ($1,133) ($663) ($4,851) ($3,202)
======= ===== ======= =======
Net loss per share - basic ($0.06) ($0.03) ($0.23) ($0.13)
Net loss per share - diluted ($0.06) ($0.03) ($0.23) ($0.13)
Weighted average shares - basic 19,782 23,510 21,230 23,753
Weighted average shares - diluted 19,782 23,510 21,230 23,753
(1) Effective January 1, 2006 the Company adopted Statement of Financial
Accounting Standard No. 123 (Revised), "Share-Based Payment" (FAS
123(R)). The amounts in the tables above include stock-based
compensation as follows (in thousands):
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
Cost of product sales $3 $3 $8 $9
Cost of contract revenue 36 45 105 105
Research and development 174 136 458 463
Sales and marketing 140 52 249 133
General and administrative 324 161 656 405
--- --- --- ---
Total stock-based compensation
costs $677 $397 $1,476 $1,115
==== ==== ====== ======
AWARE, INC.
NON-GAAP FINANCIAL MEASURES AND RECONCILIATION
(In thousands, except per share data)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
GAAP net loss ($1,133) ($663) ($4,851) ($3,202)
Stock-based compensation 677 397 1,476 1,115
--- --- ----- -----
Non-GAAP net loss ($456) ($266) ($3,375) ($2,087)
===== ===== ======= =======
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
GAAP net loss per share ($0.06) ($0.03) ($0.23) ($0.13)
Stock-based compensation 0.04 0.02 0.07 0.04
---- ---- ---- ----
Non-GAAP net loss per share ($0.02) ($0.01) ($0.16) ($0.09)
====== ====== ======= =======
AWARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(unaudited)
September 30, December 31,
2009 2008
ASSETS
Cash and investments $32,628 $45,516
Accounts receivable, net 3,780 2,211
Inventories, net 1,130 1,656
Property and equipment, net 6,841 7,463
Assets held for sale 192 -
Other assets, net 764 700
--- ---
Total assets $45,335 $57,546
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Total current liabilities $2,804 $2,693
Long-term deferred revenue 330 330
Total stockholders' equity 42,201 54,523
------ ------
Total liabilities and stockholders' equity $45,335 $57,546
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SOURCE
Rick Moberg of Aware, Inc., +1-781-276-4000