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Aware, Inc. Reports Fourth Quarter and 2011 Financial Results
BEDFORD, Mass., Feb. 14, 2012 /PRNewswire via COMTEX/ --
Aware, Inc. (NASDAQ: AWRE), a leading supplier of biometrics software and DSL service assurance products, today reported financial results for its fourth quarter and year ended December 31, 2011.
Revenue for the fourth quarter of 2011 was $5.9 million, a decrease of 14% compared to $6.8 million in the same quarter last year. Net income for the fourth quarter of 2011 was $959,000, or $0.05 per diluted share. These results compared to net income of $230,000, or $0.01 per diluted share, for the same period a year ago.
For the year ended December 31, 2011, revenue increased 4% to $24.6 million, compared to $23.6 million in 2010. Net income for the year ended December 31, 2011 was $2.6 million, or $0.12 per diluted share. These results compared to net income of $180,000, or $0.01 per diluted share, for the same period a year ago.
Additional information regarding fourth quarter financial results is presented below:
Product revenue declined from $5.3 million in the fourth quarter of 2010 to $4.2 million this quarter. The decrease was due to lower DSL service assurance hardware and software revenue. Sales of biometrics software were higher than the year ago quarter, but not enough to offset lower DSL service assurance revenue.
The increase in services revenue from $949,000 in the fourth quarter of 2010 to $1.1 million this quarter was due to increased revenue from biometrics engineering projects. The increase in royalties from $548,000 in the fourth quarter of 2010 to $605,000 this quarter was due to higher royalties reported to us by one of our DSL chip licensees.
Spending declined from $6.6 million in the fourth quarter of 2010 to $5.0 million this quarter. The $1.6 million spending decrease was primarily the result of three factors: i) lower hardware cost of goods sold on lower hardware sales; ii) lower legal fee spending; and iii) lower officer compensation expenses.
We had 77 full time employees at December 31, 2011, which was down from 81 heads at the end of last quarter.
Rick Moberg, Aware's co-chief executive officer and chief financial officer, said, "Net income of almost $1.0 million this quarter was driven by revenue growth of our biometrics business and lower expenses. Biometrics software products and services continued to sell well in the fourth quarter. In January 2012 we announced we were going to stop selling DSL hardware products. We intend to continue to sell DSL service assurance software products. Results for the full year in 2011 were also encouraging. Net income was $2.6 million and we increased our cash and investments by $7.4 million to $47.3 million.
With respect to our patent management operations, our board is continuing to review its strategic options, including a potential spin-off, sale, or licensing of patents."
About Aware
Aware is a leading software and technology supplier for the biometrics, telecommunications, and healthcare industries. Aware's biometrics software products and services are provided to solution vendors and system integrators for use by government agencies towards applications including border management, secure credentials, law enforcement, and national defense. Aware's DSL Service Assurance Group offers test and diagnostics software and hardware products that enable broadband service providers to manage their DSL networks. Aware also provides standards-based medical imaging software products to the healthcare industry. Aware is a publicly held company (Nasdaq: AWRE) based in Bedford, Massachusetts. www.aware.com
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 service assurance 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; our intellectual property is subject to limited protection; our business may be affected by our use of open source software; our business may be affected by government regulations; adverse economic conditions; and our ability to obtain or enforce patents could be affected by new laws, regulations or rules. DSL service assurance factors include, but are not limited to: our DSL service assurance product line depends upon a limited number of customers; our DSL service assurance 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 services contract milestones; and our dependence on third party contractors and consultants to deliver certain services contract milestones. Further, there can be no assurance as to the timing of a possible transaction with respect to our patent management operations, whether it will ultimately be structured as a spin-off, sale, or license or whether such a transaction will be completed.
We refer you to the documents Aware files from time to time with the Securities and Exchange Commission, specifically the section titled Risk Factors in our annual report on Form 10-K for the fiscal year ended December 31, 2010 and other reports and filings made with the Securities and Exchange Commission.
Aware and Dr. DSL are trademarks or registered trademarks of Aware, Inc.
Any other trademarks appearing herein are the property of their respective owners.
AWARE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
Three Months Ended Year Ended
December 31, December 31,
------------------ ----------------
2011 2010 2011 2010
------ ---------- ------- -------
Revenue:
Product sales $4,152 $5,326 $18,129 $18,914
Services 1,135 949 4,311 1,992
Royalties 605 547 2,146 2,654
------ ---------- ------- -------
Total revenue 5,892 6,822 24,586 23,560
Costs and expenses:
Cost of product sales 552 1,250 3,637 4,362
Cost of services 556 362 1,777 714
Research and development 1,639 1,898 7,240 8,096
Selling and marketing 1,285 1,135 4,441 4,283
General and administrative 936 1,969 5,005 6,438
------ ---------- ------- -------
Total costs and expenses 4,968 6,614 22,100 23,893
Income (loss) from operations 924 208 2,486 (333)
Other income - - - 425
Interest income 35 22 83 90
------ ---------- ------- -------
Income before provision for income taxes 959 230 2,569 182
Provision for income taxes - - 2 2
------ ---------- ------- -------
Net income $959 $230 $2,567 $180
Net income per share - basic $0.05 $0.01 $0.12 $0.01
Net income per share - diluted $0.05 $0.01 $0.12 $0.01
Weighted average shares - basic 20,612 20,040 20,534 19,971
Weighted average shares - diluted 20,775 20,527 20,735 20,182
AWARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(unaudited)
December 31, December 31,
2011 2010
------------ ------------
ASSETS
Cash and investments $46,577 $39,949
Accounts receivable, net 3,546 4,968
Inventories, net 547 1,863
Property and equipment, net 6,232 6,360
Investments 727 -
Other assets, net 222 260
------------ ------------
Total assets $57,851 $53,400
LIABILITIES AND STOCKHOLDERS' EQUITY
Total current liabilities $2,814 $3,197
Long-term deferred revenue 462 320
Total stockholders' equity 54,575 49,883
------------ ------------
Total liabilities and stockholders' equity $57,851 $53,400
SOURCE Aware, Inc.
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