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Aware, Inc. Reports First Quarter 2013 Financial Results



           Aware, Inc. Reports First Quarter 2013 Financial Results

PR Newswire

BEDFORD, Mass., April 23, 2013

BEDFORD, Mass., April 23, 2013 /PRNewswire/ -- Aware, Inc. (NASDAQ: AWRE), a
leading supplier of biometrics software and services and DSL service assurance
software products, today reported financial results for its first quarter
ended March 31, 2013. 

Revenue for the first quarter of 2013 was $5.6 million, an increase of 15%
compared to $4.9 million in the same quarter last year. Operating income
before patent related income in the first quarter of 2013 was $2.0 million
compared to $1.0 million in the first quarter of 2012.

Net income for the first quarter of 2013 was $1.9 million, or $0.08 per
diluted share, which compares to net income of $1.1 million, or $0.05 per
diluted share, for the same period a year ago.

Additional information regarding first quarter 2013 results is as follows:

  o The improvement in operating income before patent related income this year
    versus last year was primarily due to increased profitability in our
    biometrics and imaging business and lower general and administrative
    expenses.
  o Net income in the first quarter of 2013 included income from a patent
    arrangement of $0.8 million. This income relates to an agreement we
    entered into several years ago with an unaffiliated third party under
    which we assigned patents in return for royalties on proceeds from its
    patent monetization efforts. We are unable to predict how much more income
    we might receive from this arrangement, if any, because we do not know
    whether any patent monetization efforts by the third party will be
    successful.
  o Income tax expense for the first quarter of 2013 was $1.0 million versus
    $2,000 in the prior year quarter.   Income tax expense this year was based
    on the U.S. statutory rate of 34%, increased by state income taxes.
     Income tax expense in the first quarter of 2012 was offset by the
    reversal of the valuation allowance on deferred tax assets, which reduced
    our tax expense to zero, except for $2,000 of state excise taxes.

Rick Moberg, Aware's co-chief executive officer and chief financial officer,
said, "Our strong operating results this quarter were driven by record revenue
and profitability in our biometrics and imaging business. Biometrics revenue
growth was primarily the result of a large sale to a government agency, solid
international sales, and sales of licenses to OEM customers. G&A expenses
benefitted from lower patent related expenses as a result of our 2012 patent
sales."

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 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 software products face intense
competition; and our DSL service assurance software products could have
quality problems. 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.

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, 2012 and other reports and filings made with the Securities and Exchange
Commission.

Aware is a trademark or registered trademark 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
                                                            March 31,
                                                            2013       2012
Revenue:
    Software licenses                                       $3,808     $2,839
    Software maintenance                                    1,041      881
    Services                                                476        693
    Royalties                                               291        491
  Total revenue                                             5,616      4,904
Costs and expenses:
    Cost of services                                        221        356
    Research and development                                1,557      1,436
    Selling and marketing                                   1,095      1,079
    General and administrative                              731        985
  Total costs and expenses                                  3,604      3,856
Operating income before patent related income               2,012      1,048
Income from patent arrangement                              780        -
Operating income after patent related income                2,792      1,048
Other income                                                -          26
      Interest income                                       82         52
Income from continuing operations before income taxes       2,874      1,126
Provision for income taxes                                  1,017      2
Income from continuing operations                           1,857      1,124
Loss from discontinued operations, net of income taxes      -          (6)
Net income                                                  $1,857     $1,118
Basic net income per share:
   Basic net income per share from continuing operations    $0.08      $0.05
   Basic net loss per share from discontinued operations    0.00       (0.00)
Basic net income per share                                  $0.08      $0.05
Diluted net income per share:
   Diluted net income per share from continuing operations  $0.08      $0.05
   Diluted net loss per share from discontinued             0.00       (0.00)
operations 
Diluted net income per share                                $0.08      $0.05
Weighted-average shares – basic                             22,511     20,724
Weighted-average shares - diluted                           22,564     20,928

AWARE, INC

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(unaudited)
                                                 March 31,  December 31,

                                                 2013       2012
 

ASSETS
     Cash and investments                        $74,570    $73,084
     Accounts receivable, net                    5,829      4,578
     Property and equipment, net                 5,867      5,904
     Deferred tax assets                         1,610      1,760
     Other assets, net                           568        528
     Total assets                                $88,444    $85,854
LIABILITIES AND STOCKHOLDERS' EQUITY
     Total current liabilities                   $3,480     $3,639
     Long-term deferred revenue                  285        319
     Total stockholders' equity                  84,679     81,896
     Total liabilities and stockholders' equity  $88,444    $85,854

 

SOURCE Aware, Inc.

Website: http://www.aware.com
Contact: Rick Moberg, Aware, Inc., 781-276-4000
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