Aware, Inc. Reports Second Quarter 2013 Financial Results PR Newswire BEDFORD, Mass., July 23, 2013 BEDFORD, Mass., July 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 second quarter ended June 30, 2013. Revenue for the second quarter of 2013 was $4.9 million, an increase of 19% compared to $4.1 million in the same quarter last year. Net income for the second quarter of 2013 was $307,000, or $0.01 per diluted share, which compares to net income of $54.9 million, or $2.49 per diluted share, for the same period a year ago. Net income in the second quarter of 2012 included a gain on the sale of patent assets of $71.2 million. Operating income before patent related income in the second quarter of 2013 was $283,000 compared to $119,000 in the second quarter of 2012. For the six months ended June 30, 2013, revenue increased 17% to $10.5 million, compared to $9.0 million in the same period a year ago. Net income for the six months ended June 30, 2013 was $2.2 million, or $0.10 per diluted share. These results compared to net income of $56.0 million, or $2.60 per diluted share, for the same period a year ago. Year-to-date net income in 2012 also included the aforementioned $71.2 million gain on the sale of patent assets. Operating income before patent related income for the first six months of 2013 was $2.3 million compared to $1.2 million for the same period a year ago. The improvement in operating income before patent related income in the three and six month periods this year compared to the corresponding periods last year was primarily due to increased profitability in our biometrics business and lower general and administrative expenses. Rick Moberg, Aware's co-chief executive officer and chief financial officer, said, "We are pleased to report this is our eight consecutive profitable quarter on an operating and net income basis. We look forward to continuing to build our software and services business in upcoming quarters." 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 Six Months Ended June 30, June 30, 2013 2012 2013 2012 Revenue: Software licenses $1,562 $1,843 $5,370 $4,683 Software maintenance 1,123 929 2,164 1,810 Services 759 683 1,235 1,376 Hardware sales 1,129 - 1,129 - Royalties 277 624 568 1,115 Total revenue 4,850 4,079 10,466 8,984 Costs and expenses: Cost of hardware sales 813 - 813 - Cost of services 359 361 581 717 Research and development 1,495 1,529 3,052 2,965 Selling and marketing 972 995 2,067 2,074 General and administrative 928 1,075 1,659 2,061 Total costs and expenses 4,567 3,960 8,172 7,817 Operating income before patent related 283 119 2,294 1,167 income Gain on sale of patent assets - 71,226 - 71,226 Income from patent arrangement - - 780 - Operating income after patent related 283 71,345 3,074 72,393 income Other income - 58 - 85 Interest income 78 40 161 92 Income from continuing operations before 361 71,443 3,235 72,570 income taxes Provision for income taxes 54 16,667 1,071 16,670 Income from continuing operations 307 54,776 2,164 55,900 Income from discontinued operations, net - 150 - 144 of income taxes Net income $307 $54,926 $2,164 $56,044 Basic net income per share: Basic net income per share from $0.01 $2.51 $0.10 $2.63 continuing operations Basic net income per share from 0.00 0.01 0.00 0.01 discontinued operations Basic net income per share $0.01 $2.52 $0.10 $2.64 Diluted net income per share: Diluted net income per share from $0.01 $2.48 $0.10 $2.59 continuing operations Diluted net income per share from 0.00 0.01 0.00 0.01 discontinued operations Diluted net income per share $0.01 $2.49 $0.10 $2.60 Weighted-average shares – basic 22,517 21,757 22,514 21,241 Weighted-average shares - diluted 22,687 22,099 22,625 21,583 Comprehensive income: Net income $307 $54,926 $2,164 $56,044 Other comprehensive income: Unrealized gains (losses) on (38) (39) 20 20 available for sale securities Comprehensive income $269 $54,887 $2,184 $56,064 AWARE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (unaudited) June 30, December 31, 2013 2012 ASSETS Cash and investments $77,775 $73,084 Accounts receivable, net 3,736 4,578 Property and equipment, net 5,797 5,904 Deferred tax assets 1,501 1,760 Other assets, net 567 528 Total assets $89,376 $85,854 LIABILITIES AND STOCKHOLDERS' EQUITY Total current liabilities $4,335 $3,639 Long-term deferred revenue 200 319 Total stockholders' equity 84,841 81,896 Total liabilities and stockholders' equity $89,376 $85,854 SOURCE Aware, Inc. Website: http://www.aware.com Contact: Rick Moberg, Aware, Inc., 781-276-4000
Aware, Inc. Reports Second Quarter 2013 Financial Results
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