Aware, Inc. Reports Second Quarter 2013 Financial Results

          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