Aware, Inc. Reports First Quarter 2014 Financial Results

           Aware, Inc. Reports First Quarter 2014 Financial Results

PR Newswire

BEDFORD, Mass., April 22, 2014

BEDFORD, Mass., April 22, 2014 /PRNewswire/ -- Aware, Inc. (NASDAQ: AWRE), a
leading supplier of biometrics software and services, today reported financial
results for its first quarter ended March 31, 2014.

Revenue for the first quarter of 2014 was $6.6 million, an increase of 33%
compared to $5.0 million in the same quarter last year. Operating income
before patent related income in the first quarter of 2014 was $1.3 million
compared to $2.2 million in the first quarter of 2013.

Net income for the first quarter of 2014 was $0.9 million, or $0.04 per
diluted share, which compares to net income of $1.9 million, or $0.08 per
diluted share, for the same period a year ago.

Financial results for the first quarter of 2014 reflect Aware's first quarter
as primarily a biometrics software and services company after we completed the
shutdown of DSL operations in the fourth quarter of 2013. Lower operating
income before patent related income this quarter compared to the prior year
quarter was primarily attributable to a large non-recurring direct sale to a
government agency in the year ago quarter and new product development
initiatives in the current quarter.

Net income in the year ago quarter also included $0.8 million of income from a
patent arrangement. There was no such income in the current year quarter.

Rick Moberg, Aware's co-chief executive officer and chief financial officer,
said, "Our first quarter financial performance was positive, particularly in
light of the new product development investments we made. Notwithstanding
these investments, cash and investment balances grew by $1.9 million to $77.3
million as of March 31, 2014. As we move into the second quarter, we are
focused on winning new customer biometrics projects and getting new products
to market."

About Aware
Aware is a leading provider of biometrics software products and development
services to governments, system integrators, and solution providers globally.
Our products include SDKs, software components, workstation applications, and
a modular, centralized, service-oriented platform. They fulfill a broad range
of functions critical to biometric authentication and search, including face,
fingerprint, and iris autocapture, image quality assurance, data compliance,
capture hardware peripheral abstraction, centralized data processing and
workflow, subsystem connectivity, and biometric matching algorithms. The
products are used to enable identity-centric security solutions with
biometrics for applications including border management, credentialing and
access control, intelligence and defense, and law enforcement. Aware is a
publicly held company (Nasdaq: AWRE) based in Bedford, Massachusetts.

See Aware's website for more information about our biometrics software
products.

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 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.

Risk factors related to our business include, but are not limited to: i) our
operating results may fluctuate significantly and are difficult to predict;
ii) we derive a significant portion of our revenue from government customers,
and our business may be adversely affected by changes in the contracting or
fiscal policies of those governmental entities; iii) we derive a significant
portion of our revenue from third party channel partners; iv) we face intense
competition from other biometrics solution providers; v) our business is
subject to rapid technological change; vi) our software products may have
errors, defects or bugs which could harm our business; vii) our business may
be adversely affected by our use of open source software; viii) our
intellectual property is subject to limited protection; ix) we may be sued by
third parties for alleged infringement of their proprietary rights; x) we must
attract and retain key personnel; xi) we rely on single sources of supply for
certain components used in our hardware products; xii) our business may be
affected by government regulations and adverse economic conditions; and xiii)
we may make acquisitions that could adversely affect our results.

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, 2013 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 INCOME
(In thousands, except per share data)
(unaudited)
                                                            Three Months Ended
                                                            March 31,
                                                            2014       2013
Revenue:
 Software licenses                                       $1,617     $3,333
 Software maintenance                                    1,045      947
 Services                                                1,008      407
 Hardware sales                                          2,633      -
 Royalties                                               314        291
  Total revenue                                    6,617      4,978
Costs and expenses:
 Cost of hardware sales                                  1,902      -
 Cost of services                                        463        197
 Research and development                                1,279      973
 Selling and marketing                                   858        876
 General and administrative                              804        731
 Total costs and expenses                             5,306      2,777
Operating income before patent related income               1,311      2,201
Income from patent arrangement                              -          780
Operating income after patent related income                1,311      2,981
Interest income                                             86         82
Income from continuing operations before income taxes       1,397      3,063
Provision for income taxes                                  517        1,091
Income from continuing operations                           880        1,972
Loss from discontinued operations, net of income taxes      -          (115)
Net income                                                 $880       $1,857
Basic net income per share:
 Basic net income per share from continuing operations   $0.04      $0.09
 Basic net loss per share from discontinued operations   -          (0.01)
Basic net income per share                                  $0.04      $0.08
Diluted net income per share:
 Diluted net income per share from continuing operations $0.04      $0.09
 Diluted net loss per share from discontinued             -          (0.01)
operations
Diluted net income per share                                $0.04      $0.08
Weighted-average shares – basic                             22,626     22,511
Weighted-average shares - diluted                           22,699     22,564





AWARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(unaudited)
                                                March 31,  December 31,

                                                2014       2013


ASSETS
 Cash and investments                       $77,264    $75,414
 Accounts receivable, net                   4,593      4,582
 Inventories                                1          1,601
 Property and equipment, net                5,489      5,582
 Deferred tax assets                        1,056      1,145
 Other assets, net                          1,059      1,005
 Total assets                               $89,462    $89,329




LIABILITIES AND STOCKHOLDERS' EQUITY
 Total current liabilities                  $2,792     $4,161
 Long-term deferred revenue                 16         18
 Total stockholders' equity                 86,654     85,150
 Total liabilities and stockholders' equity $89,462    $89,329



SOURCE Aware, Inc.

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