BEDFORD, Mass., Nov. 2 /PRNewswire-FirstCall/ -- Aware, Inc. (Nasdaq:
AWRE), a leading supplier of broadband technology and biometrics software,
today reported financial results for its third quarter ended September 30,
2006.
Revenues for the third quarter of 2006 increased 31% to $6.7 million,
from $5.1 million in the same quarter last year. For the nine months ended
September 30, 2006, revenues increased 47% to $17.6 million, compared to
$12.0 million in the same period a year ago.
The Company reports its net income and basic and diluted net income per
share in accordance with U.S. generally accepted accounting principles
(GAAP), and additionally, on a non-GAAP basis. Non-GAAP net income, where
applicable, excludes the effect of stock-based compensation expense. The
company uses the non-GAAP information internally to evaluate its operating
performance and believes these non-GAAP measures are useful to investors as
they provide additional insight into the underlying operating results.
However, non-GAAP measures are not stated in accordance with, should not be
considered in isolation from, and are not a substitute for, GAAP measures.
A reconciliation of GAAP to non-GAAP results has been provided in the
attached financial tables.
GAAP net income for the third quarter of 2006 was $0.8 million, or
$0.03 per diluted share, which included $0.5 million of stock-based
compensation charges, as this was the Company's third quarter subject to
the provisions of FAS 123(R). This compared to a GAAP net income of $0.6
million, or $0.02 per diluted share, for the same period a year ago. GAAP
net income for the nine months ended September 30, 2006 was $0.2 million or
$0.01 per diluted share, compared to a net loss of $1.3 million, or $0.06
per share, for the same period a year ago. GAAP results prior to 2006 do
not include a charge for stock-based compensation.
Non-GAAP net income for the third quarter of 2006, excluding the effect
of stock-based compensation, was $1.3 million, or $0.05 per diluted share.
For the nine months ended September 30, 2006, the company had a non-GAAP
net income, excluding the effect of stock-based compensation, of $1.8
million, or $0.07 per diluted share.
Michael Tzannes, Aware's chief executive officer, said, "We continue to
make progress in growing our business. We're looking forward to continued
success through the remainder of 2006 and into 2007. Please join us on our
conference call today and at the AeA Classic conference next week where we
will provide more details on our strategy, market position and reasons for
optimism."
Note: Aware's conference call will be broadcast live over the Internet
today, November 2, 2006 at 5:00 p.m. Eastern Time. To listen to the call,
please go to http://www.aware.com/ir. The conference call may also be heard
by calling (719) 457-2633 and referencing the confirmation number 6528654.
A replay of the call will be archived on our website after the call.
About Aware
Aware, Inc. designs, develops, licenses and markets DSL technologies
that enable broadband communications over existing telephone networks. Its
solutions, including splitterless G.lite, full-rate ADSL, ADSL2, ADSL2+,
VDSL2, Bonded ADSL2+, Dr. DSL(R), StratiPHY(TM), StratiPHY-Bonded(TM),
StratiPHY2+(TM), StratiPHY3(TM) and G.SHDSL, address central office as well
as customer premise requirements. Aware is also a leading provider of
standards-based biometric transaction and image compression software
toolkits. More information can be found at http://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 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. The DSL factors include, but are not limited to: we
have a unique business model, our quarterly results are difficult to
predict, we depend on a limited number of licensees, we derive a
significant amount of revenue from a small number of customers, we depend
on equipment companies to incorporate our technology into their products,
we face intense competition from other DSL vendors, DSL technology competes
with other technologies for broadband access, and our business is subject
to rapid technological change. 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, 2005 and other reports and filings made with
the Securities and Exchange Commission.
Dr. DSL, StratiPHY, StratiPHY2+, StratiPHY3, and StratiPHY-Bonded are
trademarks or registered trademarks of Aware, Inc.
AWARE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2006 2005 2006 2005
Revenue:
Product sales $1,736 $2,417 $4,973 $4,163
Contract revenue 3,990 1,920 9,924 5,061
Royalties 956 750 2,710 2,770
Total Revenue 6,682 5,087 17,607 11,994
Costs and expenses:
Cost of product
sales (1) 286 157 615 279
Cost of contract
revenue (1) 1,363 826 3,759 2,384
Research and
development (1) 2,726 2,487 8,646 7,400
Selling and
marketing (1) 784 721 2,518 2,064
General and
administrative (1) 843 644 2,930 1,940
Total costs and
expenses 6,002 4,835 18,468 14,067
Net income (loss)
from operations 680 252 (861) (2,073)
Interest income 490 309 1,342 798
Net income (loss)
before provision
for income taxes 1,170 561 481 (1,275)
Provision for income taxes 330 - 330 -
Net income (loss) $840 $561 $151 ($1,275)
Net income (loss)
per share -- basic $0.04 $0.02 $0.01 ($0.06)
Net income (loss)
per share -- diluted $0.03 $0.02 $0.01 ($0.06)
Weighted average
shares -- basic 23,552 23,116 23,433 23,027
Weighted average
shares -- diluted 24,987 25,168 24,976 23,027
(1) Effective January 1, 2006 the Company adopted Statement of Financial
Accounting Standard No. 123 (Revised), "Share-Based Payment" (FAS
123(R)). Accordingly, for the nine months ended September 30, 2006,
stock-based compensation was accounted for under FAS 123(R) while, for
the nine months ended September 30, 2005, stock-based compensation was
accounted for under APB No. 25 "Accounting for Stock Issued to
Employees."The amounts in the tables above include stock-based
compensation as follows (in thousands):
Three Months Ended Nine Months Ended
September 30, September 30,
2006 2005 2006 2005
Cost of product sales $4 $- $12 $-
Cost of contract revenue 13 - 98 -
Research and development 241 - 786 -
Sales and marketing 88 - 266 -
General and administrative 106 - 532 -
Total stock-based
compensation costs $452 $- $1,694 $-
AWARE, INC.
Non-GAAP Financial Measures and Reconciliation
(In thousands, except per share data)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2006 2005 2006 2005
GAAP net income (loss) $840 $561 $151 ($1,275)
Stock-based compensation 452 --- 1,694 ---
Non-GAAP net income
(loss) $1,292 $561 $1,845 ($1,275)
Three Months Ended Nine Months Ended
September 30, September 30,
2006 2005 2006 2005
GAAP diluted net income
(loss)
per share $0.03 $0.02 $0.01 ($0.06)
Stock-based
compensation 0.02 - 0.06 -
Non-GAAP diluted
net income (loss)
per share $0.05 $0.02 $0.07 ($0.06)
AWARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(unaudited)
September 30, December 31,
2006 2005
ASSETS
Cash and investments $37,660 $36,763
Accounts receivable, net 5,855 3,749
Property and equipment, net 7,934 8,075
Other assets, net 1,754 1,154
Total assets $53,203 $49,741
LIABILITIES AND STOCKHOLDERS' EQUITY
Total current liabilities $2,875 $2,238
Long-term deferred revenue 330 -
Total stockholders' equity 49,998 47,503
Total liabilities and stockholders' equity $53,203 $49,741
SOURCE Aware, Inc.
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Related links:
http://www.aware.com
http://www.prnewswire.com/comp/107679.html/
CONTACT:
Keith Farris of Aware, Inc., +1-781-276-4000
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