BEDFORD, Mass., July 25, 2017 /PRNewswire/ -- Aware, Inc.
(NASDAQ: AWRE), a leading supplier of biometrics software and
services, today reported financial results for its second quarter
ended June 30, 2017.
Revenue for the second quarter of 2017 was $2.7 million, a decrease of 60% compared to
$6.9 million in the same quarter last
year. Operating income in the second quarter of 2017 was
$0.2 million compared to $2.1 million in the second quarter of 2016. The
decrease in revenue and operating income were primarily due to: i)
a large biometrics software license sale to a U.S. government
military customer in the second quarter of 2016 whereas there was
no such sale in the current three month period; and ii) revenue
from a large medical imaging license sale in the second quarter of
2016 whereas there was no such revenue in the current three month
period. The resulting decline in operating income was
partially offset by: i) patent related income from an unaffiliated
third party; and ii) lower cost of software licenses.
Net income in the second quarter of 2017 was $0.2 million, or $0.01 per diluted share, which compares to
$1.4 million, or $0.06 per diluted share, in the same period a
year ago.
Revenue for the first six months of 2017 was $7.1 million, a decrease of 40% compared to
$11.7 million in the same six month
period last year. Operating income for the first six months of 2017
was $0.6 million compared to
$3.0 million in the same period last
year. The decrease in revenue and operating income were primarily
due to: i) a large biometrics software license sale to a U.S.
government military customer in the second quarter of 2016 whereas
there no such sale in the first six months of 2017, ii) revenue
from a large medical imaging license sale in the first six months
of 2016 whereas there was no such revenue in the corresponding
period of 2017; and iii) no hardware sales in the first six months
of 2017. The resulting decline in operating income was
partially offset by: i) patent related income from an unaffiliated
third party, ii) lower cost of software licenses; and iii) lower
cost of hardware sales.
Net income for the first six months of 2017 was $0.6 million, or $0.03 per diluted share, which compares to
$2.1 million, or $0.09 per diluted share, in the same period a
year ago.
Kevin Russell, Aware's chief
executive officer and president, said, "Our revenue results for the
second quarter did not meet our expectations. Our quarterly
revenue and earnings fluctuate based on project wins and the timing
of the delivery of licenses and services for those projects.
Financial results this quarter are a reflection of these
fluctuations. The ability to forecast the timing of revenue
remains a challenge. We continue to be encouraged by the
interest in and opportunities for our biometric solutions in the
government, commercial and mobile markets."
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) a significant commercial
market for biometrics technology may not develop, and if it does,
we may not be successful in that market; iv) we derive a
significant portion of our revenue from third party channel
partners; v) hardware revenue is likely to decline in future
periods; vi) we face intense competition from other biometrics
solution providers; vii) our business is subject to rapid
technological change; viii) our software products may have errors,
defects or bugs which could harm our business; ix) our business may
be adversely affected by our use of open source software; x) our
intellectual property is subject to limited protection; xi) we may
be sued by third parties for alleged infringement of their
proprietary rights; xii) we must attract and retain key personnel;
xiii) we rely on single sources of supply for certain components
used in our hardware products; xiv) our business may be affected by
government regulations and adverse economic conditions; xv) we may
make acquisitions that could adversely affect our results, and xvi)
we may have additional tax liabilities.
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, 2016
and other reports and filings made with the Securities and Exchange
Commission.
Aware is a 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
June 30,
|
|
Six Months
Ended
June 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Revenue:
|
|
|
|
|
|
|
|
|
Software licenses
|
|
$1,214
|
|
$5,347
|
|
$3,900
|
|
$8,121
|
Software maintenance
|
|
1,282
|
|
1,181
|
|
2,534
|
|
2,462
|
Services
|
|
206
|
|
216
|
|
580
|
|
635
|
Hardware
|
|
-
|
|
31
|
|
-
|
|
317
|
Royalties
|
|
43
|
|
129
|
|
78
|
|
203
|
Total
revenue
|
|
2,745
|
|
6,904
|
|
7,092
|
|
11,738
|
|
|
|
|
|
|
|
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
Cost of software licenses
|
|
-
|
|
858
|
|
247
|
|
1,101
|
Cost of services
|
|
104
|
|
158
|
|
320
|
|
372
|
Cost of hardware
|
|
-
|
|
29
|
|
-
|
|
234
|
Research and development
|
|
1,876
|
|
1,802
|
|
3,733
|
|
3,451
|
Selling and marketing
|
|
1,024
|
|
1,111
|
|
1,966
|
|
2,031
|
General and administrative
|
|
816
|
|
872
|
|
1,605
|
|
1,595
|
Total costs and
expenses
|
|
3,820
|
|
4,830
|
|
7,871
|
|
8,784
|
Patent related
income
|
|
1,313
|
|
-
|
|
1,403
|
|
-
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
238
|
|
2,074
|
|
624
|
|
2,954
|
Other
income
|
|
36
|
|
-
|
|
36
|
|
-
|
Interest
income
|
|
88
|
|
72
|
|
172
|
|
138
|
Income before
provision for income taxes
|
|
362
|
|
2,146
|
|
832
|
|
3,092
|
Provision for income
taxes
|
|
134
|
|
710
|
|
198
|
|
1,022
|
Net income
|
|
$228
|
|
$1,436
|
|
$634
|
|
$2,070
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share –
basic
|
|
$0.01
|
|
$0.06
|
|
$0.03
|
|
$0.09
|
Net income per share –
diluted
|
|
$0.01
|
|
$0.06
|
|
$0.03
|
|
$0.09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares – basic
|
|
21,774
|
|
22,964
|
|
22,013
|
|
22,978
|
Weighted-average
shares - diluted
|
|
21,919
|
|
23,124
|
|
22,119
|
|
23,064
|
AWARE,
INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(In
thousands)
|
(unaudited)
|
|
|
|
June
30,
2017
|
|
December
31,
2016
|
ASSETS
|
|
|
|
|
Cash and
investments
|
|
$49,425
|
|
$52,864
|
Accounts receivable,
net
|
|
3,321
|
|
3,016
|
Property and equipment,
net
|
|
4,479
|
|
4,634
|
Deferred tax
assets
|
|
5,843
|
|
1,078
|
All other assets,
net
|
|
343
|
|
392
|
|
|
|
|
|
Total assets
|
|
$63,411
|
|
$61,984
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued
expenses
|
|
$1,324
|
|
$1,210
|
Deferred revenue
|
|
2,291
|
|
2,933
|
Total stockholders'
equity
|
|
59,796
|
|
57,841
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
|
$63,411
|
|
$61,984
|
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content:http://www.prnewswire.com/news-releases/aware-inc-reports-second-quarter-2017-financial-results-300493578.html
SOURCE Aware, Inc.