BEDFORD, Mass., July 24, 2018 /PRNewswire/ -- Aware, Inc.
(NASDAQ: AWRE), a leading supplier of biometrics software and
services, today reported financial results for its second quarter
ended June 30, 2018.
Revenue for the second quarter of 2018 was $3.8 million, an increase of 48% compared to
$2.5 million in the same quarter last
year. Operating loss in the second quarter of 2018 was $0.4 million compared to operating income of
$0.1 million in the second quarter of
2017. The increase in revenue was primarily due to higher
biometrics license, maintenance and services sales. Higher
biometrics license and services sales this quarter were primarily
due to a software license agreement we entered into with a systems
integrator in the second quarter of 2018 for a large project. The
decrease in operating income this quarter was primarily due to: i)
no income from a patent arrangement from an unaffiliated third
party; and ii) higher total engineering costs.
Net loss in the second quarter of 2018 was $0.2 million, or $0.01 per diluted share, which compares to net
income of $0.1 million, or
$0.01 per diluted share, in the same
period a year ago.
Revenue for the first six months of 2018 and 2017 was
$6.7 million for both periods.
Operating loss for the first six months of 2018 was $1.1 million compared to operating income of
$0.3 million in the same period last
year. The decrease in operating income was primarily due to: i) no
income from a patent arrangement from an unaffiliated third party;
and ii) higher total engineering costs, that was partially offset
by lower cost of software sales.
Net loss for the first six months of 2018 was $0.7 million, or $0.03 per diluted share, which compares to net
income of $0.4 million, or
$0.02 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 were an improvement over the first quarter of this
year and the same quarter last year. Our expenses were higher
due to our continued investment in product and business development
with respect to enhancing our product offerings as well as
addressing the commercial and mobile markets. The highlight
of the quarter was our selection to provide our BioSP™ software and
services for the United Kingdom Government biometric matching
platform. We also continue to be optimistic about the level
of interest from potential customers with regard to our Knomi™
mobile biometric authentication framework either as an alternative
to passwords or as part of a step-up authentication scheme."
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, iris, and voice capture, sample quality assurance,
data compliance, capture hardware peripheral abstraction,
centralized data processing and workflow, subsystem connectivity,
and biometric matching algorithms. The products apply biometrics to
enable identity-centric security solutions for applications
including banking and payments, 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 be zero 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) we
rely on third party software to develop and provide our solutions
and significant defects in third party software could harm our
business xi) our intellectual property is subject to limited
protection; xii) we may be sued by third parties for alleged
infringement of their proprietary rights; xiii) we must attract and
retain key personnel; xiv) we rely on single sources of supply for
certain components used in our hardware products; xv) our business
may be affected by government regulations and adverse economic
conditions; xvi) we may make acquisitions that could adversely
affect our results, and xvii) 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, 2017
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 OPERATIONS
|
AND COMPREHENSIVE
INCOME (LOSS)
|
(In thousands,
except per share data)
|
(unaudited)
|
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Revenue:
|
|
|
|
|
|
|
|
|
Software licenses
|
|
$1,659
|
|
$1,014
|
|
$3,133
|
|
$3,500
|
Software maintenance
|
|
1,402
|
|
1,282
|
|
2,696
|
|
2,534
|
Services
|
|
699
|
|
206
|
|
842
|
|
580
|
Royalties
|
|
-
|
|
40
|
|
-
|
|
84
|
Total
revenue
|
|
3,760
|
|
2,542
|
|
6,671
|
|
6,698
|
|
|
|
|
|
|
|
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
Cost of software licenses
|
|
-
|
|
-
|
|
-
|
|
247
|
Cost of services
|
|
370
|
|
104
|
|
420
|
|
320
|
Research and development
|
|
1,887
|
|
1,876
|
|
3,762
|
|
3,733
|
Selling and marketing
|
|
1,013
|
|
995
|
|
1,937
|
|
1,910
|
General and administrative
|
|
871
|
|
816
|
|
1,656
|
|
1,605
|
Total costs and
expenses
|
|
4,141
|
|
3,791
|
|
7,775
|
|
7,815
|
Patent related
income
|
|
-
|
|
1,313
|
|
-
|
|
1,403
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
(381)
|
|
64
|
|
(1,104)
|
|
286
|
Other
income
|
|
-
|
|
36
|
|
-
|
|
36
|
Interest
income
|
|
201
|
|
88
|
|
363
|
|
172
|
Income (loss) before
provision for income taxes
|
|
(180)
|
|
188
|
|
(741)
|
|
494
|
Provision (benefit)
for income taxes
|
|
8
|
|
74
|
|
(58)
|
|
79
|
Net income
(loss)
|
|
($188)
|
|
$114
|
|
($683)
|
|
$415
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share – basic
|
|
($0.01)
|
|
$0.01
|
|
($0.03)
|
|
$0.02
|
Net income (loss) per
share – diluted
|
|
($0.01)
|
|
$0.01
|
|
($0.03)
|
|
$0.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares – basic
|
|
21,534
|
|
21,774
|
|
21,540
|
|
22,013
|
Weighted-average
shares - diluted
|
|
21,534
|
|
21,919
|
|
21,540
|
|
22,119
|
AWARE,
INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(In
thousands)
|
(unaudited)
|
|
|
|
June
30,
2018
|
|
December
31,
2017
|
ASSETS
|
|
|
|
|
Cash and
investments
|
|
$49,121
|
|
$51,608
|
Accounts and unbilled
receivables, net
|
|
5,059
|
|
3,818
|
Property and equipment,
net
|
|
4,226
|
|
4,304
|
Deferred tax
assets
|
|
5,223
|
|
5,071
|
All other assets,
net
|
|
224
|
|
234
|
|
|
|
|
|
Total assets
|
|
$63,853
|
|
$65,035
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued
expenses
|
|
$1,545
|
|
$1,569
|
Deferred revenue
|
|
2,421
|
|
2,932
|
Total stockholders'
equity
|
|
59,887
|
|
60,534
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
|
$63,853
|
|
$65,035
|
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SOURCE Aware, Inc.