BEDFORD, Mass., Oct. 23, 2018 /PRNewswire/ -- Aware, Inc.
(NASDAQ: AWRE), a leading supplier of biometrics software and
services, today reported financial results for its third quarter
ended September 30, 2018.
Revenue for the third quarter of 2018 was $5.4 million, a decrease of 5% compared to
$5.7 million in the same quarter last
year. Operating income in the third quarter of 2018 was
$1.1 million compared to $1.5 million in the third quarter of 2017.
The decrease in revenue and operating income was primarily due
to: i) a large imaging software license sale to a medical imaging
customer in the third quarter of 2017 whereas there was no such
sale in the current three month period; and ii) no royalty revenue
in the third quarter of 2018. The decrease in revenue was partially
offset by: i) a large biometrics software license sale to a large
commercial customer in the third quarter of 2018; and ii) higher
maintenance and services revenue in the third quarter of
2018. To a lesser extent, lower patent related income from an
unaffiliated third party and higher total costs and expenses in the
third quarter of 2018 also contributed to lower operating
income.
Net income in the third quarter of 2018 was $1.3 million, or $0.06 per diluted share, which compares to net
income of $1.1 million, or
$0.05 per diluted share, in the same
period a year ago.
Revenue for the first nine months of 2018 was $12.1 million, a decrease of 3% compared to
$12.4 million in the same nine month
period last year. Operating income for the first nine months of
2018 was $38,000 compared to
operating income of $1.8 million in
the same period last year. The decrease in revenue and operating
income was primarily due to: i) a large imaging software license
sale to a medical imaging customer in the first nine months of 2017
whereas there was no such sale in the first nine months of 2018;
and ii) no royalty revenue in the first nine months of 2018. The
decrease in revenue was partially offset by: i) a large biometrics
software license sale to a large commercial customer in the third
quarter of 2018; and ii) higher maintenance and services revenue in
the first nine months of
2018. In addition to the above, lower patent related income
from an unaffiliated third party in the first nine months of 2018
also contributed to lower operating income.
Net income for the first nine months of 2018 was $0.6 million, or $0.03 per diluted share, which compares to net
income of $1.6 million, or
$0.07 per diluted share, in the same
period a year ago.
Kevin Russell, Aware's chief
executive officer and president, said, "Our financial performance
in the third quarter represented our strongest quarter
year-to-date. Revenue was lifted by a large license sale of
our Knomi™ mobile biometric authentication solution to a large
commercial customer as well as our continuing work under the United
Kingdom Government biometric matching platform project. We
are pleased with the level of interest we are receiving for our
Knomi solution. We will continue to make investments in
product and business development to enhance our opportunities in
the government and commercial 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, 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 and Knomi are trademarks or registered
trademarks of Aware, Inc. Any other trademarks appearing herein are
the property of their respective owners.
AWARE,
INC. CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE
INCOME (in thousands, except per share
data) (unaudited)
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Revenue:
|
|
|
|
|
|
|
|
|
Software licenses
|
|
$3,449
|
|
$4,233
|
|
$6,582
|
|
$7,732
|
Software maintenance
|
|
1,297
|
|
1,088
|
|
3,993
|
|
3,622
|
Services
|
|
655
|
|
343
|
|
1,498
|
|
924
|
Royalties
|
|
-
|
|
43
|
|
-
|
|
127
|
Total
revenue
|
|
5,401
|
|
5,707
|
|
12,073
|
|
12,405
|
|
|
|
|
|
|
|
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
Cost of software licenses
|
|
20
|
|
27
|
|
20
|
|
274
|
Cost of services
|
|
320
|
|
179
|
|
740
|
|
499
|
Research and development
|
|
1,816
|
|
2,151
|
|
5,579
|
|
5,884
|
Selling and marketing
|
|
1,297
|
|
1,028
|
|
3,234
|
|
2,938
|
General and administrative
|
|
807
|
|
849
|
|
2,463
|
|
2,454
|
Total costs and
expenses
|
|
4,260
|
|
4,234
|
|
12,036
|
|
12,049
|
Patent related
income
|
|
1
|
|
19
|
|
1
|
|
1,422
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
1,142
|
|
1,492
|
|
38
|
|
1,778
|
Other
income
|
|
-
|
|
-
|
|
-
|
|
36
|
Interest
income
|
|
224
|
|
109
|
|
587
|
|
281
|
Income before
provision for income taxes
|
|
1,366
|
|
1,601
|
|
625
|
|
2,095
|
Provision for income
taxes
|
|
89
|
|
456
|
|
31
|
|
535
|
Net income
|
|
$1,277
|
|
$1,145
|
|
$594
|
|
$1,560
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share –
basic
|
|
$0.06
|
|
$0.05
|
|
$0.03
|
|
$0.07
|
Net income per share –
diluted
|
|
$0.06
|
|
$0.05
|
|
$0.03
|
|
$0.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares – basic
|
|
21,564
|
|
21,679
|
|
21,548
|
|
21,900
|
Weighted-average
shares - diluted
|
|
21,639
|
|
21,758
|
|
21,604
|
|
21,967
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AWARE,
INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In
thousands) (unaudited)
|
|
|
|
|
|
|
|
September
30,
2018
|
|
December
31,
2017
|
ASSETS
|
|
|
|
|
Cash and
investments
|
|
$48,963
|
|
$51,608
|
Accounts and unbilled
receivables, net
|
|
7,514
|
|
3,818
|
Property and equipment,
net
|
|
4,128
|
|
4,304
|
Deferred tax
assets
|
|
5,199
|
|
5,071
|
All other assets,
net
|
|
386
|
|
234
|
|
|
|
|
|
Total assets
|
|
$66,190
|
|
$65,035
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued
expenses
|
|
$1,893
|
|
$1,569
|
Deferred revenue
|
|
3,115
|
|
2,932
|
Total stockholders'
equity
|
|
61,182
|
|
60,534
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
|
$66,190
|
|
$65,035
|
View original
content:http://www.prnewswire.com/news-releases/aware-inc-reports-third-quarter-2018-financial-results-300736284.html
SOURCE Aware, Inc.