Exhibit 99.1
FOR IMMEDIATE RELEASE
Contact:
Rick Moberg
Aware, Inc.
781-276-4000
Aware, Inc. Reports First Quarter 2009
Financial Results
BEDFORD, MASS. – May 5, 2009 – Aware, Inc. (NASDAQ: AWRE), a leading supplier of broadband technology and biometrics software, today reported financial results for its first quarter ended March 31, 2009.
Revenues for the first quarter of 2009 were $4.6 million, a decrease of 22% compared to $5.9 million in the same quarter last year.
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.
The GAAP net loss for the first quarter of 2009 was $2.1 million, or $0.09 per diluted share, which included $0.4 million of stock-based compensation charges in accordance with the provisions of FAS 123(R). This compared to a GAAP net loss of $1.3 million, or $0.05 per diluted share, for the same period a year ago.
Aware, Inc. • 40 Middlesex Turnpike • Bedford, MA USA 01730-1432
Tel: (781) 276-4000 • Fax: (781) 276-4001 • E-mail: aware@aware.com
| Aware, Inc. Reports First Quarter 2009 Financial Results | Page 2 |
The non-GAAP net loss for the first quarter of 2009, excluding the effect of stock-based compensation, was $1.7 million, or $0.07 per diluted share.
Michael Tzannes, Aware’s chief executive officer, said, “We continued to experience slowdowns in our business as a result of the slowing economy during the first quarter. Our goal is to emerge from the current environment stronger and focused on growth in our target markets. We believe we will succeed by focusing on leading edge, innovative solutions to a large and diverse customer base in the biometrics and broadband markets.”
Note: Aware’s conference call will be broadcast live over the Internet today, May 5, 2009 at 5:00 p.m. Eastern Time. To listen to the call, please go to www.aware.com/ir. The conference call may also be heard by calling 719-325-4808 and referencing the confirmation number 1841428. A replay of the call will be archived on our website after the call.
About Aware
Aware is a leading technology and software supplier for the telecommunications and biometrics industries. For more than ten years, Aware has pioneered innovations at telecommunications standards-setting organizations and continues to develop and market DSL silicon intellectual property and test and diagnostics products. Its StratiPHY(tm) IP product line supports DSL standards, including ADSL2+ and VDSL2, and has been broadly licensed to leading semiconductor companies. Telecom equipment vendors and phone companies use Aware's DSL test and diagnostics modules and Dr. DSL® software to help provision DSL circuits globally. Aware is also a veteran of the biometrics industry, providing biometric and imaging software components used in government systems worldwide since 1992. Aware's interoperable, standard-compliant, field-proven imaging products are used in a number of applications, from border management to criminal justice to medical imaging. Aware is a publicly held company (NASDAQ: AWRE) based in Bedford, Massachusetts. 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. General factors include, but are not limited to: our quarterly results are unpredictable and may fluctuate significantly; our business is subject to rapid technological change; we face intense competition from a wide range of competitors; current economic conditions, including the credit crisis affecting the financial markets; our intellectual property is subject to limited protection; our ability to obtain or enforce patents could be affected by new laws, regulations or rules; and our business may be affected by government regulations. DSL factors include, but are not limited to: our DSL licensing and DSL test and diagnostic businesses depend upon a limited number of customers; there has been and may continue to be a cyclical demand for DSL chipsets; the success of our DSL licensing and test and diagnostics products businesses requires telephone companies to install DSL service in volume; our test and diagnostic hardware and software products could have quality problems; we depend on a single source contract manufacturer for the manufacture of our DSL hardware products; and we are dependent on single source suppliers for components in our DSL hardware products. Biometric factors include, but are not limited to: market acceptance of our biometric technologies and products; changes in contracting practices of government or law enforcement agencies; the failure of the biometrics market to experience continued growth; announcements or introductions of new technologies or products by our competitors; failures or problems in our biometric software products; delays in the adoption of new industry biometric standards; growth of proprietary biometric systems which do not conform to industry standards; our ability to sell services contracts in a manner that is consistent with our business model; our ability to deliver service contract milestones; and our dependence on third party contractors and consultants to deliver certain services contract milestones. 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, 2008 and other reports and filings made with the Securities and Exchange Commission.
Aware, StratiPHY, and Dr. DSL are trademarks or registered trademarks of Aware, Inc.
| Aware, Inc. Reports First Quarter 2009 Financial Results | Page 3 |
AWARE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
| | | Three Months Ended March 31, | |
| | | 2009 | | | 2008 | |
| Revenue: | | | | | | |
| Product sales | | $ | 2,819 | | | $ | 3,924 | |
| Contract revenue | | | 1,277 | | | | 1,521 | |
| Royalties | | | 477 | | | | 431 | |
| Total revenue | | | 4,573 | | | | 5,876 | |
| | | | | | | | | |
| Costs and expenses: | | | | | | | | |
| Cost of product sales (1) | | | 513 | | | | 824 | |
| Cost of contract revenue (1) | | | 908 | | | | 1,018 | |
| Research and development (1) | | | 3,111 | | | | 3,528 | |
| Selling and marketing (1) | | | 1,081 | | | | 969 | |
| General and administrative (1) | | | 1,213 | | | | 1,193 | |
| Total costs and expenses | | | 6,826 | | | | 7,532 | |
| | | | | | | | | |
| Net loss from operations | | | (2,253 | ) | | | (1,656 | ) |
| Interest income | | | 125 | | | | 383 | |
| Net loss before provision for income taxes | | | (2,128 | ) | | | (1,273 | ) |
| Provision for income taxes | | | 3 | | | | 9 | |
| Net loss | | $ | (2,131 | ) | | $ | (1,282 | ) |
| | | | | | | | | |
| Net loss per share – basic | | $ | (0.09 | ) | | $ | (0.05 | ) |
| Net loss per share – diluted | | $ | (0.09 | ) | | $ | (0.05 | ) |
| | | | | | | | | |
| Weighted average shares – basic | | | 23,281,204 | | | | 23,880,358 | |
| Weighted average shares – diluted | | | 23,281,204 | | | | 23,880,358 | |
| | (1) | Effective January 1, 2006 the Company adopted Statement of Financial Accounting Standard No. 123 (Revised), "Share-Based Payment" (FAS 123(R)). The amounts in the tables above include stock-based compensation as follows (in thousands): |
| | | Three Months Ended March 31, | |
| | | 2009 | | | 2008 | |
| Cost of product sales | | $ | 3 | | | $ | 3 | |
| Cost of contract revenue | | | 32 | | | | 34 | |
| Research and development | | | 146 | | | | 167 | |
| Sales and marketing | | | 52 | | | | 31 | |
| General and administrative | | | 158 | | | | 90 | |
| Total stock-based compensation costs | | $ | 391 | | | $ | 325 | |
| Aware, Inc. Reports First Quarter 2009 Financial Results | Page 4 |
AWARE, INC.
NON-GAAP FINANCIAL MEASURES AND RECONCILIATION
(In thousands, except per share data)
(unaudited)
| | | Three Months Ended March 31, | |
| | | 2009 | | | 2008 | |
| GAAP net loss | | $ | (2,131 | ) | | $ | (1,282 | ) |
| Stock-based compensation | | | 391 | | | | 325 | |
| Non-GAAP net loss | | $ | (1,740 | ) | | $ | (957 | ) |
| | | Three Months Ended March 31, | |
| | | 2009 | | | 2008 | |
| GAAP diluted net loss per share | | $ | (0.09 | ) | | $ | (0.05 | ) |
| Stock-based compensation per share | | | 0.02 | | | | 0.01 | |
| Non-GAAP diluted net loss per share | | $ | (0.07 | ) | | $ | (0.04 | ) |
| Aware, Inc. Reports First Quarter 2009 Financial Results | Page 5 |
AWARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(unaudited)
| | | March 31, 2009 | | | December 31, 2008 | |
| ASSETS | | | | | | |
| Cash and investments | | $ | 42,513 | | | $ | 45,516 | |
| Accounts receivable, net | | | 3,426 | | | | 2,211 | |
| Inventories, net | | | 1,558 | | | | 1,656 | |
| Property and equipment, net | | | 7,327 | | | | 7,463 | |
| Other assets, net | | | 977 | | | | 700 | |
| | | | | | | | | |
| Total assets | | $ | 55,801 | | | $ | 57,546 | |
| | | | | | | | | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | |
| | | | | | | | | |
| Total current liabilities | | $ | 2,688 | | | $ | 2,693 | |
| | | | | | | | | |
| Long-term deferred revenue | | | 330 | | | | 330 | |
| | | | | | | | | |
| Total stockholders’ equity | | | 52,783 | | | | 54,523 | |
| | | | | | | | | |
| Total liabilities and stockholders’ equity | | $ | 55,801 | | | $ | 57,546 | |
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