Exhibit 99.1
FOR IMMEDIATE RELEASE
AWARE, INC. REPORTS 2004 THIRD QUARTER
FINANCIAL RESULTS
BEDFORD, Mass., November 4, 2004 - Aware, Inc. (NASDAQ: AWRE), a worldwide
leader and innovator of broadband intellectual property, today reported
financial results for its third quarter ended September 30, 2004.
Revenues for the third quarter of 2004 were $4.6 million compared to $3.1
million for the same period last year. Net income for the third quarter of 2004
was $0.2 million, or $0.01 per share, compared to a net loss of $1.7 million, or
$0.08 per share, for the year-ago period.
For the nine months ended September 30, 2004, revenues were $11.9 million
compared to $7.8 million in the same period last year. Net loss for the nine
months ended September 30, 2004 was $1.8 million or $0.08 per share, compared to
a net loss of $6.6 million, or $0.29 per share, for the year-ago period.
Michael Tzannes, chief executive officer, said: "Aware's business is headed in
the right direction. Our licensing products, which are centered around our
StratiPHY(TM) intellectual property platform, are capitalizing on the transition
to new ADSL2 and ADSL2+ standards by the ADSL industry. VDSL2 is emerging as an
exciting new ultra high-speed technology with opportunities for Aware and for
the industry. Our test and diagnostics products are positioned to address the
challenges that service providers encounter as they offer new broadband services
including video. Our biometrics software products are serving a growing
biometrics industry and our JPEG2000 products are addressing opportunities in
the medical and digital imaging markets. "
Mr. Tzannes continued: "Our financial performance this quarter confirms that we
are on the right track. We are optimistic that we can continue on this path and
bring more successful days to Aware and our stakeholders."
Note: Aware's conference call will be broadcast live over the Internet today,
November 4, 2004 at 5:00 p.m. Eastern Time. To listen to the call, please go to
WWW.AWARE.COM, and click on "Investor Relations." The conference call may also
be heard by calling (719) 457-2729 and referencing the confirmation number
873352. A replay of the call will be archived on our website after the call.
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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+, Dr. DSL(R),
StratiPHY2+(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 about
Aware 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 market.
Aware wishes to caution you that there are factors that could cause actual
results to differ materially from the results indicated by such statements.
These 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 one customer, 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 quarterly report on Form 10-Q for the quarter ended
June 30, 2004 and other reports and filings made with the Securities and
Exchange Commission.
Contact: Rob Weiskopf
Aware, Inc.
781-276-4000
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AWARE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
----------------------------- ------------------------------
2004 2003 2004 2003
-------------- -------------- -------------- --------------
Revenue:
Product sales....................................... $ 977 $1,431 $3,228 $2,727
Contract revenue.................................... 2,556 691 5,625 2,213
Royalties........................................... 1,028 933 3,035 2,879
-------------- -------------- -------------- --------------
Total revenue..................................... 4,561 3,055 11,888 7,819
Costs and expenses:
Cost of product sales............................... 198 293 730 629
Cost of contract revenue............................ 676 447 1,996 998
Research and development............................ 2,511 2,962 7,685 9,513
Selling and marketing............................... 521 637 1,792 1,837
General and administrative.......................... 634 598 1,857 1,857
-------------- -------------- -------------- --------------
Total costs and expenses........................... 4,540 4,937 14,060 14,834
Net income (loss) from operations....................... 21 (1,882) (2,172) (7,015)
Interest income......................................... 143 136 381 463
-------------- -------------- -------------- --------------
Net income (loss) before provision for income taxes..... 164 (1,746) (1,791) (6,552)
Provision for income taxes.............................. - - - -
-------------- -------------- -------------- --------------
Net income (loss)....................................... $ 164 ($1,746) ($1,791) ($6,552)
============== ============== ============== ==============
Net income (loss) per share - basic..................... $ 0.01 ($0.08) ($0.08) ($0.29)
Net income (loss) per share - diluted .................. $ 0.01 ($0.08) ($0.08) ($0.29)
Weighted average shares - basic ........................ 22,784 22,718 22,767 22,707
Weighted average shares - diluted ...................... 22,837 22,718 22,767 22,707
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AWARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
SEPTEMBER 30, DECEMBER 31,
2004 2003
---------------- ------------------
ASSETS
Cash and investments............................................... $36,940 $38,964
Accounts receivable, net........................................... 3,851 2,449
Property and equipment, net........................................ 8,327 8,921
Other assets, net.................................................. 518 690
---------------- ------------------
Total assets....................................................... $49,636 $51,024
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LIABILITIES AND STOCKHOLDERS' EQUITY
Total current liabilities.......................................... $ 1,692 $ 1,384
Total stockholders' equity......................................... 47,944 49,640
---------------- ------------------
Total liabilities and stockholders' equity......................... $49,636 $51,024
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