Exhibit 99.1
FOR IMMEDIATE RELEASE
AWARE, INC. REPORTS 2004 FOURTH QUARTER AND ANNUAL FINANCIAL RESULTS
BEDFORD, Mass., February 3, 2005 - Aware, Inc. (NASDAQ: AWRE), a worldwide
leader and innovator of broadband intellectual property, today reported
financial results for its fourth quarter ended December 31, 2004.
Revenues for the fourth quarter of 2004 were $4.6 million compared to $3.0
million for the same period last year. Net income for the fourth quarter of 2004
was $0.4 million, or $0.02 per share, compared to a net loss of $1.5 million, or
$0.07 per share, for the year-ago period.
For the year ended December 31, 2004, revenues were $16.5 million compared to
$10.8 million for the same period last year. Net loss for the year ended
December 31, 2004 was $1.4 million or $0.06 per share, compared to a net loss of
$8.0 million, or $0.35 per share, for the year-ago period.
Michael Tzannes, chief executive officer, said: "Aware's business continues to
head in the right direction. Our StratiPHY2+ licensing products are positioned
to benefit from the industry's move to ADSL2 and ADSL2+. It is these standards
that service providers worldwide are looking to for new revenue opportunities.
With ADSL2 and ADSL2+, as well as the exciting new developments underway in
VDSL2, phone companies are poised to deploy a broader array of services
including television."
Mr. Tzannes continued: "We are optimistic that we can continue to grow our
business and build shareholder value by improving our market share as the new
ADSL2+ and VDSL2 landscapes form. We continue to see opportunities for our
biometrics software products to serve a growing biometrics industry and for our
JPEG2000 products to address opportunities in the medical and digital imaging
markets. With our test and diagnostics products, we intend to capitalize on
service deployment and maintenance challenges facing ADSL service providers
worldwide."
Note: Aware's conference call will be broadcast live over the Internet today,
February 3, 2005 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)-457-2657 and referencing the confirmation number
9501493. 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
September 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 YEAR ENDED
DECEMBER 31, DECEMBER 31,
--------------------------- ---------------------------
2004 2003 2004 2003
------------ ------------- ------------ -------------
Revenue:
Product sales.................................... $1,531 $1,582 $4,759 $4,309
Contract revenue................................. 1,950 627 7,575 2,840
Royalties........................................ 1,116 815 4,151 3,694
------------ ------------- ------------ -------------
Total revenue.................................. 4,597 3,024 16,485 10,843
Costs and expenses:
Cost of product sales............................ 132 414 862 1,043
Cost of contract revenue......................... 687 570 2,683 1,567
Research and development......................... 2,328 2,560 10,013 12,074
Selling and marketing............................ 587 570 2,379 2,407
General and administrative....................... 616 530 2,473 2,387
------------ ------------- ------------ -------------
Total costs and expenses........................ 4,350 4,644 18,410 19,478
Net income (loss) from operations.................... 247 (1,620) (1,925) (8,635)
Interest income...................................... 177 135 558 597
------------ ------------- ------------ -------------
Net income (loss) before provision for income taxes.. 424 (1,485) (1,367) (8,038)
Provision for income taxes........................... - - - -
------------ ------------- ------------ -------------
Net income (loss).................................... $424 ($1,485) ($1,367) ($8,038)
============ ============= ============ =============
Net income (loss) per share - basic.................. $0.02 ($0.07) ($0.06) ($0.35)
Net income (loss) per share - diluted ............... $0.02 ($0.07) ($0.06) ($0.35)
Weighted average shares - basic ..................... 22,838 22,730 22,785 22,713
Weighted average shares - diluted ................... 23,624 22,730 22,785 22,713
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AWARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
DECEMBER 31, DECEMBER 31,
2004 2003
---------------- ------------------
ASSETS
Cash and investments........................................ $38,267 $38,964
Accounts receivable, net.................................... 3,070 2,449
Property and equipment, net................................. 8,287 8,921
Other assets, net........................................... 559 690
---------------- ------------------
Total assets................................................ $50,183 $51,024
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LIABILITIES AND STOCKHOLDERS' EQUITY
Total current liabilities................................... $1,427 $1,384
Total stockholders' equity................................. 48,756 49,640
---------------- ------------------
Total liabilities and stockholders' equity.................. $50,183 $51,024
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