Exhibit 99.1
[AWARE LOGO APPEARS HERE]
FOR IMMEDIATE RELEASE
Contact:
Keith Farris
Aware, Inc.
781-276-4000
AWARE, INC. REPORTS FIRST QUARTER 2007
FINANCIAL RESULTS
BEDFORD, MASS. - MAY 3, 2007 - Aware, Inc. (NASDAQ: AWRE), a leading supplier of
broadband technology and biometrics software, today reported financial results
for its first quarter ended March 31, 2007.
Revenues for the first quarter of 2007 were $5.8 million, compared to $6.1
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.
GAAP net loss for the first quarter of 2007 was $0.1 million, or $0.00 per
share, which included $0.2 million of stock-based compensation charges in
accordance with the provisions of FAS 123(R). This compared to GAAP net income
of $0.5 million, or $0.02 per share, for the same period a year ago.
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AWARE, INC. O 40 MIDDLESEX TURNPIKE O BEDFORD, MA USA 01730-1432
TEL: (781) 276-4000 O FAX: (781) 276-4001 O E-MAIL: AWARE@AWARE.COM
AWARE, INC. REPORTS 2007 FIRST QUARTER FINANCIAL RESULTS PAGE 2
Non-GAAP net income for the first quarter of 2007, excluding the effect of
stock-based compensation, was $0.1 million, or $0.01 per diluted share.
Michael Tzannes, Aware's chief executive officer, said, "We are pleased with our
progress in each of the markets we are addressing. Our outlook for the future is
very positive. The rollout of ADSL2+ and VDSL2 networks is driving demand for
our DSL licensing and our DSL test and diagnostics products. Interest in secure
credentialing at government agencies is increasing demand for our biometrics
software products. Encouraging highlights from this quarter include:
o Sales of DSL test and diagnostics products were up this quarter
as our products gain traction in the service assurance market.
In addition, one of our OEM customers announced a significant
deployment win for service assurance solutions that utilize our
products.
o In biometrics, sales of both our traditional products as well as
our new server-based products were strong this quarter. During
Q1, a large government agency successfully deployed our products
in a PIV-compliant secure credentialing system."
Note: Aware's conference call will be broadcast live over the Internet today,
May 3, 2007 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)
457-2649 and referencing the confirmation number 5029784. A replay of the call
will be archived on our website after the call.
ABOUT AWARE
Aware is a leading technology supplier for the telecommunications 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(R)
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. The DSL 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
a small number of customers, 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 annual report on
Form 10-K for the fiscal year ended December 31, 2006 and other reports and
filings made with the Securities and Exchange Commission.
DR. DSL, STRATIPHY, STRATIPHY2+, STRATIPHY3, AND STRATIPHY-BONDED ARE
TRADEMARKS OR REGISTERED TRADEMARKS OF AWARE, INC.
AWARE, INC. REPORTS 2007 FIRST QUARTER FINANCIAL RESULTS PAGE 3
AWARE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
------------------------------
2007 2006
------------ ------------
Revenue:
Product sales ................................ $ 3,465 $ 1,718
Contract revenue ............................. 1,834 3,692
Royalties .................................... 501 724
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Total Revenue ............................ 5,800 6,134
Costs and expenses:
Cost of product sales (1) .................... 496 152
Cost of contract revenue (1) ................. 1,352 1,246
Research and development (1) ................. 2,789 2,790
Selling and marketing (1) .................... 872 814
General and administrative (1) ............... 884 1,004
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Total costs and expenses ................. 6,393 6,006
Net income (loss) from operations ................. (593) 128
Interest income ................................... 505 394
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Net income (loss) before provision for income taxes (88) 522
Provision for income taxes ........................ (10) -
------------ ------------
Net income (loss) ................................. ($ 98) $ 522
============ ============
Net income (loss) per share - basic ............... ($ 0.00) $ 0.02
Net income (loss) per share - diluted ............. ($ 0.00) $ 0.02
Weighted average shares - basic ................... 23,656,931 23,307,208
Weighted average shares - diluted ................. 23,656,931 24,839,567
(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,
------------------------
2007 2006
---------- ----------
Cost of product sales .............. $ 2 $ 3
Cost of contract revenue ........... 36 64
Research and development ........... 85 149
Sales and marketing ................ 21 68
General and administrative ......... 91 213
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Total stock-based compensation costs $235 $497
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AWARE, INC. REPORTS 2007 FIRST QUARTER FINANCIAL RESULTS PAGE 4
AWARE, INC.
NON-GAAP FINANCIAL MEASURES AND RECONCILIATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(unaudited)
THREE MONTHS ENDED
MARCH 31,
------------------------
2007 2006
---------- ----------
GAAP net income (loss) ...... ($ 98) $ 522
Stock-based compensation 235 497
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Non-GAAP net income (loss) .. $ 137 $1,019
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THREE MONTHS ENDED
MARCH 31,
------------------------
2007 2006
---------- ----------
GAAP diluted net income (loss) per share ($ 0.00) $ 0.02
Stock-based compensation .......... 0.01 0.02
---------- ----------
Non-GAAP diluted net income (loss) per
share .................................. $ 0.01 $ 0.04
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AWARE, INC. REPORTS 2007 FIRST QUARTER FINANCIAL RESULTS PAGE 5
AWARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
(UNAUDITED)
MARCH 31, DECEMBER 31,
2007 2006
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ASSETS
Cash and investments ..................... $39,483 $39,802
Accounts receivable, net ................. 5,341 4,738
Property and equipment, net .............. 8,181 8,123
Other assets, net ........................ 2,335 1,923
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Total assets ............................. $55,340 $54,586
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LIABILITIES AND STOCKHOLDERS' EQUITY
Total current liabilities ................ $ 3,326 $ 2,886
Long-term deferred revenue ............... 330 330
Total stockholders' equity ............... 51,684 51,370
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Total liabilities and stockholders' equity $55,340 $54,586
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