Aware, Inc. Reports Second Quarter 2015 Financial Results

Jul 23, 2015, 16:05 ET from Aware, Inc.

BEDFORD, Mass., July 23, 2015 /PRNewswire/ -- Aware, Inc. (NASDAQ: AWRE), a leading supplier of biometrics software and services, today reported financial results for its second quarter ended June 30, 2015. 

Revenue for the second quarter of 2015 was $4.5 million, a decrease of 33% compared to $6.8 million in the same quarter last year.  Net income in the second quarter of 2015 was $0.3 million, or $0.01 per diluted share, which compared to $0.9 million, or $0.04 per diluted share, in the same period a year ago. 

Lower revenue and net income in the second quarter of this year versus last year were primarily due to $2.0 million less hardware revenue and lower services revenue from a large U.S. government services project that is coming to an end.  Revenue from software licenses and software maintenance increased 10% over the second quarter of last year.

For the six months ended June 30, 2015, revenue decreased 36% to $8.6 million, compared to $13.4 million in the same period a year ago.  Net income for the six months ended June 30, 2015 was $0.6 million, or $0.03 per diluted share, which compared to net income of $1.7 million, or $0.08 per diluted share, in the same period a year ago.

Lower revenue and net income in the first six months of 2015 versus the same period last year were primarily due to $4.7 million less hardware revenue, lower DSL royalties, and lower services revenue from the U.S. government project mentioned above.  Revenue from software licenses and software maintenance increased 8% over the six month period last year.

Rick Moberg, Aware's co-chief executive officer and chief financial officer, said "Quarterly revenue and earnings fluctuate based on project wins and the timing of delivery of licenses and services for those projects.  Financial results this quarter are a reflection of these fluctuations.  Moreover, we are moving through a transition in which we are working on lessening our dependence on government markets by moving into new commercial markets. Commercial biometrics markets represent a potential area of growth for us, but it is too early to predict whether we will be successful in these markets. We are optimistic they could develop into meaningful sources of revenue."

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, and iris autocapture, image quality assurance, data compliance, capture hardware peripheral abstraction, centralized data processing and workflow, subsystem connectivity, and biometric matching algorithms. The products are used to enable identity-centric security solutions with biometrics for applications including 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 decline 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) our intellectual property is subject to limited protection; xi) we may be sued by third parties for alleged infringement of their proprietary rights; xii) we must attract and retain key personnel; xiii) we rely on single sources of supply for certain components used in our hardware products; xiv) our business may be affected by government regulations and adverse economic conditions; xv) we may make acquisitions that could adversely affect our results, and xvi) 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, 2014 and other reports and filings made with the Securities and Exchange Commission.

Aware is a trademark or registered trademark of Aware, Inc. Any other trademarks appearing herein are the property of their respective owners.

 

AWARE, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

 (unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2015

2014

2015

2014

Revenue:

    Software licenses

$2,272

$2,065

$3,921

$3,682

    Software maintenance

1,278

1,152

2,431

2,197

    Services

855

1,338

2,075

2,346

    Hardware

-

2,048

-

4,681

    Royalties

105

164

206

478

              Total revenue

4,510

6,767

8,633

13,384

Costs and expenses:

    Cost of hardware

-

1,411

-

3,313

    Cost of services

569

618

1,116

1,082

    Research and development

1,439

1,400

2,874

2,679

    Selling and marketing

1,064

981

2,036

1,839

    General and administrative

961

975

1,746

1,779

       Total costs and expenses

4,033

5,385

7,772

10,692

Operating income

477

1,382

861

2,692

Other income/(expense)

-

(59)

12

(59)

Interest income

33

52

74

139

Income before provision for income taxes

510

1,375

947

2,772

Provision for income taxes

191

510

356

1,026

Net income

$319

$865

$591

$1,746

Net income per share – basic

$0.01

$0.04

$0.03

$0.08

Net income per share – diluted

$0.01

$0.04

$0.03

$0.08

Weighted-average shares – basic

22,867

22,630

22,866

22,628

Weighted-average shares - diluted

23,029

22,837

22,958

22,769

 

AWARE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(unaudited)

June 30,

2015

December 31,

2014

 

ASSETS

     Cash and investments

$45,369

$45,413

     Accounts receivable, net

4,821

3,619

     Property and equipment, net

5,140

5,289

     Deferred tax assets

926

972

     All other assets, net

1,520

600

     Total assets

$57,776

$55,893

LIABILITIES AND STOCKHOLDERS' EQUITY

     Total current liabilities

$3,921

$3,430

     Long-term deferred revenue

183

74

     Total stockholders' equity

53,672

52,389

     Total liabilities and stockholders' equity

$57,776

$55,893

 

SOURCE Aware, Inc.



RELATED LINKS

http://www.aware.com