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FOR IMMEDIATE RELEASE
Aware, Inc. Reports Fourth Quarter and 2019
BEDFORD, MASS. – February 11, 2020 – Aware, Inc. (NASDAQ: AWRE), a leading supplier of biometrics software and services, today reported financial results for its quarter and year ended December 31, 2019.
Revenue for the fourth quarter of 2019 was $2.4 million compared to $4.1 million in the same quarter last year. Operating loss in the fourth quarter of 2019 was $1.7 million compared to operating income of $0.3 million in the fourth quarter of 2018.
The decrease in revenue was primary due to lower biometrics software license revenue and lower biometrics services revenue, and to a lesser extent lower biometrics maintenance revenue. This was partially offset by slightly higher imaging software license revenue and imaging maintenance revenue. Lower biometrics software license revenue was primarily due to lower revenue from the license agreement we entered into with a systems integrator in the second quarter of 2018, and to a lesser extent generally lower biometrics license sales to our other biometrics customers. Lower biometrics services revenue was primarily due to: i) lower services revenue from the project with aforementioned systems integrator; and ii) fewer service projects in the current year quarter as compared to the corresponding period of 2018. The operating loss in the fourth quarter of 2019 as compared to operating income in the fourth quarter of 2018 was primarily due to: i) lower revenue in the fourth quarter of 2019; and ii) higher total costs and expenses in the fourth quarter of 2019.
|Aware, Inc. Reports Fourth Quarter and 2019 Financial Results||Page 2|
Net loss in the fourth quarter of 2019 was $7.5 million, or $0.35 per diluted share, which compares to a net income of $0.6 million, or $0.03 per diluted share, in the same period a year ago.
Revenue for the year ended December 31, 2019 was $12.2 million compared to $16.1 million in 2018. Operating loss for 2019 was $4.1 million compared to operating income of $0.4 million in 2018.
The decrease in revenue was primarily due to lower biometrics software license revenue and to a lesser extent lower biometrics services revenue, biometric maintenance revenue and imaging software license revenue. This was partially offset by higher imaging maintenance revenue. Lower biometrics software license revenue was primarily due to: i) a software license agreement we entered into with a large commercial customer in the third quarter of 2018, whereas we had no such corresponding license sale in 2019, and ii) lower revenue from the software license agreement we entered into with a systems integrator in the second quarter of 2018. Lower operating income in 2019 as compared to 2018 was primarily due to lower revenue in 2019, and to a lesser extent higher total costs and expenses in 2019.
Net loss for the year ended December 31, 2019 was $8.3 million, or $0.39 per diluted share, which compared to net income of $1.2 million, or $0.06 per diluted share in 2018. In addition to the $4.1 million operating loss in 2019, we recorded a $5.2 million tax provision that was partially offset by $1.0 million of interest income. The tax provision was primarily due to an analysis of the future realization of our deferred tax assets. We evaluated and considered all available evidence, both positive and negative, to determine whether, based on the weight of that evidence, a valuation allowance for our deferred tax assets was needed. As a result of this analysis, we concluded that it is more likely than not that the deferred tax assets of $6.3 million would not be realized. Accordingly, we recorded a full valuation of $6.3 million against the deferred tax asset as of the end of 2019. The valuation allowance results in a net deferred tax provision of $5.2 million for 2019.
Robert Eckel, Aware’s chief executive officer and president, said “Our revenue results for the fourth quarter were below expectations. We had a number of deals that were not closed and slid from the fourth quarter into the first quarter of 2020. As we enter into 2020, we are focused on executing a shift in our business model to a focus on long-term subscription-based accounts in the commercial and government markets. We have increased our emphasis on the front end of the business and have hired a vice president of worldwide sales and are looking to further leverage our multi-modal biometrics domain expertise, unique liveness spoofing prevention technology and customer-managed and integration ready biometrics frameworks, platforms and software building blocks to drive company growth. We are focused in “Bringing Your Identity Solutions to Life™” by helping our customers enhance their compliance, security, fraud prevention and deterrence, data protection, processes, return on investment, peace of mind through the use of Aware software in their identity solutions. We plan on making continued investments in engineering, program management and sales and marketing in 2020 to enhance our productized solutions and business development addressing the growing needs for mobile biometric solutions in multiple markets. We are excited about the opportunity for our company and encouraged by the quality, quantity and variety of companies and organizations who are looking to Aware for biometric solutions to address their use cases.”
The following information was filed by Aware Inc (AWRE) on Tuesday, February 11, 2020 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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