Exhibit 99.1
 
GRAPHIC
 
 

FOR IMMEDIATE RELEASE
 
Contact:
Rick Moberg
Aware, Inc.
781-276-4000

Aware, Inc. Reports Fourth Quarter and 2011
Financial Results

BEDFORD, MASS. – February 14, 2012 –
Aware, Inc. (NASDAQ: AWRE), a leading supplier of biometrics software and DSL service assurance products, today reported financial results for its fourth quarter and year ended December 31, 2011.

Revenue for the fourth quarter of 2011 was $5.9 million, a decrease of 14% compared to $6.8 million in the same quarter last year. Net income for the fourth quarter of 2011 was $959,000, or $0.05 per diluted share. These results compared to net income of $230,000, or $0.01 per diluted share, for the same period a year ago.

For the year ended December 31, 2011, revenue increased 4% to $24.6 million, compared to $23.6 million in 2010.  Net income for the year ended December 31, 2011 was $2.6 million, or $0.12 per diluted share. These results compared to net income of $180,000, or $0.01 per diluted share, for the same period a year ago.

Additional information regarding fourth quarter financial results is presented below:

Product revenue declined from $5.3 million in the fourth quarter of 2010 to $4.2 million this quarter. The decrease was due to lower DSL service assurance hardware and software revenue.  Sales of biometrics software were higher than the year ago quarter, but not enough to offset lower DSL service assurance revenue.
 
 
 

Aware, Inc.  •  40 Middlesex Turnpike  •  Bedford, MA  USA  01730-1432
Tel: (781) 276-4000  •  Fax: (781) 276-4001  •  E-mail: IR@aware.com

 
 

 
 
Aware, Inc. Reports Fourth Quarter and 2011 Financial Results
Page 2
 
The increase in services revenue from $949,000 in the fourth quarter of 2010 to $1.1 million this quarter was due to increased revenue from biometrics engineering projects.  The increase in royalties from $548,000 in the fourth quarter of 2010 to $605,000 this quarter was due to higher royalties reported to us by one of our DSL chip licensees.

Spending declined from $6.6 million in the fourth quarter of 2010 to $5.0 million this quarter. The $1.6 million spending decrease was primarily the result of three factors: i) lower hardware cost of goods sold on lower hardware sales; ii) lower legal fee spending; and iii) lower officer compensation expenses.

We had 77 full time employees at December 31, 2011, which was down from 81 heads at the end of last quarter.

Rick Moberg, Aware’s co-chief executive officer and chief financial officer, said, “Net income of almost $1.0 million this quarter was driven by revenue growth of our biometrics business and lower expenses.  Biometrics software products and services continued to sell well in the fourth quarter. In January 2012 we announced we were going to stop selling DSL hardware products. We intend to continue to sell DSL service assurance software products.  Results for the full year in 2011 were also encouraging. Net income was $2.6 million and we increased our cash and investments by $7.4 million to $47.3 million.

With respect to our patent management operations, our board is continuing to review its strategic options, including a potential spin-off, sale, or licensing of patents.”

 
 

 
 
Aware, Inc. Reports Fourth Quarter and 2011 Financial Results
Page 3
 
About Aware
Aware is a leading software and technology supplier for the biometrics, telecommunications, and healthcare industries. Aware's biometrics software products and services are provided to solution vendors and system integrators for use by government agencies towards applications including border management, secure credentials, law enforcement, and national defense. Aware’s DSL Service Assurance Group offers test and diagnostics software and hardware products that enable broadband service providers to manage their DSL networks. Aware also provides standards-based medical imaging software products to the healthcare industry.  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 service assurance 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.

General factors include, but are not limited to: our quarterly results are unpredictable and may fluctuate significantly; our business is subject to rapid technological change; we face intense competition from a wide range of competitors; our intellectual property is subject to limited protection; our business may be affected by our use of open source software; our business may be affected by government regulations; adverse economic conditions; and our ability to obtain or enforce patents could be affected by new laws, regulations or rules. DSL service assurance factors include, but are not limited to: our DSL service assurance product line depends upon a limited number of customers; our DSL service assurance hardware and software products could have quality problems; we depend on a single source contract manufacturer for the manufacture of our DSL hardware products; and we are dependent on single source suppliers for components in our DSL hardware products. Biometric factors include, but are not limited to: market acceptance of our biometric technologies and products; changes in contracting practices of government or law enforcement agencies; the failure of the biometrics market to experience continued growth; announcements or introductions of new technologies or products by our competitors; failures or problems in our biometric software products; delays in the adoption of new industry biometric standards; growth of proprietary biometric systems which do not conform to industry standards; our ability to sell services contracts in a manner that is consistent with our business model; our ability to deliver services contract milestones; and our dependence on third party contractors and consultants to deliver certain services contract milestones. Further, there can be no assurance as to the timing of a possible transaction with respect to our patent management operations, whether it will ultimately be structured as a spin-off, sale, or license or whether such a transaction will be completed.

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, 2010 and other reports and filings made with the Securities and Exchange Commission.

Aware and Dr. DSL are trademarks or registered trademarks of Aware, Inc.
Any other trademarks appearing herein are the property of their respective owners.
 
 
 

 
 
Aware, Inc. Reports Fourth Quarter and 2011 Financial Results
Page 4
 
AWARE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
 (unaudited)


   
Three Months Ended
   
Year Ended
 
   
December 31,
   
December 31,
 
   
2011
   
2010
   
2011
   
2010
 
                         
Revenue:
                       
    Product sales
  $ 4,152     $ 5,326     $ 18,129     $ 18,914  
    Services
    1,135       949       4,311       1,992  
    Royalties
    605       547       2,146       2,654  
Total revenue
    5,892       6,822       24,586       23,560  
                                 
Costs and expenses:
                               
    Cost of product sales
    552       1,250       3,637       4,362  
    Cost of services
    556       362       1,777       714  
    Research and development
    1,639       1,898       7,240       8,096  
    Selling and marketing
    1,285       1,135       4,441       4,283  
    General and administrative
    936       1,969       5,005       6,438  
Total costs and expenses
    4,968       6,614       22,100       23,893  
                                 
Income (loss) from operations
    924       208       2,486       (333 )
Other income     -       -       -       425  
Interest income
    35       22       83       90  
                                 
Income before provision for income taxes
    959       230       2,569       182  
Provision for income taxes
    -       -       2       2  
                                 
Net income
  $ 959     $ 230     $ 2,567     $ 180  
                                 
                                 
Net income per share – basic 
  $ 0.05     $ 0.01     $ 0.12     $ 0.01  
Net income per share – diluted
  $ 0.05     $ 0.01     $ 0.12     $ 0.01  
                                 
Weighted average shares – basic
    20,612       20,040       20,534       19,971  
Weighted average shares - diluted
    20,775       20,527       20,735       20,182  

 
 

 
 
Aware, Inc. Reports Fourth Quarter and 2011 Financial Results
Page 5
 
AWARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(unaudited)


   
December 31,
2011
   
December 31,
2010
 
ASSETS
           
     Cash and investments
  $ 46,577     $ 39,949  
     Accounts receivable, net
    3,546       4,968  
     Inventories, net
    547       1,863  
     Property and equipment, net
    6,232       6,360  
     Investments
    727       -  
     Other assets, net
    222       260  
                 
     Total assets
  $ 57,851     $ 53,400  
                 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
                 
     Total current liabilities
  $ 2,814     $ 3,197  
     Long-term deferred revenue
    462       320  
     Total stockholders’ equity 
    54,575       49,883  
                 
     Total liabilities and stockholders’ equity
  $ 57,851     $ 53,400  
 
 
 
 
 
###
 
 

 

Aware, Inc.  •  40 Middlesex Turnpike  •  Bedford, MA  USA  01730-1432
Tel: (781) 276-4000  •  Fax: (781) 276-4001  •  E-mail: IR@aware.com

The following information was filed by Aware Inc (AWRE) on Tuesday, February 14, 2012 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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