Exhibit 99.1
 
(LOGO)
 
FOR IMMEDIATE RELEASE

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

Aware, Inc. Reports Fourth Quarter and 2013
Financial Results

BEDFORD, MASS. – February 11, 2014
Aware, Inc. (NASDAQ: AWRE), a leading supplier of biometrics software and services, today reported financial results for its fourth quarter and year ended December 31, 2013.

The Company completed the previously announced shutdown of its DSL service assurance software business in the fourth quarter and reported results from that business in discontinued operations effective this quarter.

Revenue from continuing operations for the fourth quarter of 2013 was $5.6 million, an increase of 16%, which compares to $4.9 million in the same quarter last year. Income from continuing operations for the current quarter was $0.5 million compared to $6.0 million for the same period a year ago.  Income from continuing operations in the fourth quarter of 2012 included $1.1 million from a patent arrangement and an income tax benefit of $3.0 million.

Income from discontinued operations, net of income taxes was $1.1 million in the fourth quarter of 2013 compared to a loss of $39,000 in the year ago period. The income from discontinued operations in the current quarter included $2.0 million of income from a customer termination agreement.
 
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 2013 Financial Results Page 2
   
Net income for the fourth quarter of 2013 was $1.6 million, or $0.07 per diluted share, which compares to net income of $6.0 million, or $0.27 per diluted share, for the same period a year ago.

For the year ended December 31, 2013, revenue from continuing operations was $19.4 million, an increase of 12%, which compares to $17.3 million in 2012.  Income from continuing operations in 2013 was $3.8 million compared to $72.4 million in 2012. Income from continuing operations in 2012 included an $86.4 million gain on the sale of patents.

Loss from discontinued operations, net of income taxes was $1.2 million for the year ended December 31, 2013 compared to a loss of $76,000 in 2012. The loss from discontinued operations in 2013 included $2.9 million of exit costs associated with the shutdown of the DSL service assurance software business, which was partially offset by $2.0 million of income from a customer termination agreement.

Net income for the year ended December 31, 2013 was $2.6 million, or $0.11 per diluted share, which compares to net income of $72.3 million, or $3.28 per diluted share, in 2012.

Rick Moberg, Aware’s co-chief executive officer and chief financial officer, said, “With the completion of the shutdown of our DSL service assurance business in the fourth quarter of 2013, we have become essentially a biometrics software and services company.  I am pleased to report that this business turned in another solid performance in 2013.  While it is difficult for us to forecast future financial performance, we are optimistic about our prospects for 2014. Our optimism is founded in revenue backlog as of December 31, 2013, the expected launch of new products, and new biometrics project opportunities.”
 
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.
 
 
 

 


   
Aware, Inc. Reports Fourth Quarter and 2013 Financial Results Page 3
   
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) we derive a significant portion of our revenue from third party channel partners; iv) we face intense competition from other biometrics solution providers; v) our business is subject to rapid technological change; vi) our software products may have errors, defects or bugs which could harm our business; vii) our business may be adversely affected by our use of open source software; viii) our intellectual property is subject to limited protection; ix) we may be sued by third parties for alleged infringement of their proprietary rights; x) we must attract and retain key personnel; xi) we rely on single sources of supply for certain components used in our hardware products; xii) our business may be affected by government regulations and adverse economic conditions; and xiii) we may make acquisitions that could adversely affect our results.

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, 2012 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. Reports Fourth Quarter and 2013 Financial Results Page 4
   
AWARE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
 (unaudited)
             
   
Three Months Ended
December 31,
   
Year Ended
December 31,
 
   
2013
   
2012
   
2013
   
2012
 
Revenue:
                       
    Software licenses                                                                                   
  $ 1,382     $ 2,709     $ 8,241     $ 9,525  
    Software maintenance                                                                                   
    952       830       3,866       3,038  
    Services                                                                                   
    1,068       748       3,148       2,571  
    Hardware sales                                                                                   
    2,053       -       3,182       -  
    Royalties                                                                                   
    182       571       920       2,170  
         Total revenue                                                                                  
    5,637       4,858       19,357       17,304  
                                 
Costs and expenses:
                               
    Cost of hardware sales                                                                                   
    1,551       -       2,365       -  
    Cost of services                                                                                   
    468       431       1,503       1,542  
    Research and development                                                                                   
    1,043       803       4,085       3,489  
    Selling and marketing                                                                                   
    879       913       3,344       3,370  
    General and administrative
    942       945       3,522       3,860  
       Total costs and expenses
    4,883       3,092       14,819       12,261  
                                 
Operating income before patent related income
    754       1,766       4,538       5,043  
Gain on sale of patent assets
    -       -       -       86,394  
Income from patent arrangement
    -       1,121       780       1,121  
Operating income after patent related income
    754       2,887       5,318       92,558  
Other income
    (3 )     -       23       85  
Interest income
    88       90       328       227  
Income from continuing operations before income taxes
    839       2,977       5,669       92,870  
Provision for (benefit from) income taxes
    314       (3,028 )     1,917       20,487  
Income from continuing operations
    525       6,005       3,752       72,383  
Income (loss) from discontinued operations, net of income taxes
    1,060       (39 )     (1,156 )     (76 )
                                 
Net income                                                                                   
  $ 1,585     $ 5,966     $ 2,596     $ 72,307  
                                 
Basic net income per share:
                               
   Basic net income per share from continuing operations 
  $ 0.02     $ 0.27     $ 0.17     $ 3.32  
   Basic net income (loss) per share from discontinued operations 
    0.05       (0.00 )     (0.05 )     (0.00 )
Basic net income per share                                                                                   
  $ 0.07     $ 0.27     $ 0.12     $ 3.32  
                                 
Diluted net income per share:
                               
   Diluted net income per share from continuing operations 
  $ 0.02     $ 0.27     $ 0.16     $ 3.28  
   Diluted net income (loss) per share from discontinued operations 
    0.05       (0.00 )     (0.05 )     (0.00 )
Diluted net income per share                                                                                   
  $ 0.07     $ 0.27     $ 0.11     $ 3.28  
                                 
Weighted-average shares – basic                                                                                   
    22,572       22,422       22,543       21,814  
Weighted-average shares - diluted                                                                                   
    22,693       22,539       22,641       22,071  
 
 
 

 

 
   
Aware, Inc. Reports Fourth Quarter and 2013 Financial Results Page 5
   
AWARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(unaudited)
             
   
December 31,
2013
   
December 31,
2012
 
ASSETS
           
     Cash and investments
  $ 75,414     $ 73,084  
     Accounts receivable, net
    4,582       4,578  
     Inventories
    1,601       -  
     Property and equipment, net
    5,582       5,904  
     Deferred tax assets
    1,145       1,760  
     Other assets, net
    1,005       528  
                 
     Total assets
  $ 89,329     $ 85,854  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
                 
     Total current liabilities
  $ 4,161     $ 3,639  
     Long-term deferred revenue
    18       319  
     Total stockholders’ equity 
    85,150       81,896  
                 
     Total liabilities and stockholders’ equity
  $ 89,329     $ 85,854  
 
###
 
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 11, 2014 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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