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Aware, Inc. Reports First Quarter 2019 Financial Results

BEDFORD, Mass., April 30, 2019 /PRNewswire/ -- Aware, Inc. (AWRE), a leading supplier of biometrics software and services, today reported financial results for its first quarter ended March 31, 2019. 

Revenue for the first quarter of 2019 was $3.7 million compared to $2.9 million in the same quarter last year. Operating loss in the first quarter of 2019 was $44,000 compared to an operating loss of $723,000 in the first quarter of 2018.    

The increase in revenue and operating income in the current three month period compared to the corresponding period last year was primarily due to: i) higher services revenue, ii) higher biometrics software license sales, and iii) income from a patent arrangement from an unaffiliated third party. This was partially offset by: i) lower imaging software license sales; and ii) higher total costs and expenses.

Net income in the first quarter of 2019 was $228,000, or $0.01 per diluted share, which compares to a net loss of $495,000, or $0.02 per diluted share, in the same period a year ago.

Kevin Russell, Aware's chief executive officer and president, said "Revenue for the first quarter was an improvement over the same quarter last year.  Our revenue was higher primarily due to more services revenue from contracts that we recently won.  We are optimistic about our prospects in 2019, but we are unable to predict when opportunities will result in revenue.  We are pleased with the high level of interest and activity being generated by our Knomi™ mobile biometric authentication solution in the enterprise and mobile markets."

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, iris, and voice capture, sample quality assurance, data compliance, capture hardware peripheral abstraction, centralized data processing and workflow, subsystem connectivity, and biometric matching algorithms. The products apply biometrics to enable identity-centric security solutions for applications including banking and payments, border management, credentialing and access control, intelligence and defense, and law enforcement. Aware is a publicly held company (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) the biometrics market may not experience significant growth or our products may not achieve broad acceptance; 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) we rely on third party software to develop and provide our solutions and significant defects in third party software could harm our business; xi) our operational systems and networks and products may be subject to an increasing risk of continually evolving cybersecurity or other technological risks which could result in the disclosure of company or customer confidential information, damage to our reputation, additional costs, regulatory penalties and financial losses; xii) our intellectual property is subject to limited protection; xiii) we may be sued by third parties for alleged infringement of their proprietary rights; xiv) we must attract and retain key personnel; xv) we rely on single sources of supply for certain components used in our hardware products; xvi) our business may be affected by government regulations and adverse economic conditions; xvii) we may make acquisitions that could adversely affect our results, and xviii) 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, 2018 and other reports and filings made with the Securities and Exchange Commission.

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

 

 

AWARE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(unaudited)






Three Months Ended
March 31,



2019


2018

Revenue:





    Software licenses


$1,537


$1,473

    Software maintenance


1,355


1,294

    Services


840


144

           Total revenue


3,732


2,911






Costs and expenses:





    Cost of services


518


50

    Research and development


1,760


1,875

    Selling and marketing


826


924

    General and administrative


721


785

       Total costs and expenses


3,825


3,634






Patent related income


49


-






Operating loss


(44)


(723)

Interest income


275


162

Income (loss) before provision for (benefit from) income taxes


231


(561)

Provision for (benefit from) income taxes


3


(66)

Net income (loss)


$228


($495)











Net income (loss) per share – basic


$0.01


($0.02)

Net income (loss) per share – diluted


$0.01


($0.02)











Weighted-average shares – basic


21,565


21,547

Weighted-average shares - diluted


21,582


21,573


 

 

AWARE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(unaudited)








March 31,

2019


December 31,

2018

 

ASSETS





     Cash and investments


$50,414


$51,612

     Accounts and unbilled receivables, net


5,829


5,289

     Property and equipment, net


3.995


4,085

     Deferred tax assets


5,180


5,171

     All other assets, net


508


284






     Total assets


$65,926


$66,441






 

 

LIABILITIES AND STOCKHOLDERS' EQUITY










     Accounts payable and accrued expenses


$1,398


$1,445

     Deferred revenue


2,516


3,099

     Total stockholders' equity


62,012


61,897






     Total liabilities and stockholders' equity


$65,926


$66,441

 

Cision

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