Revenues for the third quarter of 2005 were $5.1 million compared to $4.6 million for the same period last year. Net income for the third quarter of 2005 was $0.6 million, or $0.02 per share, compared to net income of $0.2 million, or $0.01 per share, for the year-ago period.
For the nine months ended September 30, 2005, revenues were $12.0 million compared to $11.9 million in the same period last year. Net loss for the nine months ended September 30, 2005 was $1.3 million or $0.06 per share, compared to a net loss of $1.8 million, or $0.08 per share, for the year-ago period.
Michael Tzannes, Aware's chief executive officer commented, "Events in the industry and interactions with existing and prospective customers continue to build our confidence that our products and product developments are well positioned. The markets we are addressing are going through significant changes and we are optimistic that we can capitalize on these changes. Please join us on our conference call today where we will elaborate on the transitions that are underway in the DSL and biometrics industries and why they are positive for Aware."
Tzannes added, "From the conclusion of today's conference call until Friday, October 28 at 5:00 p.m., we invite interested parties to submit investor questions via email to Email Contact. We will post questions and answers next week on our website."
Note: Aware's conference call will be broadcast live over the Internet today, October 27, 2005 at 5:00 p.m. Eastern Time. To listen to the call, please go to http://www.aware.com, and click on "Investor Relations." The conference call may also be heard by calling (719) 457-2633 and referencing the confirmation number 1864272. A replay of the call will be archived on our website after the call.
Aware, Inc. designs, develops, licenses and markets DSL technologies that enable broadband communications over existing telephone networks. Its solutions, including splitterless G.lite, full-rate ADSL, ADSL2, ADSL2+, VDSL2, Bonded ADSL2+, Dr. DSL(R), StratiPHY(TM), StratiPHY-Bonded(TM), StratiPHY2+(TM), StratiPHY3(TM) and G.SHDSL, address central office as well as customer premise requirements. Aware is also a leading provider of standards- based biometric transaction and image compression software toolkits. More information can be found at http://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 market. Aware wishes to caution you that there are factors that could cause actual results to differ materially from the results indicated by such statements. These factors include, but are not limited to: we have a unique business model, our quarterly results are difficult to predict, we depend on a limited number of licensees, we derive a significant amount of revenue from a small number of customers, we depend on equipment companies to incorporate our technology into their products, we face intense competition from other DSL vendors, DSL technology competes with other technologies for broadband access, and our business is subject to rapid technological change. 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 quarterly report on Form 10-Q for the quarter ended June 30, 2005 and other reports and filings made with the Securities and Exchange Commission.
Dr. DSL, StratiPHY, StratiPHY2+, StratiPHY3, and StratiPHY-Bonded are trademarks or registered trademarks of Aware, Inc.
AWARE, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) Three Months Ended Nine Months Ended September 30, September 30, 2005 2004 2005 2004 Revenue: Product sales $2,417 $977 $4,163 $3,228 Contract revenue 1,920 2,556 5,061 5,625 Royalties 750 1,028 2,770 3,035 Total revenue 5,087 4,561 11,994 11,888 Costs and expenses: Cost of product sales 157 198 279 730 Cost of contract revenue 826 676 2,384 1,996 Research and development 2,487 2,511 7,400 7,685 Selling and marketing 721 521 2,064 1,792 General and administrative 644 634 1,940 1,857 Total costs and expenses 4,835 4,540 14,067 14,060 Income (loss) from operations 252 21 (2,073) (2,172) Interest income 309 143 798 381 Income (loss) before provision for income taxes 561 164 (1,275) (1,791) Provision for income taxes - - - - Net income (loss) $561 $164 ($1,275) ($1,791) Net income (loss) per share - basic $0.02 $0.01 ($0.06) ($0.08) Net income (loss) per share - diluted $0.02 $0.01 ($0.06) ($0.08) Weighted average shares - basic 23,116 22,784 23,027 22,767 Weighted average shares - diluted 25,168 22,837 23,027 22,767 AWARE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) September 30, December 31, 2005 2004 ASSETS Cash and investments $37,518 $38,266 Accounts receivable, net 3,606 3,070 Property and equipment, net 8,063 8,287 Other assets, net 1,032 560 Total assets $50,219 $50,183 LIABILITIES AND STOCKHOLDERS' EQUITY Total current liabilities $1,896 $1,427 Total stockholders' equity 48,323 48,756 Total liabilities and stockholders' equity $50,219 $50,183 Contact: Rob Weiskopf Aware, Inc. 781-276-4000