Aware, Inc. Reports 2003 Fourth Quarter and Annual Financial Results.Business Editors BEDFORD, Mass.--(BUSINESS WIRE)--Feb. 5, 2004 Aware, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : AWRE AWRE Atomic Weapons Research Establishment AWRE Australian Workshop on Requirements Engineering AWRE Automatic Write Reallocation Enable ), a worldwide leader and innovator of broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). intellectual property, today reported financial results for its fourth quarter and fiscal year ended December 31, 2003. Revenues for the fourth quarter of 2003 were $3.2 million compared to $2.3 million for the same period last year. Net loss for the fourth quarter of 2003 was $1.3 million, or $0.06 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to a net loss of $4.3 million, or $0.19 per diluted share, for the year-ago period. For the year ended December 31, 2003, revenues were $11.0 million compared to $13.8 million in the same period last year. Net loss for the year ended December 31, 2003 was $7.9 million or $0.35 per diluted share, compared to a net loss of $18.7 million, or $0.83 per diluted share, for the year-ago period. Net loss for the year ended December 31, 2002 included a $7.1 million deferred tax asset write-off. Michael Tzannes, chief executive officer, said: "The new ADSL See DSL. ADSL - Asymmetric Digital Subscriber Line 2 and ADSL2+ standards continue to gain momentum in the ADSL industry. These new standards are enabling higher speeds, longer reach and better diagnostics and maintenance capabilities. We believe that we are positioned to benefit from ADSL2 and ADSL2+ deployments with our StratiPHY family of intellectual property offerings. In addition, our Dr. DSL DSL in full Digital Subscriber Line Broadband digital communications connection that operates over standard copper telephone wires. It requires a DSL modem, which splits transmissions into two frequency bands: the lower frequencies for voice (ordinary test and diagnostics and our biometrics The biological identification of a person. Examples are face, iris and retinal patterns, hand geometry and voice. Increasingly built into laptop computers, fingerprint readers have become popular as a secure method for identification. software businesses have shown improvement over the last few quarters and look promising for the future." He concluded, "The business outlook for Aware is more positive than it has been for many months." Note: Aware's conference call will be broadcast live over the Internet today, February 5, 2004 at 5:00 p.m. Eastern Time. To listen to the call, please go to www.aware.com, and click on "Investor Relations Investor relations The process by which the corporation communicates with its investors. ." The conference call may also be heard by calling (719) 457-2633 and referencing the confirmation number 197889. A replay of the call will be archived on our website after the call. About Aware 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 Refers to the standard ADSL technology in contrast to the slower-speed G.lite version. See DSL. , ADSL2, ADSL2+, Dr. DSL(R), StratiPHY2+(TM), and G.SHDSL A DSL technology from the ITU (G.991.2) that provides symmetric transmission from 192 Kbps to 2.3 Mbps using a single copper pair, depending on distance from the central office (from 20,000 ft. to 6,500 ft.). With two wire pairs, 384 Kbps to 4.6 Mbps can be achieved. G. , address central office as well as customer premise requirements. Aware is also a leading provider of standards-based biometric bi·o·met·rics n. (used with a sing. verb) The statistical study of biological phenomena. bi transaction and image compression Noun 1. image compression - the compression of graphics for storage or transmission compression - encoding information while reducing the bandwidth or bits required software toolkits. More information about Aware can be found at http://www.aware.com. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Warning Portions of this release contain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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 one customer, 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 See broadband and wireless broadband. , 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 Form 10-Q See 10-Q. for the quarter ended September 30, 2003 and other reports and filings made with the Securities and Exchange Commission.
AWARE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in Thousands, Except Per Share Data)
Three Months Ended Year Ended
December 31, December 31,
2003 2002 2003 2002
Revenue:
Product sales $1,582 $1,131 $4,309 $4,530
Contract revenue 826 620 3,040 6,797
Royalties 816 552 3,694 2,517
Total revenue 3,224 2,303 11,043 13,844
Costs and expenses:
Cost of product sales 414 124 1,043 955
Cost of contract revenue 589 545 1,587 4,889
Research and development 2,561 4,042 12,074 13,956
Selling and marketing 570 691 2,407 2,966
General and administrative 530 1,441 2,387 3,607
Total costs and expenses 4,664 6,843 19,498 26,373
Loss from operations (1,440) (4,540) (8,455) (12,529)
Interest income 134 199 597 894
Loss before provision for income
taxes (1,306) (4,341) (7,858) (11,635)
Provision for income taxes - - - (7,093)
Net loss ($1,306) ($4,341) ($7,858) ($18,728)
Net loss per share - basic and
diluted ($0.06) ($0.19) ($0.35) ($0.83)
Weighted average shares - basic
and diluted 22,730 22,690 22,713 22,679
AWARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in Thousands)
December 31, December 31,
2003 2002
ASSETS
Cash and investments $38,964 $47,118
Accounts receivable, net 2,649 1,258
Property and equipment, net 8,921 10,038
Other assets, net 690 823
Total assets $51,224 $59,237
LIABILITIES AND STOCKHOLDERS' EQUITY
Total current liabilities $1,404 $1,659
Total stockholders' equity 49,820 57,578
Total liabilities and stockholders'
equity $51,224 $59,237
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