Aware, Inc. Reports First Quarter 2001 Financial Results; Revenues $8.2M, EPS $0.09.Business/Technology Editors BEDFORD Bedford, town, England Bedford, town (1991 pop. 75,632), county seat of Bedfordshire, central England, on the Ouse River. It is an important industrial center; diesel engines, pumps, turbines, agricultural machinery, electrical equipment, and transistors , Mass.--(BUSINESS WIRE)--April 26, 2001 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 ) reported financial results for its first quarter ended March 31, 2001. First quarter 2001 revenue increased 25 percent to $8.2 million, compared to $6.6 million for the quarter ended March 31, 2000. Net income this quarter was $2.1 million, or $0.09 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. Net income in the first quarter of 2000, which included a $1.6 million non-recurring charge, was $0.6 million, or $0.03 per diluted share. Michael Tzannes, chief executive officer, said: "The ADSL See DSL. ADSL - Asymmetric Digital Subscriber Line subscriber market continues to grow as subscribers are added in existing markets and new markets are opened around the world. However, excess ADSL chip inventory and central office service capacity still needs to be absorbed by the market. We expect that because of this, despite growing demand for ADSL service, there will be a reduced demand for chipsets in the short term." Tzannes, continued, "There are a number of reasons why we are optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about the longer term, including: -- End-user demand for ADSL service remains strong - estimates show between 10 and 12 million new subscribers in 2001, and an additional 15-20 million in 2002. -- Service providers are continuing rollouts in the US and Korea and expanding into new countries such as Germany, Japan, China and Taiwan; -- DSL-enabled Digital Loop Carrier In telephone communications, a technology that increases the number of channels in the local loop by converting analog signals to digital and multiplexing them back to the end office. products are expected to expand the reach and open new market opportunities; and -- New chipsets from Aware's customers are expected to enter the market in coming quarters. For these reasons, we are continuing to increase spending in technology and resources, with the goal of reaching new levels of profitability when the market recovers. We feel confident about our prospects as an intellectual property company in the 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). communications industry communications industry, broadly defined, the business of conveying information. Although communication by means of symbols and gestures dates to the beginning of human history, the term generally refers to mass communications. and are focused on the long term success of our business." Note: Aware's conference call will be broadcast live over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the today, April 26, 2001 at 6:00 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. ." About Aware Aware, Inc. designs, develops, and licenses 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 technology to semiconductor and equipment manufacturers to enable broadband communications over existing telephone networks. 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. , our business is subject to rapid technological change, and we will require additional engineering personnel. We refer you to the documents Aware files from time to time with the Securities and Exchange Commission, specifically the section titled Factors That May Affect Future Results in our annual report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2000 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
March 31,
2001 2000
Revenue:
Product sales $ 1,452 $ 1,192
Contract revenue 2,647 2,783
Royalties 4,119 2,588
Total revenue 8,218 6,563
Costs and expenses:
Cost of product sales 180 143
Cost of contract revenue 2,191 1,971
Research and development 1,837 1,414
Selling and marketing 672 667
General and administrative 705 672
Total costs and expenses 5,585 4,867
Income from operations 2,633 1,696
Interest income 794 570
Income before provision
for income taxes and
cumulative effect of
change in accounting principle 3,427 2,266
Provision for income taxes (1,371) --
Income before cumulative
effect of change in
accounting principle 2,056 2,266
Cumulative effect of
change in accounting principle -- (1,618)
Net income $ 2,056 $ 648
Basic income per share:
Income before cumulative
effect of change in
accounting principle $ 0.09 $ 0.10
Cumulative effect of
change in accounting principle -- ($ 0.07)
Net income per share $ 0.09 $ 0.03
Diluted income per share:
Income before cumulative
effect of change in
accounting principle $ 0.09 $ 0.09
Cumulative effect of
change in accounting principle -- ($ 0.06)
Net income per share $ 0.09 $ 0.03
Weighted average shares - basic 22,614 22,230
Weighted average shares - diluted 22,945 23,880
AWARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
March 31, December 31,
2001 2000
ASSETS
Cash and investments $61,496 $57,503
Accounts receivable, net 3,132 5,200
Deferred tax assets 5,722 7,093
Other assets 614 467
Property and equipment, net 11,220 11,187
Total assets $82,184 $81,450
LIABILITIES AND STOCKHOLDERS' EQUITY
Total current liabilities $ 1,677 $ 3,117
Total stockholders' equity 80,507 78,333
Total liabilities and
stockholders' equity $82,184 $81,450
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