-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PVSf+FMNavuM3aDOzF7XCXeq9K9s2iOelPf6xqJChty7ax+igSIK/+dJV8j9vIuE ovYxx3Q/o/HBhGo6viwWuA== 0001188112-06-003240.txt : 20061102 0001188112-06-003240.hdr.sgml : 20061102 20061102162030 ACCESSION NUMBER: 0001188112-06-003240 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20061102 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20061102 DATE AS OF CHANGE: 20061102 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AWARE INC /MA/ CENTRAL INDEX KEY: 0001015739 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 042911026 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-21129 FILM NUMBER: 061182976 BUSINESS ADDRESS: STREET 1: 40 MIDDLESEX TURNPIKE CITY: BEDFORD STATE: MA ZIP: 01730 BUSINESS PHONE: 6172764000 MAIL ADDRESS: STREET 1: 40 MIDDLESEX TURNPIKE CITY: BEDFORD STATE: MA ZIP: 01730 8-K 1 t12107_8-k.txt CURRENT REPORT ON FORM 8-K ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------ FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 ----------- Date of Report (date of earliest event reported): November 2, 2006 ---------------------- AWARE, INC. ----------------------------------------------------- (Exact name of registrant as specified in its charter) Massachusetts 000-21129 04-2911026 - ---------------------------- ----------- ------------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 40 Middlesex Turnpike, Bedford, MA, 01730 ------------------------------------------------------------ (Address of principal executive offices, including zip code) Registrant's telephone number, including area code: (781) 276-4000 Not Applicable ------------------------------------------------------------ (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ================================================================================ ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On November 2, 2006, Aware, Inc. issued the press release, attached to this Form 8-K as Exhibit 99.1, describing the results of operations and financial condition of the company as of and for the quarter ended September 30, 2006. ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS. No financial statements are required to be filed as part of this Report. The following exhibits are filed as part of this report: (c) EXHIBITS. Number Description ------ ----------- 99.1 Press release issued by Aware, Inc. on November 2, 2006 ------------------------------------------------------------------------------- SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. AWARE, INC. Dated: November 2, 2006 By: /s/ Michael A. Tzannes ---------------- ---------------------- Michael A. Tzannes Chief Executive Officer -2- EXHIBIT INDEX Number Description ------ ----------- 99.1 Press release issued by Aware, Inc. on November 2, 2006. -3- EX-99.1 2 ex99-1.txt EXHIBIT 99.1 Exhibit 99.1 FOR IMMEDIATE RELEASE Contact: Keith Farris Aware, Inc. 781-276-4000 AWARE, INC. REPORTS 2006 THIRD QUARTER FINANCIAL RESULTS BEDFORD, MASS. - NOVEMBER 2, 2006 - Aware, Inc. (NASDAQ: AWRE), a leading supplier of broadband technology and biometrics software, today reported financial results for its third quarter ended September 30, 2006. Revenues for the third quarter of 2006 increased 31% to $6.7 million, from $5.1 million in the same quarter last year. For the nine months ended September 30, 2006, revenues increased 47% to $17.6 million, compared to $12.0 million in the same period a year ago. The Company reports its net income and basic and diluted net income per share in accordance with U.S. generally accepted accounting principles (GAAP), and additionally, on a non-GAAP basis. Non-GAAP net income, where applicable, excludes the effect of stock-based compensation expense. The company uses the non-GAAP information internally to evaluate its operating performance and believes these non-GAAP measures are useful to investors as they provide additional insight into the underlying operating results. However, non-GAAP measures are not stated in accordance with, should not be considered in isolation from, and are not a substitute for, GAAP measures. A reconciliation of GAAP to non-GAAP results has been provided in the attached financial tables. GAAP net income for the third quarter of 2006 was $0.8 million, or $0.03 per diluted share, which included $0.5 million of stock-based compensation charges, as this was the Company's third quarter subject to the provisions of FAS 123(R). This compared to a GAAP net income of $0.6 million, or $0.02 per diluted share, for the same period a year ago. GAAP net income for the - -------------------------------------------------------------------------------- AWARE, INC. * 40 MIDDLESEX TURNPIKE * BEDFORD, MA USA 01730-1432 TEL: (781) 276-4000 * FAX: (781) 276-4001 * E-MAIL: AWARE@AWARE.COM AWARE, INC. REPORTS 2006 THIRD QUARTER FINANCIAL RESULTS PAGE 2 nine months ended September 30, 2006 was $0.2 million or $0.01 per diluted share, compared to a net loss of $1.3 million, or $0.06 per share, for the same period a year ago. GAAP results prior to 2006 do not include a charge for stock-based compensation. Non-GAAP net income for the third quarter of 2006, excluding the effect of stock-based compensation, was $1.3 million, or $0.05 per diluted share. For the nine months ended September 30, 2006, the company had a non-GAAP net income, excluding the effect of stock-based compensation, of $1.8 million, or $0.07 per diluted share. Michael Tzannes, Aware's chief executive officer, said, "We continue to make progress in growing our business. We're looking forward to continued success through the remainder of 2006 and into 2007. Please join us on our conference call today and at the AeA Classic conference next week where we will provide more details on our strategy, market position and reasons for optimism." Note: Aware's conference call will be broadcast live over the Internet today, November 2, 2006 at 5:00 p.m. Eastern Time. To listen to the call, please go to WWW.AWARE.COM/IR. The conference call may also be heard by calling (719) 457-2633 and referencing the confirmation number 6528654. 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, 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 and 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. The DSL 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 annual report on Form 10-K for the fiscal year ended December 31, 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. REPORTS 2006 THIRD QUARTER FINANCIAL RESULTS PAGE 3
AWARE, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------------- -------------------- 2006 2005 2006 2005 -------- -------- -------- -------- Revenue: Product sales ..................... $ 1,736 $ 2,417 $ 4,973 $ 4,163 Contract revenue .................. 3,990 1,920 9,924 5,061 Royalties ......................... 956 750 2,710 2,770 -------- -------- -------- -------- Total Revenue ................. 6,682 5,087 17,607 11,994 Costs and expenses: Cost of product sales (1) ......... 286 157 615 279 Cost of contract revenue (1) ...... 1,363 826 3,759 2,384 Research and development (1) ...... 2,726 2,487 8,646 7,400 Selling and marketing (1) ......... 784 721 2,518 2,064 General and administrative (1) .... 843 644 2,930 1,940 -------- -------- -------- -------- Total costs and expenses ...... 6,002 4,835 18,468 14,067 Net income (loss) from operations ...... 680 252 (861) (2,073) Interest income ........................ 490 309 1,342 798 -------- -------- -------- -------- Net income (loss) before provision for income taxes ........................... 1,170 561 481 (1,275) Provision for income taxes ............. 330 - 330 - -------- -------- -------- -------- Net income (loss) ...................... $ 840 $ 561 $ 151 ($ 1,275) ======== ======== ======== ======== Net income (loss) per share - basic .... $ 0.04 $ 0.02 $ 0.01 ($ 0.06) Net income (loss) per share - diluted... $ 0.03 $ 0.02 $ 0.01 ($ 0.06) Weighted average shares - basic ........ 23,552 23,116 23,433 23,027 Weighted average shares - diluted ...... 24,987 25,168 24,976 23,027
(1) Effective January 1, 2006 the Company adopted Statement of Financial Accounting Standard No. 123 (Revised), "Share-Based Payment" (FAS 123(R)). Accordingly, for the nine months ended September 30, 2006, stock-based compensation was accounted for under FAS 123(R) while, for the nine months ended September 30, 2005, stock-based compensation was accounted for under APB No. 25 "Accounting for Stock Issued to Employees." The amounts in the tables above include stock-based compensation as follows (in thousands):
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ----------------- ---------------- 2006 2005 2006 2005 ------ ------- ------ ------- Cost of product sales ................ $ 4 $ - $ 12 $ - Cost of contract revenue ............. 13 - 98 - Research and development ............. 241 - 786 - Sales and marketing .................. 88 - 266 - General and administrative ........... 106 - 532 - ------ ------- ------ ------- Total stock-based compensation costs.. $ 452 $ - $1,694 $ - ------ ------- ------ -------
WARE, INC. REPORTS 2006 THIRD QUARTER FINANCIAL RESULTS PAGE 4 AWARE, INC. NON-GAAP FINANCIAL MEASURES AND RECONCILIATION (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------------- ---------------------- 2006 2005 2006 2005 --------- ------ -------- ------- GAAP net income (loss)............................................. $ 840 $ 561 $ 151 ($1,275) Stock-based compensation ..................................... 452 1,694 - --------- ------ --------- ------- Non-GAAP net income (loss)......................................... $ 1,292 $ 561 $ 1,845 ($1,275) --------- ------ --------- ------- THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------------- ---------------------- 2006 2005 2006 2005 --------- ------ --------- ------- GAAP diluted net income (loss) per share .......................... $ 0.03 $ 0.02 $ 0.01 ($ 0.06) Stock-based compensation ..................................... 0.02 - 0.06 - --------- ------ --------- ------- Non-GAAP diluted net income (loss) per share ...................... $ 0.05 $ 0.02 $ 0.07 ($ 0.06) --------- ------ --------- -------
WARE, INC. REPORTS 2006 THIRD QUARTER FINANCIAL RESULTS PAGE 5 AWARE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS) (UNAUDITED) SEPTEMBER 30, DECEMBER 31, 2006 2005 ------- --------- ASSETS Cash and investments ........................ $37,660 $36,763 Accounts receivable, net .................... 5,855 3,749 Property and equipment, net ................. 7,934 8,075 Other assets, net ........................... 1,754 1,154 ------- ------- Total assets ................................ $53,203 $49,741 ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY Total current liabilities ................... $ 2,875 $ 2,238 Long-term deferred revenue .................. 330 - Total stockholders' equity .................. 49,998 47,503 ------- ------- Total liabilities and stockholders' equity... $53,203 $49,741 ======= ======= ### -----END PRIVACY-ENHANCED MESSAGE-----