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Revenue for the fourth quarter of 2012 was
Net income for the fourth quarter of 2012 was
Additional information regarding fourth quarter 2012 results is as follows:
- The improvement in operating income before patent related income compared to the fourth quarter of last year was primarily due to increased profitability in our biometrics business and lower general and administrative expenses.
- The income from a patent arrangement of
$1.1 millionrelates to an agreement we entered into several years ago with an unaffiliated third party under which we assigned patents in return for royalties on proceeds from its patent monetization efforts. Based on information provided to us by the third party, we may receive additional income from this arrangement in the first quarter of 2013. We estimate that income could be in the range of $400,000 to $800,000depending on a variety of factors. Beyond the first quarter of 2013, we are unable to predict how much more income we might receive from this arrangement, if any, because we do not know whether any patent monetization efforts by the third party will be successful.
- The income tax benefit of
$3.1 millionin the fourth quarter of this year was primarily due to three unrelated factors: i) a $1.8 millionreversal of the valuation allowance we had established on our deferred tax assets in previous periods; ii) a determination, based on a project we completed in December 2012, that more of our research and development tax credits were available to reduce income tax expense than we previously estimated; and iii) the utilization of foreign tax credits that we had previously been unable to use.
For the year ended
Net income for the year ended
Additional information regarding full year 2012 results is as follows:
$1.0 millionimprovement in operating income before patent related income in 2012 was primarily due to increased profitability in our biometrics business and lower general and administrative expenses, which were partially offset by higher losses in our DSL service assurance software business.
- As we previously disclosed, we completed two significant patent sales in the second and third quarters of 2012. We received
$91.0 milliontotal proceeds on these patent sales, and recorded a net gain of $86.4 millionafter transaction costs.
- We completed the shutdown of our DSL service assurance hardware business in 2012 and recorded after tax income of
- We recorded a
$20.2 millionincome tax expense for 2012, but our actual income tax liability to federal and state governments was $7.8 million. The difference between our book tax expense and actual tax liability arises because a substantial portion of the deferred tax assets we used in 2012 comprised cumulative deductions for stock options in excess of book expense. Under income tax accounting rules, that portion of tax benefits attributable to such deductions must be recorded as an adjustment to equity versus a reduction of income tax expense.
We completed the shutdown of our DSL service assurance hardware business in 2012, which allows us to focus our business strategy on being a provider of software and services. Our biometrics business had a record year in terms of both revenue and profitability. Our DSL service assurance business made good progress in enhancing its Line Diagnostics Platform software product. We look forward to building on our core software operations and growing a profitable business in 2013 and beyond."
Aware is a leading software and technology supplier for the biometrics, telecommunications, and healthcare industries. Aware's biometrics software products and services are provided to solution vendors and system integrators for use by government agencies towards applications including border management, secure credentials, law enforcement, and national defense. Aware's
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 service assurance 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.
General factors include, but are not limited to: our quarterly results are unpredictable and may fluctuate significantly; our business is subject to rapid technological change; we face intense competition from a wide range of competitors; our intellectual property is subject to limited protection; our business may be affected by our use of open source software; our business may be affected by government regulations; adverse economic conditions; and our ability to obtain or enforce patents could be affected by new laws, regulations or rules. DSL service assurance factors include, but are not limited to: our DSL service assurance product line depends upon a limited number of customers; our DSL service assurance software products face intense competition; and our DSL service assurance software products could have quality problems. Biometric factors include, but are not limited to: market acceptance of our biometric technologies and products; changes in contracting practices of government or law enforcement agencies; the failure of the biometrics market to experience continued growth; announcements or introductions of new technologies or products by our competitors; failures or problems in our biometric software products; delays in the adoption of new industry biometric standards; growth of proprietary biometric systems which do not conform to industry standards; our ability to sell services contracts in a manner that is consistent with our business model; our ability to deliver services contract milestones; and our dependence on third party contractors and consultants to deliver certain services contract milestones.
We refer you to the documents Aware files from time to time with the
Aware is a trademark or registered trademark of
Any other trademarks appearing herein are the property of their respective owners.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended
Costs and expenses:
Cost of services
Research and development
Selling and marketing
General and administrative
Total costs and expenses
Operating income before patent related income
Gain on sale of patent assets
Income from patent arrangement
Operating income after patent related income
Income from continuing operations before income taxes
Provision for (benefit from) income taxes
Income from continuing operations
Income (loss) from discontinued operations, net of income taxes
Basic net income per share:
Basic net income per share from continuing operations
Basic net income (loss) per share from discontinued operations...
Basic net income per share
Diluted net income per share:
Diluted net income per share from continuing operations
Diluted net income (loss) per share from discontinued operations
Diluted net income per share
Weighted-average shares – basic
Weighted-average shares - diluted
CONDENSED CONSOLIDATED BALANCE SHEETS
Cash and investments
Accounts receivable, net
Property and equipment, net
Deferred tax assets
Other assets, net
LIABILITIES AND STOCKHOLDERS' EQUITY
Total current liabilities
Long-term deferred revenue
Total stockholders' equity
Total liabilities and stockholders' equity