BEDFORD, Mass., November 7, 2002 - Aware, Inc. (NASDAQ: AWRE), a worldwide leader in DSL (digital subscriber line) technology for high-speed Internet access over telephone networks, today reported financial results for its third quarter ended September 30, 2002.
Revenues for the third quarter of 2002 were $4.0 million compared to $3.1 million for the same period last year. Excluding a non-recurring income tax provision, net loss for the third quarter of 2002 was $2.6 million, or $0.11 per diluted share, compared to a net loss of $2.0 million, or $0.09 per diluted share, for the year-ago period. GAAP net loss for the third quarter was $9.7 million or $0.43 per diluted share.
During the third quarter, the company recorded a $7.1 million non-recurring, non-cash income tax provision in connection with the establishment of a valuation allowance against previously recorded deferred tax assets. These deferred tax assets relate primarily to net operating loss carry forwards and tax credits. The company will still be able to realize the benefit of these deferred tax assets, both from a cash and an accounting perspective, upon achieving sufficient taxable income in the future.
For the nine months ended September 30, 2002, revenues were $11.5 million compared to $15.3 million for the same period last year. Excluding the non-recurring income tax provision, net loss for the nine months ended September 30, 2002 was $7.3 million, or $0.32 per diluted share, compared to net income of $58,000, or $0.00 per diluted share, for the year-ago period. GAAP net loss for the nine months ended September 30, 2002 was $14.4 million or $0.63 per diluted share.
Michael Tzannes, chief executive officer, said: "ADSL's worldwide footprint continues to grow as it is now the most widely used wide area network technology for broadband services in the world. With new ADSL2 and ADSL2+ International Telecommunications Union (ITU) standards further improving the value of ADSL, we expect ADSL to continue to expand its presence for many years to come. While our company and our industry are experiencing difficult times, Aware remains committed to returning to profitability by developing and proliferating the highest value ADSL technology in the industry."
Note: Aware's conference call will be broadcast live over the Internet today, November 7, 2002 at 5:00 p.m. Eastern Time. To listen to the call, please go to www.aware.com, and click on "Investor Relations."
Aware, Inc. designs, develops, licenses and markets DSL technology that enables broadband communications over existing telephone networks. Its solutions, including splitterless G.lite, full-rate ADSL, ADSL2, ADSL2+, VeDSL™, Dr. DSL®, XRDSL™, StratiPHY™, FastADSL™, BondedADSL™, and G.shdsl address central office as well as consumer electronics requirements. The company licenses its intellectual property and software to semiconductor manufacturers and equipment manufacturers who sell products incorporating Aware's technology. Aware also markets to systems companies to encourage them to design its technology into their products, and to service providers to encourage them to deploy new broadband services based on its technology. More information about Aware 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 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, 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, 2002 and other reports and filings made with the Securities and Exchange Commission.