Aware Inc (AWRE) 2002 Q3 法說會逐字稿

Good day everyone and welcome to this Aware, Inc. third quarter earnings release conference call. Today's call is being recorded. At this time I would like to turn the call over to Mr. Rick Moberg, Chief Financial Officer, for opening remarks. Mr. Moberg, please go ahead, sir.

Thank you. Welcome to Aware's third quarter 2002 earnings conference call. I'm Rick Moberg, the company's CFO. With me is Michael Tzannes, Aware's CEO. Thank you for joining us today. The agenda for the call will be as follows. I'll review financial results for the quarter. Next, Michael will talk about the business, and finally we'll take your questions.

A recording of this call will be available on our website at aware.com after the call is completed. First I'd like to point out that various remarks that we may make about future expectations, plans, and prospects for the company in the DSL market constitute forward-looking statements for the purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors including those discussed in the section titled risk factors in our quarterly report on Form 10-Q for the quarter ended June 30th, 2002, which is on file with the SEC.

Now turning to results. Q3 results were in line with the guidance we provided in July. Third quarter 2002 revenue was $4m and EPS was a loss of $0.11 per share excluding a non-recurring item that I will describe in a moment. Last year in Q3 revenue was $3.1m and we lost $0.09 cents per share. During the 3Q, we wrote off $7.1m of deferred tax assets by recording a non-cash income tax provision. Our tax assets are mostly attributable to net operating loss carried forwards. The Q3 write off fully reserves tax assets that were not in our balance sheet. I should note that we will still be able to realize the benefit of these deferred tax assets from both a cash and accounting perspective upon achievement of sufficient taxable income in the future.

Including a $7.1m tax write off, GAAP EPS for the quarter was a loss of $0.03 of share. Royalty revenue was $729,000 this quarter which compares to $759,000 last quarter and $751,000 in last year's third quarter. Contract revenue was $1.9m this quarter which compares to $2.2m last quarter and $1.5m a year ago. Product revenue was $1.3m this quarter which compares to $1.1m last quarter and $819,000 a year ago. Product revenue consists of hardware solutions for ADSL applications and compression software for electronic ID applications. The increase this quarter is mostly due to sales of specialized ADSL hardware modules.