Excerpted from 10-Q filed on 05/12 by AWARE INC :
AWARE INC files 0331 qtr 10-Q. Reports $2 mil tot rev and $-0.07 EPS.
RESULTS OF OPERATIONS
Product Revenue. Product revenue consists primarily of revenue from the
sale of Asymmetric Digital Subscriber Line ("ADSL") modems, transceiver modules,
and development systems. Product revenue increased by 319.3% from $103,790 in
the first quarter of 1997 to $435,175 in the current year quarter. Product
revenue as a percentage of total revenue was 21.7% in the first quarter of 1998
as compared to 5.8% in the corresponding quarter of 1997. The dollar increase,
as well as the increase as a percentage of total revenue, is primarily due to
two reasons. The Company shipped transceiver modules and development systems in
the first quarter of 1998, and such products were not available in the first
quarter of 1997. Secondly, there was greater demand for the Company's x200
Access Routers for trial purposes in the current year quarter.
License and Royalty Revenue. License and royalty revenue consists primarily
of revenue from the sale of intellectual property, such as hardware and software
technology licenses, compression software licenses, and royalties from the sale
of chipsets by customers who have licensed the Company's technology. As such
revenue has only a nominal cost of sale associated with it, the Company does not
report a separate cost of license and royalty revenue line in its Statements of
Operations.
License and royalty revenue decreased by 41.3% from $1,310,984 in the first
quarter of 1997 to $769,464 in the current year quarter. License and royalty
revenue as a percentage of total revenue was 38.4% in the first quarter of 1998
as compared to 72.8% in the corresponding quarter of 1997. The dollar decrease,
as well as the decrease as a percentage of total revenue, is primarily due to a
significant ADSL license sale to U.S. Robotics Access Corp. (now 3Com Corp.) in
the first quarter of 1997. There was not a telecom technology licensing sale of
this magnitude in the current year quarter. Lower telecommunications licensing
revenue was partially offset by higher chipset royalties and revenue from the
sale of compression software licenses in the current year quarter.
Research and Development Revenue. Research and development revenue consists
primarily of revenue from commercial contract engineering and development, and
government research contracts. Research and development revenue increased by
106.9% from $386,311 in the first quarter of 1997 to $799,377 in the current
year quarter. Research and development revenue as a percentage of total revenue
was 39.9% in the first quarter of 1998 as compared to 21.4% in the corresponding
quarter of 1997. The dollar increase, as well as the increase as a percentage of
total revenue, is primarily due to an increase in commercial engineering
projects, which was partially offset by a modest decrease in U.S. government
research projects. The increase in commercial engineering project revenue is
primarily driven by telecommunication customers, who have engaged the Company to
jointly develop products using the Company's technology and software. |
