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Aware's DSL Patents for Sale
Wednesday, 26 October 2011 00:59
Avoid war. Reasonable and non-discriminatory, please. Aware did pioneering work in DSL, including design work crucial to several chipmakers. As DSL chipmakers dwindled to the current four, demand for independent design dried up and Aware sold the business to Lantiq. They’ve retained the Dr. DSL diagnostic business and some royalties from earlier work, but revenues are declining. Their board now is “reviewing its strategic options, including a potential spin-off, sale, or licensing of patents.”
     Aware’s patents have long been difficult to monetize. There are dozens, perhaps hundreds of patents related to DSL, making the value of any individual patent hard to prove. In addition, the total value of DSL chip sales is dramatically down and likely to continue dropping over time as such a large proportion of phone lines are already equipped.
     Texas Instruments won a large judgment against Globespan that was so questionable they settled at a major discount. Otherwise, patent lawsuits have primarily been tactics to tie up competitors, an abuse of the system.
     The standards bodies have been incredibly negligent about enforcing the “reasonable and non-discriminatory” clauses in the standards.

Aware, Inc. Reports Third Quarter 2011 Financial Results
BEDFORD, Mass., Oct. 25, 2011 /PRNewswire/ -- Aware, Inc. (NASDAQ: AWRE), a leading supplier of broadband technology and biometrics software, today reported financial results for its third quarter ended September 30, 2011.  

Revenue for the third quarter of 2011 was $6.4 million, an increase of 4% compared to $6.2 million in the same quarter last year. Net income for the third quarter of 2011 was $1.3 million, or $0.06 per diluted share. These results compared to net income of $76,000, or $0.00 per diluted share, for the same period a year ago.

For the nine months ended September 30, 2011, revenue increased 12% to $18.7 million, compared to $16.7 million in the same period a year ago. Net income for the nine months ended September 30, 2011 was $1.6 million, or $0.08 per diluted share. These results compared to a net loss of $50,000, or $0.00 per diluted share, for the same period a year ago.

Additional information regarding third quarter financial results is presented below:

Product revenue declined 2% from $5.0 million in the third quarter of 2010 to $4.9 million this quarter. The slight decrease in product revenue reflects a $1.3 million decrease in test and diagnostics hardware and software revenue that was mostly offset by a $1.2 million increase in biometrics software revenue.

Services revenue grew 99% from $488,000 in the third quarter of 2010 to $971,000 this quarter. The rise in services revenue was primarily due to increased revenue from biometrics engineering projects.  

Royalties declined 14% from $637,000 in the third quarter of 2010 to $549,000 this quarter. The decrease in royalties was due to lower royalties reported to us by one of our legacy DSL chip licensees.
Spending declined 17% from $6.2 million in the third quarter of 2010 to $5.2 million this quarter. The $1.0 million spending decrease was primarily the result of three factors: i) lower hardware cost of goods sold on lower hardware sales; ii) lower director and officer compensation expenses; and iii) lower legal fee spending.
We had 81 full time employees at September 30, 2011, which was down 1 head from the end of last quarter.

Rick Moberg, Aware's co-chief executive officer and chief financial officer, said, "We were pleased with the performance of our operating businesses again this quarter.  Third quarter profitability of $1.3 million was primarily driven by strong sales of biometrics software and services, and a reduction of general and administrative expenses. With respect to our patent management operations, our board is reviewing its strategic options, including a potential spin-off, sale, or licensing of patents."