AWRE - Aware

[whistlerbumps]

Has anyone here looked at Aware (AWRE)?  Trading at $3.50 per share with ~$2.25 per share of net cash.  Company makes biometric software for government and commercial applications.  Historically they have mainly served the government which is a perpetual license business (thus very lumpy) but they have just announced their first commercial sale which is expected to be a SaaS business and a much larger potential market.  Investors may be missing this inflection because the company has no analysts, does not do earnings calls/conferences and the stock is not liquid.

 

Company has been a good steward of capital historically, paying 3 special dividends from 2012-14 and buying back ~8% of the stock since mid 2016 (no mean feat given liquidity constraints).  Seems like solid downside protection with the chance for material upside if the commercial business gains real traction.  Be interested if anyone has any thoughts.

 

 

[whistlerbumps]

Good interview with AWRE's VP of Marketing talking about the company's commercial potential and recent UK govt win.

 

https://findbiometrics.com/interview-aware-david-benini-knomi-fido-uaf-industry-trends-512110/

[whistlerbumps]

Q4 results out and were pretty good.  Revenues up 32.6% y/y and the company noted the signing of other commercial licenses.  Commercial gaining traction has the potential to drive substantial upside to current results.  Net cash of $2.39 per share and ongoing government business should continue to provide solid downside support.

[whistlerbumps]

AWRE announced a new CEO today.  Robert Eckel was formerly the CEO of Identity Solutions unit at competitor Idemia (~$700mln in revenue so much larger than AWRE) and had been a consultant at AWRE for the past few months. 

 

He received 200k options split into 4 tranche with strikes at the greater of $4.50 or market and then up $1 for each tranche until $7.50 or market.

 

For those to be in the money, the share price has to rally significantly from current levels. 

 

 

As Regional President for North America Identity and Security at Idemia/OT-Morpho, Bob oversaw a $700m business with over 3200 employees.

https://www.linkedin.com/in/roberteckel/

 

[Foreign Tuffett]

AWRE announced a new CEO today.  Robert Eckel was formerly the CEO of Identity Solutions unit at competitor Idemia (~$700mln in revenue so much larger than AWRE) and had been a consultant at AWRE for the past few months. 

 

He received 200k options split into 4 tranche with strikes at the greater of $4.50 or market and then up $1 for each tranche until $7.50 or market.

 

For those to be in the money, the share price has to rally significantly from current levels. 

 

 

As Regional President for North America Identity and Security at Idemia/OT-Morpho, Bob oversaw a $700m business with over 3200 employees.

https://www.linkedin.com/in/roberteckel/

 

What's with the last CEO being demoted to Chief Legal Officer?

 

I see the company only did $3 million in rev last Q. What's the timeline on their strategy gaining traction? They've been doing biometrics for years, right? Why haven't they had success up to this point?

[whistlerbumps]

Old CEO was previously general counsel so its really just him going back to his old role.  Robert Eckel ran a much bigger biometrics company and had been consulting for AWRE so I would bet that he offered to run it and the company jumped at the opportunity to add someone as accomplished as him and had to demote the current CEO to make room.

 

With regards to the business, the company has historically focused on selling perpetual licenses to government customers.  This was a decent business but is a somewhat limited market and is a lumpy revenue stream. 

 

Now that commercial biometrics is starting to move mainstream, they are looking to make inroads there with customers like major banks, healthcare providers etc.  This business would more likely be Biometrics-as-a-Service They had one success with a major latin american bank in 2018 but have not gained much traction there yet.  I will be that it will be Eckel's job to drive more commercial business.

 

The fact that the came to such a small company and has an incentive structure with options at such higher strike prices suggests to me that he is optimistic about AWRE's likelihood of success in this area.

[Stuart D]

Thanks for posting, it's always nice seeing companies with fortress balance sheets & conservative capital allocators.

 

 

[whistlerbumps]

AWRE announced two game changing deals this morning.

 

Firstly, the company announced that its Knomi solution was chosen by "Several Leading Latin American Banks for Mobile Biometric Authentication.  This deal is a huge win for AWRE as it is the company's first tangible success with Knomi in the banking vertical.  Success in the commercial space would represent a massive positive inflection for AWRE as it would provide a new large TAM for their biometric software in addition to the company's historical government biometrics division.  Furthermore, commercial business is likely to come under a SaaS-type model, which will provide more stable, high value revenue than the company's historical perpetual license model.

 

“Knomi delivers the reliability and performance of government-grade software that banks of this size require to scale biometric authentication to millions of users,” said Bob Eckel,  Aware CEO & President.  “But it’s Aware’s ability to engage with our customers at the workflow and algorithm level, utilizing their existing robust processes providing continual optimization of the performance and user experience that sets us apart from other providers.”

 

https://www.aithority.com/mobile/awares-knomi-solution-chosen-by-several-leading-latin-american-banks-for-mobile-biometric-authentication/

[whistlerbumps]

The second deal involved AWRE's CaptureSuite software which will be deployed to capture fingerprints as US Land Border Crossings.  This is yet another US government win for AWRE but is very helpful as the government business had been going through a bit of a lull.  Overall, this win should provide significant revenue in FY 20.

 

BEDFORD, Mass., Feb. 11, 2020 /PRNewswire/ -- Aware, Inc. (NASDAQ: AWRE), a leading global provider of biometrics software products, solutions and services, today announced that its CaptureSuite™ solution has been chosen by the U.S. Customs and Border Protection Agency ("CBP") for deployment at U.S. land border crossings.  This deployment is an extension to the air entry border crossing system which has utilized CaptureSuite to help CBP protect the nation's borders for several years.

 

CaptureSuite is a set of three Aware fingerprint software development kits ("SDKs") that apply a variety of biometric fingerprint algorithms to enable rapid, high quality, fingerprint capture and quality assurance that is independent of the capture device used.  By incorporating Aware's CaptureSuite fingerprint capture software into its border stations, CBP is able to rapidly capture tenprints of people crossing the U.S. borders in a way that helps minimize queue buildup at the crossing points, while ensuring optimal quality of the captured prints.

 

"Aware has been a trusted biometric product supplier to the U.S. Federal Government for over 25 years," said Bob Eckel,  Aware's CEO & President.  "As a U.S.-based company, we are proud to assist our government in protecting our borders, our citizens, and our service men and women."

https://www.tmcnet.com/usubmit/-awares-capturesuitetrade-software-deployed-us-land-border-crossing-/2020/02/11/9096219.htm

[whistlerbumps]

$10mln repurchase authorized and CEO bought 15k shares.

 

 

 

(WSA) Robert A Eckel,C.E.O.,Buys 15,000 from 5/7/20-5/8/20 of AWRE

 

Robert A Eckel,C.E.O.,Buys 15,000 from 5/7/20-5/8/20 of AWRE

2020-05-11 20:07:22.84 GMT

 

 

 

The following transactions were reported by Robert A Eckel of Aware Inc on a

Form 4 filed with the S.E.C. on May 11, 2020:

 

Date(s) Trans Type Shares Price(s)

------------------- -------------- --------------- -----------------------

5/7/20 - 5/8/20 Purchase 15,000 $2.62-$2.74

 

[whistlerbumps]

CEO and CFO buys

 

AWRE: Aware Inc Ma - Eckel Robert A (CEO,PR,DIR) Bought (B) 10k shares @ $2.79

2020-11-20 22:20:48.600 GMT

 

AWRE: Aware Inc Ma - Barcelo David Brian (CFO) Bought (B) 15k shares @ $2.72

2020-11-20 22:21:14.590 GMT

[bilo]

First earnings call in many years! 

 

Hopefully a good story to tell with measurable progress, etc.  I'm looking forward to it.

 

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Aware Sets Fourth Quarter and Full Year 2020 Conference Call for Tuesday, February 9, 2021 at 5:00 p.m. Eastern Time

BEDFORD, Mass., Feb. 01, 2021 (GLOBE NEWSWIRE) -- Aware, Inc. (NASDAQ: AWRE), a leading global provider of biometrics software products, solutions, and services, will hold a webcast on Tuesday, February 9, 2021 at 5:00 p.m. Eastern time to discuss its financial results for the fourth quarter and full year ended December 31, 2020. Financial Results will be issued in a press release prior to the call.

 

Aware management will host the webcast presentation, followed by a question-and-answer session.

 

 

 

Date: Tuesday, February 9, 2021

 

Time: 5:00 p.m. Eastern time (2:00 p.m. Pacific time)

 

Webcast: https://webinars.on24.com/aware/EarningsQ42020

 

Interested parties may submit questions in advance of the conference call by emailing AWRE@gatewayir.com.

 

The presentation will be made available for replay in the investor relations section of the Company’s website. The audio recording will be available for approximately 90 days following the live event.