Aware, Inc. Reports Fourth Quarter and 2007 Financial Results

BEDFORD, Mass. - February 12, 2008 – Aware, Inc. (NASDAQ: AWRE), a leading supplier of broadband technology and biometrics software, today reported financial results for its fourth quarter ended December 31, 2007.

Revenues for the fourth quarter of 2007 were $6.8 million, an increase of 5% compared to $6.4 million in the same quarter last year. For the year ended December 31, 2007, revenues increased 10% to $26.4 million, compared to $24.1 million for the year ended December 31, 2006.

The Company reports its net income and basic and diluted net income per share in accordance with U.S. generally accepted accounting principles (GAAP), and additionally, on a non-GAAP basis. Non-GAAP net income, where applicable, excludes the effect of stock-based compensation expense. The company uses the non-GAAP information internally to evaluate its operating performance and believes these non-GAAP measures are useful to investors as they provide additional insight into the underlying operating results. However, non-GAAP measures are not stated in accordance with, should not be considered in isolation from, and are not a substitute for, GAAP measures. A reconciliation of GAAP to non-GAAP results has been provided in the attached financial tables.

GAAP net income for the fourth quarter of 2007 was $0.2 million, or $0.01 per diluted share, which included $0.3 million of stock-based compensation charges in accordance with the provisions of FAS 123(R). This compared to GAAP net income of $0.9 million, or $0.04 per diluted share, for the same period a year ago. GAAP net income for the year ended December 31, 2007 was $0.2 million, or $0.01 per share, compared to net income of $1.0 million, or $0.04 per diluted share, for the year ended December 31, 2006.

Non-GAAP net income for the fourth quarter of 2007, excluding the effect of stock-based compensation, was $0.5 million, or $0.02 per diluted share. For the year ended December 31, 2007, the company had non-GAAP net income, excluding the effect of stock-based compensation, of $1.3 million, or $0.05 per share.

Michael Tzannes, Aware’s chief executive officer, said, “Our 2007 results reflect healthy revenue growth in our DSL test and diagnostics hardware and software product lines as well as biometrics software applications. Looking forward to 2008, we are expecting a rebound in our DSL licensing business. Each of these three product lines, DSL test and diagnostics hardware and software, biometrics and medical imaging software and DSL licensing are well positioned for positive revenue and earnings growth.”

Note: Aware’s conference call will be broadcast live over the Internet today, February 12, 2008 at 5:00 p.m. Eastern Time. To listen to the call, please go to www.aware.com/ir. The conference call may also be heard by calling 617-213-4864 and referencing the confirmation number 36075315. A replay of the call will be archived on our website after the call.

About Aware
Aware is a leading technology supplier for the telecommunications industries. For more than ten years, Aware has pioneered innovations at telecommunications standards-setting organizations and continues to develop and market DSL silicon intellectual property and test and diagnostics products. Its StratiPHY™ IP product line supports DSL standards, including ADSL2+ and VDSL2, and has been broadly licensed to leading semiconductor companies. Telecom equipment vendors and phone companies use Aware's DSL test and diagnostics modules and Dr. DSL® software to help provision DSL circuits globally. Aware is also a veteran of the biometrics industry, providing biometric and imaging software components used in government systems worldwide since 1992. Aware's interoperable, standard-compliant, field-proven imaging products are used in a number of applications, from border management to criminal justice to medical imaging. Aware is a publicly held company (NASDAQ: AWRE) based in Bedford, Massachusetts. www.aware.com

Contact:
Keith Farris
Aware, Inc.
781-276-4000 

Aware, StratiPHY and Dr. DSL are trademarks or registered trademarks of Aware, Inc.

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