Adam Inc (863650) SEC Filing 10-K Annual report for the fiscal year ending Monday, December 31, 2007

Revenues for the year ended December 31, 2007 were $27,878,000 as compared to $16,505,000 for the same period of 2006, an increase of 69%. The increased revenues were primarily attributable to A.D.A.M.’s acquisition of OnlineBenefits, Inc., which was completed in August 2006 and as a result of additional sales of health content licenses and increased sales of Benergy-related services during the year.

Adjusted operating income for the year ended December 31, 2007 was $6,050,000 as compared to $3,753,000 for the same period of 2006, an increase of 61%. Adjusted operating income excludes non-cash stock-based compensation and accrued expenses for severance for former employees of OnlineBenefits. GAAP operating income for 2007 was $4,763,000 as compared to $3,132,000 for the same period last year, an increase of 52%. Operating income increased from the inclusion of OnlineBenefits results for the full year, profits from revenue growth and operating improvements implemented during the year.

Net income for the year ended December 31, 2007 was $3,939,000 or $0.38 per share on a fully diluted basis as compared to $2,548,000 or $0.25 per share on a fully diluted basis for the same period of 2006. Net income for 2007 included severance charges of $529,000 and an income tax benefit of $1,510,000 for the Company’s expected future use of its income tax net operating loss carryforwards.

Adjusted EBITDA for the year ended December 31, 2007, which excludes non-cash stock-based compensation expense increased to $7,973,000 as compared to $4,913,000 for the same period of 2006. Adjusted EBITDA margins for the years of 2007 and 2006 were 29% of revenues.

Gross margin for the year ended December 31, 2007 was 76% as compared to 79% for the same period of 2006. The slight decrease in gross margin as a percent of revenues is attributable primarily to additional professional services associated with increased sales of Benergy’s online benefit enrollment product, Ready…Enroll Complete.