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A.D.A.M., Inc. Announces Financial Results for Fourth Quarter and Year-End 2008
Total license revenues increase 8% for the year; Content license revenues increase 19%;
Full-year Non-GAAP operating income of $5,711,000 hits 20% of revenues
ATLANTA, GA March 17, 2009 A.D.A.M., Inc. (Nasdaq: ADAM), a leading provider of health information and benefit technology solutions, today announced financial results for its fourth quarter and year ended December 31, 2008.
We delivered profitable operating results even in a challenging economic environment while investing and repositioning the company for long-term growth, said Kevin Noland, President and Chief Executive Officer of A.D.A.M. We are very pleased with 19% growth in our health content licensing business which is a result of people and product investments we made previously. During 2008, we continued to invest in sales, marketing and customer service functions for Benergy as we look to grow our important broker channel and capitalize on the opportunities we see with larger employers. In addition, we replaced several internal product offerings with a broader suite of products that allows us to provide a more comprehensive product set for our broker and employer clients through new outsourced relationships. While this was underway, A.D.A.M. continued to generate positive operating cash flows and ended the year in a solid financial position. Based on the strength of our business model, we secured new long-term debt financing in the fourth quarter and with a lower cash interest rate.
Fourth Quarter Highlights
License revenues for the fourth quarter ended December 31, 2008, which include both health content and Benergy products, were $6,367,000 as compared to $6,182,000 for the same period of 2007, an increase of 3%, primarily as a result of growth in health content licensing.
Total revenues for the fourth quarter ended December 31, 2008 were $7,406,000 as compared to $7,633,000 for the same period of 2007, a decrease of 3%. Fourth quarter revenues were primarily impacted as a result of a professional services contract relating to the Companys education business in excess of $350,000 that occurred in the prior year period.
Net loss for the fourth quarter ended December 31, 2008 was $2,007,000 or $0.19 per share on a fully diluted basis as compared to a profit of $1,824,000 or $0.17 per share on a fully diluted basis for the same period of 2007. The fourth quarter of 2008 included charges of $3,006,000 relating to facility consolidation and loan refinance expenses, while 2007 included an income tax benefit of $1,510,000, related to the Companys utilization of its net operating loss carryforward.
Adjusted non-GAAP operating income for the fourth quarter ended December 31, 2008 was $1,642,000, or 22% of revenues, compared to $1,624,000, or 21%, for the same period in 2007. Adjusted EBITDA was $2,023,000, or 27% of revenues, for the fourth quarter ended December 31, 2008 as compared to $2,215,000, or 29% for the same period of 2007.
During the fourth quarter, the Company expanded its credit facility to include a term loan of $10,000,000 and a revolving credit facility of $3,000,000. In conjunction with the new facility, the Company terminated its agreement with its previous lender and recorded a non-cash charge of $813,000 related to the write-off of unamortized financing fees and the issuance of warrants related to the termination of the prior agreement.
Also completed in the fourth quarter was the Companys facility consolidation program. This program included an outsourcing arrangement with a third party to resell their financial service offerings, such as Flexible Spending Account administration, which will provide a broader and more comprehensive service offering to our customers. This allowed the Company to close two office facilities and reduce personnel related to several product offerings and consolidate support services into the Atlanta location. As a result, the Company recorded $2,193,000 in costs related to the facility consolidation program.
Full Year 2008 Financial Results
For the year ended December 31, 2008, revenues were $28,857,000, up 4% from $27,878,000 from the same period last year. License revenues for the year were $25,395,000 an increase of 8% in total and 19% related to health content licensing. This increase in license revenues was driven by expansion of the Companys licensing customer base under multiple year contracts that generate recurring revenues for the Company. Product revenues for the year ended December 31, 2008, which are comprised of the Companys products for the education market, were $1,182,000 as compared to $1,642,000 for the same period last year, a decline of 28%. The decrease in product revenues is a result of the market shift away from CD-ROM-based educational products and towards Web-based e-learning platforms. To meet the growing need for online education products, the Company expects to release a Web-based version of its core educational product later this year. Revenues from professional services for the year ended December 31, 2008 were $2,280,000 as compared to $2,673,000 for the same period last year, a decrease of 15%. The decrease in professional services revenue was a result of a large contract completed in 2007.
The following information was filed by Adam Inc on Tuesday, March 17, 2009 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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