A.D.A.M., Inc. Announces Financial Results for Fourth Quarter and Year-End 2007
biz.yahoo.com
Tuesday March 11, 6:00 am ET
Revenues increase 69%; Adjusted EBITDA reaches $8 million
ATLANTA--(BUSINESS WIRE)--A.D.A.M., Inc. (Nasdaq: ADAM) today announced financial results for its fourth quarter and year ended December 31, 2007.
Full Year 2007 Financial Highlights
* 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.
* As of December 31, 2007, cash and investments were $8,234,000. During 2007, the Company made early payments of $5,000,000 (in advance of the original required repayment schedule) on its long-term note payable associated with the OnlineBenefits’ acquisition.
Fourth Quarter 2007 Financial Highlights
* Revenues for the fourth quarter ended December 31, 2007 were $7,633,000 as compared to $6,835,000 for the same period of 2006, an increase of 12%. The increase in revenues is primarily attributable to increased sales of the Company’s health content licenses, education products, and Benergy products and services. The fourth quarter of 2006 was the first full quarter that included OnlineBenefits results.
* Operating income, computed on a GAAP basis, for the fourth quarter ended December 31, 2007 was $831,000 as compared to $1,051,000 for the same period of 2006. The decrease in operating income is attributed to non-cash stock-based compensation and charges associated with severance for a former employee of OnlineBenefits. Excluding these items, adjusted operating income for the fourth quarter increased to $1,624,000 as compared to $1,552,000 for the same period last year.
* Net income for the fourth quarter ended December 31, 2007 was $1,824,000 or $0.17 per share on a fully diluted basis, as compared to $384,000 or $0.04 per share on a fully diluted basis, for the same period of 2006. Net income for the fourth quarter of 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 was $2,215,000 for the fourth quarter ended December 31, 2007 as compared to $1,948,000 for the same period of 2006, an increase of 14%. Adjusted EBITDA margins for the fourth quarters of 2007 and 2006 were 29% of revenues.
“Our financial results for the year were in line with our expectations for revenues and net income. These results came during a critical time of expansion of A.D.A.M.’s business. We made significant progress during the year executing against our strategic plans for growing our employer business and expanding our content licensing relationships and I am confident in our growth outlook for the future,” commented Kevin Noland, A.D.A.M.’s president and chief executive officer. “We continue to enhance our leadership position as a trusted source for health and benefits information for consumers, while creating strong business value propositions for our group insurance brokers, healthcare clients, and employers.”
2007 Business Highlights
* Released Benergy 2G!, a significant product enhancement to the Company’s flagship Benergy benefits technology platform in August 2007. Benergy 2G! includes an enhanced consumer experience, the addition of A.D.A.M.’s health and wellness content and additional tools for both group insurance brokers and employers.
* Bolstered management team with the addition of several key executives, including new sales executives for content and education products.
* Expanded the Company’s health content products, including the addition of five key new health centers that explore men’s, women’s, senior’s, pediatric, orthopedic and neurology topics.
* Released a significant upgrade to the Company’s agency management system, AgencyWare, that allows integration with Microsoft Outlook, providing a critical feature to enhance the use of the product by brokers.
* Secured key relationships with new clients, including Fluke Corporation, the New York Times, Loma Linda University Medical Center, AARP and Lenox Hill Hospital.
“Looking towards 2008, we’ve made a number of operational and organizational improvements that provide a strong foundation for growth,” Mr. Noland continued. “We’ve added to our product management and development efforts to strengthen our ability to deliver additional products and services through our Benergy system, and we have significantly enhanced our sales force and sales management to provide a broader sales reach and greater focus on net growth of current business and new sales channels. We look forward to an exciting 2008 as we see the investments we are making realized.” |
