Exhibit 99.1
Contact:
Jody Burfening/Amy Gibbons
Lippert/Heilshorn & Associates
(212) 838-3777
investorrelations@adamcorp.com
A.D.A.M., Inc. Announces Second Quarter Financial Results
Content Licensing Revenue Increases 7%
ATLANTA — August 11, 2009 — A.D.A.M., Inc. (Nasdaq: ADAM), a leading provider of health information and benefit technology solutions, announced financial results for the second quarter ended June 30, 2009.
“We experienced a noticeable increase in activity levels and contract volume in the second quarter primarily for Benergy and our online enrollment solution,” said Kevin Noland, A.D.A.M.’s president and chief executive officer. “This is reflective of a more receptive employer spending environment and the normal seasonality of our enrollment business. Also, we’ve seen good growth of our sales pipeline for new enrollment opportunities as a result of our expanded sales efforts, which should result in positive bookings for the last half of the year. In addition, we have an aggressive delivery schedule over the next two quarters of new products and product enhancements to drive Benergy growth and improve retention of our broker partners. Our health content business also continues to grow, a result of new product initiatives and new customers.”
Second Quarter Highlights
License revenues for the second quarter ended June 30, 2009 were $6.5 million, compared to $6.3 million in the second quarter of 2008, and $6.2 million in the first quarter of 2009. The increase from the prior year and sequentially primarily reflects an increase in health content license revenue of 7% and 5% respectively.
Total revenues for the second quarter ended June 30, 2009 were $7.1 million, compared to $7.2 million in the second quarter of 2008. The change reflects a lower level of Benergy professional services provided in 2009.
During the second quarter of 2009, the company recorded a restructuring charge of $1.4 million, which was an adjustment to its charge for its 2008 facility consolidation program. The charge reflects a loss of sub-lease receipts for its Uniondale, NY office facility. The Uniondale facilities are no longer being used by the company, and the company expects no further charges relating to this facility.
Non-GAAP operating income was $1.2 million, or 17% of revenues, compared to $1.3 million or 18% of revenues for the same period a year ago. Non-GAAP operating income excludes charges for stock-based compensation and the restructuring charge.
Cash flow, as measured by Adjusted EBITDA was $1.8 million, or 26% of revenues, for the second quarter ended June 30, 2009, as compared to $1.9 million or 26% of revenues for the same period a year ago. At June 30, 2009, the company had cash and cash equivalents of $2.2 million as compared to $1.4 million at December 31, 2008.
Net loss for the second quarter ended June 30, 2009, which included the $1.4 million restructuring charge, was $463,000 or $0.05 per share on a diluted basis as compared to a profit of $810,000 or $0.08 per share on a diluted basis for the second quarter of 2008.
Non-GAAP net income, which excludes charges for stock-based compensation, amortization of purchased intangibles and restructuring charges was $1.3 million, a 10% increase from the same period a year ago.
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A.D.A.M. Announces Second Quarter Financial Results
August 11, 2009
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“We are encouraged by the number of new customer wins in the second quarter. A.D.A.M. continues to deliver solid profits from operations, and we believe we are well positioned to capitalize on our strengths in health content and employer and broker services. The value of our brands, the size of our distribution network and an aggressive product roadmap, will help us build long-term growth for our company,” said Mr. Noland.
Conference Call
To access the call in the U.S., please dial 866-900-2647 and for international callers, dial 706-758-3362 approximately 10 minutes prior to the start of the conference call. The conference call will also be broadcast live over the Internet and available for replay for 90 days at http://www.adam.com.
In addition, a replay of the call will be available via telephone for one week, beginning two hours after the call. To listen to the telephone replay in the U.S., please dial 800-642-1687 and for international callers, dial 706-645-9291. The pass code is 19709965.
Use of Non-GAAP Measures
To supplement our consolidated financial statements presented in accordance with GAAP, we present investors with certain non-GAAP operational measures, including adjusted operating income, adjusted net income, adjusted earnings per share and adjusted EBITDA, all of which primarily exclude the effects of amortization of intangible assets, stock-based compensation, acquisition related expenses, facility consolidation charges, debt refinancing costs, the income tax benefits from valuation of future tax loss carryforwards and a goodwill impairment charge.
Our management considers the total return of an investment we have made in an acquisition (i.e., operating profit generated as compared to the purchase price paid) without taking into consideration any allocations made for accounting purposes. Thus, because the purchase price for an acquisition does not necessarily reflect the accounting value assigned to intangible assets, including customer lists and goodwill, when analyzing the return provided by the acquisition in subsequent periods, our management, for planning and evaluation purposes, excludes the GAAP impact of acquired intangible assets, goodwill impairment charges and other acquisition related expenses to our financial results. We believe that such an approach is useful in understanding the long-term return provided by an acquisition and that our investors benefit from a supplemental non-GAAP financial measure that adjusts for the accounting expense associated with acquired intangible assets.
Similarly, we believe that excluding stock-based compensation expense provides supplemental information and an alternative presentation useful to investors’ understanding of our operating results and trends, especially when comparing those results on a consistent basis to results for previous periods and anticipated results for future periods.
We also believe that, in excluding stock-based compensation, amortization of intangible assets, facility consolidation and the other listed items in the GAAP to Non-GAAP reconciliation schedules, our non-GAAP financial measures provide investors with transparency into the information and basis used by management and our board of directors to measure and forecast our results of operations, to compare on a consistent basis our results of operations for the current period to that of prior periods, to compare our results of operations on a more consistent basis against that of other companies in making financial and operating decisions, and to establish targets for management incentive compensation.
We believe that the presentation of non-GAAP operational measures of adjusted operating income, adjusted net income, adjusted earnings per share and adjusted EBITDA provide important supplemental information to management and investors regarding financial and business trends relating to the company’s financial condition and results of operations. These non-GAAP operational measures have historically been used as key performance metrics by our senior management as they evaluate the performance of the consolidated financial results. These non-GAAP operational measures are reviewed individually as well as in total in measuring our performance against internal and external expectations for the period. The expectations for such key non-GAAP operational measures are the basis for any financial guidance provided by management for future periods. Management believes that the use of each of these non-GAAP financial measures provides enhanced consistency and comparability with our past financial reports. We provide this information to investors to enable them to perform additional analyses of past, present and future operating performance.
A.D.A.M. Announces Second Quarter Financial Results
August 11, 2009
Page 3 of 4
We believe that each of these operational measures is useful to investors in their assessment of our operating performance and the valuation of our company. Adjusted operating income, adjusted net income, adjusted earnings per share and adjusted EBITDA are significant measures used by management for:
| | • | | Reporting our financial results and forecasts to our board of directors; |
| | • | | Evaluating the operating performance of our company; |
| | • | | Managing and comparing performance internally and externally against our peers; and |
| | • | | Establishing internal operating targets. |
These non-GAAP operational measures, including adjusted operating income, adjusted net income, adjusted earnings per share and adjusted EBITDA, are used by us as broad measures of financial performance that encompass our operating performance, cash, capital structure, investment management, and income tax planning effectiveness. These operational measures are not calculated in accordance with GAAP and should be considered supplemental to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. These operational measures have limitations in that they do not reflect all of the costs or reductions to revenues associated with the operations of our business as determined in accordance with GAAP. In addition, these operational measures may not be comparable to non-GAAP financial measures reported by other companies. As a result, one should not consider these measures in isolation or as a substitute for analysis of our results as reported under GAAP. We compensate for these limitations by analyzing current and future results on a GAAP basis as well as a non-GAAP basis, prominently disclosing GAAP results and providing reconciliations from GAAP results to operational measures. The limitations in relying on our non-GAAP financial measures include the fact that the adjusted operating income, adjusted net income, adjusted earnings per share and adjusted EBITDA operational measures do not include the impact of stock-based compensation expense or the effects of amortization of intangible assets, acquisition related expenses and other charges. We expect to continue to incur expenses similar to the non-GAAP adjustments described above, and the exclusion or inclusion of these items from our non-GAAP financial measures should not be construed as an inference that these costs are unusual or infrequent.
About A.D.A.M., Inc.
A.D.A.M. (Nasdaq: ADAM) is a leading provider of health information and benefits technology solutions to healthcare organizations, employers, consumers, and educational institutions. A.D.A.M.’s portfolio of products includes its award-winning Multimedia Encyclopedia and Benergy®, the leading benefits communication and healthcare decision support platform for small and mid-sized employers. A.D.A.M. content and technology solutions help consumers better understand their health, wellness and benefits, while helping healthcare organizations and employers reduce the costs of healthcare and benefits administration. For more information, visit http://www.adam.com or call 1-800-755-ADAM.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934, as amended. The forward-looking statements are based on A.D.A.M.’s current intent, belief and expectations. These statements, especially revenue, net income, cash flow, are not guarantees of future performance and involve a number of risks and uncertainties that can be difficult to predict and that could cause actual results, performance or developments to differ materially. Factors that could affect the company's actual results, performance or developments include general economic conditions, development of the Internet as a source of health information, pricing actions taken by competitors, demand for the company's health information, regulatory changes in laws and regulations that impact how the company conducts its business and the other factors described in A.D.A.M.’s filings with the SEC. A.D.A.M. undertakes no obligation or duty to update or revise any of its forward-looking statements whether as a result of new information, future events, circumstances or otherwise.
# # #
A.D.A.M., Inc.
Consolidated Statements of Operations
A.D.A.M. Announces Second Quarter Financial Results
August 11, 2009
Page 4 of 4
Second Quarter, 2009
Numbers in thousands, except per share data
A.D.A.M., Inc.
Reconciliation of Selected GAAP Measures to Non-GAAP Measures
Second Quarter, 2009
Numbers in thousands, except per share data
A.D.A.M., Inc.
Consolidated Balance Sheets
Numbers in thousands
A.D.A.M., Inc.
Consolidated Statements of Cash Flows
Numbers in thousands
A.D.A.M., Inc.
Consolidated Statements of Operations (Unaudited)
Second Quarter, 2009 and 2008
(numbers in thousands, except per share data)
| | | | | | | | | | | | | | | | |
| | | Three Months Ended June 30, | | | % Increase
(Decrease) | |
| | | 2009 | | | % of
Revenues | | | 2008 | | % of
Revenues | | |
Revenues, net: | | | | | | | | | | | | | | | | |
Licensing | | $ | 6,528 | | | 92 | % | | $ | 6,330 | | 88 | % | | 3 | % |
Product | | | 340 | | | 5 | % | | | 316 | | 4 | % | | 8 | % |
Professional services and other | | | 204 | | | 3 | % | | | 543 | | 8 | % | | -62 | % |
| | | | | | | | | | | | | | | | |
Total revenues, net | | | 7,072 | | | 100 | % | | | 7,189 | | 100 | % | | -2 | % |
| | | | | | | | | | | | | | | | |
Cost of revenues: | | | | | | | | | | | | | | | | |
Cost of revenues | | | 1,064 | | | 15 | % | | | 921 | | 13 | % | | 16 | % |
Cost of revenues – amortization | | | 512 | | | 7 | % | | | 465 | | 6 | % | | 10 | % |
| | | | | | | | | | | | | | | | |
Total cost of revenues | | | 1,576 | | | 22 | % | | | 1,386 | | 19 | % | | 14 | % |
| | | | | | | | | | | | | | | | |
Gross profit | | | 5,496 | | | 78 | % | | | 5,803 | | 81 | % | | -5 | % |
| | | | | | | | | | | | | | | | |
Operating expenses: | | | | | | | | | | | | | | | | |
Product and content development | | | 1,445 | | | 20 | % | | | 1,197 | | 17 | % | | 21 | % |
Sales and marketing | | | 1,831 | | | 26 | % | | | 2,157 | | 30 | % | | -15 | % |
General and administrative | | | 1,161 | | | 16 | % | | | 1,298 | | 18 | % | | -11 | % |
Restructuring costs | | | 1,408 | | | 20 | % | | | — | | 0 | % | | (a | ) |
| | | | | | | | | | | | | | | | |
Total operating expenses | | | 5,845 | | | 83 | % | | | 4,652 | | 65 | % | | 26 | % |
| | | | | | | | | | | | | | | | |
Operating income (loss) | | | (349 | ) | | -5 | % | | | 1,151 | | 16 | % | | -130 | % |
| | | | | | | | | | | | | | | | |
Interest expense, net | | | 114 | | | 2 | % | | | 341 | | 5 | % | | -67 | % |
| | | | | | | | | | | | | | | | |
Income before income taxes | | | (463 | ) | | -7 | % | | | 810 | | 11 | % | | -157 | % |
Income tax benefit | | | — | | | 0 | % | | | — | | 0 | % | | (a | ) |
| | | | | | | | | | | | | | | | |
Net income (loss) | | $ | (463 | ) | | -7 | % | | $ | 810 | | 11 | % | | -157 | % |
| | | | | | | | | | | | | | | | |
Earnings per share | | | | | | | | | | | | | | | | |
Basic | | $ | (0.05 | ) | | | | | $ | 0.08 | | | | | | |
Diluted | | $ | (0.05 | ) | | | | | $ | 0.08 | | | | | | |
Weighted average common shares outstanding | | | | | | | | | | | | | | | | |
Basic | | | 9,882 | | | | | | | 9,795 | | | | | | |
Diluted | | | 9,882 | | | | | | | 10,760 | | | | | | |
A.D.A.M., Inc.
Consolidated Statements of Operations (Unaudited)
Year-to-Date, 2009 and 2008
(numbers in thousands, except per share data)
| | | | | | | | | | | | | | | | |
| | | Six Months Ended June 30, | | | % Increase
(Decrease) | |
| | | 2009 | | | % of
Revenues | | | 2008 | | % of
Revenues | | |
Revenues, net: | | | | | | | | | | | | | | | | |
Licensing | | $ | 12,704 | | | 92 | % | | $ | 12,759 | | 89 | % | | 0 | % |
Product | | | 555 | | | 4 | % | | | 557 | | 4 | % | | 0 | % |
Professional services and other | | | 482 | | | 4 | % | | | 996 | | 7 | % | | -52 | % |
| | | | | | | | | | | | | | | | |
Total revenues, net | | | 13,741 | | | 100 | % | | | 14,312 | | 100 | % | | -4 | % |
| | | | | | | | | | | | | | | | |
Cost of revenues: | | | | | | | | | | | | | | | | |
Cost of revenues | | | 2,179 | | | 16 | % | | | 1,867 | | 13 | % | | 17 | % |
Cost of revenues – amortization | | | 975 | | | 7 | % | | | 947 | | 7 | % | | 3 | % |
| | | | | | | | | | | | | | | | |
Total cost of revenues | | | 3,154 | | | 23 | % | | | 2,814 | | 20 | % | | 12 | % |
| | | | | | | | | | | | | | | | |
Gross profit | | | 10,587 | | | 77 | % | | | 11,498 | | 80 | % | | -8 | % |
| | | | | | | | | | | | | | | | |
Operating expenses: | | | | | | | | | | | | | | | | |
Product and content development | | | 2,490 | | | 18 | % | | | 2,188 | | 15 | % | | 14 | % |
Sales and marketing | | | 3,778 | | | 27 | % | | | 4,274 | | 30 | % | | -12 | % |
General and administrative | | | 2,244 | | | 16 | % | | | 2,593 | | 18 | % | | -13 | % |
Goodwill impairment and restructuring costs | | | 13,940 | | | 101 | % | | | — | | 0 | % | | (a | ) |
Restructuring costs | | | 1,408 | | | 10 | % | | | — | | 0 | % | | (a | ) |
| | | | | | | | | | | | | | | | |
Total operating expenses | | | 23,860 | | | 174 | % | | | 9,055 | | 63 | % | | 164 | % |
| | | | | | | | | | | | | | | | |
Operating income (loss) | | | (13,273 | ) | | -97 | % | | | 2,443 | | 17 | % | | -643 | % |
| | | | | | | | | | | | | | | | |
Interest expense | | | 233 | | | 2 | % | | | 789 | | 6 | % | | -70 | % |
Loss on sale of investments | | | — | | | 0 | % | | | 296 | | 2 | % | | (a | ) |
| | | | | | | | | | | | | | | | |
Income before income taxes | | | (13,506 | ) | | -98 | % | | | 1,358 | | 9 | % | | (a | ) |
Income tax benefit | | | — | | | 0 | % | | | — | | 0 | % | | (a | ) |
| | | | | | | | | | | | | | | | |
Net income (loss) | | $ | (13,506 | ) | | -98 | % | | $ | 1,358 | | 9 | % | | (a | ) |
| | | | | | | | | | | | | | | | |
Earnings per share | | | | | | | | | | | | | | | | |
Basic | | $ | (1.37 | ) | | | | | $ | 0.14 | | | | | | |
Diluted | | $ | (1.37 | ) | | | | | $ | 0.13 | | | | | | |
| | | | | |
Weighted average common shares outstanding | | | | | | | | | | | | | | | | |
Basic | | | 9,882 | | | | | | | 9,755 | | | | | | |
Diluted | | | 9,882 | | | | | | | 10,743 | | | | | | |
A.D.A.M., Inc.
Reconciliation of Selected GAAP Measures to Non-GAAP Measures (1) (Unaudited)
Second Quarter, 2009 and 2008
(numbers in thousands, except per share data)
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended June 30, | |
| | | 2009
GAAP | | | 2009
Non-GAAP | | | 2008
GAAP | | 2008
Non-GAAP | | % Increase/
Decrease | |
Reconciliation of GAAP operating income (loss), net income (loss) and EPS to non-GAAP measures. | | | | | | | | | | | | | | | | | |
| | | | | |
GAAP operating income (loss) | | $ | (349 | ) | | $ | (349 | ) | | $ | 1,151 | | $ | 1,151 | | | |
Stock-based compensation (2) | | | | | | | 158 | | | | | | | 178 | | | |
Restructuring costs (4) | | | | | | | 1,408 | | | | | | | — | | | |
| | | | | | | | | | | | | | | | | |
Non-GAAP operating income | | | | | | $ | 1,217 | | | | | | $ | 1,329 | | -8 | % |
| | | | | | | | | | | | | | | | | |
GAAP net income (loss) | | $ | (463 | ) | | $ | (463 | ) | | $ | 810 | | $ | 810 | | | |
Stock-based compensation (2) | | | | | | | 158 | | | | | | | 178 | | | |
Amortization of purchased intangibles (3) | | | | | | | 189 | | | | | | | 188 | | | |
Restructuring costs (4) | | | | | | | 1,408 | | | | | | | — | | | |
| | | | | | | | | | | | | | | | | |
Non-GAAP net income | | | | | | $ | 1,292 | | | | | | $ | 1,176 | | 10 | % |
| | | | | | | | | | | | | | | | | |
Diluted earnings per share | | $ | (0.05 | ) | | $ | 0.13 | | | $ | 0.08 | | $ | 0.11 | | | |
Diluted common shares outstanding | | | 9,882 | | | | 9,882 | | | | 10,760 | | | 10,760 | | | |
| | | | | |
Reconciliation of GAAP net income (loss) to adjusted EBITDA is as follows: | | | | | | | | | | | | | | | | | |
| | | | | |
GAAP net income (loss) | | | | | | $ | (463 | ) | | | | | $ | 810 | | | |
Depreciation | | | | | | | 107 | | | | | | | 106 | | | |
Amortization of software development | | | | | | | 323 | | | | | | | 277 | | | |
Stock-based compensation (2) | | | | | | | 158 | | | | | | | 178 | | | |
Amortization of purchase intangibles (3) | | | | | | | 189 | | | | | | | 188 | | | |
Interest expense (income) | | | | | | | 114 | | | | | | | 341 | | | |
Restructuring costs (4) | | | | | | | 1,408 | | | | | | | — | | | |
| | | | | | | | | | | | | | | | | |
Adjusted EBITDA | | | | | | $ | 1,836 | | | | | | $ | 1,900 | | -3 | % |
| | | | | | | | | | | | | | | | | |
| (1) | This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered as a substitute for comparable GAAP measures and should be read only in conjunction with our financial statements prepared in accordance with GAAP and our press release, which explains our use of non-GAAP measures. |
| (2) | Stock-based compensation related to non-cash charges for stock options. |
| (3) | Amortization of customer list and purchased software acquired with Online Benefits. |
| (4) | Facility consolidation—revision in estimate of sublease rental income related to 2008 Facility Consolidation Program |
A.D.A.M., Inc.
Reconciliation of Selected GAAP Measures to Non-GAAP Measures (1) (Unaudited)
Year-to-Date, 2009 and 2008
(numbers in thousands, except per share data)
| | | | | | | | | | | | | | | | | |
| | | Six Months Ended June 30, | |
| | | 2009
GAAP | | | 2009
Non-GAAP | | | 2008
GAAP | | 2008
Non-GAAP | | % Increase/
Decrease | |
Reconciliation of GAAP operating income (loss), net income (loss) and EPS to non-GAAP measures. | | | | | | | | | | | | | | | | | |
| | | | | |
GAAP operating income (loss) | | $ | (13,273 | ) | | $ | (13,273 | ) | | $ | 2,443 | | $ | 2,443 | | | |
Stock-based compensation (2) | | | | | | | 306 | | | | | | | 322 | | | |
Goodwill impairment (5) | | | | | | | 13,940 | | | | | | | — | | | |
Restructuring costs (6) | | | | | | | 1,408 | | | | | | | — | | | |
| | | | | | | | | | | | | | | | | |
Non-GAAP operating income | | | | | | $ | 2,381 | | | | | | $ | 2,765 | | -14 | % |
| | | | | | | | | | | | | | | | | |
GAAP net income (loss) | | $ | (13,506 | ) | | $ | (13,506 | ) | | $ | 1,358 | | $ | 1,358 | | | |
Stock-based compensation (2) | | | | | | | 306 | | | | | | | 322 | | | |
Amortization of purchased intangibles (3) | | | | | | | 377 | | | | | | | 377 | | | |
Goodwill impairment (5) | | | | | | | 13,940 | | | | | | | — | | | |
Restructuring costs (6) | | | | | | | 1,408 | | | | | | | — | | | |
| | | | | | | | | | | | | | | | | |
Non-GAAP net income | | | | | | $ | 2,525 | | | | | | $ | 2,057 | | 23 | % |
| | | | | | | | | | | | | | | | | |
Diluted earnings per share | | $ | (1.37 | ) | | $ | 0.26 | | | $ | 0.13 | | $ | 0.19 | | | |
Diluted common shares outstanding | | | 9,882 | | | | 9,882 | | | | 10,743 | | | 10,743 | | | |
| | | | | |
Reconciliation of GAAP net income (loss) to adjusted EBITDA is as follows: | | | | | | | | | | | | | | | | | |
| | | | | |
GAAP net income (loss) | | | | | | $ | (13,506 | ) | | | | | $ | 1,358 | | | |
Depreciation | | | | | | | 211 | | | | | | | 215 | | | |
Amortization of software development | | | | | | | 598 | | | | | | | 570 | | | |
Stock-based compensation (2) | | | | | | | 306 | | | | | | | 322 | | | |
Amortization of purchase intangibles (3) | | | | | | | 377 | | | | | | | 377 | | | |
Interest expense (income) | | | | | | | 233 | | | | | | | 789 | | | |
Loss on sale of investments (4) | | | | | | | — | | | | | | | 296 | | | |
Goodwill impairment (5) | | | | | | | 13,940 | | | | | | | — | | | |
Restructuring costs (6) | | | | | | | 1,408 | | | | | | | — | | | |
| | | | | | | | | | | | | | | | | |
Adjusted EBITDA | | | | | | $ | 3,567 | | | | | | $ | 3,927 | | -9 | % |
| | | | | | | | | | | | | | | | | |
| (1) | This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered as a substitute for comparable GAAP measures and should be read only in conjunction with our financial statements prepared in accordance with GAAP and our press release, which explains our use of non-GAAP measures. |
| (2) | Stock-based compensation related to non-cash charges for stock options. |
| (3) | Amortization of customer list and purchased software acquired with Online Benefits. |
| (4) | Recognition of loss from sale of interest bearing short term investments. |
| (5) | Goodwill impairment related to the acquisition of Online Benefits. |
| (6) | Facility consolidation—revision in estimate of sublease rental income related to 2008 Facility Consolidation Program |
A.D.A.M., Inc.
Consolidated Balance Sheets (Unaudited)
June 30, 2009 and December 31, 2008
(numbers in thousands)
| | | | | | | | |
| | | June 30,
2009 | | | December 31,
2008 | |
Assets | | | | | | | | |
Current assets | | | | | | | | |
Cash and cash equivalents | | $ | 2,215 | | | $ | 1,377 | |
Accounts receivable, net | | | 2,706 | | | | 3,986 | |
Restricted cash | | | 18 | | | | 47 | |
Inventories, net | | | 23 | | | | 33 | |
Prepaids and other current assets | | | 531 | | | | 597 | |
Deferred income tax asset | | | 558 | | | | 558 | |
| | | | | | | | |
Total current assets | | | 6,051 | | | | 6,598 | |
| | | | | | | | |
Non-current assets | | | | | | | | |
Property and equipment, net | | | 1,495 | | | | 1,592 | |
Intangible assets, net | | | 9,870 | | | | 9,979 | |
Goodwill | | | 13,690 | | | | 27,617 | |
Other assets | | | 212 | | | | 206 | |
Deferred financing costs, net | | | 72 | | | | 92 | |
Deferred income tax asset | | | 7,062 | | | | 7,062 | |
| | | | | | | | |
Total non-current assets | | | 32,401 | | | | 46,548 | |
| | | | | | | | |
Total assets | | $ | 38,452 | | | $ | 53,146 | |
| | | | | | | | |
| | |
Liabilities and shareholders’ equity | | | | | | | | |
Current liabilities | | | | | | | | |
Accounts payables and accrued expenses | | $ | 3,373 | | | $ | 3,880 | |
Deferred revenue | | | 5,404 | | | | 5,995 | |
Current portion of long-term debt | | | 2,000 | | | | 2,000 | |
Current portion of capital lease obligations | | | 20 | | | | 44 | |
| | | | | | | | |
Total current liabilities | | | 10,797 | | | | 11,919 | |
| | | | | | | | |
Non-current liabilities | | | | | | | | |
Capital lease obligations, net of current portion | | | 103 | | | | 112 | |
Other liabilities | | | 1,930 | | | | 1,293 | |
Long-term debt, net of current portion | | | 7,000 | | | | 8,000 | |
| | | | | | | | |
Total non-current liabilities | | | 9,033 | | | | 9,405 | |
| | | | | | | | |
Stockholders’ equity | | | | | | | | |
Common stock | | | 102 | | | | 102 | |
Treasury stock | | | (1,088 | ) | | | (1,088 | ) |
Additional paid-in capital | | | 58,781 | | | | 58,475 | |
Accumulated deficit | | | (39,173 | ) | | | (25,667 | ) |
| | | | | | | | |
Total stockholders’ equity | | | 18,622 | | | | 31,822 | |
| | | | | | | | |
Total liabilities and stockholders’ equity | | $ | 38,452 | | | $ | 53,146 | |
| | | | | | | | |
A.D.A.M., Inc.
Consolidated Statements of Cash Flows (Unaudited)
Year-to-Date, 2009 and 2008
(numbers in thousands)
| | | | | | | | |
| | | Six Months Ended
June 30, 2009 | | | Six Months Ended
June 30, 2008 | |
Cash flows from operating activities | | | | | | | | |
Net income (loss) | | $ | (13,506 | ) | | $ | 1,358 | |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | | | | | | | | |
Goodwill impairment | | | 13,940 | | | | — | |
Restructuring costs | | | 1,408 | | | | — | |
Payments for restructuring costs | | | (841 | ) | | | — | |
Depreciation and amortization | | | 1,186 | | | | 1,163 | |
Stock-based compensation expense | | | 306 | | | | 322 | |
Deferred financing cost amortization | | | 20 | | | | 241 | |
Loss on sale of investments | | | — | | | | 296 | |
Changes in assets and liabilities: | | | | | | | | |
Accounts receivable | | | 1,280 | | | | 852 | |
Inventories | | | 10 | | | | 16 | |
Prepaids and other assets | | | 60 | | | | (215 | ) |
Accounts payable and accrued liabilities | | | (756 | ) | | | (1,014 | ) |
Deferred revenue | | | (591 | ) | | | (265 | ) |
Other liabilities | | | 319 | | | | 10 | |
| | | | | | | | |
Net cash provided by operating activities | | | 2,835 | | | | 2,764 | |
| | | | | | | | |
Cash flows from investing activities | | | | | | | | |
Software product and content development costs | | | (866 | ) | | | (1,114 | ) |
Purchases of property and equipment | | | (114 | ) | | | (329 | ) |
Additional cost of previous acquisition | | | (13 | ) | | | (40 | ) |
Net change in restricted cash | | | 29 | | | | — | |
Proceeds from sale of investments | | | — | | | | 2,716 | |
Purchase of investments | | | — | | | | (37 | ) |
| | | | | | | | |
Net cash (used in) provided by investing activities | | | (964 | ) | | | 1,196 | |
| | | | | | | | |
Cash flows from financing activities | | | | | | | | |
Payment on long-term debt | | | (1,000 | ) | | | (6,000 | ) |
Proceeds from exercise of common stock options | | | — | | | | 554 | |
Repayments on capital leases | | | (33 | ) | | | (57 | ) |
| | | | | | | | |
Net cash used in financing activities | | | (1,033 | ) | | | (5,503 | ) |
| | | | | | | | |
Increase (decrease) in cash and cash equivalents | | | 838 | | | | (1,543 | ) |
Cash and cash equivalents, beginning of period | | | 1,377 | | | | 5,425 | |
| | | | | | | | |
Cash and cash equivalents, end of period | | $ | 2,215 | | | $ | 3,882 | |
| | | | | | | | |
