A.D.A.M. second-quarter total revenues decrease to $6.7 million

A.D.A.M., Inc. (Nasdaq: ADAM), a leading provider of health information and benefit technology solutions, today announced its financial results for the second quarter ended June 30, 2010.

"We made solid progress during the second quarter in sharpening our operational execution in 2010," said Mark Adams, president and chief executive officer of A.D.A.M. "Sharper focus on customer service, marketing, sales and product development will further align our company with marketplace requirements and drive revenue growth in the future. In addition, our accelerated product development programs are creating a pipeline of new product offerings, several of which we expect to release in the second half of this year."

"Our second quarter financial results were consistent with our expectations and are highlighted by our adjusted operating income margin of 18% of revenues. A.D.A.M.'s revenues continue to shift more heavily towards our recurring revenue model and away from product sales. Our business model continued to generate EBITDA that was 27% of revenues, which gives us the internal funding necessary to continue to reinforce our foundation for future growth."

Financial Results:

Second Quarter Highlights

License revenues were $6.5 million for the second quarter of 2010 and 2009. Total revenues were $6.7 million for the second quarter of 2010, compared to $7.1 million in the second quarter of 2009, reflecting lower product revenue as a result of the switch from selling CD-ROM products to online license solutions with recurring revenues over future periods.

Non-GAAP adjusted operating income was unchanged at $1.2 million, or 18% of revenues, for the second quarter of 2010, compared to 17% of revenues for the second quarter of 2009.

Cash flow, as measured by Adjusted EBITDA, was $1.8 million, or 27% of revenues, for the second quarter ended June 30, 2010, as compared to $1.8 million, or 26% of revenues, for the same period a year ago.

Net income for the second quarter ended June 30, 2010 increased by $1.5 million to $1.0 million, compared to a net loss of $463,000 for the second quarter of 2009. Net income for the second quarter 2009 included a restructuring charge of $1.4 million related to the 2008 facility consolidation program.

Non-GAAP adjusted net income was $1.2 million, compared to $1.3 million for the same period a year ago. Non-GAAP adjusted net income excludes charges for stock-based compensation, amortization of purchased intangibles, and the restructuring charge in the second quarter of 2009.

At June 30, 2010, the company had cash and cash equivalents of $4.0 million as compared to $5.4 million at December 31, 2009. Long-term debt was reduced by $3.0 million during the first half of 2010, which included $2.0 million in payments in advance of the required payment schedule. At June 30, 2010, the company had a debt balance of $5.0 million.