8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

Current Report

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): 02/13/2007

A.D.A.M., Inc.

(Exact name of registrant as specified in its charter)

Commission File Number: 000-26962

Georgia	58-1878070
(State or other jurisdiction of incorporation)	(IRS Employer Identification No.)

1600 Riveredge Parkway, Suite 100, Atlanta, Georgia 30328

(Address of principal executive offices, including zip code)

770-980-0888

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Information to be included in the report

Item 2.02. Results of Operations and Financial Condition

On February 13, 2007, A.D.A.M., Inc. issued a press release announcing its financial results for the fourth quarter and year ended December 31, 2006. The press release is attached as Exhibit 99.1 to this Form 8-K. The information in this Form 8-K and the Exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Act of 1934 and shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits

(d) The following exhibit is being furnished with this report pursuant to Item 2.02 of this Form 8-K:

Exhibit No	Description
99.1	Press Release Regarding Financial Results for the Fourth

Quarter and Year Ended December 31, 2006.

Signature(s)

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	A.D.A.M., Inc.
Date: February 15, 2007	By:	/s/ Kevin S. Noland
		Kevin S. Noland President and Chief Executive Officer

Exhibit Index

Exhibit No.	Description
EX-99.1	Press Release Regarding Financial Results for the Fourth Quarter and Year Ended December 31, 2006.

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

A.D.A.M., Inc. Reports Preliminary 2006 Results and Provides 2007 Guidance

February 13, 2007 – Atlanta, GA – A.D.A.M., Inc. (Nasdaq:ADAM), a leading provider of health information services and benefits management solutions, today reported preliminary and unaudited financial results for the fourth quarter and year ended December 31, 2006.

Revenues for the fourth quarter ended December 31, 2006 were $6,800,000 as compared to $2,507,000 in the year-ago period. The increase in revenue is primarily attributable to the acquisition of Online Benefits, Inc., which the Company completed in August 2006. On a pro forma basis, reflecting Online Benefits as if it had been consolidated for the entire period, revenue for the fourth quarter increased approximately 12% from $6,063,000 in the year-ago period and approximately 12% sequentially from $6,072,000 for the quarter ending September 30, 2006. The fourth quarter 2006 included $245,000 in revenues for two large book shipments.

Revenues for the year ended December 31, 2006 were $16,500,000 as compared to $10,054,000 in the year-ago period, an increase of 64%. For 2006, Online Benefits revenues were $5,400,000 and A.D.A.M. revenues were $11,100,000. On a pro forma basis, total revenues for the year increased 7% to $24,800,000.

Operating income for the fourth quarter and year ended December 31, 2006 was $1,000,000 and $3,100,000, respectively. For the fourth quarter and year, operating income was reduced by one-time charges of $500,000 in the fourth quarter related to employee severance costs. Non-GAAP, adjusted operating income for the fourth quarter and year, which excludes the aforementioned severance charges, non-cash stock-based compensation expense and amortization of purchase intangibles, was $1,700,000 and $4,000,000, respectively. Non-GAAP, adjusted operating margin was 25% and 24% for the fourth quarter and year, respectively.

Net income for the fourth quarter and year ended December 31, 2006 was $300,000 and $2,500,000, respectively. Non-GAAP, adjusted net income, which excludes severance costs, non-cash stock-based compensation expense and amortization of purchased intangibles, was $1,000,000 and $3,400,000 for the fourth quarter and year, respectively.

2006 Highlights

• Successfully completed acquisition and integration of Online Benefits, Inc.

• Signed multi-year distribution agreement with Thomson Micromedex

• Selected by Walgreens to provide consumer health information on Walgreens.com

• Launched DecisionAssist suite and Health Risk Assessment Reporting tools to address the needs of the accelerating consumer driven health marketplace

• Expanded relationship with Subimo to provide consumers with a comprehensive wellness tool set designed to teach health plan members how to track, evaluate and manage their health

2007 Outlook

The following statements are forward-looking and actual results may differ materially. Please refer to the section titled, “Forward-Looking Statements” at the end of this press release for a complete description of risks. The Company’s quarterly and annual filings with the Securities and Exchange Commission also provide a more detailed description of risk factors.

The company has now fully integrated the acquisition of Online Benefits and the first of a three phase launch of our next generation product, Benergy 2G!, is expected to begin in early second quarter, 2007. The company is revising its financial guidance for the year ending December 31, 2007 to $26 – $28 million of revenues and Adjusted EBITDA of $6 – $7 million. The company defines Non-GAAP Adjusted EBITDA as earnings before interest, taxes, depreciation, amortization and non-cash stock-based compensation expense. For the year ending December 31, 2006, the company’s Adjusted EBITDA was $4,900,000.

Non-GAAP Measures

Adjusted operating income represents operating income before severance costs, non-cash stock-based compensation expense and amortization of purchased intangibles. Adjusted net income represents net income before severance costs, non-cash stock-based compensation expense and amortization of purchased intangibles. Adjusted EBITDA represents earnings before interest, taxes, depreciation, amortization and non-cash stock-based compensation expense. These financial measures are not measures of financial performance in accordance with generally accepted accounting principles. We believe these non-GAAP financial measures are useful because they are appropriate measures for evaluating our operating performance. We present these non-GAAP financial measures to provide additional information regarding our performance and because they are measures by which we gauge our profitability. You should not consider these non-GAAP financial measures as an alternative to net income. Our calculation of these financial measures may be different from the calculations used by other companies and, as a result, comparability may be limited.

Forward-Looking Statements

Except for historical information, all of the statements, expectations and assumptions contained in this press release are forward-looking statements. These statements,

especially revenue, net income and cash flow forecasts, involve a number of risks and uncertainties 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, the ability to realize the anticipated benefits of the acquisition, 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. disclaims any obligation or duty to update any of its forward-looking statements.

Conference Call and Earnings Release Information

These financial results are preliminary and subject to adjustments during the Company’s year-end close process. The Company will be conducting a conference call to discuss final earnings results for the fourth quarter and year-end on March 20, 2007, at 10:00 A.M. ET. To participate in the call, please dial (866) 624-3372 approximately five minutes prior to the start time. International callers may dial (706) 758-3874. A digital replay will be available the following day by dialing (800) 633-8284 or (402) 977-9140 with reservation number 21328889. The Company will issue its final results prior to the conference call.

About A.D.A.M., Inc.

A.D.A.M. (Nasdaq: ADAM – News) is a leading provider of health information services and benefits management solutions serving healthcare organizations, employers, insurance brokers, consumers, and educational institutions. With an industry-leading employee and HR benefits management platform and one of the largest consumer health information libraries in the world, A.D.A.M. engages consumers to learn about their health and manage their benefit choices while reducing the costs of healthcare and benefits administration. For more information, visit www.adam.com or call 1-800-408-ADAM.

For further information contact:

Victor Thompson, Investor Relations

A.D.A.M., Inc.

(770) 425-7877

A.D.A.M., Inc.

Preliminary Non-GAAP Condensed Financial Results

	Three Months Ended December 31, 2006									Year Ended December 31, 2006
	GAAP			Adj.			Non-GAAP			GAAP			Adj.			Non-GAAP
Total revenues	$	6,800,000		$	—		$	6,800,000		$	16,500,000		$	—		$	16,500,000
Total operating expenses		5,800,000			(700,000	)		5,100,000			13,400,000			(900,000	)		12,500,000
Stock-based compensation (1)		—			—			—			100,000			(100,000	)		—
Amortization of purchased intangibles (2)		200,000			(200,000	)		—			300,000			(300,000	)		—
Severance (3)		500,000			(500,000	)		—			500,000			(500,000	)		—
Operating income		1,000,000			700,000			1,700,000			3,100,000			900,000			4,000,000
Operating margin %		14.7	%		—			25.0	%		18.8	%		—			24.2	%
Net Income		300,000			700,000			1,000,000			2,500,000			900,000			3,400,000
Net income		300,000			700,000			1,000,000			2,500,000			900,000			3,400,000
Depreciation		100,000			—			100,000			200,000			—			200,000
Amortization of software development		100,000			—			100,000			700,000			—			700,000
Amortization of purchased intangibles (2)		200,000			(200,000	)		—			300,000			(300,000	)		—
Interest expense (income)		700,000			—			700,000			600,000			—			600,000
EBITDA	$	1,400,000		$	500,000		$	1,900,000		$	4,300,000		$	600,000		$	4,900,000

(1) Stock-based compensation related to non-cash charges for stock options and variable stock compensation expense.

(2) Amortization of customer list and purchased software acquired with Online Benefits.

(3) Severance costs related to reduction in force.