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adam.com misses estimates but &#039Net sales surge

adam.com posted a slightly wider-than-expected loss in its fiscal fourth quarter Monday, losing $3.47 million, or 72 cents a share, on sales of $1.26 million.

First Call consensus expected the provider of online medical and health information to lose 70 cents a share.

Including non-recurring charges of $1 million related to stock and compensation transactions, the Atlanta-based firm lost $4.5 million, or 93 cents a share.

adam.com (Nasdaq: ADAM) shares closed off 1 7/16 to 14 13/16 ahead of the earnings report. In December, the company switched its fiscal calendar to conclude on Dec. 31 rather than March 31.

While the quarterly loss was a tad wider than most analysts' predicted, company officials can take solace in the fact that its Internet sales jumped to $519,000 in the quarter, up 185 percent from the year-ago period. Total sales improved to $1.26 million, up from $1.11 million in the same period last year.

"1999 was clearly a year of transition for us," said CEO Bob Cramer. "But we're hitting it at full speed right now. As our Internet sales go up, our cost of revenues go down. That's the power of our profit margins."

In the quarter, adam.com's gross profit margins checked in at 90 percent, Cramer said.

Cramer said the company has already inked several key contracts with major corporations as well as several smaller health care companies in the first eight weeks of the current quarter.

"Analysts are projecting we will double our sales this year and in 2001," he said. "That means between $16 million to $20 million in sales in fiscal 2001."

The stock surged to a 52-week high of 40 in May when Internet stocks of all shapes and sizes were on terrific run-ups. It was trading at a low of 5 1/2 in April.

Both analysts tracking the stock maintain either a "buy" or "strong buy" recommendation.