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):

August 3, 2004

AUDIBLE, INC.

(Exact name of registrant as specified in its charter)

DELAWARE

(State or other jurisdiction of incorporation)

000-26529	22-3407945
(Commission File No.)	(IRS Employer Identification No.)

65 Willowbrook Boulevard

Wayne, NJ 07470

(Address of principal executive offices and zip code)

(973) 837-2700

(Registrant's telephone number, including area code)

Item 7.Financial Statements and Exhibits.

(a)Not Applicable.

(b)Not Applicable.

(c)Exhibits. 99.1 Press Release dated August 3, 2004.

Item 9.Regulation FD Disclosure.

This Form 8-K furnishes information required under Items 9 and 12 of Form 8-K. See Item 12 below.

Item 12.            Results of Operations and Financial Condition.

On August 3, 2004, Audible, Inc. (the "Company") issued a press release (the "Press Release") announcing its financial results for the quarter ended June 30, 2004.

A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.

The information contained in this Form 8-K and the press release attached hereto as Exhibit 99.1 shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall such press release be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.

SIGNATURES

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.

Date: August 3, 2004	Audible, Inc.
	/s/ Andrew P. Kaplan
	By:	Andrew P. Kaplan
	Title:	Chief Financial Officer

INDEX TO EXHIBITS

Exhibit No.	Description
99.1	Press release issued by the Company on August 3, 2004.

EX-99.1

For Release at 4p.m. EDT Tuesday, August 3, 2004

Contacts:
Andrew Kaplan	Jonathan Korzen
Chief Financial Officer	Director of Public Relations
(973) 837-2734	(973) 837-2718
akaplan@audible.com	jkorzen@audible.com

AUDIBLE® REPORTS SECOND QUARTER RESULTS
HIGHLIGHTED BY 86% YEAR-OVER-YEAR CONTENT
AND SERVICES REVENUE GROWTH

Company Achieves Solid Free Cash Flow and Profit Growth

WAYNE, NJ, August 3, 2004— Audible, Inc. (NASDAQ: ADBL), the leading provider of digitally delivered spoken word audio, today announced financial results for the three months ended June 30, 2004.

Second quarter financial and growth highlights include:

·   Net content and services revenue of $7.9 million, up 86% over the second quarter of 2003 and 20% over the first quarter of 2004.

·   Total revenue of $8.1 million, up 82% over the second quarter of 2003 and 19% over the first quarter of 2004.

·   Net income of $237,000 and EPS of $0.01.

·   Free cash flow* of $611,000 as compared to $312,000 in the first quarter of 2004.

·   The addition of 35,250 new customers, of which 24,500, or 70%, were AudibleListener® members.

"Our strong second quarter results demonstrate the key characteristics of our business model: operating efficiencies inherent to digital distribution, the consistent scalability of a steady membership-based recurrent revenue stream, and the additive growth elements of a creative and fast-moving retailer," said Donald Katz, Chairman and CEO, Audible, Inc. "We are particularly pleased by our progress during the quarter as these results come in advance of the expected significant increase in new AudibleReady® digital audio devices during the last half of the year."

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"This was another positive quarter for Audible," added Andrew Kaplan, Chief Financial Officer, Audible, Inc. "Solid gains in AudibleListener membership, combined with strong a la carte sales at audible.com and accelerating sales at the Apple iTunes Music Store resulted in record revenue. While operating expenses remain under tight control, general and administrative expenses in the second quarter were unusually high due to outside legal costs related to business development activities overseas, spending related to Sarbanes-Oxley compliance, and expenses related to the Company’s relisting on Nasdaq."

Other recent highlights:

·   Audible® was relisted on the Nasdaq Small Cap market effective July 1, 2004, and completed a 1-for-3 reverse stock split on June 17.

·   William H. Washecka, a retired Ernst & Young partner who established and managed E&Y’s High Technology and Emerging Business practice before his retirement, joined Audible’s board and has been appointed the Chairman of the Audit Committee.

·   Audible’s distribution partnership with the Apple® iTunes® Music Store was extended to cover the new European versions of the Apple iTunes Music Store.

·   Audible and Samsung Electronics Co. Ltd. announced that hard drive-based MP3 players from Samsung will ship as AudibleReady devices later in the third quarter of 2004.

·   Audible and Soniqcast™ announced that the Soniqcast Element Aireo™ MP3 player is shipping as an AudibleReady® device. The world’s first-ever portable wireless MP3 player is able to receive content wirelessly transferred from listeners’ personal computers.

·   Audible made the first-ever Software Development Kit (SDK) for the digital distribution of the spoken word, available for license in part or whole, to technology and device partners.

·   Retail co-marketing and rebate partnerships were established with Berkshire Hathaway’s Nebraska Furniture Mart and Buy.com.

·   Audible’s Chairman and CEO Donald Katz was named Entrepreneur of the Year in New Jersey by Ernst & Young.

Business Outlook

The Company has raised its expectation of 2004 total revenue to the range of $29.5 million to $31.5 million, up from the previously announced range of $28.0 million to $30.0 million. If the company achieves these results, it would represent a revenue growth rate of 53% to 63% compared to $19.3 million in total revenue in 2003. Management also reaffirmed its estimate of free cash flow for the year of $2.0 million to $2.4 million and its expectations of net income of

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$1.0 million to $1.4 million before dividend and preferred stock conversion charges.

Conference Call

Senior management will host an investor teleconference at 5:00 p.m. EDT today, to discuss these results as well as related financial and operational developments. A live webcast of the conference call is available at www.audible.com/ir for audio streaming access to the call. To participate in the call the dial-in number is (800) 218-9073. The replay of the call will be available starting at 7:00 p.m. EDT on Tuesday, August 3, at (800) 405-2236, passcode 11002808#.

*Use of Non-GAAP Measures

Management believes that free cash flow is a useful measure of liquidity because it includes cash provided by operating activities as well as the impact of cash used for investment in property and equipment. However, this non-GAAP measure should be considered in addition to, not as a substitute for, or superior to, net cash provided by (used in) operating activities, or other financial measures prepared in accordance with GAAP. A reconciliation to the GAAP equivalents of this non-GAAP measure is contained in tabular form on the attached unaudited financial statements.

To enhance the clarity of Audible’s operating expense presentation, certain operating expenses for historical periods in the attached Statements of Operations have been reclassified to conform with newly reclassified current presentation.

About Audible.com:

Audible.com, recently named the best consumer Web service by CNet.com, and one of the "Best of Today’s Web" by PC World, features daily audio editions of The Wall Street Journal and The New York Times — available on a subscription basis in time for the morning drive to work each day—as well as Forbes, Harvard Business Review, Scientific American,and Fast Company. The site offers a powerful collection of audiobook best sellers and classics by authors such as Tom Clancy, Stephen King, John Grisham, Janet Evanovich, James Patterson, the Dalai Lama, David McCullough, Stephen Hawking, William Shakes peare, Emily Dickinson, and Jane Austen. There are also speeches, lectures, and on-demand radio programs including Marketplace, All Things Considered, Car Talk,Fresh Air, and This American Life, and original shows such as RobinWilliams@audible.com. All of the programs at audible.com are available for computer-based playback, burning

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to audio CD, and on-the-go listening using numerous AudibleReady® portable digital audio players offered by leading consumer electronics and computer manufacturers.

About Audible, Inc.:

Audible® (www.audible.com®) is the Internet's leading premium spoken audio source. Content from Audible is downloaded and played back on personal computers, CDs, or AudibleReady® computer-based mobile devices. Audible has more than 50,000 hours of audio programs fromm ore than 185 content partners that include leading audiobook publishers, broadcasters, entertainers, magazine and newspaper publishers, and business information providers. Audible.com is Amazon.com's and the Apple iTunes Music Store’s pre-eminent provider of spoken word products for downloading or streaming via the Web. Additionally, the Company is strategically a ligned with Random House, Inc. in the first-ever imprint to produce spoken word content specifically suited for digital distribution, Random House Audible. Among the Company's key business relationships are Apple Corp., Creative Labs, Hewlett-Packard Company, Microsoft Corporation, palm One, Inc., PhatNoise Inc., RealNetworks, Inc., Rio Audio, Roxio, Inc., Sony Electronics, Texas Instruments Inc., and VoiceAge Corporation.

Audible, www.audible.com, AudibleListener, and AudibleReady are registered trademarks of Audible, Inc. and all are part of the family of Audible, Inc. trademarks.

Other product or service names mentioned herein are the trademarks of their respective owners.

This press release contains information about Audible, Inc. that is not historical fact and may be deemed to contain forward-looking statements about the company. Actual results may differ materially from those anticipated in any forward-looking statements as a result of certain risks and uncertainties, including, without limitation, Audible’s limited operating history, history of losses, uncertain market for its services, and its inability to license or produce compelling audio content and other risks and uncertainties detailed in the company’s Securities and Exchange Commission filings.

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AUDIBLE INC.

COMPARATIVE STATEMENTS OF OPERATIONS

	Three months ended
	June 30,			March 31,
	2004			2004
	(unaudited)			(unaudited)
Revenue:
Consumer content	$	7,938,082		$	6,675,438
Point of sale rebates		(67,775	)		(116,250	)
Services		12,901			17,102
Net content and services		7,883,208			6,576,290
Hardware		162,749			181,717
Other		16,131			16,126
Total revenue, net		8,062,088			6,774,133
Operating expenses:
Cost of content and services revenue:
Royalties and other content charges		2,600,606			2,054,162
Discount certificate rebates		305,235			39,100
Total cost of content and services revenue		2,905,841			2,093,262
Cost of hardware revenue		613,568			518,035
Operations		1,196,685			1,143,247
Technology and development		1,280,970			1,255,132
Marketing		999,711			1,152,286
General and administrative		840,537			567,178
Total operating expenses		7,837,312			6,729,140
Income from operations		224,776			44,993
Other income, (expense)
Interest income		44,688			14,967
Interest expense		(14,090	)		(2,188	)
Total other income, net		30,598			12,779
Income before income taxes		255,374			57,772
Income taxes		(18,789	)		-
Net income		236,585			57,772
Dividends on convertible preferred stock		-			(614,116	)
Charges related to conversion of convertible preferred stock		-			(9,873,394	)
Total preferred stock expense		-			(10,487,510	)
Net income (loss) applicable to common shareholders	$	236,585		$	(10,429,738	)
Basic net income (loss) per common share	$	0.01		$	(0.56	)
Weighted average basic common shares outstanding		21,238,711			18,664,387
Diluted net income (loss) per common share	$	0.01		$	(0.56	)
Weighted average diluted shares outstanding		23,620,502			18,664,387

6

AUDIBLE INC.

STATEMENTS OF OPERATIONS

	Three months ended						Six Months ended
	June 30,						June 30,
	2004			2003			2004			2003
	(unaudited)						(unaudited)
Revenue, net:
Consumer content	$	7,938,062		$	4,204,999		$	14,613,500		$	8,092,584
Point of sale rebates		(67,755	)		-			(184,005	)		-
Services		12,901			30,485			30,003			58,581
Net content and services		7,883,208			4,235,484			14,459,498			8,151,165
Hardware		162,749			175,109			344,466			352,324
Other		16,131			16,126			32,257			32,252
Total revenue, net		8,062,088			4,426,719			14,836,221			8,535,741
Operating Expenses:
Cost of content and services revenue:
Royalties and other content charges		2,600,606			1,137,954			4,654,768			2,103,583
Discount certificate rebates		305,235			-			344,335			-
Total cost of content and services revenue		2,905,841			1,137,954			4,999,103			2,103,583
Cost of hardware revenue		613,568			512,508			1,131,603			1,060,812
Operations		1,196,685			912,476			2,339,932			1,886,326
Technology and Development		1,280,970			1,188,460			2,536,102			2,440,433
Marketing		999,711			1,095,215			2,151,997			2,558,279
General and administrative		840,537			497,213			1,407,715			1,207,088
Total operating expenses		7,837,312			5,343,826			14,566,452			11,256,521
Income (loss) from operations		224,776			(917,107	)		269,769			(2,720,780	)
Other income, (expense)
Interest income		44,688			4,097			59,655			10,012
Interest expense		(14,090	)		-			(16,278	)		-
Total other income, net		30,598			4,097			43,377			10,012
Income (loss) before taxes		255,374			(913,010	)		313,146			(2,710,768	)
Income taxes		(18,789	)		-			(18,789	)		-
Net income (loss)		236,585			(913,010	)		294,357			(2,710,768	)
Dividends on convertible preferred stock		-			(376,982	)		(614,116	)		(740,631	)
Charges related to conversion of convertible preferred stock		-			-			(9,873,394	)		-
Total preferred stock expense		-			(376,982	)		(10,487,510	)		(740,631	)
Net income (loss) applicable to common shareholders	$	236,585		$	(1,289,992	)	$	(10,193,153	)	$	(3,451,399	)
Basic net income (loss) per common share	$	0.01		$	(0.12	)	$	(0.51	)	$	(0.34	)
Weighted average basic common shares outstanding		21,238,711			10,332,648			19,936,969			10,173,370
Diluted net income (loss) per common share	$	0.01		$	(0.12	)	$	(0.51	)	$	(0.34	)
Weighted average diluted shares outstanding		23,620,502			10,332,648			19,936,969			10,173,370

7

AUDIBLE INC.

CONDENSED BALANCE SHEETS

	June 30,			December 31,
Assets	2004			2003
	(unaudited)
Current Assets
Cash and cash equivalents	$	10,412,267		$	9,074,987
Accounts receivable, net of allowance		442,984			245,641
Royalty advances		13,800			72,338
Prepaid expenses and other current assets		934,340			596,720
Inventory		202,932			99,936
Total current assets		12,006,323			10,089,622
Property and equipment, net		998,538			272,851
Other assets		20,805			418,524
Total Assets	$	13,025,666		$	10,780,997
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable	$	489,934		$	526,359
Accrued expenses and compensation		3,449,855			2,809,860
Royalty obligations		280,500			408,000
Capital lease obligations		424,737			-
Deferred revenue and advances		1,071,838			873,520
Total current liabilities		5,716,864			4,617,739
Deferred cash compensation		-			58,750
Stockholders' Equity
Convertible preferred stock: Series A		-			13,027,375
Convertible preferred stock: Series B		-			1,137,500
Common stock		214,935			150,156
Additional paid-in capital		139,253,697			110,507,840
Deferred compensation and services		(183,999	)		(239,425	)
Notes due from stockholders for common stock		-			(58,750	)
Treasury stock at cost		(184,740	)		(184,740	)
Accumulated deficit		(131,791,091	)		(118,235,448	)
Total Stockholders' Equity		7,308,802			6,104,508
Total Liabilities and Stockholders' Equity	$	13,025,666		$	10,780,997

8

AUDIBLE INC.

CONDENSED STATEMENTS OF CASH FLOWS

	Three months ended						Six months ended
	June 30,						June 30,
	2004			2003			2004			2003
	(unaudited)						(unaudited)
Cash flows from operating activities:
Net income (loss)	$	236,585		$	(913,010	)	$	294,357		$	(2,710,768	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		144,902			95,525			255,426			308,066
Services rendered for common stock and warrants		163,246			155,985			432,328			740,690
Non-cash compensation charge		21,313			37,210			55,426			110,488
Non-cash forgiveness of notes due from stockholders for common stock		-			-			-			198,995
Deferred cash compensation		(55,000	)		-			(58,750	)		-
Changes in assets and liabilities:
Accounts receivable, net		(105,898	)		(69,901	)		(197,343	)		(121,468	)
Royalty advances		25,412			(2,959	)		58,538			(130,700	)
Prepaid expenses and other current assets		(374,201	)		84,872			(337,620	)		210,358
Inventory		(14,380	)		(82,685	)		(102,996	)		(222,928	)
Other assets		399,748			(86,769	)		397,719			(86,769	)
Accounts payable		(198,051	)		(208,118	)		(36,425	)		(79,276	)
Accrued expenses and compensation		599,834			334,622			647,495			389,926
Royalty obligations		(40,000	)		(57,500	)		(127,500	)		(18,500	)
Deferred revenue and advances		203,702			260,463			198,318			217,020
Net cash provided by (used in) operating activities		1,007,212			(452,265	)		1,478,973			(1,194,866	)
Cash flows from investing activities:
Purchases of property and equipment		(113,310	)		(18,569	)		(237,811	)		(41,187	)
Net cash used in investing activities		(113,310	)		(18,569	)		(237,811	)		(41,187	)
Cash flows from financing activities:
Proceeds from exercise of common stock warrants		25,000			-			27,500			-
Proceeds from exercise of common stock options		104,855			-			328,433			-
Payments received on notes due from stockholders for common stock		55,000			-			58,750			-
Principal payments made on capital lease obligations		(283,099	)		-			(318,565	)		-
Net cash (used in) provided by financing activities		(98,244	)		-			96,118			-
Increase (decrease) in cash and cash equivalents		795,658			(470,834	)		1,337,280			(1,236,053	)
Cash and cash equivalents at beginning of period		9,616,609			2,056,861			9,074,987			2,822,080
Cash and cash equivalents at end of period	$	10,412,267		$	1,586,027		$	10,412,267		$	1,586,027
Non-cash investing and financing activities:
Purchase of property and equipment through capital leases	$	305,813		$	-		$	743,302		$	-
Reversal of unused accrued expense related to Series C financing		7,500			-			7,500			-
	$	313,313		$	-		$	750,802		$	-
Non-GAAP Free Cash Flow reconciliation:
Net cash provided by (used in) operating activities	$	1,007,212		$	(452,265	)	$	1,478,973		$	(1,194,866	)
Purchases of property and equipment and capital lease payments		(396,409	)		(18,569	)		(556,376	)		(41,187	)
Non-GAAP Free Cash Flow	$	610,803		$	(470,834	)	$	922,597		$	(1,236,053	)