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): February 16, 2006

AUDIBLE, INC.

(Exact name of registrant as specified in its charter)

Delaware	000-26529	22-3407945
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

65 Willowbrook Boulevard, Wayne, NJ	07470
(Address of Principal Executive Offices)	(Zip Code)

(973) 837-2700

(Registrant's telephone number, including area code)

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 (see General Instruction A.2. below):

[ ] 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))

ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On February 16, 2006, Audible, Inc. (“Audible” or the “Company”) announced its financial results for the fiscal year and fiscal quarter ended December 31, 2006 and certain other information. A copy of this press release is attached hereto as Exhibit 99.1.

The information in this Item 2.02 and the Exhibit attached hereto is being furnished pursuant to Item 2.02 of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Act of 1934, as amended (the “Exchange Act”), nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

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.

ITEM 5.02. DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF PRINCIPAL OFFICERS

(b)Andrew P. Kaplan, the Chief Financial Officer and a Director of the Company, notified the Company’s Board of Directors that he will transition to a new leadership role within the company, focusing on Audible’s growing international businesses. Mr. Kaplan will remain in his current capacity while the Board conducts a search for a successor. Mr. Kaplan will remain on the Board of Directors, but he will not stand for re-election to the Board at the Company’s 2006 Annual Meeting of Stockholders.

ITEM 8.01 OTHER EVENTS

On February 16, 2006, announced that its Board of Directors adopted a program to repurchase shares of Audible’s common stock up to $25 million.  Audible plans to repurchase shares at times and prices considered appropriate by the company and with its own cash resources, in the open market or in privately negotiated transactions, subject to market conditions. This program does not obligate Audible to acquire any particular amount of shares of common stock.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS

(a) Financial Statements of Business Acquired - Not Applicable.

(b) Pro Forma Financial Information - Not Applicable.

(c) Exhibits:

 99.1 Press Release dated February 16, 2006.

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 thereunto duly authorized.

Date: February 16, 2006	Audible, Inc. /s/ Andrew P. Kaplan
	Title:Chief Financial Officer

EXHIBIT INDEX

99.1Press Release dated February 16, 2006.

EX-99.1

Exhibit 99.1

AUDIBLE ANNOUNCES 2005 FINANCIAL RESULTS

- Company Reports 2005 Revenue of $63.0 Million -

- 2005 Diluted EPS of $(0.02) -

- Announces Share Buyback Program -

WAYNE, N.J., February 16, 2005 — Audible, Inc. (NASDAQ: ADBL; www.audible.com), the leader in spoken audio entertainment, information and educational programming on the Internet, today announced unaudited financial results for the fourth quarter and full year ended December 31, 2005.

Audible reported unaudited consolidated 2005 net revenue of $63.0 million, up 83% year over year; a Non-GAAP loss before income taxes* of $0.4 million, excluding stock-based compensation expense of $1.0 million; and GAAP diluted net loss per share of $0.02. These results compare to the company’s preliminary results provided on January 10, 2005, of $62-64 million in revenue and Non-GAAP loss before income taxes of $1.0 to $1.5 million, excluding stock-based compensation expense.

Also for the full year, total customers acquired reached 303,000, representing growth of 67% versus the prior year. AudibleListener^® members acquired in 2005 were 237,000, up 104% for the year, and total AudibleListeners members at the end of the year were 248,000, up 56% for the year.

Audible generated $11.8 million in operating cash flow, a 127% increase over the prior year, and $3.3 million in free cash flow* in 2005.

For Q4-05, Audible reported consolidated net revenue of $18.0 million, up 76% year over year; a Non-GAAP loss before income taxes of $2.5 million, excluding stock-based compensation of $0.4 million; and GAAP diluted net loss per share of $0.09.

Audible also announced today that its Board of Directors has adopted a program to repurchase up to $25 million of Audible’s common stock. Audible plans to repurchase shares at times and prices considered appropriate by the company and with its own cash resources, in the open market or in privately negotiated transactions, subject to market conditions.

“2005 was a big year for us as we continued to see strong momentum and accelerating revenue growth, while executing on several key growth initiatives,” stated Donald Katz, chairman and CEO of Audible. “The result is that we are better positioned than ever to capitalize on the huge market opportunity before us. The share buy-back program we announced today is just one reflection of the enthusiasm Audible’s management and Board of Directors has for the future of this company.”

Audible also announced that Andrew Kaplan, the company’s chief financial officer, will move to a new leadership role within the company, focusing on Audible’s growing international businesses. Mr. Kaplan will remain CFO until a successor has been identified. The company has initiated the search for Mr. Kaplan’s successor. Mr. Kaplan will remain on Audible’s Board of Directors, but will not stand for reelection when his current term expires at Audible’s 2006 Annual Meeting of Stockholders.

“Few individuals have as profoundly contributed to our success over the past six years of business building as has Andy Kaplan,” Mr. Katz noted. “Andy has held operating roles at Audible in the past and in various capacities before Audible. He helped design our businesses in Europe and will now help lead them. He has been an incredible asset to our leadership team as CFO, and we all expect his contribution will be very substantial in his new role.”

Full Year Key Financial and Operating Metrics

Consolidated Net Revenue: consolidated net revenue totaled $63.0 million in 2005, an 83% increase over the $34.3 million reported in 2004.

Total New Customers: total new customers, a combination of new AudibleListener^® members and new a la carte customers in 2005, totaled 303,000, a 67% increase over the prior year.

New AudibleListener^® Members: new AudibleListener^® members totaled 237,000, a 104% increase over the prior year.

AudibleListener^® Members: AudibleListener^® members at the end of 2005 totaled 248,000, a 56% increase year over year.

Non-GAAP Loss before Income Taxes: Non-GAAP loss before income taxes totaled $0.4 million in 2005, excluding $1.0 million in stock-based compensation expense, as compared to Non-GAAP income before income taxes of $1.4 million in 2004.

Net Loss and GAAP EPS: net loss totaled $0.6 million, or a $0.02 GAAP net loss per diluted share.

Operating Cash Flow: operating cash flow totaled $11.8 million in 2005, as compared to operating cash flow of $5.2 million in 2004.

Free Cash Flow: free cash flow totaled $3.3 million in 2005, as compared to free cash flow of $4.6 million in 2004.

Cash, Cash Equivalents and Short-Term Investments: Audible’s cash, cash equivalents and short-term investments at the end of 2005 totaled $67.2 million.

Q4-05 Key Financial and Operating Metrics

Consolidated Net Revenue: consolidated net revenue totaled $18.0 million in Q4-05, a 76% increase over the $10.2 million reported in Q4-04.

Total New Customers: total new customers, a combination of new AudibleListener^® members and new a la carte customers in 2005, totaled 76,000, a 20% increase year over year.

New AudibleListener^® Members: new AudibleListener^® members totaled 65,000, a 60% increase year over year.

Non-GAAP Loss before Income Taxes: Non -GAAP loss before income taxes totaled $2.5 million in Q4-05, excluding $0.4 million in stock-based compensation expense, as compared to Non -GAAP income before income taxes of $0.5 million in Q4-04, excluding $15,000 in stock-based compensation expense.

Net Loss and GAAP EPS: net loss totaled $2.1 million in Q4-05, or a $0.09 net loss per diluted share.

Operating Cash Flow: operating cash flow totaled $2.6 million in Q4-05, as compared to operating cash flow of $2.5 million in Q4-04.

Free Cash Flow: free cash flow totaled $(2.9) million, as compared to free cash flow of $2.2 million in Q4-04.

Ongoing Audit of Financial Results and Internal Controls

The Company is undergoing an audit of its financial results for the year 2005, and an audit of its internal controls over financial reporting as required by Section 404 of the Sarbanes-Oxley Act of 2002. These audit procedures are not yet complete as of the date of this press release. There can be no assurance that our financial results as disclosed in this press release will not change following the completion of the audits or that our internal controls will be found to be effective.

Conference Call

Senior management will host an investor teleconference at 5:00 p.m. EDT today, to discuss fourth quarter 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) 475-3716 or +1 (719) 475-2728.

* Use of Non-GAAP Measures

Management believes that non-GAAP (loss) income before income taxes is a useful measure of operating performance because it excludes the non-cash impact of stock-based compensation expense. 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 and capitalized software development costs. However, these non-GAAP measures should be considered in addition to, not as a substitute for, or superior to, financial measures prepared in accordance with U.S. GAAP. Reconciliations to the U.S. GAAP equivalents of these non-GAAP measures are contained in tabular forms in the attached unaudited condensed consolidated financial statements or Non-GAAP reconciliation table.

About Audible Inc.:

Audible (www.audible.com) is the leader in spoken audio information and entertainment on the Internet. Content from Audible is downloaded and played back on personal computers, CDs, or AudibleReady^® computer-based mobile devices. Audible has more than 90,000 hours of audio programs from 293 content partners that include leading audiobook publishers, broadcasters, entertainers, magazine and newspaper publishers, and business information providers. Audible.com is the Apple iTunes Music Store's preeminent provider of spoken-word products for downloading or streaming via the Web. Among the Company's key business relationships are Amazon.com, Apple Corp., Hewlett-Packard Company, Microsoft Corporation, Palm, Inc., XM Satellite Radio, PhatNoise Inc., Creative Labs, 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.

Media and Investor Relations Contact:

David Joseph

973-837-2824

djoseph@audible.com

ADBL Full-Year 2005 Earnings Release, February 16, 2006

AUDIBLE INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
	Three months ended						Year ended
	December 31,						December 31,
	2005			2004			2005			2004
	(unaudited)			(unaudited)			(unaudited)
Revenue, net:
Content and services:
Consumer content	$	17,545		$	10,114		$	62,013		$	33,838
Point of sale rebates		(245	)		(410	)		(1,040	)		(696	)
Services		34			20			115			68
Total content and services		17,334			9,724			61,088			33,210
Hardware		280			164			612			695
Related party revenue		302			296			1,099			362
Other		86			20			175			52
Total revenue, net		18,002			10,204			62,974			34,319
Operating expenses:
Cost of content and services revenue:
Royalties and other content charges		6,691			3,158			22,245			10,650
Discount certificate rebates		437			683			1,699			1,462
Total cost of content and services revenue		7,128			3,841			23,944			12,112
Cost of hardware revenue		1,492			318			2,953			2,197
Operations		2,773			1,487			9,361			5,146
Technology and development		2,411			1,250			8,182			5,058
Marketing		5,021			1,852			13,560			5,185
General and administrative		2,764			1,173			8,364			3,540
Total operating expenses		21,589			9,921			66,364			33,238
(Loss) income from operations		(3,587	)		283			(3,390	)		1,081
Other income (expense):
Interest income		654			170			2,078			253
Interest expense		-			(6	)		(1	)		(32	)
Other income, net		654			164			2,077			221
(Loss) income before income taxes		(2,933	)		447			(1,313	)		1,302
Income tax benefit (expense)		94			75			(4	)		(1	)
State income tax benefit		740			724			740			724
Net (loss) income		(2,099	)		1,246			(577	)		2,025
Dividends on preferred stock		-			-			-			(614	)
Charges related to conversion of convertible preferred stock		-			-			-			(9,873	)
Total preferred stock expense		-			-			-			(10,487	)
Net (loss) income applicable to common shareholders	$	(2,099	)	$	1,246		$	(577	)	$	(8,462	)
Basic net (loss) income applicable to common shareholders per common share	$	(0.09	)	$	0.06		$	(0.02	)	$	(0.40	)
Basic weighted average common shares outstanding		24,310			22,458			24,196			20,913
Diluted net (loss) income applicable to common shareholders per common share	$	(0.09	)	$	0.05		$	(0.02	)	$	(0.40	)
Diluted weighted average common shares outstanding		24,310			25,086			24,196			20,913

AUDIBLE INC. AND SUBSIDIARY
NON GAAP RECONCILATION
(UNAUDITED)
(Dollars in thousands)
	Three months ended					Year ended
	December 31,					December 31,
	2005			2004		2005			2004
Non-GAAP (loss) income before income taxes reconciliation:
(Loss) income before income taxes	$	(2,933	)	$	447	$	(1,313	)	$	1,302
Add back stock based compensation expense		421			15		956			85
Non-GAAP (loss) income before income taxes	$	(2,512	)	$	462	$	(357	)	$	1,387

ADBL Full-Year 2005 Earnings Release, February 16, 2006

AUDIBLE INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
	December 31,			December 31,
Assets	2005			2004
	(unaudited)
Current Assets:
Cash and cash equivalents	$	11,549		$	13,296
Short-term investments		55,616			48,386
Interest receivable on short-term investments		428			76
Accounts receivable, net of allowance		2,337			787
Accounts receivable, related parties		384			88
Royalty advances		471			141
Prepaid expenses and other current assets		745			666
Inventory		498			394
Total current assets		72,028			63,834
Property and equipment, net		8,159			919
Other assets		114			21
Total Assets	$	80,301		$	64,774
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable	$	4,744		$	851
Accrued expenses		9,055			3,628
Royalty obligations, current		406			151
Accrued compensation		868			448
Capital lease obligations		--			121
Deferred revenue, current		6,578			2,446
Total current liabilities		21,651			7,645
Royalty obligations, non current		79			38
Deferred revenue, non current		99			--
Commitments and contingencies
Stockholders' Equity:
Common stock		243			242
Additional paid-in capital		192,548			187,249
Deferred compensation		(3,696	)		(154	)
Accumulated other comprehensive income		15			--
Treasury stock at cost		--			(185	)
Accumulated deficit		(130,638	)		(130,061	)
Total Stockholders' Equity		58,472			57,091
Total Liabilities and Stockholders' Equity	$	80,301		$	64,774

ADBL Full-Year 2005 Earnings Release, February 16, 2006

AUDIBLE INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
	Three months ended						Year ended
	December 31,						December 31,
	2005			2004			2005			2004
	(unaudited)			(unaudited)			(unaudited)
Cash flows from operating activities:
Net (loss) income	$	(2,099	)	$	1,246		$	(577	)	$	2,025
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization		428			122			1,105			499
Services rendered for common stock and warrants		-			78			-			511
Non-cash stock compensation charge		421			15			956			85
Deferred cash compensation		-			-			-			(59	)
Accretion of discounts on short-term investments		(252	)		(86	)		(1,184	)		(86	)
Income tax effect from exercise of stock options		(96	)		1			1			1
Changes in assets and liabilities:
Interest receivable on short-term investments		(185	)		(76	)		(351	)		(76	)
Accounts receivable, net		(914	)		(257	)		(1,551	)		(541	)
Accounts receivable, related parties		(207	)		(22	)		(296	)		(88	)
Royalty advances		70			(112	)		(330	)		(68	)
Prepaid expenses and other current assets		(11	)		(28	)		(79	)		(69	)
Inventory		(399	)		(243	)		(105	)		(294	)
Other assets		20			-			(94	)		398
Accounts payable		3,011			137			3,896			325
Accrued expenses		(415	)		483			5,433			1,187
Royalty obligations		(98	)		(73	)		296			(219	)
Accrued compensation		(90	)		26			423			87
Deferred revenue		3,436			1,260			4,234			1,572
Net cash provided by operating activities		2,620			2,471			11,777			5,190
Cash flows from investing activities:
Purchases of property and equipment		(2,379	)		(77	)		(4,485	)		(402	)
Capitalized software development costs		(3,092	)		-			(3,861	)		-
Purchases of short-term investments		(17,827	)		(48,300	)		(79,546	)		(48,300	)
Proceeds from maturity of short-term investments		18,600			-			73,500			-
Net cash used in investing activities		(4,698	)		(48,377	)		(14,392	)		(48,702	)
Cash flows from financing activities:
Proceeds from sale of common stock, net		-			46,457			-			46,457
Proceeds from exercise of common stock options		68			1,422			692			1,785
Proceeds from exercise of common stock warrants		-			29			295			57
Principal payments made on capital lease obligations		-			(154	)		(121	)		(623	)
Payments received on notes due from stockholders for common stock		-			-			-			59
Net cash provided by financing activities		68			47,754			866			47,735
Effect of exchange rate changes on cash and cash equivalents		(10	)		-			3			-
(Decrease) increase in cash and cash equivalents		(2,022	)		1,848			(1,747	)		4,221
Cash and cash equivalents at beginning of period		13,571			11,448			13,296			9,075
Cash and cash equivalents at end of period	$	11,549		$	13,296		$	11,549		$	13,296
Non-GAAP Free Cash Flow reconciliation:
Net cash provided by operating activities	$	2,620		$	2,471		$	11,777		$	5,190
Purchases of property and equipment and capital lease payments		(2,379	)		(231	)		(4,606	)		(556	)
Capitalized software development costs		(3,092	)		-			(3,861	)		-
Non-GAAP Free Cash Flow	$	(2,851	)	$	2,240		$	3,310		$	4,634

ADBL Full-Year 2005 Earnings Release, February 16, 2006

AUDIBLE INC. AND SUBSIDIARY
UNAUDITED SUPPLEMENTAL OPERATING DATA
(Numbers in thousands)
	Q1 2004			Q2 2004			Q3 2004			Q4 2004			Q1 2005			Q2 2005			Q3 2005			Q4 2005
AudibleListener® Members1		109			118			134			159			189			206			223			248
Year-over-year		--			--			--			--			74	%		74	%		66	%		56	%
Quarter-over-quarter		13	%		9	%		14	%		19	%		18	%		9	%		8	%		12	%
Total New AudibleListener® Members2		23			22			31			41			55			55			62			65
Year-over-year		--			--			--			--			146	%		143	%		103	%		60	%
Quarter-over-quarter		--			0	%		36	%		33	%		36	%		-1	%		14	%		5	%
Average Monthly Churn in AudibleListener® Members3		2.8	%		3.3	%		3.2	%		3.0	%		4.0	%		5.1	%		5.7	%		4.6	%
(1) Total number of AudibleListener® members at the end of the period
(2) Total number of new AudibleListener® members added during the period
(3) Churn is defined as member cancellations in the period divided by the sum of members at the beginning of the period and gross member adds, divided by three months