Science & Technology
Science and Technology
Science and Technology
Wed, December 17, 2008 
GOLDEN, Colo.--([ BUSINESS WIRE ])--Health Grades, Inc. (NASDAQ: HGRD), the leading independent healthcare ratings company, today introduced 2009 financial guidance.
The Company expects 2009 total revenue to increase approximately 20% compared with 2008 total revenue, with all current lines of business contributing to the revenue growth. Provider Services, which includes HealthGrades' hospital marketing and quality-improvement programs, is forecast to grow by approximately 15% over 2008. Provider Services, the Company's largest business segment, is expected to contribute nearly 75% of total revenue during 2008. Growth in this segment will be driven primarily by sales to new hospital clients, incremental sales to existing hospital clients and new products, including the recently introduced HealthGrades Outstanding Patient Experience Award™.
HealthGrades' Internet Business Group, which includes advertising, sponsorship and consumer report revenue, and its Strategic Health Solutions unit, which provides hospital and physician information to employers and health plans, are both expected to grow between 30% and 40% over 2008. The forecast for the Internet Business Group includes a full year revenue contribution from the website [ www.WrongDiagnosis.com ], which had an annual revenue run rate of approximately $2 million at the time it was acquired by HealthGrades in October 2008.
HealthGrades also expects operating margin for 2009 to be in the range of 17% to 21%. The Company stated that during 2009 it will continue to invest in new products and services, and that it is currently adding to its sales team and other revenue-generating segments of its workforce.
"Even in this current challenging economic environment, we look forward to 2009 being a strong year, both operationally and financially. Our outlook is based on positive market dynamics, good new business opportunities and our ability to efficiently execute on our growth strategy," said Kerry Hicks, CEO of HealthGrades. "Patients and others are increasingly seeking healthcare information over the Internet, and then acting on that information. At the same time, healthcare providers are striving to be more effective in reaching those consumers with targeted, differentiated content. At HealthGrades those trends are reflected in traffic to our sites running at all-time highs, and continuing strong customer retention rates. We look forward to building on our market leadership position throughout 2009."
HealthGrades also affirmed its previous guidance for 2008 of ratings and advisory revenue in the range of $39 million to $40 million, and an operating margin in the range of 17% to 21%.
About Health Grades, Inc.
Health Grades, Inc. (NASDAQ: HGRD) is the leading independent healthcare ratings organization, providing quality ratings, profiles and cost information on the nation's hospitals, physicians, nursing homes and prescription drugs. Millions of patients and many of the nation's largest employers, health plans and hospitals rely on HealthGrades' quality ratings, advisory services and decision-support resources. The HealthGrades Network of Web sites, including HealthGrades.com and WrongDiagnosis.com, is a top-ten health property according to ComScore and is the Internet's leading destination for patients choosing providers. More information on the company can be found at [ http://www.healthgrades.com ].
This press release contains forward-looking statements, including without limitation statements relating to the Company's expected revenue growth and operating margin in 2009, 2008 contribution from Provider Services, revenue from [ www.WrongDiagnosis.com ], 2008 ratings and advisory revenue and operating margin guidance, new products and services, sales force growth, customer retention rates, and industry growth drivers. Actual results may differ materially from those described in such forward-looking statements due to several factors, including without limitation, significant variance in expected sales across the Company's product areas, slower than expected adoption of some of the Company's newer product areas such as advertising/sponsorship sales, the Company's inability to continue increasing sales of its licensing agreements or to complete its strategic initiatives, a decline in anticipated contract retention rates, the Company's inability to enter into meaningful contractual arrangements and to successfully expand certain lines of business and other factors described in the Company's filings with the Securities and Exchange Commission, especially the section entitled "Risk Factors" in its 2007 Annual Report on Form 10-K and in its subsequent quarterly reports on Form 10-Q. The Company does not undertake to update its forward-looking statements.
