Health Grades, Inc. Announces 2007 Revenue and Operating Margin Forecast

Business Wire, Dec 7, 2006

Business Development and Innovations Unveiled at 2006 Investor Day

GOLDEN, Colo. -- Health Grades, Inc. ("HealthGrades") (Nasdaq: HGRD), the leading independent healthcare ratings company, today announced its 2007 revenue growth and operating margin forecast. HealthGrades is targeting 30% revenue growth over 2006 with an operating margin target of approximately 20% in 2007.

The company expects its provider services revenue to increase in excess of 30% in 2007. This business currently represents over 70% of the company's revenue. In 2007, the company will continue to invest in a number of strategic initiatives and new, innovative products. These strategic initiatives include, among other things, a customer loyalty program, new quality reports for ambulatory surgery and oncology centers and the launch of a dual product and market strategy by HealthGrades' Strategic Health Solutions. These strategic initiatives, which will be discussed today at the company's Investor Day, provide both opportunity and risk for the company.

Kerry Hicks, President and Chief Executive Officer of Health Grades, Inc., stated, "During 2007 we plan continued investment in our existing product offerings, as well as new products that provide consumers with the ability to make better healthcare decisions. HealthGrades continues to lead healthcare innovation by creating markets in a dynamic industry; the investments we are making in our business will further solidify our position as a leader in the healthcare ratings industry and provide new potential avenues for growth into 2007 and beyond. In the context of these continued investments, we are targeting a strong 2007."

HealthGrades is hosting its 2006 Investor Day today from 10:00 a.m. to 2:00 p.m. MT. Senior management will provide an in-depth look at the company's business areas and growth strategy.

A live webcast and a copy of the 2006 Investor Day presentation will be available in the investor relations section of the company's website at www.healthgrades.com. To access the live webcast, visit the company's website at least 15 minutes prior to the scheduled start time to download any necessary audio or plug-in software. An audio replay of the webcast and a copy of the presentation will be available for 90 days.

About HealthGrades

Health Grades, Inc. (Nasdaq: HGRD) is the leading health care ratings company, providing quality ratings and profiles of hospitals, nursing homes and physicians to consumers, corporations, health plans and hospitals. HealthGrades' independent ratings and complete suite of health-management tools are relied upon by 3 million consumers each month as well as more than 125 of the nation's largest employers and health plans and more than 250 hospitals. More information on the company can be found at www.healthgrades.com.

This press release contains forward-looking statements, including statements relating to the company's expected revenue growth and operating margin target and the company's investment in a number of strategic initiatives. Actual results may differ materially from those described in such forward-looking statements due to several factors, including the company's inability to enter into meaningful contractual arrangements and to successfully expand certain lines of business, the risk of losing existing Hewitt Associates LLC revenue in 2007, which represents approximately $800,000 annually, longer than expected sales cycles for the Health Management Suite, and other factors described in the company's filings with the Securities and Exchange Commission. The company does not undertake to update its forward-looking statements.