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» Health Grades, Inc. Q1 2010 Earnings Call Transcript
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» Health Grades Inc. Q3 2009 Earnings Call Transcript
On today’s call Health Grades Chairman and CEO, Kerry Hicks will provide a company update and discuss business highlights. I will review the financial results. Following our prepared remarks we’ll open the call for questions.With that said, I’d like to turn the call over to Kerry Hicks. Kerry. Kerry Hicks Thank you, Allen. I’d also like to extend my welcome to everyone on the call today. I’m pleased to have the opportunity to discuss the solid quarter for Health Grades. Allen will be providing additional detail on the second quarter results. While our call today will focus on second quarter results, I also want to acknowledge the additional release from this morning announcing that Health Grades has agreed to be acquired by an affiliate of Vestar Capital Partners. The purchase price is $8.20 per share, which represents a premium of 32% over our 30 day average closing stock price in premium of 29% over the closing price of our common stock on July 27, 2010 the last trading day prior to today’s announcement. We expect to file certain documents with the SEC within the next couple of weeks, which will provide additional detail with respect to this transaction. Questions surrounding that transaction we’ll differ to the filing of the documents with the SEC. With that I would like to turn to our second quarter results. I would like to begin by highlighting some key metrics for the second quarter. Allen and I will give more color on each of these points during our prepared remarks. Our top line revenue growth was 25% over the second quarter of 2009. We achieved a 22% operating margin for the quarter with 34% operating income growth over the second quarter of 2009. We added 77% retention rate with respect to our professional services contract with the first or second year anniversary date for the first six months ended June 30, 2010.
The unique visitors to our web properties increased 50 million to 54.1 million for the second quarter, which represents 38% growth over the second quarter of 2009. For the first six months of the year we made significant progress against several of our key initiatives. The two initiatives upon which I would like to focus on our developing and optimizing the advertising and sponsorship revenue model, and the continued evolution of our provider, professional services sales and delivery model from being product focused to market focused. We continued to build out our advertising and sponsorship model with 50% revenue growth in this business in the second quarter of 2010 over the same period of 2009; we are pleased with the results.We are continuing our evolution of providing more information free to consumers on our website properties. Specifically our focus is on increasing free or organic traffic and improving our revenue mix, for both Health Grades and the WrongDiagnosis web properties. As I mentioned earlier the unique visitors to our web properties increased 50 million or 38% in the second quarter compared to the same period of 2009. As many of you know, we are committed to grow our traffic not by paying for key words on Google and other search engines, but rather through organic search. Today approximately 98% of our web traffic from our combined properties comes through organic search. That means we do not pay a fee for this traffic intrinsic value of the user who comes to us through organic search, his factor sounds more valuable than a user that is generated through paid search. We think this is a significant key differentiator for Health Grades against many other competitors, and others looking to build an online presence in Healthcare. As far as our efforts continue to differentiate our technology assets, I’m pleased to announce our acquisition of HealthWorldWeb. Allen will provide financial details of this acquisition, but this internet based social decision platform related to the Medical and Healthcare industry we believe provides us with a number of unique opportunities. More specifically, the platform includes community tools, content syndication, semantic search and a proprietary recommendations engine. The engine applies pager profiles to make relevant recommendation using proprietary artificial intelligence. The recommendation engine can be turned by the user and also to establish authority of Health Grades recommendation based on six data points. In addition, applications and tools help patients apply collective knowledge to help make better, more informed decisions about physicians and potentially treatments, recovery et cetra. We are excited about the opportunities this asset provides us. Read the rest of this transcript for free on seekingalpha.com