-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Wgz/LoO+yxEpGtm1L3SjatS/cejQaGRg86VNqNHBg4WUdK9BL307d0TIGdliA/Ao 6FutixG4wupzbjhpDQN8sA== 0000935836-98-000007.txt : 19980129 0000935836-98-000007.hdr.sgml : 19980129 ACCESSION NUMBER: 0000935836-98-000007 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19980128 SROS: NASD SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: QUALITY SYSTEMS INC CENTRAL INDEX KEY: 0000708818 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 952888568 STATE OF INCORPORATION: CA FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-33913 FILM NUMBER: 98514885 BUSINESS ADDRESS: STREET 1: 17822 E 17TH ST STE 210 CITY: TUSTIN STATE: CA ZIP: 92680 BUSINESS PHONE: 7147317171 MAIL ADDRESS: STREET 1: 178222 E 17TH STREET SUITE 210 CITY: TUSTIN STATE: CA ZIP: 92680 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: LAWNDALE CAPITAL MANAGEMENT INC CENTRAL INDEX KEY: 0000929870 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: ONE SAMSOME ST STE 3900 CITY: SAN FRANCISCO STATE: CA ZIP: 94104 BUSINESS PHONE: 4152882330 SC 13D/A 1 OMB APPROVAL OMB Number:3235-0145 Expires: August 31, 1999 Estimated average burden hours per form 14.90 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 1)* Quality Systems, Inc. (Name of Issuer) Common Stock - --------------------------------------------------------------------------- (Title of Class of Securities) 747582104 (CUSIP Number) Andrew E. Shapiro, Manager Christopher J. Rupright, Esq. Lawndale Capital Management, LLC Shartsis Friese & Ginsburg One Sansome Street, Suite 3900 One Maritime Plaza, 18th Floor San Francisco, CA 94104 San Francisco, CA 94111 (415) 288-2330 (415) 421-6500 - --------------------------------------------------------------------------- January 27, 1998 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box / /. Note: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. * The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). Potential persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number. SEC 1746 (10-97) CUSIP No. 747582104 Page 2 of 11 pages - --------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON SS OR IRS IDENTIFICATION NO. OF ABOVE PERSON Lawndale Capital Management, LLC - --------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / X / (b) / / - --------------------------------------------------------------------------- 3 SEC USE ONLY - --------------------------------------------------------------------------- 4 SOURCE OF FUNDS* AF - --------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(E) / / - --------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION California - --------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES -0- BENEFICIALLY -------------------------------------------------- OWNED BY 8 SHARED VOTING POWER EACH 370,000 REPORTING -------------------------------------------------- PERSON 9 SOLE DISPOSITIVE POWER WITH -0- -------------------------------------------------- 10 SHARED DISPOSITIVE POWER 370,000 - --------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 370,000 - --------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / / - --------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.2 - --------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* OO and IA CUSIP No. 747582104 Page 3 of 11 pages - --------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON SS OR IRS IDENTIFICATION NO. OF ABOVE PERSON Andrew E. Shapiro - --------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X / (b) / / - --------------------------------------------------------------------------- 3 SEC USE ONLY - --------------------------------------------------------------------------- 4 SOURCE OF FUNDS* AF - --------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(E) / / - --------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States - --------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES -0- BENEFICIALLY -------------------------------------------------- OWNED BY 8 SHARED VOTING POWER EACH 370,000 REPORTING -------------------------------------------------- PERSON 9 SOLE DISPOSITIVE POWER WITH -0- -------------------------------------------------- 10 SHARED DISPOSITIVE POWER 370,000 - --------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 370,000 - --------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / / - --------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.2 - --------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* IN CUSIP No. 747582104 Page 4 of 11 pages - --------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON SS OR IRS IDENTIFICATION NO. OF ABOVE PERSON Diamond A Partners, L.P. - --------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X / (b) / / - --------------------------------------------------------------------------- 3 SEC USE ONLY - --------------------------------------------------------------------------- 4 SOURCE OF FUNDS* WC - --------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(E) / / - --------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION California - --------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES -0- BENEFICIALLY -------------------------------------------------- OWNED BY 8 SHARED VOTING POWER EACH 312,700 REPORTING -------------------------------------------------- PERSON 9 SOLE DISPOSITIVE POWER WITH -0- -------------------------------------------------- 10 SHARED DISPOSITIVE POWER 312,700 - --------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 312,700 - --------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / / - --------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.2 - --------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* PN CUSIP No. 747582104 Page 5 of 11 pages - --------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON SS OR IRS IDENTIFICATION NO. OF ABOVE PERSON Diamond A Investors, L.P. - --------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X / (b) / / - --------------------------------------------------------------------------- 3 SEC USE ONLY - --------------------------------------------------------------------------- 4 SOURCE OF FUNDS* WC - --------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(E) / / - --------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION California - --------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES -0- BENEFICIALLY -------------------------------------------------- OWNED BY 8 SHARED VOTING POWER EACH 57,300 REPORTING -------------------------------------------------- PERSON 9 SOLE DISPOSITIVE POWER WITH -0- -------------------------------------------------- 10 SHARED DISPOSITIVE POWER 57,300 - --------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 57,300 - --------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / / - --------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.0 - --------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* PN CUSIP No. 747582104 Page 6 of 11 pages ITEM 1. SECURITY AND ISSUER. This statement relates to Common Stock (the "Stock") of Quality Systems, Inc. ("QSII"). The principal executive office of QSII is located at 17822 East 17th Street, Tustin, CA 92780. ITEM 2. IDENTITY AND BACKGROUND. The persons filing this statement and the persons enumerated in Instruction C of Schedule 13D and, where applicable, their respective places of organization, general partners, directors, executive officers and controlling persons, and the information regarding them, are as follows: (a) Lawndale Capital Management, LLC, a California limited liability company ("LCM"); Diamond A Partners, L.P., a California limited partnership ("DAP"); Diamond A Investors, L.P., a California limited partnership ("DAI"); and Andrew E. Shapiro ("Shapiro"). (b) The business address of LCM, DAP, DAI and Shapiro is One Sansome Street, Suite 3900, San Francisco, California 94104. (c) LCM is the investment adviser to and general partner of DAP and DAI, which are investment limited partnerships. Shapiro is the sole manager of LCM. (d) During the last five years, none of such persons has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). (e) During the last five years, none of such persons was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. (f) Shapiro is a citizen of the United States of America. CUSIP No. 747582104 Page 7 of 11 pages ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. The source and amount of funds used in purchasing the Stock were as follows: Purchaser Source of Funds Amount LCM Funds Under Management(1) $2,437,846.50 DAP Working Capital $2,060,067.60 DAI Working Capital $ 377,778.90 (1) Includes funds of DAP and DAI invested in Stock. ITEM 4. PURPOSE OF TRANSACTION. Subsequent to their filing of Schedule 13D on December 22, 1997, the Reporting Persons have been in additional contact with management and members of the Board of Directors of QSII to discuss the strategies QSII plans to employ to maximize shareholder value, including, but not limited to, QSII's stock buyback plan, the composition of QSII's Board of Directors, the integration of QSII's separate businesses and QSII's acquisition strategy. The Reporting Persons have introduced QSII management to prospective customers and joint venture partners. The Reporting Persons have also been in contact with other significant shareholders of QSII regarding these matters. The Reporting Persons may continue such activities. As part of these additional discussions, the Reporting Persons have asked the Board of Directors, through its Chairman, to reauthorize QSII's stock buyback plan, which authorization is scheduled to expire in the near future. The Reporting Persons also believe that in light of the few shares acquired by QSII during its most recent buyback, the implementation of a large scale stock buyback through a "Dutch Tender Auction" or similar process may be a more effective and efficient means of executing such a buyback. The Reporting Persons have asked the Board, through its Chairman, to give serious consideration to this or a similar process. The Reporting Persons have acquired the Stock solely for investment purposes because they believe that the value of the Common Stock in the public market does not adequately reflect the potential value of QSII's underlying businesses and assets. The Reporting Persons did not at the time of the purchase of the Stock, and do not presently, have any plan to acquire control of QSII. The Reporting Persons may buy or sell additional shares of Stock in the open market from time to time. CUSIP No. 747582104 Page 8 of 11 pages ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. The beneficial ownership of the Stock of the persons named in Item 2 of this statement is as follows at the date hereof: Aggregate Beneficially Owned Voting Power Dispositive Power Name Number Percent Sole Shared Sole Shared LCM 370,000 6.2 -0- 370,000 -0- 370,000 Shapiro 370,000 6.2 -0- 370,000 -0- 370,000 DAP 312,700 5.2 -0- 312,700 -0- 312,700 DAI 57,300 1.0 -0- 57,300 -0- 57,300 The persons filing this statement effected the following transactions in the Stock on the dates indicated, and such transactions are the only transactions in the Stock by the persons filing this statement since December 20, 1997. Purchase Number Price Name or Sale Date of Shares Per Share DAP P 12-22-97 8,700 5.969 DAI P 12-22-97 1,300 5.969 DAP S 12-23-97 2,000 5.988 DAP P 12-23-97 9,900 6.011 DAI P 12-23-97 1,400 6.011 DAP S 12-26-97 1,000 6.594 DAI P 12-26-97 500 6.500 DAI P 12-26-97 1,000 6.500 DAP P 1-2-98 1,500 7.375 DAI P 1-6-98 1,000 7.000 DAI P 1-7-98 3,500 6.795 DAI P 1-8-98 2,000 6.938 DAP P 1-9-98 1,100 6.645 DAI P 1-9-98 3,500 6.645 (Table continued on page 9) CUSIP No. 747582104 Page 9 of 11 pages (Table continued from page 8) DAP P 1-12-98 4,200 6.467 DAP P 1-13-98 5,000 6.156 DAI S 1-14-98 500 6.313 DAP P 1-15-98 4,900 6.082 DAP S 1-15-98 500 6.125 DAP P 1-16-98 2,500 6.050 DAP S 1-16-98 1,000 6.219 DAP P 1-20-98 2,000 6.463 DAP S 1-20-98 500 6.563 DAP P 1-21-98 1,100 6.500 DAP P 1-22-98 4,000 6.219 DAI S 1-22-98 500 6.375 DAP P 1-23-98 500 6.250 DAP P 1-26-98 1,000 6.125 DAP P 1-27-98 4,500 6.125 DAP S 1-27-98 1,000 6.313 DAP P 1-27-98 7,500 6.246 All transactions were executed through the Nasdaq National Market System. ITEM. 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. LCM is the general partner of DAP and DAI pursuant to limited partnership agreements providing to LCM the authority, among other things, to invest the funds of DAP and DAI in Stock, to vote and dispose of Stock and to file this statement on behalf of DAP and DAI. Pursuant to such limited partnership agreements, the general partner of DAP and DAI is entitled to allocations based on assets under management and realized and unrealized gains. CUSIP No. 747582104 Page 10 of 11 pages ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. A. Agreement Regarding Joint Filing of Statement on Schedule 13D or 13G. SIGNATURES After reasonable inquiry and to the best of my knowledge, I certify that the information set forth in this statement is true, complete and correct. DATED: January 28, 1998. DIAMOND A PARTNERS, L.P. DIAMOND A INVESTORS, L.P. By: Lawndale Capital Management, LLC By: Lawndale Capital Management, LLC General Partner General Partner By: /s/ Andrew E. Shapiro By: /s/ Andrew E. Shapiro Andrew E. Shapiro Andrew E. Shapiro Manager Manager LAWNDALE CAPITAL MANAGEMENT, LLC By: /s/ Andrew E. Shapiro /s/ Andrew E. Shapiro Andrew E. Shapiro Andrew E. Shapiro Manager CUSIP No. 747582104 Page 11 of 11 pages EXHIBIT A AGREEMENT REGARDING JOINT FILING OF STATEMENT ON SCHEDULE 13D OR 13G The undersigned agree to file jointly with the Securities and Exchange Commission (the "SEC") any and all statements on Schedule 13D or Schedule 13G (and any amendments or supplements thereto) required under section 13(d) of the Securities Exchange Act of 1934, as amended, in connection with purchases by the undersigned of Common Stock of Quality Systems, Inc. For that purpose, the undersigned hereby constitute and appoint Lawndale Capital Management, LLC, a California limited liability company, as their true and lawful agent and attorney-in-fact, with full power and authority for and on behalf of the undersigned to prepare or cause to be prepared, sign, file with the SEC and furnish to any other person all certificates, instruments, agreements and documents necessary to comply with section 13(d) and section 16(a) of the Securities Exchange Act of 1934, as amended, in connection with said purchases, and to do and perform every act necessary and proper to be done incident to the exercise of the foregoing power, as fully as the undersigned might or could do if personally present. DATED: December 22, 1997. DIAMOND A PARTNERS, L.P. DIAMOND A INVESTORS, L.P. By: Lawndale Capital Management, LLC By: Lawndale Capital Management, LLC General Partner General Partner By: /s/ Andrew E. Shapiro By: /s/ Andrew E. Shapiro Andrew E. Shapiro Andrew E. Shapiro Manager Manager LAWNDALE CAPITAL MANAGEMENT, LLC By: /s/ Andrew E. Shapiro /s/ Andrew E. Shapiro Andrew E. Shapiro Andrew E. Shapiro Manager C:\DMS\3693\011\0248700.WP -----END PRIVACY-ENHANCED MESSAGE-----