EX-99.1 5 a54993exv99w1.htm EX-99.1 exv99w1
Exhibit 99.1
(QUALITY SYSTEMS INC.)
     
For Further Information, Contact:
   
Quality Systems, Inc.
  Susan J. Lewis
18111 Von Karman Avenue, Suite 600
  Phone: (303) 804-0494
Irvine, CA 92612
  slewis@qsii.com
Phone: (949) 255-2600
   
Paul Holt, CFO, pholt@qsii.com
   
FOR IMMEDIATE RELEASE
     January 28, 2010
QUALITY SYSTEMS REPORTS FISCAL 2010 THIRD QUARTER RESULTS
IRVINE, Calif. ... January 28, 2010 ... Quality Systems, Inc. (NASDAQ:QSII) today announced the results of operations for its fiscal 2010 third quarter ended December 31, 2009. The Company posted record net revenues of $75.0 million in the third quarter, an increase of 14 percent from $65.5 million for same period last year. The Company reported net income of $13.2 million in the third quarter, which remained unchanged from the comparable quarter last year. Fully diluted earnings per share were $0.46 in the quarter, which also remained unchanged when compared with $0.46 fully diluted earnings per share for the same quarter last year.
For the third quarter, the Company’s NextGen Healthcare Information Systems division posted record revenue of $70.6 million, up 15 percent from the same period a year ago and operating income of $24.5 million, an increase of 8 percent versus the comparable period last year.
“We are pleased with the results for the third quarter, which represent our team’s ability to grow the business to record levels. Time and again, we have stated that the Company continues to make the necessary investments in its infrastructure to ensure that we remain in a state of preparedness as the stimulus plan takes effect during the next three years,” noted Steven T. Plochocki, chief executive officer.
“We are well positioned to garner additional market share and fuel future growth as the healthcare industry shifts to an electronic-based medical records platform. We will continue to capitalize on the significant business opportunities that lie ahead from the implementation of the American Recovery and Reinvestment Act,” Plochocki concluded.
Quality Systems, Inc. will hold a conference call to discuss fiscal 2010 third quarter financial results on Thursday, January 28, 2010 at 10:00 AM ET (7:00 AM PT). All participants should dial 877-941-8609 at least ten minutes prior to the start of the call. International callers should dial 480-629-9031. To hear a live web simulcast or to listen to the archived web cast following completion of the call, please visit the company web site at www.qsii.com, click on the “Investor Relations” tab, then select “Conference Calls,” to access the link to the call. To listen to a telephone replay of the conference call, please dial 800-406-7325 and enter reservation identification number 4206115. The replay will be available from approximately 12:00 PM ET on Thursday, January 28, 2010, through 11:59 PM ET on Thursday, February 4, 2010.
A transcript of the conference call will be made available on the QSII website (www.qsii.com).

 


 

About Quality Systems, Inc.
Irvine, Calif.-based Quality Systems, Inc. and its NextGen Healthcare Information Systems subsidiary develop and market computer-based practice management, patient records and revenue cycle management applications as well as connectivity products and services for medical and dental group practices. Visit www.qsii.com and www.nextgen.com for additional information.
This news release may contain forward-looking statements within the meaning of the federal securities laws. Statements regarding future events, developments, the Company’s future performance, as well as management’s expectations, beliefs, intentions, plans, estimates or projections relating to the future (including, without limitation, statements concerning revenue and net income), are forward-looking statements within the meaning of these laws and involve a number of risks and uncertainties. Moreover, these forward-looking statements are subject to a number of risks and uncertainties, some of which are outlined below. As a result, actual results may vary materially from those anticipated by the forward-looking statements. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are: the volume and timing of systems sales and installations; length of sales cycles and the installation process; the possibility that products will not achieve or sustain market acceptance; seasonal patterns of sales and customer buying behavior; the timing, cost and success or failure of new product and service introductions, development and product upgrade releases; undetected errors or bugs in software; changing economic, political or regulatory influences in the health-care industry; changes in product-pricing policies; availability of third-party products and components; competitive pressures including product offerings, pricing and promotional activities; the Company’s ability or inability to attract and retain qualified personnel; possible regulation of the Company’s software by the U.S. Food and Drug Administration; uncertainties concerning threatened, pending and new litigation against the Company including related professional services fees; uncertainties concerning the amount and timing of professional fees incurred by the Company generally; changes of accounting estimates and assumptions used to prepare the prior periods’ financial statements; general economic conditions; and the risk factors detailed from time to time in Quality Systems’ periodic reports and registration statements filed with the Securities and Exchange Commission. A significant portion of the Company’s quarterly sales of software product licenses and computer hardware is concluded in the last month of the fiscal quarter, generally with a concentration of such revenues earned in the final ten business days of that month. Due to these and other factors, the Company’s revenues and operating results are very difficult to forecast. A major portion of the Company’s costs and expenses, such as personnel and facilities, are of a fixed nature and, accordingly, a shortfall or decline in quarterly and/or annual revenues typically results in lower profitability or losses. As a result, comparison of the Company’s period-to-period financial performance is not necessarily meaningful and should not be relied upon as an indicator of future performance. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.
[financial highlights follow]

 


 

QUALITY SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF INCOME

(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
                                 
    Three Months Ended     Nine Months Ended  
    December 31,     December 31,  
    2009     2008     2009     2008  
Revenues:
                               
Software, hardware and supplies
  $ 24,346     $ 22,336     $ 64,978     $ 65,002  
Implementation and training services
    3,313       2,675       10,150       9,746  
 
                       
System sales
    27,659       25,011       75,128       74,748  
Maintenance
    22,139       19,152       65,254       53,522  
Electronic data interchange services
    8,897       8,008       25,855       21,663  
Revenue cycle management and related services
    9,602       6,835       27,482       13,319  
Other services
    6,665       6,473       19,579       16,432  
 
                       
Maintenance, EDI, RCM and other services
    47,303       40,468       138,170       104,936  
 
                       
Total revenues
    74,962       65,479       213,298       179,684  
 
                       
Cost of revenue:
                               
Software, hardware and supplies
    2,810       3,030       9,251       9,912  
Implementation and training services
    2,898       2,143       9,075       7,783  
 
                       
Total cost of system sales
    5,708       5,173       18,326       17,695  
Maintenance
    3,392       2,826       9,672       8,856  
Electronic data interchange services
    6,525       5,541       18,579       15,688  
Revenue cycle management and related services
    7,124       4,475       20,502       8,912  
Other services
    5,560       5,085       15,430       12,398  
 
                       
Total cost of maintenance, EDI, RCM and other services
    22,601       17,927       64,183       45,854  
 
                       
Total cost of revenue
    28,309       23,100       82,509       63,549  
 
                       
Gross profit
    46,653       42,379       130,789       116,135  
Operating expenses:
                               
Selling, general and administrative
    21,951       18,601       62,829       52,136  
Research and development costs
    3,954       3,624       12,277       10,085  
 
                       
Total operating expenses
    25,905       22,225       75,106       62,221  
 
                       
Income from operations
    20,748       20,154       55,683       53,914  
Interest income
    43       328       180       1,042  
Other income
    136             194        
 
                       
Income before provision for income taxes
    20,927       20,482       56,057       54,956  
Provision for income taxes
    7,775       7,332       20,739       20,193  
 
                       
Net income
  $ 13,152     $ 13,150     $ 35,318     $ 34,763  
 
                       
Net income per share:
                               
Basic
  $ 0.46     $ 0.46     $ 1.24     $ 1.25  
Diluted
  $ 0.46     $ 0.46     $ 1.23     $ 1.23  
Weighted average shares outstanding:
                               
Basic
    28,667       28,340       28,586       27,913  
Diluted
    28,833       28,473       28,755       28,275  
Dividends declared per common share
  $ 0.30     $ 0.30     $ 0.90     $ 0.85  

 


 

QUALITY SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
                 
    December 31,     March 31,  
    2009     2009  
ASSETS
               
Current assets:
               
Cash and cash equivalents
  $ 79,111     $ 70,180  
Restricted cash
    1,514       1,303  
Marketable securities
    7,454        
Accounts receivable, net
    101,660       90,070  
Inventories, net
    1,433       1,125  
Income tax receivable
    3,117       5,605  
Net current deferred tax assets
    4,848       3,994  
Other current assets
    6,603       6,312  
 
           
Total current assets
    205,740       178,589  
Marketable securities
          7,395  
Equipment and improvements, net
    7,962       6,756  
Capitalized software costs, net
    9,958       9,552  
Intangibles, net
    7,577       8,403  
Goodwill
    32,884       28,731  
Other assets
    4,100       2,675  
 
           
Total assets
  $ 268,221     $ 242,101  
 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
Current liabilities:
               
Accounts payable
  $ 4,433     $ 5,097  
Deferred revenue
    55,658       47,584  
Accrued compensation and related benefits
    7,254       9,511  
Dividends payable
    8,598       8,529  
Other current liabilites
    12,878       8,888  
 
           
Total current liabilites
    88,821       79,609  
Deferred revenue, net of current
    443       521  
Net deferred tax liabilities
    3,589       4,566  
Deferred compensation
    1,897       1,838  
 
           
Total liabilites
    94,750       86,534  
Commitments and contingencies
               
Shareholders’ equity
               
Common Stock
               
$0.01 par value; authorized 50,000 shares; issued and outstanding 28,660 and 28,447 shares at December 31, 2009 and March 31, 2009, respectively
    287       284  
Additional paid-in capital
    111,852       103,524  
Retained earnings
    61,332       51,759  
 
           
Total shareholders’ equity
    173,471       155,567  
 
           
Total liabilities and shareholders’ equity
  $ 268,221     $ 242,101