EX-99.1 2 a57673exv99w1.htm EX-99.1 exv99w1
Exhibit 99.1
(QUALITY SYSTEMS INC LOGO)
     
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
          October 29, 2010
QUALITY SYSTEMS REPORTS FISCAL 2011 SECOND QUARTER RESULTS
     IRVINE, Calif. ... October 29, 2010... Quality Systems, Inc. (NASDAQ:QSII) announced today the results of operations for its fiscal 2011 second quarter ended September 30, 2010.
     The Company reported record net revenues of $81.5 million for the fiscal 2011 second quarter, an increase of 14 percent from $71.7 million in the comparable period last year. The Company reported net income of $13.4 million, a 14 percent increase when compared with $11.8 million in net income for the same period last year. Fully diluted earnings per share were $0.46 in the fiscal 2011 second quarter; up 12 percent versus the $0.41 fully diluted earnings per share for the second quarter of fiscal 2010.
     “At the very end of the second quarter, in fact on September 30, 2010, the Certification Commission for Health Information Technology (CCHIT®) announced that our EHR solution was certified as a Complete EHR and 2011/2012 compliant. This came on the heels of the Stage 1 Meaningful Use definition criteria revealed in July 2010. With the lifting of the many uncertainties that had been looming for quite some time, we are well positioned to aid physicians and hospitals with their EHR decisions as they prepare to make incentive-based purchases,” explained Steven T. Plochocki, Quality Systems’ chief executive officer.
     “Now that we have met both Meaningful Use and CCHIT® standards, we believe our robust product and service offering will bode well for those physicians and hospitals seeking to transition to EHR and help to optimize shareholder value as we enter year one of the five-year stimulus plan,” Plochocki added.
- more -

 


 

Quality Systems, Inc.
Fiscal 2011 Second Quarter Results
Page 2
     Quality Systems, Inc. also announced that the Company’s Board of Directors declared a cash dividend of Thirty Cents ($0.30) per share on the Company’s outstanding shares of Common Stock, payable to shareholders of record as of December 17, 2010, with an anticipated distribution date of January 5, 2011, pursuant to the Company’s current policy to pay a regular quarterly dividend of Thirty Cents ($0.30) per share on the Company’s outstanding shares of Common Stock, subject to further Board review and approval, and establishment of record and distribution dates by the Board prior to the declaration and payment of each such quarterly dividend.
     Quality Systems, Inc. will host a conference call to discuss its fiscal 2011 second quarter results on Friday, October 29, 2010 at 10:00 AM ET (7:00 AM PT). All participants should dial 877-941-6013 at least ten minutes prior to the start of the call. International callers should dial 480-629-9738. To hear a live Web simulcast or to listen to the archived webcast following completion of the call, please visit the company website at www.qsii.com, click on the “Investors” tab, then select “Conference Calls,” to access the link to the call. To listen to a telephone replay of the conference call, please dial 1-800-406-7325 or 303-590-3030 and enter reservation identification number 4375400. The replay will be available from approximately 12:00 PM ET on Friday, October 29, 2010, through 11:59 PM ET on Friday, November 5, 2010.
     A transcript of the conference call will be made available on the Company’s website at www.qsii.com.
About Quality Systems, Inc.
     Irvine, Calif.-based Quality Systems, Inc. and its NextGen Healthcare subsidiary develop and market computer-based practice management, electronic health records and revenue cycle management applications as well as connectivity products and services for medical and dental group practices and small hospitals. Visit www.qsii.com and www.nextgen.com for additional information.
SAFE HARBOR PROVISIONS FOR FORWARD-LOOKING STATEMENTS
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. Management believes that these forward looking statements are reasonable and are based on reasonable assumptions and forecasts, however, undue reliance should not be placed on such statements that speak only as of the date hereof. 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 development by competitors of new or superior technologies; the timing, cost and success or failure of new product and service introductions, development and product upgrade releases; undetected errors or bugs in software; product liability; 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 the Company’s periodic reports and registration statements filed with the Securities and Exchange Commission.
- more -

 


 

Quality Systems, Inc.
Fiscal 2011 Second Quarter Results
Page 3
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 TABLES ATTACHED

 


 

QUALITY SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF INCOME

(IN THOUSANDS)
(UNAUDITED)
                                 
    Three Months Ended September 30,     Six Months Ended September 30,  
    2010     2009     2010     2009  
Revenues:
                               
Software, hardware and supplies
  $ 20,375     $ 22,856     $ 45,131     $ 40,632  
Implementation and training services
    4,499       3,380       8,807       6,837  
 
                       
System sales
    24,874       26,236       53,938       47,469  
 
                               
Maintenance
    27,529       21,475       53,065       43,115  
Electronic data interchange services
    10,142       8,796       19,906       16,958  
Revenue cycle management and related services
    11,175       8,888       21,947       17,880  
Other services
    7,737       6,303       15,528       12,914  
 
                       
Maintenance, EDI, RCM and other services
    56,583       45,462       110,446       90,867  
 
                       
Total revenues
    81,457       71,698       164,384       138,336  
 
                       
 
                               
Cost of revenue:
                               
Software, hardware and supplies
    4,696       3,737       10,908       6,441  
Implementation and training services
    3,475       3,296       6,465       6,177  
 
                       
Total cost of system sales
    8,171       7,033       17,373       12,618  
Maintenance
    3,238       3,255       6,692       6,280  
Electronic data interchange services
    6,773       6,164       13,482       12,054  
Revenue cycle management and related services
    8,222       6,856       16,367       13,378  
Other services
    3,724       5,003       8,073       9,870  
 
                       
Total cost of maintenance, EDI, RCM and other service
    21,957       21,278       44,614       41,582  
 
                       
Total cost of revenue
    30,128       28,311       61,987       54,200  
 
                       
Gross profit
    51,329       43,387       102,397       84,136  
 
                               
Operating expenses:
                               
Selling, general and administrative
    24,829       20,061       51,067       40,154  
Research and development costs
    5,232       4,346       10,688       8,323  
Amortization of acquired intangible assets
    445       367       792       724  
 
                       
Total operating expenses
    30,506       24,774       62,547       49,201  
 
                       
Income from operations
    20,823       18,613       39,850       34,935  
Interest income
    129       59       189       137  
Other income
    65             59       58  
 
                       
Income before provision for income taxes
    21,017       18,672       40,098       35,130  
Provision for income taxes
    7,587       6,852       14,576       12,964  
 
                       
Net income
  $ 13,430     $ 11,820     $ 25,522     $ 22,166  
 
                       
Net income per share:
                               
Basic
  $ 0.46     $ 0.41     $ 0.88     $ 0.78  
Diluted
  $ 0.46     $ 0.41     $ 0.88     $ 0.77  
Weighted-average shares outstanding:
                               
Basic
    28,935       28,597       28,915       28,545  
Diluted
    29,078       28,742       29,066       28,717  
Dividends declared per common share
  $ 0.30     $ 0.30     $ 0.60     $ 0.60  

 


 

QUALITY SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
                 
    September 30,     March 31,  
    2010     2010  
ASSETS
               
Current assets:
               
Cash and cash equivalents
  $ 106,852     $ 84,611  
Restricted cash
    2,114       2,339  
Marketable securities
          7,158  
Accounts receivable, net
    112,506       107,458  
Inventories, net
    1,483       1,340  
Income taxes receivable
    177       2,953  
Deferred income taxes, net
    5,470       5,678  
Other current assets
    8,086       8,684  
 
           
Total current assets
    236,688       220,221  
 
               
Equipment and improvements, net
    8,728       8,432  
Capitalized software costs, net
    13,799       11,546  
Intangibles, net
    18,550       20,145  
Goodwill
    46,189       46,189  
Other assets
    4,494       3,647  
 
           
Total assets
  $ 328,448     $ 310,180  
 
           
 
               
LIABILITIES AND SHAREHOLDERS’ EQUITY
               
Current liabilities:
               
Accounts payable
  $ 5,972     $ 3,342  
Deferred revenue
    65,737       64,109  
Accrued compensation and related benefits
    6,988       8,951  
Dividends payable
    8,686       8,664  
Other current liabilities
    19,026       16,220  
 
           
Total current liabilities
    106,409       101,286  
Deferred revenue, net of current
    797       474  
Deferred income taxes, net
    10,254       10,859  
Deferred compensation
    2,178       1,883  
Other noncurrent liabilities
    7,354       7,389  
 
           
Total liabilities
    126,992       121,891  
 
               
Commitments and contingencies
               
 
               
Shareholders’ equity:
               
Common stock $0.01 par value; authorized 50,000 shares; issued and outstanding 28,956 and 28,879 shares at September 30, 2010 and March 31, 2010, respectively
    290       289  
Additional paid-in capital
    127,274       122,271  
Retained earnings
    73,892       65,729  
 
           
Total shareholders’ equity
    201,456       188,289  
 
           
Total liabilities and shareholders’ equity
  $ 328,448     $ 310,180  
 
           
# # #