EX-99.1 2 a59615exv99w1.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 700
  Phone: (303) 804-0494
Irvine, CA 92612
  slewis@qsii.com
Phone: (949) 255-2600
    
Paul Holt, CFO, pholt@qsii.com
    
FOR IMMEDIATE RELEASE
   MAY 26, 2011
QUALITY SYSTEMS, INC. REPORTS RECORD FISCAL 2011 FOURTH QUARTER AND
YEAR-END RESULTS
Strong Quarterly and Year-end Results Reflect Onset of Stimulus Incentives
     IRVINE, Calif. ... May 26, 2011 ... Quality Systems, Inc. (NASDAQ:QSII) announced today results for its fiscal 2011 fourth quarter and year ended March 31, 2011.
     The Company reported record net revenues of $97.1 million for the fiscal 2011 fourth quarter, up 24 percent from the $78.5 million reported in the comparable period a year ago. For the 2011 fourth quarter, net income reached $18.6 million, an increase of 42 percent when compared with net income of $13.1 million for the same period last year. Fully diluted earnings per share were $0.64 in the fiscal 2011 fourth quarter, a 42 percent increase, versus $0.45 fully diluted earnings per share for the fiscal 2010 fourth quarter.
     Revenue for the fiscal year ended March 31, 2011 reached $353.4 million, rising 21 percent when compared with fiscal 2010 revenue of $291.8 million. Net income for fiscal year 2011 was $61.6 million, an increase of 27 percent versus net income of $48.4 million for the 2010 fiscal year. Fully diluted earnings per share increased to $2.12 for fiscal year 2011, up from $1.68 earned during fiscal year 2010, an increase of 26 percent.
     The record fourth quarter and year end results were positively impacted by the onset of the stimulus plan.
     “The last quarter of our fiscal year marked the first full quarter under the stimulus plan of The American Recovery and Reinvestment Act (ARRA). As we have stated, we spent much time preparing all facets of our organization for this important point in time. As we enter the front-end of the stimulus — where regulations are finalized, meaningful use standards have been established and our products certified — the rubber is hitting the road as it relates to benefitting from the stimulus,” explained Steven T. Plochocki, Quality Systems’ chief executive officer.
-more-

 

 

Quality Systems, Inc.
Fiscal 2011 Fourth Quarter and Year-end Results
Page 2
     “Decisions are being made with more clarity and certainty in a timely manner, which is obviously reflected in our results and will bode well for us over the next few years of the stimulus. All of our planning and preparation during the past several quarters has paid off as we look ahead to further solidifying our leadership role in an industry well positioned for change, growth and expansion,” Plochocki said.
     Quality Systems, Inc. also announced that the Company’s Board of Directors declared a quarterly cash dividend of Thirty-Five Cents ($0.35) per share on the Company’s outstanding shares of Common Stock, payable to shareholders of record as of June 17, 2011, with an anticipated distribution date of July 5, 2011. The $0.35 per share cash dividend is pursuant to the Company’s current policy to pay a regular quarterly dividend 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.
     The Company also announced that its 2011 Annual Shareholders’ Meeting will be held on Thursday, August 11, 2011 at 1:00 PM. The meeting will be held at The Center Club, 650 Town Center Drive, Costa Mesa, Calif. Holders of record as of June 13, 2011 are eligible to vote and attend. Proxy materials and the 2011 Annual Report will be made available to shareholders of record and will also be posted on the Company’s website at www.qsii.com.
     Quality Systems, Inc. will host a conference call to discuss its fiscal 2011 fourth quarter and year-end results on Thursday, May 26, 2011 at 11:00 AM ET (8:00 AM PT). All participants should dial 877-941-2332 at least ten minutes prior to the start of the call. International callers should dial 480-629-9722. 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 800-406-7325 or 303-590-3030 and enter reservation identification number 4442392. The replay will be available from approximately 1:00 PM ET on Thursday, May 26, 2011, through 11:59 PM ET on Thursday, June 2, 2011.
     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.
-more-

 

 

Quality Systems, Inc.
Fiscal 2011 Fourth Quarter and Year-end Results
Page 2
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 systemssales 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; impact of incentive payments under The American Recovery and Reinvestment Act on sales and the ability of the Company to meet continued certification requirements; 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 upgradereleases; 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.
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 March 31,     Fiscal Year Ended March 31,  
    2011     2010     2011     2010  
Revenues:
                                
Software, hardware and supplies
   $ 31,708     $ 24,783     $ 106,514     $ 89,761  
Implementation and training services
     4,946       4,226       18,015       14,376  
 
                        
System sales
     36,654       29,009       124,529       104,137  
Maintenance
     29,046       23,938       110,019       89,192  
Electronic data interchange services
     10,756       9,181       41,022       35,035  
Revenue cycle management and related services
     11,622       9,183       45,065       36,665  
Other services
     9,030       7,202       32,728       26,782  
 
                        
Maintenance, EDI, RCM and other services
     60,454       49,504       228,834       187,674  
 
                        
Total revenues
     97,108       78,513       353,363       291,811  
 
                        
Cost of revenue:
                                
Software, hardware and supplies
     3,204       2,864       19,779       12,115  
Implementation and training services
     4,868       2,908       15,010       11,983  
 
                        
Total cost of system sales
     8,072       5,772       34,789       24,098  
Maintenance
     2,875       3,667       12,948       13,339  
Electronic data interchange services
     7,321       6,683       27,711       25,262  
Revenue cycle management and related services
     8,733       7,213       33,815       27,715  
Other services
     6,165       4,963       18,219       20,393  
 
                        
Total cost of maintenance, EDI, RCM and other services
     25,094       22,526       92,693       86,709  
 
                        
Total cost of revenue
     33,166       28,298       127,482       110,807  
 
                        
Gross profit
     63,942       50,215       225,881       181,004  
Operating expenses:
                                
Selling, general and administrative
     29,285       25,223       108,310       86,951  
Research and development costs
     5,751       4,269       21,797       16,546  
Amortization of acquired intangible assets
     445       682       1,682       1,783  
 
                        
Total operating expenses
     35,481       30,174       131,789       105,280  
 
                        
Income from operations
     28,461       20,041       94,092       75,724  
Interest income
     19       46       263       226  
Other income, net
     2       74       61       268  
 
                        
Income before provision for income taxes
     28,482       20,161       94,416       76,218  
Provision for income taxes
     9,929       7,100       32,810       27,839  
 
                        
Net income
   $ 18,553     $ 13,061     $ 61,606     $ 48,379  
 
                        
Net income per share:
                                
Basic
   $ 0.64     $ 0.45     $ 2.13     $ 1.69  
Diluted
   $ 0.64     $ 0.45     $ 2.12     $ 1.68  
Weighted average shares outstanding:
                                
Basic
     29,005       28,784       28,947       28,635  
Diluted
     29,202       28,929       29,118       28,796  
Dividends declared per common share
   $ 0.35     $ 0.30     $ 1.25     $ 1.20  

 

 

QUALITY SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
                 
    March 31,     March 31,  
    2011     2010  
ASSETS
                
Current assets:
                
Cash and cash equivalents
   $ 116,617     $ 84,611  
Restricted cash
     3,787       2,339  
Marketable securities
     1,120       7,158  
Accounts receivable, net
     139,772       107,458  
Inventories
     1,933       1,340  
Income taxes receivable
     —       2,953  
Deferred income tax assets, net
     10,397       5,678  
Other current assets
     8,768       8,684  
 
            
Total current assets
     282,394       220,221  
Equipment and improvements, net
     12,599       8,432  
Capitalized software costs, net
     15,150       11,546  
Intangibles, net
     16,890       20,145  
Goodwill
     46,721       46,189  
Other assets
     4,932       3,647  
 
            
Total assets
   $ 378,686     $ 310,180  
 
            
LIABILITIES AND SHAREHOLDERS’ EQUITY
                
Current liabilities:
                
Accounts payable
   $ 6,686     $ 3,342  
Deferred revenue
     76,695       64,109  
Accrued compensation and related benefits
     10,247       8,951  
Income taxes payable
     3,530       —  
Dividends payable
     10,162       8,664  
Other current liabilities
     29,316       16,220  
 
            
Total current liabilities
     136,636       101,286  
Deferred revenue, net of current
     1,099       474  
Deferred income tax liabilities, net
     11,384       10,859  
Deferred compensation
     2,488       1,883  
Other noncurrent liabilities
     2,409       7,389  
 
            
Total liabilities
     154,016       121,891  
Commitments and contingencies
                
Shareholders’ equity:
                
Common stock $0.01 par value; authorized 50,000 shares; issued and outstanding 29,034 and 28,879 shares at March 31, 2011 and March 31, 2010, respectively
     290       289  
Additional paid-in capital
     133,259       122,271  
Retained earnings
     91,121       65,729  
 
            
Total shareholders’ equity
     224,670       188,289  
 
            
Total liabilities and shareholders’ equity
   $ 378,686     $ 310,180  
 
            
# # #