EX-99.1 2 ex99_1.htm EXHIBIT 99.1 ex99_1.htm

Exhibit 99.1

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 30, 2009

QUALITY SYSTEMS REPORTS FISCAL YEAR 2010
SECOND QUARTER RESULTS
 
IRVINE, Calif. — October 30, 2009-- Quality Systems, Inc. (NASDAQ:QSII) today announced the results of operations for its fiscal 2010 second quarter ended September 30, 2009.  The Company posted record net revenues of $71.7 million in the second quarter, an increase of 22% from the $59.0 million generated during the same quarter of the prior year.  The Company reported net income of $11.8 million, up 13% when compared to net income of $10.5 million earned in the comparable quarter of the prior year.  Fully diluted earnings per share was $0.41 in the quarter, which was up 11% compared to $0.37 per share earnings recorded in the same quarter last year.
 
For the quarter, the Company’s NextGen Healthcare Information Systems division posted revenue of $67.4 million, up 23% over the same quarter of the prior year and operating income of $21.8 million, up 13% over the same quarter of the prior year.
 
“We are pleased with the second quarter results as we continue to post revenue and earnings growth.  Since the stimulus bill was signed in February 2009, the healthcare community has had an opportunity to become more familiar with the specific details of the American Recovery and Reinvestment Act (ARRA).  As a result, there seems to be a heightened comfort level in purchasing decisions relating to electronic health records (EHR) systems,” noted Steven T. Plochocki, president and chief executive officer at Quality Systems.
 
“Additionally, our closure cycles are gaining momentum as our pipeline continues to build,” Plochocki concluded.
 
Quality Systems, Inc. will hold a conference call to discuss second quarter end financial results on October 30, 2009 at 11:00 am ET (8:00 a.m. PT).  All participants should dial 888-549-7750 at least ten minutes prior to the start of the call.  International callers should dial 1-480-629-9866.  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 1-800-406-7325 and enter reservation identification number 4177638.  The replay will be available from approximately 12:00 PM ET on Friday, October 30, 2009, through 11:59 PM ET on Thursday, November 6, 2009.
 
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 September 30,
   
Six Months Ended September 30,
 
   
2009
   
2008
   
2009
   
2008
 
                         
Revenues:
                       
Software, hardware and supplies
  $ 22,856     $ 21,297     $ 40,632     $ 42,666  
Implementation and training services
    3,380       3,486       6,837       7,071  
                                 
System sales
    26,236       24,783       47,469       49,737  
                                 
Maintenance
    21,475       17,234       43,115       34,370  
Electronic data interchange services
    8,796       6,985       16,958       13,655  
Revenue cycle management and related services ...
    8,888       4,527       17,880       6,484  
Other services
    6,303       5,452       12,914       9,959  
                                 
Maintenance, EDI, RCM and other services
    45,462       34,198       90,867       64,468  
                                 
Total revenue
    71,698       58,981       138,336       114,205  
                                 
Cost of revenue:
                               
Software, hardware and supplies
    3,737       3,395       6,441       6,882  
Implementation and training services
    3,296       2,626       6,177       5,640  
                                 
Total cost of system sales
    7,033       6,021       12,618       12,522  
                                 
Maintenance
    3,255       2,947       6,280       6,030  
Electronic data interchange services
    6,164       5,256       12,054       10,147  
Revenue cycle management and related services
    6,856       3,132       13,378       4,437  
Other services
    5,003       3,866       9,870       7,313  
Total cost of maintenance, EDI, RCM and other services
    21,278       15,201       41,582       27,927  
                                 
Total cost of revenue
    28,311       21,222       54,200       40,449  
                                 
Gross profit
    43,387       37,759       84,136       73,756  
                                 
Operating expenses:
                               
Selling, general and  administrative
    20,428       18,283       40,878       33,535  
Research and development costs
    4,346       3,342       8,323       6,461  
                                 
Total operating expenses
    24,774       21,625       49,201       39,996  
                                 
Income from operations
    18,613       16,134       34,935       33,760  
                                 
Interest income
    59       340       137       714  
Other income
    -       -       58       -  
                                 
Income before provision for income taxes
    18,672       16,474       35,130       34,474  
Provision for income taxes
    6,852       5,975       12,964       12,861  
                                 
Net income
  $ 11,820     $ 10,499     $ 22,166     $ 21,613  
                                 
Net income per share:
                               
Basic
  $ 0.41     $ 0.38     $ 0.78     $ 0.78  
Diluted
  $ 0.41     $ 0.37     $ 0.77     $ 0.77  
                                 
Weighted average shares outstanding:
                               
Basic
    28,597       27,930       28,545       27,699  
Diluted
    28,742       28,211       28,717       28,014  
Dividends declared per common share
  $ 0.30     $ 0.30     $ 0.60     $ 0.55  
  
 
 

 

QUALITY SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
 
   
September 30,
2009
   
March 31,
2009
 
ASSETS
           
Current assets:
           
Cash and cash equivalents
  $ 75,429     $ 70,180  
Restricted cash
    897       1,303  
Marketable securities
    7,448       -  
Accounts receivable, net
    97,240       90,070  
Inventories, net
    1,245       1,125  
Income tax receivable
    5,486       5,605  
Net current deferred tax assets
    3,944       3,994  
Other current assets
    7,985       6,312  
                 
Total current assets
    199,674       178,589  
                 
Marketable securities
    -       7,395  
Equipment and improvements, net
    8,026       6,756  
Capitalized software costs, net
    9,646       9,552  
Intangibles, net
    7,955       8,403  
Goodwill
    29,381       28,731  
Other assets
    2,940       2,675  
                 
Total assets
  $ 257,622     $ 242,101  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY
               
Current liabilities:
               
Accounts payable
  $ 5,673     $ 5,097  
Deferred revenue
    48,663       47,584  
Accrued compensation and related benefits
    7,959       9,511  
Dividends payable
    8,593       8,529  
Other current liabilities
    12,951       8,888  
                 
Total current liabilities
    83,839       79,609  
                 
Deferred revenue, net of current
    552       521  
Net deferred tax liabilities
    3,884       4,566  
Deferred compensation
    1,674       1,838  
                 
Total liabilities
    89,949       86,534  
                 
Commitments and contingencies
               
                 
Shareholders’ equity:
               
Common stock
               
$0.01 par value; authorized 50,000 shares; issued and outstanding 28,643 and 28,447 shares at September 30, 2009 and March 31, 2009, respectively
    286       284  
Additional paid-in capital
    110,609       103,524  
Retained earnings
    56,778       51,759  
                 
Total shareholders' equity
    167,673       155,567  
                 
Total liabilities and shareholders’ equity
  $ 257,622     $ 242,101