EX-99.1 2 d72912_ex99-1.htm QUALITY SYSTEMS REPORTS SECOND QUARTER RESULTS

     
 
 
 

FOR IMMEDIATE RELEASE

Exhibit 99.1

 

For more information contact:

Louis Silverman
President and CEO
Quality Systems, Inc.
(949) 255-2600
www.qsii.com

 

Sean Collins
Partner

CCG Investor Relations

(310) 231-8600

www.ccgir.com      

QUALITY SYSTEMS REPORTS SECOND QUARTER RESULTS

IRVINE, Calif.--(BUSINESS WIRE)— October 31, 2007--Quality Systems, Inc. (NASDAQ:QSII - news) today announced the results of operations for its fiscal 2008 second quarter ended September 30, 2007. The Company posted net revenues of $45.1 million in the second quarter, an increase of 21% from the $37.5 million generated during the same quarter last year. The Company reported record net income of $9.7 million, an increase of 16% over net income of $8.3 million earned in the comparable quarter of the prior year. Fully diluted earnings per share was $0.35 in the quarter, a record for the Company, and an increase of 17% over the fully diluted $0.30 per share earnings recorded in the same quarter last year.

For the quarter, the Company’s NextGen Healthcare Information Systems division posted record revenue of $41.1 million, up 23% over the same quarter prior year and record operating income of $15.7 million, up 12% over the same quarter of the prior year.

Quality Systems, Inc. will hold a conference call to discuss second quarter financial results October 31, 2007 at 4:30 p.m. EDT (1:30 p.m. PDT). To participate in the conference call, please dial the following number five to ten minutes prior to the scheduled conference call time: (877) 586-7724. There is no pass code required for this call. If you are unable to participate in the call at this time, a replay will be available on Wednesday, October 31, 2007 at 6:30 p.m. EDT through Wednesday, November 7, 2007 at midnight EDT. To access the replay dial 800-642-1687 and enter the conference ID number 22592849.

A transcript of the conference call will be made available on the QSII Web site (www.qsii.com).

About Quality Systems, Inc.

Quality Systems, Inc. and its NextGen Healthcare Information Systems subsidiary develop and market computer-based practice management, patient records, and connectivity applications 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

 

Six Months Ended

   

September
30, 2007

 

September
30, 2006

 

September
30, 2007

 

September
30, 2006

                 

Revenues:

               

  Software, hardware and   supplies

 

$ 18,514

 

$ 16,737

 

$ 35,253

 

$ 31,766

  Implementation and   training services

 

3,182

 

2,848

 

6,430

 

5,802

System sales

 

21,696

 

19,585

 

41,683

 

37,568

                 

  Maintenance

 

13,442

 

9,639

 

26,001

 

19,038

  Electronic data   interchange services

 

5,406

 

4,066

 

10,430

 

8,043

  Other services

 

4,602

 

4,169

 

9,064

 

8,884

Maintenance, EDI and other services

 

23,450

 

17,874

 

45,495

 

35,965

                 

   Total revenue

 

45,146

 

37,459

 

87,178

 

73,533

                 

Cost of revenue:

               

  Software, hardware and   supplies

 

2,477

 

1,723

 

4,966

 

3,412

  Implementation and   training services

 

2,423

 

2,154

 

4,832

 

4,117

Total cost of system sales

 

4,900

 

3,877

 

9,798

 

7,529

                 

  Maintenance

 

3,033

 

2,792

 

6,159

 

5,929

  Electronic data   interchange services

 

3,742

 

2,926

 

7,251

 

5,706

  Other services

 

3,100

 

2,238

 

6,109

 

4,126

Total cost of maintenance and other services

 

9,875

 

7,956

 

19,519

 

15,761

   Total cost of revenue

 

14,775

 

11,833

 

29,317

 

23,290

                 

   Gross profit

 

30,371

 

25,626

 

57,861

 

50,243

                 

Operating expenses:

               

   Selling, general and    administrative

 

13,188

 

9,994

 

25,831

 

20,194

   Research and development    costs

 

2,688

 

2,591

 

5,488

 

4,909

    Total operating     expenses

 

15,876

 

12,585

 

31,319

 

25,103

                 

   Income from operations

 

14,495

 

13,041

 

26,542

 

25,140

                 

Interest income

 

645

 

819

 

1,384

 

1,486

                 

Income before provision for income taxes

 

15,140

 

13,860

 

27,926

 

26,626

Provision for income taxes

 

5,468

 

5,523

 

10,314

 

10,620

                 

   Net income.

 

$ 9,672

 

$ 8,337

 

$ 17,612

 

$ 16,006

                 
                 

Net income per share:

               

   Basic

 

$ 0.35

 

$ 0.31

 

$ 0.65

 

$ 0.60

       Diluted

 

$ 0.35

 

$ 0.30

 

$ 0.64

 

$ 0.59

                 

Weighted average shares outstanding:

               

Basic

 

27,287

 

26,802

 

27,211

 

26,758

Diluted

 

27,718

 

27,380

 

27,696

 

27,332


QUALITY SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

     

September
30, 2007

 

March 31, 2007

ASSETS

Current assets:

       
 

Cash and cash equivalents

$ 26,920

 

$ 60,028

 

Marketable securities

46,000

 

 

Accounts receivable, net

68,374

 

63,945

 

Inventories, net

1,369

 

1,175

 

Net current deferred tax assets

3,912

 

3,443

 

Other current assets

3,937

 

4,507

 

    Total current assets

150,512

 

133,098

         

Equipment and improvements, net

5,075

 

5,029

Capitalized software costs, net

8,005

 

6,982

Net deferred tax assets

1,539

 

1,180

Goodwill

1,840

 

1,840

Other assets

2,811

 

2,552

 

    Total assets

$ 169,782

 

$ 150,681

         

LIABILITIES AND SHAREHOLDERS' EQUITY

     
 

Current liabilities:

     
 

Accounts payable

$ 3,814

 

$ 5,246

 

Deferred revenue

39,339

 

38,774

 

Accrued compensation and related benefits

6,002

 

6,521

 

Income taxes payable

1,080

 

315

 

Other current liabilities

7,428

 

5,626

 

    Total current liabilities

57,663

 

56,482

         

Deferred revenue, net of current

597

 

674

Deferred compensation

2,517

 

2,279

   

60,777

 

59,435

         

Commitments and contingencies

     
         

Shareholders’ equity:

     
 

Common stock, $0.01 par value; authorized 50,000 shares; issued and outstanding 27,349 and 27,123 shares at September 30, 2007 and March 31, 2007, respectively

273

 

271

 

Additional paid-in capital

72,591

 

65,666

 

Retained earnings

36,141

 

25,309

 

    Total shareholders' equity

109,005

 

91,246

 

    Total liabilities and shareholders’ equity

$ 169,782

 

$ 150,681