EX-99.1 2 d74399_ex99-1.htm PRESS RELEASE

 

 

FOR IMMEDIATE RELEASE

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 FOURTH QUARTER AND
FISCAL YEAR-END RESULTS

IRVINE, Calif.--(BUSINESS WIRE)— June 10, 2008--Quality Systems, Inc. (NASDAQ:QSII - news) today announced the results of operations for its fiscal 2008 fourth quarter and fiscal year ended March 31, 2008. The Company posted net revenue of $51.2 million in the fourth quarter, a record for the Company, and an increase of 14% from the $45.1 million generated during the same quarter last year. The Company reported record net income of $11.3 million, an increase of 32% over net income of $8.5 million earned in the comparable quarter of the prior year. Fully diluted earnings per share was $0.41 in the quarter, also a record, and an increase of 32% over the fully diluted $0.31 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 $47.3 million, up 16% over the same quarter prior year and record operating income of $19.1 million, up 24% over the same quarter of the prior year.

Revenue for the fiscal year ended March 31, 2008 was $186.5 million, an increase of 19% over fiscal year 2007 revenue of $157.2 million. Net income for fiscal year 2008 was $40.1 million, an increase of 21% over fiscal 2007’s net income of $33.2 million. Fully diluted earnings per share increased to $1.44 in fiscal year 2008 from $1.21 earned during fiscal year 2007, an increase of 19%.

Quality Systems, Inc. will hold a conference call to discuss fourth quarter and fiscal year end financial results June 10, 2008 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 Tuesday, June 10, 2008 at 6:30 p.m. EDT through Tuesday, June 17, 2008 at midnight EDT. To access the replay dial (800) 642-1687 and enter the conference ID number 50252683.



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 and other applications 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

 

Twelve Months Ended

 

 

 


 


 

 

 

March 31,
2008

 

March 31,
2007

 

March 31,
2008

 

March 31,
2007

 

 

 


 


 


 


 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

Software, hardware and supplies

 

 

$

20,519

 

 

 

$

21,017

 

 

 

$

76,363

 

 

 

$

68,871

 

 

Implementation and training services

 

 

 

3,861

 

 

 

 

3,490

 

 

 

 

13,406

 

 

 

 

12,177

 

 

 

 

 



 

 

 



 

 

 



 

 

 



 

 

System sales

 

 

 

24,380

 

 

 

 

24,507

 

 

 

 

89,769

 

 

 

 

81,048

 

 

 

Maintenance

 

 

 

15,593

 

 

 

 

11,841

 

 

 

 

56,455

 

 

 

 

41,948

 

 

Electronic data interchange services

 

 

 

6,281

 

 

 

 

4,716

 

 

 

 

22,450

 

 

 

 

17,049

 

 

Other services

 

 

 

4,978

 

 

 

 

4,072

 

 

 

 

17,826

 

 

 

 

17,120

 

 

 

 

 



 

 

 



 

 

 



 

 

 



 

 

Maintenance, EDI and other services

 

 

 

26,852

 

 

 

 

20,629

 

 

 

 

96,731

 

 

 

 

76,117

 

 

 

 

 



 

 

 



 

 

 



 

 

 



 

 

Total revenue

 

 

 

51,232

 

 

 

 

45,136

 

 

 

 

186,500

 

 

 

 

157,165

 

 

 

 

 



 

 

 



 

 

 



 

 

 



 

 

Cost of revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software, hardware and supplies

 

 

 

2,939

 

 

 

 

3,243

 

 

 

 

10,887

 

 

 

 

8,453

 

 

Implementation and training services

 

 

 

2,872

 

 

 

 

2,249

 

 

 

 

10,341

 

 

 

 

8,535

 

 

 

 

 



 

 

 



 

 

 



 

 

 



 

 

Total cost of system sales

 

 

 

5,811

 

 

 

 

5,492

 

 

 

 

21,228

 

 

 

 

16,988

 

 

 

Maintenance

 

 

 

3,153

 

 

 

 

2,847

 

 

 

 

12,446

 

 

 

 

11,834

 

 

Electronic data interchange services

 

 

 

4,363

 

 

 

 

3,331

 

 

 

 

15,776

 

 

 

 

12,181

 

 

Other services

 

 

 

3,709

 

 

 

 

3,127

 

 

 

 

13,051

 

 

 

 

9,781

 

 

 

 

 



 

 

 



 

 

 



 

 

 



 

 

Total cost of maintenance and other services

 

 

 

11,225

 

 

 

 

9,305

 

 

 

 

41,273

 

 

 

 

33,796

 

 

 

 

 



 

 

 



 

 

 



 

 

 



 

 

Total cost of revenue

 

 

 

17,036

 

 

 

 

14,797

 

 

 

 

62,501

 

 

 

 

50,784

 

 

 

 

 



 

 

 



 

 

 



 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

 

34,196

 

 

 

 

30,339

 

 

 

 

123,999

 

 

 

 

106,381

 

 

 

 

 



 

 

 



 

 

 



 

 

 



 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

 

 

14,146

 

 

 

 

14,550

 

 

 

 

53,260

 

 

 

 

45,337

 

 

Research and development costs

 

 

 

2,988

 

 

 

 

2,656

 

 

 

 

11,350

 

 

 

 

10,166

 

 

 

 

 



 

 

 



 

 

 



 

 

 



 

 

Total operating expenses

 

 

 

17,134

 

 

 

 

17,206

 

 

 

 

64,610

 

 

 

 

55,503

 

 

 

 

 



 

 

 



 

 

 



 

 

 



 

 

Income from operations

 

 

 

17,062

 

 

 

 

13,133

 

 

 

 

59,389

 

 

 

 

50,878

 

 

 

Interest income

 

 

 

567

 

 

 

 

885

 

 

 

 

2,661

 

 

 

 

3,306

 

 

Other income

 

 

 

 

 

 

 

 

 

 

 

953

 

 

 

 

 

 

 

 

 



 

 

 



 

 

 



 

 

 



 

 

Income before provision for income taxes

 

 

 

17,629

 

 

 

 

14,018

 

 

 

 

63,003

 

 

 

 

54,184

 

 

Provision for income taxes

 

 

 

6,377

 

 

 

 

5,513

 

 

 

 

22,925

 

 

 

 

20,952

 

 

 

 

 



 

 

 



 

 

 



 

 

 



 

 

 

Net income

 

 

$

11,252

 

 

 

$

8,505

 

 

 

$

40,078

 

 

 

$

33,232

 

 

 

 

 



 

 

 



 

 

 



 

 

 



 

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

$

0.41

 

 

 

$

0.31

 

 

 

$

1.47

 

 

 

$

1.24

 

 

Diluted

 

 

$

0.41

 

 

 

$

0.31

 

 

 

$

1.44

 

 

 

$

1.21

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 

27,408

 

 

 

 

27,049

 

 

 

 

27,298

 

 

 

 

26,882

 

 

Diluted

 

 

 

27,712

 

 

 

 

27,600

 

 

 

 

27,770

 

 

 

 

27,550

 

 

Dividends declared per common share

 

 

$

0.25

 

 

 

$

1.00

 

 

 

$

1.00

 

 

 

$

1.00

 

 




QUALITY SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 2008

 

March 31, 2007

 

 

 


 


 

ASSETS

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

$

59,046

 

 

 

$

60,028

 

 

Marketable securities

 

 

 

2,500

 

 

 

 

 

 

Accounts receivable, net

 

 

 

76,585

 

 

 

 

63,945

 

 

Inventories, net

 

 

 

1,024

 

 

 

 

1,175

 

 

Net current deferred tax assets

 

 

 

6,397

 

 

 

 

3,443

 

 

Other current assets

 

 

 

4,596

 

 

 

 

4,507

 

 

 

 

 



 

 

 



 

 

Total current assets

 

 

 

150,148

 

 

 

 

133,098

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketable securities

 

 

 

20,124

 

 

 

 

 

 

Equipment and improvements, net

 

 

 

4,773

 

 

 

 

5,029

 

 

Capitalized software costs, net

 

 

 

8,852

 

 

 

 

6,982

 

 

Net deferred tax assets

 

 

 

 

 

 

 

1,180

 

 

Goodwill

 

 

 

1,840

 

 

 

 

1,840

 

 

Other assets

 

 

 

2,171

 

 

 

 

2,552

 

 

 

 

 



 

 

 



 

 

Total assets

 

 

$

187,908

 

 

 

$

150,681

 

 

 

 

 



 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

 

$

4,685

 

 

 

$

5,246

 

 

Deferred revenue

 

 

 

44,389

 

 

 

 

38,774

 

 

Accrued compensation and related benefits

 

 

 

8,346

 

 

 

 

6,521

 

 

Income taxes payable

 

 

 

1,541

 

 

 

 

315

 

 

Dividends payable

 

 

 

6,861

 

 

 

 

 

 

Other current liabilities

 

 

 

4,394

 

 

 

 

5,626

 

 

 

 

 



 

 

 



 

 

Total current liabilities

 

 

 

70,216

 

 

 

 

56,482

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deferred revenue, net of current

 

 

 

506

 

 

 

 

674

 

 

Net deferred tax liabilities

 

 

 

1,575

 

 

 

 

 

 

Deferred compensation

 

 

 

1,906

 

 

 

 

2,279

 

 

 

 

 



 

 

 



 

 

Total liabilities

 

 

 

74,203

 

 

 

 

59,435

 

 

 

 

 



 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

 

 

 

 

 

 

Common stock $0.01 par value; authorized 50,000 shares; issued and outstanding 27,448 and 27,123 shares at March 31, 2008 and March 31, 2007, respectively

 

 

 

274

 

 

 

 

271

 

 

Additional paid-in capital

 

 

 

75,556

 

 

 

 

65,666

 

 

Retained earnings

 

 

 

38,071

 

 

 

 

25,309

 

 

Accumulated other comprehensive loss

 

 

 

(196

)

 

 

 

 

 

 

 

 



 

 

 



 

 

Total shareholders’ equity

 

 

 

113,705

 

 

 

 

91,246

 

 

 

 

 



 

 

 



 

 

Total liabilities and shareholders’ equity

 

 

$

187,908

 

 

 

$

150,681