EX-99.1 2 d74682_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 FIRST QUARTER RESULTS AND INCREASES DIVIDEND

IRVINE, Calif.--(BUSINESS WIRE)— August 7, 2008-- Quality Systems, Inc. (NASDAQ:QSII - news) today announced the results of operations for its fiscal 2009 first quarter ended June 30, 2008. The Company posted record net revenues of $55.2 million in the first quarter, an increase of 31% from the $42.0 million generated during the same quarter of the prior year. The Company reported net income of $11.1 million, an increase of 40% over net income of $7.9 million earned in the comparable quarter of the prior year. Fully diluted earnings per share was $0.40 in the quarter, an increase of 38% over the fully diluted $0.29 per share earnings recorded in same quarter last year.

For the quarter, the Company’s NextGen Healthcare Information Systems division posted record revenue of $51.2 million, up 34% over the same quarter prior year and record operating income of $19.9 million, up 43% over the same quarter of the prior year. The Company’s Healthcare Strategic Initiatives acquisition, which closed on May 20, 2008, contributed approximately $1.7 million to NextGen revenue during the quarter.

On August 4, 2008, the Company’s Board of Directors declared a quarterly cash dividend of $0.30 per share on the Company’s outstanding shares of common stock, payable to shareholders of record as of September 15, 2008 with an anticipated distribution date on or about October 1, 2008. The $0.30 per share cash dividend represents a 20% increase in the Company’s previous regular quarterly dividend of $0.25 per share.

Quality Systems, Inc. will hold a conference call to discuss first quarter financial results August 7, 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 Thursday, August 7, 2008 at 6:30 p.m. EDT through

 


Thursday, August 14, 2008 at midnight EDT. To access the replay dial 800-642-1687 and enter the conference ID number 59190344.

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, revenue cycle management, connectivity, and other applications and services for medical and dental group practices. Visit www.qsii.com, www.nextgen.com and www.hsillc.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

 

June 30,
2008

 

June 30,
2007

Revenues:

 

 

 

Software, hardware and supplies

$ 21,369

 

$ 16,739

Implementation and training services

3,585

 

3,248

System sales

24,954

 

19,987

 

 

 

 

Maintenance

17,136

 

12,559

Electronic data interchange services

6,670

 

5,024

Revenue cycle management and related services

1,957

 

134

Other services

4,507

 

4,328

Maintenance, EDI, revenue cycle management and other services

30,270

 

22,045

Total revenue

55,224

 

42,032

 

 

 

 

Cost of revenue:

 

 

 

Software, hardware and supplies

3,486

 

2,488

Implementation and training services

3,015

 

2,409

Total cost of system sales

6,501

 

4,897

 

 

 

 

Maintenance

3,082

 

3,127

Electronic data interchange services

4,891

 

3,509

Revenue cycle management and related services

1,305

 

98

Other services

3,448

 

2,911

Total cost of maintenance, EDI, revenue cycle management and other services

12,726

 

9,645

Total cost of revenue

19,227

14,542

Gross profit

35,997

 

27,490

 

 

 

 

Operating expenses:

 

 

 

Selling, general and administrative

15,252

 

12,643

Research and development costs

3,119

 

2,800

Total operating expenses

18,371

 

15,443

Income from operations

17,626

 

12,047

 

 

 

 

Interest income

374

 

739

 

 

 

 

Income before provision for income taxes

18,000

 

12,786

Provision for income taxes

6,886

4,846

 

 

 

 

Net income

$ 11,114

 

$    7,940

 

 

 

 

Net income per share:

 

 

 

Basic

$     0.40

 

$      0.29

Diluted

$     0.40

 

$      0.29

 

 

 

 

Weighted average shares outstanding:

 

 

 

Basic

27,465

 

27,134

Diluted

27,771

 

27,657

Dividends declared per common share

$     0.25

 

$      0.25


 

QUALITY SYSTEMS, INC.

CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

 

 

June 30,
2008

 

March 31,
2008

ASSETS

Current assets:

 

 

 

 

Cash and cash equivalents

      $ 61,399

 

       $  59,046

 

Restricted cash

1,455

 

 

Marketable securities

2,947

 

2,500

 

Accounts receivable, net

83,372

 

76,585

 

Inventories, net

1,104

 

1,024

 

Net current deferred tax assets

6,402

 

6,397

 

Other current assets

4,258

 

4,596

 

Total current assets

 160,937

 

150,148

 

 

 

 

 

Marketable securities

15,095

 

20,124

Equipment and improvements, net

5,163

 

4,773

Capitalized software costs, net

9,361

 

8,852

Intangibles, net

5,549

 

Goodwill

12,659

 

1,840

Other assets

2,240

 

2,171

 

Total assets

    $211,004

 

    $187,908

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

 

 

 

 

Accounts payable

       $    5,484

 

       $   4,685

 

Deferred revenue

45,884

 

44,389

 

Accrued compensation and related benefits

8,029

 

8,346

 

Income taxes payable

6,414

 

1,541

 

Dividends payable

6,872

 

6,861

 

Other current liabilities

7,794

 

4,394

 

Total current liabilities

80,477

 

70,216

 

 

 

 

 

Deferred revenue, net of current

364

 

506

Net deferred tax liabilities

1,259

 

1,575

Deferred compensation

1,974

 

1,906

 

Total liabilities

84,074

 

74,203

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

Common stock

 

 

 

 

$0.01 par value; authorized 50,000 shares; issued and outstanding 27,765 and 27,448 shares at June 30, 2008 and March 31, 2008, respectively

278

274

 

 

Additional paid-in capital

85,068

 

75,556

Retained earnings

42,314

 

38,071

Accumulated other comprehensive loss

(730)

 

  (196)

 

Total shareholders' equity

126,930

 

113,705

 

Total liabilities and shareholders’ equity

          $211,004

 

            $187,908