8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) May 17, 2012

QUALITY SYSTEMS, INC.

(Exact name of registrant as specified in its charter)

CALIFORNIA	001-12537	95-2888568
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification Number)

18111 Von Karman, Suite 700

Irvine, California 92612

(Address of Principal Executive Offices)

(949) 255-2600

(Registrant’s Telephone Number, Including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On May 17, 2012, Quality Systems, Inc. (the “Company”) issued a press release announcing its unaudited financial results for the fourth quarter and fiscal year ended March 31, 2012. A copy of the press release is attached to this Form 8-K as Exhibit 99.1, which is incorporated herein by reference.

On May 17, 2012, the Company will host a conference call concerning its financial performance for the fourth quarter and fiscal year ended March 31, 2012. The Company expects to furnish a copy of the transcript of the conference call as soon as it is available by amendment to this Form 8-K. The conference call may contain forward-looking statements regarding the Company and will include cautionary statements identifying important factors that could cause actual results to differ materially from those anticipated.

The information in this Item 2.02 of this Form 8-K, as well as Exhibit 99.1 attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Use of Non-GAAP Financial Measures

The Company from time to time discloses its Days Sales Outstanding (“DSO”), which is a non-GAAP financial measure. For the quarter ended March 31, 2012, DSO was 122 days. The Company calculates DSO as follows: Net revenue for the quarter is annualized (multiplied by four) and then divided by 365 days to yield an average daily sales amount. The balance of accounts receivable, net of any reserves for bad debts, is then divided by that average daily sales amount resulting in the DSO. For the quarter ended March 31, 2012, the calculation was as follows:

Quarterly Revenue		$	108,993,000
Times four(4)	x		4
Equals Annualized Revenue			435,972,000
Divided by 365 days	÷		365
Equals Daily Revenue	=	$	1,194,444
Net Accounts Receivable		$	145,756,000
Divided by Average Daily Revenue	÷		1,194,444
Equals Days Sales Outstanding	=		122

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Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1	Press Release dated May 17, 2012

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: May 17, 2012

QUALITY SYSTEMS, INC.
By:	/s/ Paul Holt
	Paul Holt
	Chief Financial Officer

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EXHIBITS ATTACHED TO THIS REPORT ON FORM 8-K

Exhibit No.	Description
99.1	Press Release dated May 17, 2012

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EX-99.1

Exhibit 99.1

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 17, 2012

QUALITY SYSTEMS, INC. REPORTS FISCAL 2012

FOURTH QUARTER AND YEAR-END RESULTS

IRVINE, Calif. … May 17, 2012 …Quality Systems, Inc. (NASDAQ:QSII) announced today results for its fiscal year and fourth quarter ended March 31, 2012.

The Company reported revenues of $429.8 million for the fiscal year ended March 31, 2012, an increase of 22 percent compared to $353.4 million for the fiscal year ended March 31, 2011. Net income for fiscal 2012 was $75.7 million, a 23 percent increase versus net income of $61.6 million for the year ago period. Fully diluted earnings per share for the fiscal year ended 2012 was $1.28, a 21 percent increase from $1.06 for fiscal 2011.

Revenues for the fiscal 2012 fourth quarter were $109.0 million, up 12 percent compared to $97.1 million in the year ago period. Net income for the fiscal 2012 fourth quarter was $15.1 million compared to $18.6 million in the same period a year ago. Fully diluted earnings per share was $0.25 in the fourth quarter of fiscal 2012 versus $0.32 for the fiscal 2011 fourth quarter.

“We are pleased with the results for fiscal 2012, which demonstrate strong growth in both revenues and profits compared with the previous fiscal year. Our performance for the fiscal 2012 fourth quarter was impacted by delays in the closing of several fourth quarter opportunities as well as recognition of revenue related to a large customer implementation program,” said Steven T. Plochocki, chief executive officer. “Looking ahead, we remain confident about the growth opportunities, as evidenced by our recent guidance for the 2013 fiscal year. We have stated that we expect revenues to increase 20 - 24 percent and earnings per share to grow 20 - 25 percent.”

Quality Systems will host a conference call to discuss its year-end and fiscal 2012 fourth quarter results on Thursday, May 17, 2012 at 10:00 AM ET (7:00 AM PT). All participants should dial 877-941-8609 at least ten minutes prior to the start of the call. International callers should dial 480-629-9692. To hear a live Web simulcast or to listen to the archived webcast following completion of the call, please visit the Company’s 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 4539176. The replay will be available from approximately 12:00 PM ET on Thursday, May 17, 2012, through 11:59 PM ET on Thursday, May 24, 2012.

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.

SAFE HARBOR PROVISIONS FOR FORWARD-LOOKING STATEMENTS

This news release may contain forward-looking statements within the meaning of the federal securities laws, including but not limited to, 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, net income and earnings per share). Risks and uncertainties exist that may cause the results to differ materially from those set forth in these forward-looking statements. Factors that could cause the anticipated results to differ from those described in the forward-looking statements are set forth in Part I, Item A of our most recent Annual Report on Form 10-K for the fiscal year ended March 31, 2011, including but not limited to: 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; 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 upgrade releases; 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; changes of accounting estimates and assumptions used to prepare the prior periods’ financial statements; and general economic conditions. A significant portion of the Company’s quarterly sales of software product licenses and computer hardware is concluded in the last month of a 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 BALANCE SHEETS

(IN THOUSANDS)

(UNAUDITED)

	March 31, 2012		March 31, 2011
ASSETS
Current assets:
Cash and cash equivalents	$	134,444	$	116,617
Restricted cash		1,962		3,787
Marketable securities		4,987		1,120
Accounts receivable, net		145,756		139,772
Inventories		3,715		1,933
Income taxes receivable		2,628		—
Deferred income tax assets, net		10,127		10,397
Other current assets		9,090		8,768
Total current assets		312,709		282,394
Equipment and improvements, net		17,841		12,599
Capitalized software costs, net		19,994		15,150
Intangibles, net		23,259		16,890
Goodwill		60,776		46,721
Other assets		5,773		4,932
Total assets	$	440,352	$	378,686
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	4,532	$	6,686
Deferred revenue		83,108		76,695
Accrued compensation and related benefits		11,870		10,247
Income taxes payable		—		3,530
Dividends payable		10,354		10,162
Other current liabilities		19,568		29,316
Total current liabilities		129,432		136,636
Deferred revenue, net of current		1,293		1,099
Deferred income tax liabilities, net		5,351		11,384
Deferred compensation		3,497		2,488
Other noncurrent liabilities		5,602		2,409
Total liabilities		145,175		154,016
Commitments and contingencies
Shareholders’ equity:
Common stock
$0.01 par value; authorized 100,000 shares; issued and outstanding 59,180 and 58,068 shares at March 31, 2012 and March 31, 2011, respectively		592		580
Additional paid-in capital		168,988		132,969
Retained earnings		125,597		91,121
Total shareholders’ equity		295,177		224,670
Total liabilities and shareholders’ equity	$	440,352	$	378,686

QUALITY SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF INCOME

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

	Three Months Ended March 31,				Year Ended March 31,
	2012		2011		2012			2011
Revenues:
Software, hardware and supplies	$	26,562	$	31,708	$	122,407		$	106,514
Implementation and training services		8,270		4,946		26,391			18,015
System sales		34,832		36,654		148,798			124,529
Maintenance		35,871		29,046		138,832			110,019
Electronic data interchange services		13,081		10,756		49,259			41,022
Revenue cycle management and related services		11,402		11,622		45,572			45,065
Other services		13,808		9,030		47,374			32,728
Maintenance, EDI, RCM and other services		74,162		60,454		281,037			228,834
Total revenues		108,994		97,108		429,835			353,363
Cost of revenue:
Software, hardware and supplies		4,976		3,204		18,399			19,779
Implementation and training services		6,179		4,868		21,298			15,010
Total cost of system sales		11,155		8,072		39,697			34,789
Maintenance		4,844		2,875		17,104			12,948
Electronic data interchange services		8,606		7,321		32,422			27,711
Revenue cycle management and related services		8,608		8,733		34,295			33,815
Other services		8,728		6,165		27,705			18,219
Total cost of maintenance, EDI, RCM and other services		30,786		25,094		111,526			92,693
Total cost of revenue		41,941		33,166		151,223			127,482
Gross profit		67,053		63,942		278,612			225,881
Operating expenses:
Selling, general and administrative		34,195		29,285		128,846			108,310
Research and development costs		8,907		5,751		31,369			21,797
Amortization of acquired intangible assets		653		445		2,198			1,682
Total operating expenses		43,755		35,481		162,413			131,789
Income from operations		23,298		28,461		116,199			94,092
Interest income		35		19		247			263
Other income (expense), net		261		2		(139	)		61
Income before provision for income taxes		23,594		28,482		116,307			94,416
Provision for income taxes		8,521		9,929		40,650			32,810
Net income	$	15,073	$	18,553	$	75,657		$	61,606
Net income per share:
Basic	$	0.26	$	0.32	$	1.29		$	1.06
Diluted	$	0.25	$	0.32	$	1.28		$	1.06
Weighted average shares outstanding:
Basic		59,048		58,010		58,729			57,894
Diluted		59,232		58,404		59,049			58,236
Dividends declared per common share	$	0.175	$	0.175	$	0.700		$	0.625