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)

July 25, 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 July 26, 2012, Quality Systems, Inc. (the “Company”) issued a press release announcing its financial performance for the period ended June 30, 2012. A copy of the press release is attached to this Form 8-K as Exhibit 99.1, which is incorporated herein by this reference.

On July 26, 2012, the Company will host a conference call concerning its financial performance for the period ended June 30, 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 June 30, 2012, DSO was 118 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 June 30, 2012, the calculation was as follows:

Quarterly Revenue	$	118,295,000
Times four(4)	x	4
Equals Annualized Revenue		473,180,000
Divided by 365 days	÷	365
Equals Daily Revenue	=    $	1,296,384
Net Accounts Receivable	$	153,218,000
Divided by Average Daily Revenue	÷	1,296,384
Equals Days Sales Outstanding	=	118

Item 8.01 Other Events.

Quarterly Dividend

On July 25, 2012, the Company’s Board of Directors declared a quarterly cash dividend of $0.175 per share on the Company’s outstanding shares of common stock, payable to shareholders of record as of September 14, 2012 with an anticipated distribution date on or about October 5, 2012. The $0.175 dividend is pursuant to the Company’s current policy to pay a regular dividend on the Company’s outstanding shares of common stock each fiscal quarter subject to Board review and approval.

A copy of the Company’s press release announcing the dividend and earnings results is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

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Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1	Press Release dated July 26, 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: July 26, 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 July 26, 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

JULY 26, 2012

QUALITY SYSTEMS, INC. REPORTS FISCAL 2013 FIRST QUARTER RESULTS

IRVINE, Calif. … July 26, 2012 …Quality Systems, Inc. (NASDAQ:QSII) announced today results for its fiscal 2013 first quarter ended June 30, 2012.

The Company reported record revenues of $118.3 million for the fiscal 2013 first quarter, an increase of 18 percent, compared with $100.4 million for the fiscal 2012 first quarter. Net income for the fiscal 2013 first quarter was $15.5 million, down 18 percent versus net income of $19.0 million for the same period a year ago. Fully diluted earnings per share for the fiscal 2013 first quarter was $0.26, a 19 percent decrease from $0.32 for the fiscal 2012 first quarter.

“Although we delivered record revenue for our fiscal 2013 first quarter driven by strong performance in our recurring revenue streams, our overall results were impacted by lower-than-expected revenue from large, higher margin software system sales. There are times when a limited number of these types of sales can influence performance in any given quarter,” explained Steven T. Plochocki, chief executive officer.

“We remain confident about our future performance and prospects. However, due to evolving conditions affecting our industry and uncertainty in predicting future results, we are not affirming our previous guidance nor providing revised guidance at this time,” Plochocki said.

Quality Systems will host a conference call to discuss its fiscal 2013 first quarter results on Thursday, July 26, 2012 at 10:00 AM ET (7:00 AM PT). All participants should dial 877-941-2927 at least ten minutes prior to the start of the call. International callers should dial 480-629-9725. 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 4553724. The replay will be available from approximately 12:00 PM ET on Thursday, July 26, 2012, through 11:59 PM ET on Thursday, August 2, 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.

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Quality Systems, Inc.

Fiscal 2013 First Quarter Results

Page 2

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, 2012, 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 STATEMENTS OF INCOME

(IN THOUSANDS)

(UNAUDITED)

	Three Months Ended June 30,
	2012			2011
Revenues:
Software, hardware and supplies	$	25,844		$	28,911
Implementation and training services		12,046			5,472
System sales		37,890			34,383
Maintenance		38,568			31,502
Electronic data interchange services		13,823			12,092
Revenue cycle management and related services		14,401			11,881
Other services		13,614			10,584
Maintenance, EDI, RCM and other services		80,406			66,059
Total revenues		118,296			100,442
Cost of revenue:
Software, hardware and supplies		5,771			4,614
Implementation and training services		9,145			4,075
Total cost of system sales		14,916			8,689
Maintenance		4,811			3,854
Electronic data interchange services		9,248			7,962
Revenue cycle management and related services		10,870			8,826
Other services		8,550			5,597
Total cost of maintenance, EDI, RCM and other services		33,479			26,239
Total cost of revenue		48,395			34,928
Gross profit		69,901			65,514
Operating expenses:
Selling, general and administrative		36,681			29,386
Research and development costs		8,576			6,827
Amortization of acquired intangible assets		1,137			482
Total operating expenses		46,394			36,695
Income from operations		23,507			28,819
Interest income		35			82
Other income (expense), net		(213	)		(38	)
Income before provision for income taxes		23,329			28,863
Provision for income taxes		7,832			9,880
Net income	$	15,497		$	18,983
Net income per share:
Basic	$	0.26		$	0.33
Diluted	$	0.26		$	0.32
Weighted average shares outstanding:
Basic		59,281			58,362
Diluted		59,388			58,800
Dividends declared per common share	$	0.175		$	0.175

QUALITY SYSTEMS, INC.

CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

	June 30, 2012		March 31, 2012
ASSETS
Current assets:
Cash and cash equivalents	$	129,906	$	134,444
Restricted cash		4,768		1,962
Marketable securities		4,990		4,987
Accounts receivable, net		153,218		145,756
Inventories		4,228		3,715
Income taxes receivable		—		2,628
Deferred income tax assets, net		10,143		10,127
Other current assets		7,563		9,090
Total current assets		314,816		312,709
Equipment and improvements, net		20,578		17,841
Capitalized software costs, net		21,865		19,994
Intangibles, net		33,292		23,259
Goodwill		63,161		60,776
Other assets		6,351		5,773
Total assets	$	460,063	$	440,352
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	12,527	$	4,532
Deferred revenue		70,653		83,108
Accrued compensation and related benefits		11,180		11,870
Income taxes payable		4,413		—
Dividends payable		10,382		10,354
Other current liabilities		27,325		19,568
Total current liabilities		136,480		129,432
Deferred revenue, net of current		1,089		1,293
Deferred income tax liabilities, net		5,357		5,351
Deferred compensation		2,926		3,497
Other noncurrent liabilities		7,654		5,602
Total liabilities		153,506		145,175
Commitments and contingencies
Shareholders’ equity:
Common stock $0.01 par value; authorized 100,000 shares; issued and outstanding 59,343 and 59,180 shares at June 30, 2012 and March 31, 2012, respectively		593		592
Additional paid-in capital		175,252		168,988
Retained earnings		130,712		125,597
Total shareholders’ equity		306,557		295,177
Total liabilities and shareholders’ equity	$	460,063	$	440,352

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