EX-99.1 2 ex99-1.htm EXHIBIT 99.1 ex99-1.htm
 
For Further Information, Contact:
Quality Systems, Inc.
Susan J. Lewis
 
18111 Von Karman Avenue, Suite 600
Phone: (303) 804-0494
 
Irvine, CA  92612
slewis@qsii.com
 
Phone: (949) 255-2600
Paul Holt, CFO, pholt@qsii.com

FOR IMMEDIATE RELEASE
          July 30, 2009

QUALITY SYSTEMS REPORTS FIRST QUARTER RESULTS
 
IRVINE, Calif. — July 30, 2009-- Quality Systems, Inc. (NASDAQ:QSII) today announced the results of operations for its fiscal 2010 first quarter ended June 30, 2009.  The Company posted record net revenues of $66.6 million in the first quarter, an increase of 21% from the $55.2 million generated during the same quarter of the prior year.  The Company reported net income of $10.3 million, down 7% when compared to net income of $11.1 million earned in the comparable quarter of the prior year.  Fully diluted earnings per share was $0.36 in the quarter, which was down 10% compared to $0.40 per share earnings recorded in the same quarter last year.
 
The Company’s results continue to be impacted by the delays in purchasing decisions related to uncertainty surrounding the American Recovery and Reinvestment Act of 2009 (“ARRA”), which was signed into law in February 2009.  Results were further impacted by investments in selling, marketing, implementation and development in preparation for expected future growth related to the ARRA.
 
For the quarter, the Company’s NextGen Healthcare Information Systems division posted revenue of $62.8 million, up 23% over the same quarter of the prior year and operating income of $19.4 million, down 3% over the same quarter of the prior year.
 
Quality Systems, Inc. will hold a conference call to discuss first quarter end financial results on Thursday, July 30, 2009 at 9:00 am ET (6:00 a.m. PT).  All participants should dial 877-941-7133 at least ten minutes prior to the start of the call.  International callers should dial 480-629-9031.  To hear a live web simulcast or to listen to the archived web cast following completion of the call, please visit the company web site at www.qsii.com, click on the "Investor Relations" tab, then select "Conference Calls," to access the link to the call.  To listen to a telephone replay of the conference call, please dial 1-800-406-7325 and enter reservation identification number 4121627.   The replay will be available from approximately 12:00 PM ET on Thursday, July 30, 2009, through 11:59 PM ET on Thursday, August 6, 2009.
 
A transcript of the conference call will be made available on the QSII website (www.qsii.com).
 
About Quality Systems, Inc.
Irvine, Calif.-based Quality Systems, Inc. and its NextGen Healthcare Information Systems subsidiary develop and market computer-based practice management, patient records and revenue cycle management applications as well as connectivity products 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
 
   
June 30, 2009
   
June 30, 2008
 
             
Revenues:
           
Software, hardware and supplies
  $ 17,776     $ 21,369  
Implementation and training services
    3,457       3,585  
                 
System sales
    21,233       24,954  
                 
Maintenance
    21,640       17,136  
Electronic data interchange services
    8,161       6,670  
Revenue cycle management and related services
    8,992       1,957  
Other services
    6,612       4,507  
Maintenance, EDI, RCM and other services.
    45,405       30,270  
Total revenue
    66,638       55,224  
                 
Cost of revenue:
               
Software, hardware and supplies
    2,704       3,486  
Implementation and training services
    2,881       3,015  
                 
Total cost of system sales
    5,585       6,501  
                 
Maintenance
    3,025       3,082  
Electronic data interchange services
    5,890       4,891  
Revenue cycle management and related services
    6,522       1,305  
Other services
    4,867       3,448  
Total cost of maintenance, EDI, RCM and other services
    20,304       12,726  
Total cost of revenue
    25,889       19,227  
Gross profit
    40,749       35,997  
                 
Operating expenses:
               
Selling, general and administrative
    20,450       15,252  
Research and development costs
    3,977       3,119  
                 
Total operating expenses
    24,427       18,371  
                 
Income from operations
    16,322       17,626  
                 
Interest income
    78       374  
Other income
    58       -  
                 
Income before provision for income taxes
    16,458       18,000  
Provision for income taxes
    6,112       6,886  
Net income
  $ 10,346     $ 11,114  
                 
Net income per share:
               
Basic
  $ 0.36     $ 0.40  
Diluted
  $ 0.36     $ 0.40  
                 
Weighted average shares outstanding:
               
Basic
    28,492       27,465  
Diluted
    28,635       27,771  
Dividends declared per common share
  $ 0.30     $ 0.25  
                 


 
 

 

QUALITY SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
 
   
June 30, 2009
   
March 31, 2009
 
ASSETS
           
Current assets:
           
 Cash and cash equivalents
  $ 77,424     $ 70,180  
 Restricted cash
    1,539       1,303  
 Accounts receivable, net
    92,430       90,070  
 Inventories, net
    1,151       1,125  
 Income tax receivable
    1,071       5,605  
 Net current deferred tax assets
    3,992       3,994  
 Other current assets
    5,508       6,312  
  
               
 Total current assets
    183,115       178,589  
  
               
Marketable securities
    7,416       7,395  
Equipment and improvements, net
    7,537       6,756  
Capitalized software costs, net
    9,532       9,552  
Intangibles, net
    8,046       8,403  
Goodwill
    28,731       28,731  
Other assets
    2,385       2,675  
 Total assets
  $ 246,762     $ 242,101  
LIABILITIES AND SHAREHOLDERS' EQUITY
               
Current liabilities:
               
 Accounts payable
  $ 4,345     $ 5,097  
 Deferred revenue
    45,986       47,584  
 Accrued compensation and related benefits
    8,451       9,511  
 Dividends payable
    8,558       8,529  
 Other current liabilities
    11,470       8,888  
  
               
 Total current liabilities
    78,810       79,609  
  
               
Deferred revenue, net of current
    643       521  
Net deferred tax liabilities
    4,049       4,566  
Deferred compensation.
    2,088       1,838  
 Total liabilities
    85,590       86,534  
  
               
Commitments and contingencies
               
Shareholders’ equity:
               
Common stock
               
$0.01 par value; authorized 50,000 shares; issued and outstanding 28,564 and 28,447 shares at June 30, 2009 and March 31, 2009, respectively
    286       284  
Additional paid-in capital
    107,335       103,524  
Retained earnings
    53,551       51,759  
 Total shareholders' equity
    161,172       155,567  
 Total liabilities and shareholders’ equity
  $ 246,762     $ 242,101