EX-99.1 2 d75986_ex99-1.htm PRESS RELEASE DATED JANUARY 29, 2009


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

Contact: Paul Holt, CFO, pholt@qsii.com

 

FOR IMMEDIATE RELEASE

 

 

JANUARY 29, 2009

 

QUALITY SYSTEMS, INC. REPORTS 2009 THIRD QUARTER RESULTS

 

IRVINE, Calif. ... January 29, 2009 ... Quality Systems, Inc. (NASDAQ:QSII) today announced the results of operations for its fiscal 2009 third quarter ended December 31, 2008. The Company posted record net revenues of $65.5 million in the third quarter, an increase of 36% from the $48.1 million generated during the same quarter of the prior year. The Company reported net income of $13.2 million, up 17% when compared with net income of $11.2 million reported in the comparable quarter last year. Fully diluted earnings per share reached $0.46 for the quarter, an increase of 15% versus $0.40 fully diluted earnings per share earnings for the same period a year ago.

For the quarter, the Company’s NextGen Healthcare Information Systems division posted record revenue of $61.5 million, up 40% when compared with the same quarter in the prior year and record operating income of $22.8 million, up 28% over third quarter last year. The Company’s Healthcare Strategic Initiatives acquisition contributed approximately $4.9 million to NextGen revenue during the quarter. The Company’s Practice Management Partners acquisition, which closed on October 28, 2008, contributed approximately $2.6 million to NextGen revenue during the quarter.

“We are pleased with the Company’s performance for the quarter. The strategic growth initiatives we put in place during the first nine months of this year are continuing to pay off. Our entry into the revenue cycle management business is reaping results as we remain focused on growing the business organically while reinvesting in new product and service development efforts,” noted Steven T. Plochocki, president and chief executive officer.

Quality Systems’ management will host a conference call to review results of the 2009 third quarter on Friday, January 30, 2009, at 9:00 AM ET (6:00 AM PT). All participants should dial 800-762-9441 at least ten minutes prior to the start of the call. International callers should dial 480-248-5081.

To hear a live web simulcast or to listen to the archived web cast following completion of the call, please visit the Company’s 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 800-406-7325 and enter reservation identification number 3968610. The replay will be available from approximately 12:00 PM ET on Friday, January 30, 2009, through 11:59 PM ET on Friday, February 6, 2009. A transcript of the conference call will be made available on the QSII website at www.qsii.com.

 

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Quality Systems, Inc.

2009 Third Quarter Results

Page 2

 

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.

 

SAFE HARBOR PROVISIONS FOR FORWARD-LOOKING STATEMENTS

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. Management believes that these forward-looking statements are reasonable and are based on reasonable assumptions and forecasts, however, undue reliance should not be placed on such statements that speak only as of the date hereof. 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: volume and timing of systems sales and installations; length of sales cycles and installation process; the possibility that the products will not achieve market acceptance; seasonal patterns of sales and customer buying behavior; 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; 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.

 

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[Financial Tables Attached]

 


QUALITY SYSTEMS, INC.

CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)


Three Months
Ended
      Nine Months
Ended
   



 


December 31,
2008

  December 31,
2007

  December 31,
2008

  December 31,
2007

Revenues:                        
  Software, hardware and supplies   $ 22,336   $ 20,591   $ 65,002   $ 55,844
  Implementation and training services     2,675     3,115     9,746     9,545
System sales     25,011     23,706     74,748     65,389
   
  Maintenance     19,152     14,861     53,522     40,862
  Electronic data interchange services     8,008     5,739     21,663     16,169
  Revenue cycle management and related services     6,835     256     13,319     612
  Other services     6,473     3,528     16,432     12,236
Maintenance, EDI, revenue cycle management
 and other services
    40,468     24,384     104,936     69,879
     Total revenue     65,479     48,090     179,684     135,268
   
Cost of revenue:                        
  Software, hardware and supplies     3,030     2,984     9,912     7,949
  Implementation and training services     2,143     2,638     7,783     7,469
Total cost of system sales     5,173     5,622     17,695     15,418
   
  Maintenance     2,826     3,131     8,856     9,292
  Electronic data interchange services     5,541     4,162     15,688     11,413
  Revenue cycle management and related services     4,475     166     8,912     402
  Other services     5,085     3,067     12,398     8,940
   
Total cost of maintenance, EDI, revenue cycle
 management and other services
    17,927     10,526     45,854     30,047
     Total cost of revenue     23,100     16,148     63,549     45,465
     Gross profit     42,379     31,942     116,135     89,803
   
Operating expenses:  
  Selling, general and administrative     18,601     13,283     52,136     39,114
  Research and development costs     3,624     2,874     10,085     8,362
     Total operating expenses     22,225     16,157     62,221     47,476
   Income from operations     20,154     15,785     53,914     42,327
   
Interest income     328     710     1,042     2,094
Other income         953         953
   
Income before provision for income taxes.     20,482     17,448     54,956     45,374
Provision for income taxes     7,332     6,234     20,193     16,548
   
   Net income   $ 13,150   $ 11,214   $ 34,763   $ 28,826
   
Net income per share:  
  Basic   $ 0.46   $ 0.41   $ 1.25   $ 1.06
  Diluted   $ 0.46   $ 0.40   $ 1.23   $ 1.04
   
Weighted average shares outstanding:                        
  Basic     28,340     27,362     27,913     27,261
  Diluted     28,473     27,696     28,275     27,739
Dividends declared per common share   $ 0.30   $ 0.25   $ 0.85   $ 0.75

 

 


 

QUALITY SYSTEMS, INC.

CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)


December 31,
2008

  March 31,
2008

ASSETS            
Current assets:            
     Cash and cash equivalents $ 55,428   $ 59,046  
     Restricted cash   1,383      
     Marketable securities   2,450     2,500  
     Accounts receivable, net   100,267     76,585  
     Inventories, net   1,253     1,024  
     Income tax receivable   513      
     Net current deferred tax assets   6,059     6,397  
     Other current assets   4,172     4,596  
          Total current assets   171,525     150,148  
 
Marketable securities   8,199     20,124  
Equipment and improvements, net   6,369     4,773  
Capitalized software costs, net   9,550     8,852  
Net deferred tax assets        
Intangibles, net   8,760      
Goodwill   28,717     1,840  
Other assets   2,074     2,171  
          Total assets $ 235,194   $ 187,908  
 
Current liabilities:            
     Accounts payable $ 4,472   $ 4,685  
     Deferred revenue   47,190     44,389  
     Accrued compensation and related benefits   9,341     8,346  
     Income taxes payable       1,541  
     Dividends payable   8,511     6,861  
     Other current liabilities   9,895     4,394  
          Total current liabilities   79,409     70,216  
 
Deferred revenue, net of current   355     506  
Net deferred tax liabilities   2,977     1,575  
Deferred compensation   1,724     1,906  
          Total liabilities   84,465     74,203  
 
Commitments and contingencies            
             
Shareholders’ equity:            
Common stock            
     $0.01 par value; authorized 50,000 shares; issued and
     outstanding 28,371 and 27,448 shares at December 31, 2008
     and March 31, 2008, respectively
  284     274  
 
Additional paid-in capital   101,530     75,556  
Retained earnings   48,932     38,071  
Accumulated other comprehensive loss, net of tax   (17 )   (196 )
          Total shareholders’ equity   150,729     113,705  
          Total liabilities and shareholders’ equity $ 235,194   $ 187,908  

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