EX-99.1 2 d385793dex991.htm PRESS RELEASE DATED JULY 26, 2012 Press Release dated July 26, 2012

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  


JULY 26, 2012


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.


Quality Systems, Inc.

Fiscal 2013 First Quarter Results

Page 2



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.







     Three Months Ended June 30,  
     2012     2011  



Software, hardware and supplies

   $ 25,844      $ 28,911   

Implementation and training services

     12,046        5,472   







System sales

     37,890        34,383   


     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   


     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:



   $ 0.26      $ 0.33   


   $ 0.26      $ 0.32   

Weighted average shares outstanding:



     59,281        58,362   


     59,388        58,800   

Dividends declared per common share

   $ 0.175      $ 0.175   






      June 30,
     March 31,



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   


     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   


     63,161         60,776   

Other assets

     6,351         5,773   







Total assets

   $ 460,063       $ 440,352   









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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