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8-K - FORM 8-K - NEXTGEN HEALTHCARE, INC.a58489e8vk.htm
Exhibit 99.1
(QUALITY SYSTEMS INC. LOGO)
     
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
     January 28, 2011
QUALITY SYSTEMS REPORTS RECORD FISCAL 2011 THIRD QUARTER RESULTS;
INCREASES QUARTERLY DIVIDEND
Company Well Positioned as First Year of Stimulus Incentives Kick in
     IRVINE, Calif. ... January 28, 2011 ... Quality Systems, Inc. (NASDAQ:QSII) announced today the results of operations for its fiscal 2011 third quarter ended December 31, 2010.
     The Company reported record net revenues of $91.9 million for the fiscal 2011 third quarter, an increase of 23 percent from the $75.0 million reported in the same period a year ago. The Company reported net income of $17.5 million, up 33 percent versus net income of $13.2 million for the comparable period last year. Fully diluted earnings per share were $0.60 in the fiscal 2011 third quarter; rising 33 percent when compared with $0.46 fully diluted earnings per share for the third quarter of fiscal 2010.
     Quality Systems, Inc. also announced that the Company’s Board of Directors increased the cash dividend by five cents ($0.05), or 17 percent, to Thirty-Five Cents ($0.35) per share on the Company’s outstanding shares of Common Stock, payable to shareholders of record as of March 17, 2011, with an anticipated distribution date of April 5, 2011. The $0.35 per share cash dividend is pursuant to the Company’s current policy to pay a regular quarterly dividend on the Company’s outstanding shares of Common Stock, subject to further Board review and approval, and establishment of record and distribution dates by the Board prior to the declaration and payment of each such quarterly dividend.
     “We are very pleased with the Company’s third quarter performance. Our entire organization has worked very hard preparing for the first year of incentives provided under The American Recovery and Reinvestment Act (ARRA). The team is ready to witness the fruits of their labor,” noted Steven T. Plochocki, Quality Systems’ chief executive officer.
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Quality Systems, Inc.
Fiscal 2011 Third Quarter Results
Page 2
     “As we said for the past 22 months since the bill was first introduced, there were levels of uncertainty and speculation, but once certification was announced in October 2010 and the regulations for Stage 1 Meaningful Use were finalized, the path became very clear. We are in a very positive position to take advantage of the benefits stemming from the first year of the stimulus incentives. Additionally, the Board’s declaration to increase our quarterly dividend is indicative of the Company’s strength in the marketplace and optimism about the future. We remain very encouraged by the industry opportunity before us, and confident in the certified electronic health solutions we bring to the physician, dental and hospital marketplaces,” Plochocki concluded.
     Quality Systems, Inc. will host a conference call to discuss its fiscal 2011 third quarter results on Friday, January 28, 2011 at 10:00 AM ET (7:00 AM PT). All participants should dial 866-225-8754 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 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 1-800-406-7325 or 303-590-3030 and enter reservation identification number 4403880. The replay will be available from approximately 12:00 PM ET on Friday, January 28, 2011, through 11:59 PM ET on Friday, February 4, 2011.
     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. 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: the volume and timing of systems
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Quality Systems, Inc.
Fiscal 2011 Third Quarter Results
Page 3
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 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 the Company’s 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 TABLES ATTACHED

 


 

QUALITY SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF INCOME

(IN THOUSANDS)
(UNAUDITED)
                                 
    Three Months Ended December 31,     Nine Months Ended December 31,  
    2010     2009     2010     2009  
Revenues:
                               
Software, hardware and supplies
  $ 29,675     $ 24,346     $ 74,806     $ 64,978  
Implementation and training services
    4,262       3,313       13,069       10,150  
 
                       
System sales
    33,937       27,659       87,875       75,128  
 
                               
Maintenance
    27,908       22,139       80,973       65,254  
Electronic data interchange services
    10,360       8,897       30,266       25,855  
Revenue cycle management and related services
    11,496       9,602       33,443       27,482  
Other services
    8,170       6,665       23,698       19,579  
 
                       
Maintenance, EDI, RCM and other services
    57,934       47,303       168,380       138,170  
 
                       
Total revenues
    91,871       74,962       256,255       213,298  
 
                       
 
                               
Cost of revenue:
                               
Software, hardware and supplies
    5,667       2,810       16,575       9,251  
Implementation and training services
    3,677       2,898       10,142       9,075  
 
                       
Total cost of system sales
    9,344       5,708       26,717       18,326  
 
                               
Maintenance
    3,381       3,392       10,073       9,672  
Electronic data interchange services
    6,908       6,525       20,390       18,579  
Revenue cycle management and related services
    8,715       7,124       25,082       20,502  
Other services
    3,981       5,560       12,054       15,430  
 
                       
Total cost of maintenance, EDI, RCM and other services
    22,985       22,601       67,599       64,183  
 
                       
Total cost of revenue
    32,329       28,309       94,316       82,509  
 
                       
Gross profit
    59,542       46,653       161,939       130,789  
 
                               
Operating expenses:
                               
Selling, general and administrative
    27,958       21,574       79,025       61,728  
Research and development costs
    5,358       3,954       16,046       12,277  
Amortization of acquired intangible assets
    445       377       1,237       1,101  
 
                       
Total operating expenses
    33,761       25,905       96,308       75,106  
 
                       
Income from operations
    25,781       20,748       65,631       55,683  
 
                               
Interest income
    55       43       244       180  
Other income, net
          136       59       194  
 
                       
Income before provision for income taxes
    25,836       20,927       65,934       56,057  
Provision for income taxes
    8,305       7,775       22,881       20,739  
 
                       
Net income
  $ 17,531     $ 13,152     $ 43,053     $ 35,318  
 
                       
Net income per share:
                               
Basic
  $ 0.60     $ 0.46     $ 1.49     $ 1.24  
Diluted
  $ 0.60     $ 0.46     $ 1.48     $ 1.23  
Weighted-average shares outstanding:
                               
Basic
    28,978       28,667       28,936       28,586  
Diluted
    29,140       28,833       29,091       28,755  
Dividends declared per common share
  $ 0.30     $ 0.30     $ 0.90     $ 0.90  

 


 

QUALITY SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
                 
    December 31,     March 31,  
    2010     2010  
ASSETS
               
Current assets:
               
Cash and cash equivalents
  $ 118,221     $ 84,611  
Restricted cash
    2,956       2,339  
Marketable securities
          7,158  
Accounts receivable, net
    123,196       107,458  
Inventories
    1,942       1,340  
Income taxes receivable
          2,953  
Deferred income taxes, net
    5,470       5,678  
Other current assets
    7,356       8,684  
 
           
Total current assets
    259,141       220,221  
Equipment and improvements, net
    10,940       8,432  
Capitalized software costs, net
    14,931       11,546  
Intangibles, net
    17,720       20,145  
Goodwill
    46,189       46,189  
Other assets
    4,576       3,647  
 
           
Total assets
  $ 353,497     $ 310,180  
 
           
LIABILITIES AND SHAREHOLDERS’ EQUITY
               
Current liabilities:
               
Accounts payable
  $ 5,525     $ 3,342  
Deferred revenue
    71,897       64,109  
Accrued compensation and related benefits
    9,322       8,951  
Income taxes payable
    1,157        
Dividends payable
    8,693       8,664  
Other current liabilities
    20,955       16,220  
 
           
Total current liabilities
    117,549       101,286  
Deferred revenue, net of current
    870       474  
Deferred income taxes, net
    10,108       10,859  
Deferred compensation
    2,240       1,883  
Other noncurrent liabilities
    10,747       7,389  
 
           
Total liabilities
    141,514       121,891  
Commitments and contingencies
               
Shareholders’ equity:
               
Common stock
               
$0.01 par value; authorized 50,000 shares; issued and outstanding 28,976 and 28,879 shares at December 31, 2010 and March 31, 2010, respectively
    290       289  
Additional paid-in capital
    128,964       122,271  
Retained earnings
    82,729       65,729  
 
           
Total shareholders’ equity
    211,983       188,289  
 
           
Total liabilities and shareholders’ equity
  $ 353,497     $ 310,180  
 
           
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