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8-K - FORM 8-K - NEXTGEN HEALTHCARE, INC.d472606d8k.htm

Exhibit 99.1

 

LOGO

 

For Further Information, Contact:

Quality Systems, Inc.

18111 Von Karman Avenue, Suite 700

Irvine, CA 92612

Phone: (949) 255-2600

Paul Holt, CFO, pholt@qsii.com

 

 

Susan J. Lewis

Phone: (303) 804-0494

slewis@qsii.com

FOR IMMEDIATE RELEASE

JANUARY 24, 2013

QUALITY SYSTEMS, INC. REPORTS FISCAL 2013 THIRD QUARTER RESULTS

IRVINE, Calif. … January 24, 2013 …Quality Systems, Inc. (NASDAQ:QSII) announced today results for its fiscal 2013 third quarter ended December 31, 2012.

The Company reported revenues of $114.5 million for the fiscal 2013 third quarter, an increase of two percent, when compared with $112.8 million for the fiscal 2012 third quarter. Net income for the fiscal 2013 third quarter was $15.6 million, versus net income of $21.1 million for the same period last year, a decrease of 26 percent. Fully diluted earnings per share for the fiscal 2013 third quarter were $0.26, a 28 percent decrease from $0.36 for the fiscal 2012 third quarter. Although revenues were slightly up in the quarter, profitability continued to be affected by lower software license sales.

“We continue to execute on the restructuring plan we laid out in October 2012, which included the centralization of our sales and marketing efforts as well as the business development and technology functions of the organization. In addition, we have been strengthening our operational structure under the direction of our recently appointed chief operating officer, Dan Morefield,” explained Steven T. Plochocki, president and chief executive officer.

“All these initiatives are starting to gain traction, and we are confident in the anticipated benefits of these organizational changes. Albeit early, we are beginning to see some impact from our reorganization as we continue to maximize and leverage our multi-product offering within the healthcare information technology marketplace,” Plochocki concluded.

In other news, Quality Systems has set a new date for its Investment Community Analyst Day, originally scheduled to be held in November 2012 but postponed due to Hurricane Sandy. The meeting has been rescheduled for Monday, May 6, 2013 at the Le Parker Meridien Hotel in New York City. More details to follow.

Quality Systems also announced that its Board of Directors declared a quarterly cash dividend of Seventeen and One-Half Cents ($0.175) per share on the Company’s outstanding shares of Common Stock, payable to shareholders of record as of March 15, 2013 with an anticipated distribution date of April 5, 2013. The $0.175 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.

 

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Quality Systems, Inc.

Fiscal 2013 Third Quarter Results

Page 2

 

Quality Systems will host a conference call to discuss its fiscal 2013 third quarter results on Thursday, January 24, 2012 at 10:00 AM ET (7:00 AM PT). All participants should dial 1-866-225-8754 at least ten minutes prior to the start of the call. International callers should dial 1-480-629-9818. 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 4591712. The replay will be available from approximately 12:00 PM ET on Thursday, January 24, 2013, through 11:59 PM ET on Thursday, January 31, 2013.

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, 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

 

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Quality Systems, Inc.

Fiscal 2013 Third Quarter Results

Page 3

 

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, EXCEPT PER SHARE DATA)

(UNAUDITED)

 

     Three Months Ended
December 31,
    Nine Months Ended
December 31,
 
     2012     2011     2012     2011  

Revenues:

        

Software, hardware and supplies

   $ 21,899      $ 35,074      $ 71,463      $ 95,845   

Implementation and training services

     7,266        6,555        27,847        18,121   
  

 

 

   

 

 

   

 

 

   

 

 

 

System sales

     29,165        41,629        99,310        113,966   

Maintenance

     39,463        36,245        116,746        102,961   

Electronic data interchange services

     15,209        12,101        44,056        36,178   

Revenue cycle management and related services

     15,015        11,147        43,902        34,170   

Other services

     15,658        11,643        44,920        33,566   
  

 

 

   

 

 

   

 

 

   

 

 

 

Maintenance, EDI, RCM and other services

     85,345        71,136        249,624        206,875   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     114,510        112,765        348,934        320,841   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cost of revenue:

        

Software, hardware and supplies

     4,660        4,622        16,055        13,423   

Implementation and training services

     7,221        5,994        23,873        15,119   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total cost of system sales

     11,881        10,616        39,928        28,542   

Maintenance

     5,259        4,412        14,811        12,260   

Electronic data interchange services

     9,852        7,890        28,251        23,816   

Revenue cycle management and related services

     10,918        8,405        32,344        25,687   

Other services

     8,686        7,011        26,021        18,977   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total cost of maintenance, EDI, RCM and other services

     34,715        27,718        101,427        80,740   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total cost of revenue

     46,596        38,334        141,355        109,282   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     67,914        74,431        207,579        211,559   

Operating expenses:

        

Selling, general and administrative

     35,532        33,096        110,045        94,651   

Research and development costs

     7,786        8,277        22,634        22,462   

Amortization of acquired intangible assets

     1,212        543        3,665        1,545   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     44,530        41,916        136,344        118,658   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     23,384        32,515        71,235        92,901   

Interest income (expense), net

     13        55        (14     212   

Other expense, net

     (122     (218     (115     (400
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before provision for income taxes

     23,275        32,352        71,106        92,713   

Provision for income taxes

     7,649        11,247        24,292        32,129   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 15,626      $ 21,105      $ 46,814      $ 60,584   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income per share:

        

Basic

   $ 0.26      $ 0.36      $ 0.79      $ 1.03   

Diluted

   $ 0.26      $ 0.36      $ 0.79      $ 1.03   

Weighted average shares outstanding:

        

Basic

     59,400        58,847        59,343        58,623   

Diluted

     59,405        59,128        59,411        58,943   

Dividends declared per common share

   $ 0.175      $ 0.175      $ 0.525      $ 0.525   


QUALITY SYSTEMS, INC.

CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS)

(UNAUDITED)

 

     December 31,     March 31,  
     2012     2012  

ASSETS

    

Current assets:

    

Cash and cash equivalents

   $ 101,702      $ 134,444   

Restricted cash

     5,155        1,962   

Marketable securities

     4,987        4,987   

Accounts receivable, net

     151,495        145,756   

Inventories

     3,912        3,715   

Income taxes receivable

     1,864        2,628   

Deferred income tax assets, net

     10,127        10,127   

Other current assets

     7,276        9,090   
  

 

 

   

 

 

 

Total current assets

     286,518        312,709   

Equipment and improvements, net

     20,930        17,841   

Capitalized software costs, net

     32,881        19,994   

Intangibles, net

     29,415        23,259   

Goodwill

     63,161        60,776   

Other assets

     7,315        5,773   
  

 

 

   

 

 

 

Total assets

   $ 440,220      $ 440,352   
  

 

 

   

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

    

Current liabilities:

    

Accounts payable

   $ 6,563      $ 4,532   

Deferred revenue

     63,001        83,108   

Accrued compensation and related benefits

     8,595        11,870   

Dividends payable

     —          10,354   

Other current liabilities

     27,750        19,568   
  

 

 

   

 

 

 

Total current liabilities

     105,909        129,432   

Deferred revenue, net of current

     1,307        1,293   

Deferred income tax liabilities, net

     4,096        5,351   

Deferred compensation

     3,454        3,497   

Other noncurrent liabilities

     4,368        5,602   
  

 

 

   

 

 

 

Total liabilities

     119,134        145,175   

Commitments and contingencies

    

Shareholders’ equity:

    

Common stock

    

$0.01 par value; authorized 100,000 shares; issued and outstanding 59,535 and 59,180 shares at December 31, 2012 and March 31, 2012, respectively

     595        592   

Additional paid-in capital

     179,306        169,033   

Accumulated other comprehensive loss

     (45     (45

Retained earnings

     141,230        125,597   
  

 

 

   

 

 

 

Total shareholders’ equity

     321,086        295,177   
  

 

 

   

 

 

 

Total liabilities and shareholders’ equity

   $ 440,220      $ 440,352