Nextgen Healthcare (NXGN) 8-K Quality Systems Reports Fiscal 2010 Third Quarter Results

Exhibit 99.1

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

     January 28, 2010

QUALITY SYSTEMS REPORTS FISCAL 2010 THIRD QUARTER RESULTS

IRVINE, Calif. ... January 28, 2010... Quality Systems, Inc. (NASDAQ:QSII) today announced the results of operations for its fiscal 2010 third quarter ended December 31, 2009. The Company posted record net revenues of $75.0 million in the third quarter, an increase of 14 percent from $65.5 million for same period last year. The Company reported net income of $13.2 million in the third quarter, which remained unchanged from the comparable quarter last year. Fully diluted earnings per share were $0.46 in the quarter, which also remained unchanged when compared with $0.46 fully diluted earnings per share for the same quarter last year.

For the third quarter, the Company’s NextGen Healthcare Information Systems division posted record revenue of $70.6 million, up 15 percent from the same period a year ago and operating income of $24.5 million, an increase of 8 percent versus the comparable period last year.

“We are pleased with the results for the third quarter, which represent our team’s ability to grow the business to record levels. Time and again, we have stated that the Company continues to make the necessary investments in its infrastructure to ensure that we remain in a state of preparedness as the stimulus plan takes effect during the next three years,” noted Steven T. Plochocki, chief executive officer.

“We are well positioned to garner additional market share and fuel future growth as the healthcare industry shifts to an electronic-based medical records platform. We will continue to capitalize on the significant business opportunities that lie ahead from the implementation of the American Recovery and Reinvestment Act,” Plochocki concluded.

Quality Systems, Inc. will hold a conference call to discuss fiscal 2010 third quarter financial results on Thursday, January 28, 2010 at 10:00 AM ET (7:00 AM PT). All participants should dial 877-941-8609 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 800-406-7325 and enter reservation identification number 4206115. The replay will be available from approximately 12:00 PM ET on Thursday, January 28, 2010, through 11:59 PM ET on Thursday, February 4, 2010.

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				Nine Months Ended
	December 31,				December 31,
	2009		2008		2009		2008
Revenues:
Software, hardware and supplies	$	24,346	$	22,336	$	64,978	$	65,002
Implementation and training services		3,313		2,675		10,150		9,746
System sales		27,659		25,011		75,128		74,748
Maintenance		22,139		19,152		65,254		53,522
Electronic data interchange services		8,897		8,008		25,855		21,663
Revenue cycle management and related services		9,602		6,835		27,482		13,319
Other services		6,665		6,473		19,579		16,432
Maintenance, EDI, RCM and other services		47,303		40,468		138,170		104,936
Total revenues		74,962		65,479		213,298		179,684
Cost of revenue:
Software, hardware and supplies		2,810		3,030		9,251		9,912
Implementation and training services		2,898		2,143		9,075		7,783
Total cost of system sales		5,708		5,173		18,326		17,695
Maintenance		3,392		2,826		9,672		8,856
Electronic data interchange services		6,525		5,541		18,579		15,688
Revenue cycle management and related services		7,124		4,475		20,502		8,912
Other services		5,560		5,085		15,430		12,398
Total cost of maintenance, EDI, RCM and other services		22,601		17,927		64,183		45,854
Total cost of revenue		28,309		23,100		82,509		63,549
Gross profit		46,653		42,379		130,789		116,135
Operating expenses:
Selling, general and administrative		21,951		18,601		62,829		52,136
Research and development costs		3,954		3,624		12,277		10,085
Total operating expenses		25,905		22,225		75,106		62,221
Income from operations		20,748		20,154		55,683		53,914
Interest income		43		328		180		1,042
Other income		136		—		194		—
Income before provision for income taxes		20,927		20,482		56,057		54,956
Provision for income taxes		7,775		7,332		20,739		20,193
Net income	$	13,152	$	13,150	$	35,318	$	34,763
Net income per share:
Basic	$	0.46	$	0.46	$	1.24	$	1.25
Diluted	$	0.46	$	0.46	$	1.23	$	1.23
Weighted average shares outstanding:
Basic		28,667		28,340		28,586		27,913
Diluted		28,833		28,473		28,755		28,275
Dividends declared per common share	$	0.30	$	0.30	$	0.90	$	0.85

QUALITY SYSTEMS, INC.

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)

	December 31,		March 31,
	2009		2009
ASSETS
Current assets:
Cash and cash equivalents	$	79,111	$	70,180
Restricted cash		1,514		1,303
Marketable securities		7,454		—
Accounts receivable, net		101,660		90,070
Inventories, net		1,433		1,125
Income tax receivable		3,117		5,605
Net current deferred tax assets		4,848		3,994
Other current assets		6,603		6,312
Total current assets		205,740		178,589
Marketable securities		—		7,395
Equipment and improvements, net		7,962		6,756
Capitalized software costs, net		9,958		9,552
Intangibles, net		7,577		8,403
Goodwill		32,884		28,731
Other assets		4,100		2,675
Total assets	$	268,221	$	242,101
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	4,433	$	5,097
Deferred revenue		55,658		47,584
Accrued compensation and related benefits		7,254		9,511
Dividends payable		8,598		8,529
Other current liabilites		12,878		8,888
Total current liabilites		88,821		79,609
Deferred revenue, net of current		443		521
Net deferred tax liabilities		3,589		4,566
Deferred compensation		1,897		1,838
Total liabilites		94,750		86,534
Commitments and contingencies
Shareholders’ equity
Common Stock
$0.01 par value; authorized 50,000 shares; issued and outstanding 28,660 and 28,447 shares at December 31, 2009 and March 31, 2009, respectively		287		284
Additional paid-in capital		111,852		103,524
Retained earnings		61,332		51,759
Total shareholders’ equity		173,471		155,567
Total liabilities and shareholders’ equity	$	268,221	$	242,101