FOR IMMEDIATE RELEASE | For more information contact: Louis Silverman President and CEO Quality Systems, Inc. (949) 255-2600 www.qsii.com |
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Sean Collins Partner CCG Investor Relations (310) 231-8600 www.ccgir.com |
QUALITY SYSTEMS REPORTS FIRST QUARTER RESULTS AND INCREASES DIVIDEND
IRVINE, Calif.--(BUSINESS WIRE)— August 7, 2008-- Quality Systems, Inc. (NASDAQ:QSII - news) today announced the results of operations for its fiscal 2009 first quarter ended June 30, 2008. The Company posted record net revenues of $55.2 million in the first quarter, an increase of 31% from the $42.0 million generated during the same quarter of the prior year. The Company reported net income of $11.1 million, an increase of 40% over net income of $7.9 million earned in the comparable quarter of the prior year. Fully diluted earnings per share was $0.40 in the quarter, an increase of 38% over the fully diluted $0.29 per share earnings recorded in same quarter last year.
For the quarter, the Company’s NextGen Healthcare Information Systems division posted record revenue of $51.2 million, up 34% over the same quarter prior year and record operating income of $19.9 million, up 43% over the same quarter of the prior year. The Company’s Healthcare Strategic Initiatives acquisition, which closed on May 20, 2008, contributed approximately $1.7 million to NextGen revenue during the quarter.
On August 4, 2008, the Company’s Board of Directors declared a quarterly cash dividend of $0.30 per share on the Company’s outstanding shares of common stock, payable to shareholders of record as of September 15, 2008 with an anticipated distribution date on or about October 1, 2008. The $0.30 per share cash dividend represents a 20% increase in the Company’s previous regular quarterly dividend of $0.25 per share.
Quality Systems, Inc. will hold a conference call to discuss first quarter financial results August 7, 2008 at 4:30 p.m. EDT (1:30 p.m. PDT). To participate in the conference call, please dial the following number five to ten minutes prior to the scheduled conference call time: (877) 586-7724. There is no pass code required for this call. If you are unable to participate in the call at this time, a replay will be available on Thursday, August 7, 2008 at 6:30 p.m. EDT through
Thursday, August 14, 2008 at midnight EDT. To access the replay dial 800-642-1687 and enter the conference ID number 59190344.
A transcript of the conference call will be made available on the QSII web site (www.qsii.com).
About Quality Systems, Inc.
Quality Systems, Inc. and its NextGen Healthcare Information Systems subsidiary develop and market computer-based practice management, patient records, revenue cycle management, connectivity, and other applications and services for medical and dental group practices. Visit www.qsii.com, www.nextgen.com and www.hsillc.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 |
| June 30,
2008 | | June 30,
2007 |
Revenues: | | | |
Software, hardware and supplies | $ 21,369 | | $ 16,739 |
Implementation and training services | 3,585 | | 3,248 |
System sales | 24,954 | | 19,987 |
| | | |
Maintenance | 17,136 | | 12,559 |
Electronic data interchange services | 6,670 | | 5,024 |
Revenue cycle management and related services | 1,957 | | 134 |
Other services | 4,507 | | 4,328 |
Maintenance, EDI, revenue cycle management and other services | 30,270 | | 22,045 |
Total revenue | 55,224 | | 42,032 |
| | | |
Cost of revenue: | | | |
Software, hardware and supplies | 3,486 | | 2,488 |
Implementation and training services | 3,015 | | 2,409 |
Total cost of system sales | 6,501 | | 4,897 |
| | | |
Maintenance | 3,082 | | 3,127 |
Electronic data interchange services | 4,891 | | 3,509 |
Revenue cycle management and related services | 1,305 | | 98 |
Other services | 3,448 | | 2,911 |
Total cost of maintenance, EDI, revenue cycle management and other services | 12,726 | | 9,645 |
Total cost of revenue | 19,227 | 14,542 |
Gross profit | 35,997 | | 27,490 |
| | | |
Operating expenses: | | | |
Selling, general and administrative | 15,252 | | 12,643 |
Research and development costs | 3,119 | | 2,800 |
Total operating expenses | 18,371 | | 15,443 |
Income from operations | 17,626 | | 12,047 |
| | | |
Interest income | 374 | | 739 |
| | | |
Income before provision for income taxes | 18,000 | | 12,786 |
Provision for income taxes | 6,886 | 4,846 |
| | | |
Net income | $ 11,114 | | $ 7,940 |
| | | |
Net income per share: | | | |
Basic | $ 0.40 | | $ 0.29 |
Diluted | $ 0.40 | | $ 0.29 |
| | | |
Weighted average shares outstanding: | | | |
Basic | 27,465 | | 27,134 |
Diluted | 27,771 | | 27,657 |
Dividends declared per common share | $ 0.25 | | $ 0.25 |
QUALITY SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
| | June 30,
2008 | | March 31,
2008 |
ASSETS |
Current assets: | | | |
| Cash and cash equivalents | $ 61,399 | | $ 59,046 |
| Restricted cash | 1,455 | | — |
| Marketable securities | 2,947 | | 2,500 |
| Accounts receivable, net | 83,372 | | 76,585 |
| Inventories, net | 1,104 | | 1,024 |
| Net current deferred tax assets | 6,402 | | 6,397 |
| Other current assets | 4,258 | | 4,596 |
| Total current assets | 160,937 | | 150,148 |
| | | | |
Marketable securities | 15,095 | | 20,124 |
Equipment and improvements, net | 5,163 | | 4,773 |
Capitalized software costs, net | 9,361 | | 8,852 |
Intangibles, net | 5,549 | | — |
Goodwill | 12,659 | | 1,840 |
Other assets | 2,240 | | 2,171 |
| Total assets | $211,004 | | $187,908 |
| | | | |
| | | |
LIABILITIES AND SHAREHOLDERS' EQUITY |
Current liabilities: | | | |
| Accounts payable | $ 5,484 | | $ 4,685 |
| Deferred revenue | 45,884 | | 44,389 |
| Accrued compensation and related benefits | 8,029 | | 8,346 |
| Income taxes payable | 6,414 | | 1,541 |
| Dividends payable | 6,872 | | 6,861 |
| Other current liabilities | 7,794 | | 4,394 |
| Total current liabilities | 80,477 | | 70,216 |
| | | | |
Deferred revenue, net of current | 364 | | 506 |
Net deferred tax liabilities | 1,259 | | 1,575 |
Deferred compensation | 1,974 | | 1,906 |
| Total liabilities | 84,074 | | 74,203 |
| | | | |
Commitments and contingencies | | | |
| | | | |
Shareholders’ equity: | | | |
Common stock | | | |
| $0.01 par value; authorized 50,000 shares; issued and outstanding 27,765 and 27,448 shares at June 30, 2008 and March 31, 2008, respectively | 278 | 274 |
| |
Additional paid-in capital | 85,068 | | 75,556 |
Retained earnings | 42,314 | | 38,071 |
Accumulated other comprehensive loss | (730) | | (196) |
| Total shareholders' equity | 126,930 | | 113,705 |
| Total liabilities and shareholders’ equity | $211,004 | | $187,908 |
| | | | |
