For Further Information:
Quality Systems, Inc. CCG Investor Relations
18191 Von Karman Ave, #450 15300 Ventura Blvd., Suite 303
Irvine, CA 92612 Sherman Oaks, CA 91403
www.qsii.com www.coffincg.com
(949) 255-2600 (818) 789-0100
CONTACT: Lou Silverman CONTACT: William F. Coffin, President
President and CEO Sean Collins, Partner
QUALITY SYSTEMS REPORTS THIRD QUARTER RESULTS
IRVINE, Calif.--(BUSINESS WIRE)--February 2, 2003--Quality Systems, Inc.
(NASDAQ:QSII - news) today announced the results of operations for its fiscal
2004 third quarter ended December 31, 2003.
The Company posted net revenues of $18.2 million in the third quarter, an
increase of 26% from $14.4 million for the same quarter last year. The Company
reported net income of $2,611,000, an increase of 35% over net income of
$1,935,000 for the comparable quarter of the prior year. Fully diluted earnings
per share totaled $0.40 in the quarter, an increase of 33% over the fully
diluted $0.30 per share earnings recorded in the same quarter of last year.
The revenue and net income results achieved in the quarter were records for the
Company. The quarter's revenue increase was driven by record revenue in the
Company's NextGen Healthcare Information Systems division, which posted revenue
of $14.0 million, up 40% over the same quarter of the prior year. Both the QSI
division and the NextGen Healthcare Information Systems division contributed
significantly to the Company's record operating income, which increased 49% over
the prior-year quarter to $4.1 million.
Quality Systems, Inc. will hold a conference call to discuss third-quarter
financial results today, Monday, February 2, 2004 at 1:00 p.m. EST (10:00 a.m.
PST). 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 Monday, February 2 at 1:00 p.m. PST, through Monday, February 9 at
midnight EST. To access the replay dial (800) 642-1687 and enter the conference
ID number 5112055.
A transcript of the conference call will be made available on the QSII Web site
(www.qsii.com).
About Quality Systems
Quality Systems, Inc. and its NextGen Healthcare Information Systems subsidiary
develop and market computer-based practice management, medical records, and
connectivity applications 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,
(more)
Quality Systems - Third Quarter 2004
For Release February 2, 2004
Page 2
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 tables follow)
Quality Systems - Third Quarter 2004
For Release February 2, 2004
Page 3
Quality Systems, Inc.
Consolidated Statements of Income
(unaudited)
Three Months Ended Nine Months Ended
December 31, December 31,
2003 2002 2003 2002
----------- ----------- ----------- -----------
Net Revenues:
Sales of computer systems,
Upgrades and supplies 9,859,000 7,666,000 29,359,000 20,905,000
Maintenance and other services 8,340,000 6,734,000 22,788,000 18,796,000
----------- ----------- ----------- -----------
18,199,000 14,400,000 52,147,000 39,701,000
Cost of Products and Services 7,523,000 6,353,000 21,625,000 16,933,000
----------- ----------- ----------- -----------
Gross Profit 10,676,000 8,047,000 30,522,000 22,768,000
Selling, General and
Administrative Expenses 4,902,000 3,918,000 14,410,000 11,033,000
Research and Development Costs 1,628,000 1,347,000 4,496,000 3,695,000
----------- ----------- ----------- -----------
Income from Operations 4,146,000 2,782,000 11,616,000 8,040,000
Investment Income 95,000 109,000 284,000 336,000
----------- ----------- ----------- -----------
Income before Provision for Income Taxes 4,241,000 2,891,000 11,900,000 8,376,000
Provision for Income Taxes 1,630,000 956,000 4,604,000 3,104,000
----------- ----------- ----------- -----------
Net Income $ 2,611,000 $ 1,935,000 7,296,000 $ 5,272,000
=========== =========== =========== ===========
Income per Share - Basic $ 0.42 $ 0.32 $ 1.18 $ 0.86
=========== =========== =========== ===========
Income per Share - Diluted $ 0.40 $ 0.30 $ 1.13 $ 0.83
=========== =========== =========== ===========
Weighted average number
of shares outstanding - Basic 6,237,000 6,134,000 6,162,000 6,121,000
=========== =========== =========== ===========
Weighted average number
of shares outstanding - Diluted 6,549,000 6,403,000 6,476,000 6,363,000
=========== =========== =========== ===========
Quality Systems - Third Quarter 2004
For Release February 2, 2004
Page 4
Quality Systems, Inc.
Consolidated Balance Sheets
(in thousands)
December 31, March 31,
2003 2003
------------ ----------
(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 45,348 $ 36,443
Accounts receivable, net 21,545 17,561
Inventories 837 667
Deferred tax assets 2,029 2,029
Other current assets 1,408 2,086
---------- ----------
Total current assets 71,167 58,786
Equipment and Improvements, net 1,919 1,777
Capitalized Software Costs, net 3,323 2,511
Deferred Tax Asset 1,819 1,819
Excess of Cost Over Net Assets
of Acquired Business, net 1,840 1,840
Other Assets 1,049 869
---------- ----------
Total assets $ 81,117 $ 67,602
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 2,066 $ 2,477
Deferred revenue 16,299 11,699
Other current liabilities 6,747 5,893
---------- ----------
Total liabilities 25,112 20,069
Commitments and Contingencies
Shareholders' Equity:
Common stock, $0.01 par value, 20,000 shares
authorized, 6,276 and 6,152 shares issued
and outstanding, respectively 63 62
Additional paid-in capital 37,946 35,121
Retained Earnings 19,646 12,350
Deferred Compensation (1,650) --
---------- ----------
Total shareholders' equity 56,005 47,533
Total liabilities and
Shareholders' equity $ 81,117 $ 67,602
========== ==========
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