Exhibit 99.1
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.ccgir.com
(949) 255-2600 (818) 789-0100
CONTACT: Lou Silverman CONTACT: William F. Coffin, President
President and CEO Sean Collins, Partner
QUALITY SYSTEMS REPORTS FIRST-QUARTER RESULTS
IRVINE, Calif.--(BUSINESS WIRE)--August 3, 2004--Quality Systems, Inc.
(NASDAQ:QSII - news) today announced the results of operations for its fiscal
2005 first quarter ended June 30, 2004.
The Company posted net revenues of $20.1 million in the first quarter of fiscal
2005, an increase of 23% from $16.3 million for the same quarter last year. The
Company reported net income of $3,382,000 for the first quarter, an increase of
49% over net income of $2,277,000 for the comparable quarter of the prior year.
Fully diluted earnings per share totaled $0.51 in the quarter, an increase of
46% over the fully diluted $0.35 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. Results in the first quarter were driven by record results achieved by
the company's NextGen Healthcare Information Systems division. For the quarter,
the Company's NextGen Healthcare division posted record revenue of $16.1
million, up 32% over the same quarter prior year, and record operating income of
$5.2 million, up 53% over the same quarter prior year.
Quality Systems, Inc. will hold a conference call to discuss first quarter
financial results today, August 3, 2004 at 10 a.m. PDT. To participate in the
call, please 877-586-7724 five to ten minutes prior to the scheduled conference
call time. 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 Tuesday,
August 3 at 3:00 p.m. PDT, through Tuesday, August 10 at 9:00 p.m. PDT; call
800-642-1687 and enter the conference ID number 9161498.
Quality Systems, Inc. and its NextGen Healthcare Information Systems subsidiary
develop and market computer-based practice management, patient 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,
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 Operations and Comprehensive Income (Unaudited)
Three Months Ended
June 30,
2004 2003
----------- -----------
Net Revenues:
Sales of computer systems,
Upgrades and supplies 11,084,000 9,474,000
Maintenance and other services 9,046,000 6,832,000
----------- -----------
20,130,000 16,306,000
Cost of Products and Services 8,101,000 6,610,000
----------- -----------
Gross Profit 12,029,000 9,696,000
Selling, General and
Administrative Expenses 4,953,000 4,740,000
Research and Development Costs 1,612,000 1,366,000
----------- -----------
Income from Operations 5,464,000 3,590,000
Investment Income, net 120,000 100,000
----------- -----------
Income before Provision for
Income Taxes 5,584,000 3,690,000
Provision for Income
Taxes 2,202,000 1,413,000
----------- -----------
Net Income 3,382,000 2,277,000
=========== ===========
Income per Share - Basic $ 0.53 $ 0.37
=========== ===========
Income per Share - Diluted $ 0.51 $ 0.35
=========== ===========
Weighted average number
of shares outstanding - Basic 6,333,000 6,157,000
=========== ===========
Weighted average number
of shares outstanding - Diluted 6,577,000 6,466,000
=========== ===========
Quality Systems, Inc.
Consolidated Balance Sheets
(in thousands)
ASSETS
June 30, March 31,
2004 2004
(unaudited)
Current Assets:
Cash and cash equivalents $ 54,941 $ 51,395
Accounts receivable, net 23,013 20,336
Inventories 784 725
Net current deferred tax assets 2,979 2,979
Other current assets 1,439 1,437
------------ ------------
Total current assets 83,156 76,872
Equipment and improvements, net 2,213 2,012
Capitalized software costs, net 3,732 3,608
Deferred long term tax assets 1,104 1,104
Goodwill, net 1,840 1,840
Other assets 1,226 1,242
------------ ------------
Total assets $ 93,271 $ 86,678
============ ============
LIABILITIES AND SHAREHOLDER'S EQUITY
Current Liabilities:
Accounts payable $ 3,222 $ 1,655
Deferred revenue 19,442 17,263
Accrued employee compensation and benefits 2,092 2,985
Other current liabilities 3,753 3,770
------------ ------------
Total current liabilities 28,509 25,673
Commitments and Contingencies
Shareholders' Equity:
Common stock, $0.01 par value, 20,000
shares authorized, 6,361 and 6,325 shares
issued and outstanding, respectively 64 63
Additional paid-in capital 40,002 39,735
Retained earnings 26,132 22,750
Deferred compensation (1,436) (1,543)
------------ ------------
Total shareholders' equity 64,762 61,005
Total liabilities and
shareholders' equity $ 93,271 $ 86,678
============ ============