Exhibit 99.1
For Further Information:
Quality Systems, Inc. CCG Investor Relations
18191 Von Karman Ave, Suite 450 10960 Wilshire Blvd., Ste. 2050
Irvine, CA 92612 Los Angeles, CA 90024
www.qsii.com www.ccgir.com
(949) 255-2600 (310) 231-8600
CONTACT: Lou Silverman CONTACT: William F. Coffin, CEO
President and CEO Sean Collins, Partner
QUALITY SYSTEMS REPORTS FOURTH QUARTER AND
FISCAL YEAR-END RESULTS
IRVINE, Calif.--(BUSINESS WIRE)-- June 13, 2005--Quality Systems, Inc.
(NASDAQ:QSII - news) today announced the results of operations for its fiscal
2005 fourth quarter and fiscal year ended March 31, 2005. The Company posted net
revenues of $25.5 million in the fourth quarter, an increase of 36% from the
$18.8 million generated during the same quarter last year. The Company reported
net income of $4.8 million an increase of 54% over net income of $3.1 million
earned in the comparable quarter of the prior year. Fully diluted earnings per
share was $0.36 in the quarter, an increase of 50% over the fully diluted $0.24
per share earnings recorded in the same quarter last year.
Revenue for the fiscal year ended March 31, 2005 was $89.0 million, an increase
of 25% over fiscal 2004 revenue of $70.9 million. Net income for fiscal year
2005 was $16.1 million, an increase of 55% over fiscal 2004's net income of
$10.4 million. Fully diluted earnings per share increased to $1.22 in fiscal
year 2005 from $0.80 earned during fiscal year 2004, an increase of 53%.
Quality Systems, Inc. will hold a conference call to discuss fourth quarter and
fiscal year-end financial results Monday June 13, 2005 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 Monday, June
13 at approximately 6:30 p.m. EDT, through Monday, June 20 at midnight EDT. To
access the replay dial (800) 642-1687 and enter conference ID number 6977665.
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, 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 INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
THREE MONTHS ENDED TWELVE MONTHS ENDED
------------------------------- -------------------------------
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
2005 2004 2005 2004
------------- ------------- ------------- -------------
Revenues:
Software, hardware and supplies .......................... $ 11,765 $ 8,501 $ 39,672 $ 32,632
Implementation and training services ..................... 2,402 1,665 8,856 6,893
------------- ------------- ------------- -------------
System sales ............................................... 14,167 10,166 48,528 39,525
Maintenance and other services ........................... 8,483 6,446 29,945 23,117
Electronic data interchange services ..................... 2,876 2,175 10,488 8,292
------------- ------------- ------------- -------------
Maintenance, EDI and other services ........................ 11,359 8,621 40,433 31,409
------------- ------------- ------------- -------------
Total revenue ........................................... 25,526 18,787 88,961 70,934
------------- ------------- ------------- -------------
Cost of revenue:
Software, hardware and supplies .......................... 2,097 1,600 7,525 8,141
Implementation and training services ..................... 1,754 1,388 6,300 5,197
------------- ------------- ------------- -------------
Total cost of system sales ................................. 3,851 2,988 13,825 13,338
Maintenance and other services ........................... 3,394 2,739 12,120 10,313
Electronic data interchange services ..................... 1,871 1,321 6,724 5,022
------------- ------------- ------------- -------------
Total cost of maintenance, EDI and other
services ................................................... 5,265 4,060 18,844 15,335
Total cost of revenue ................................... 9,116 7,048 32,669 28,673
Gross profit ............................................ 16,410 11,739 56,292 42,261
Operating expenses:
Selling, general and administrative ..................... 7,989 5,072 24,776 19,482
Research and development ................................ 1,766 1,643 6,903 6,139
------------- ------------- ------------- -------------
Total operating expenses .............................. 9,755 6,715 31,679 25,621
------------- ------------- ------------- -------------
Income from operations .................................. 6,655 5,024 24,613 16,640
Investment income .......................................... 323 102 876 386
------------- ------------- ------------- -------------
Income before provision for income
taxes ...................................................... 6,978 5,126 25,489 17,026
Provision for income taxes ................................. 2,187 2,022 9,380 6,626
------------- ------------- ------------- -------------
Net income .............................................. $ 4,791 $ 3,104 $ 16,109 $ 10,400
============= ============= ============= =============
Net income per share:
Basic ................................................... $ 0.37 $ 0.25 $ 1.25 $ 0.84
============= ============= ============= =============
Diluted ................................................. $ 0.36 $ 0.24 $ 1.22 $ 0.80
============= ============= ============= =============
Weighted-average shares used in per
share calculation:
Basic ................................................... 13,089 12,624 12,872 12,436
============= ============= ============= =============
Diluted ................................................. 13,370 13,164 13,203 12,966
============= ============= ============= =============
QUALITY SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
March 31, March 31,
2005 2004
------------- -------------
ASSETS (UNAUDITED)
Current assets:
Cash and cash equivalents .............................................................. $ 51,157 $ 51,395
Accounts receivable, net ............................................................... 33,362 20,280
Inventories, net ....................................................................... 960 725
Income tax receivable .................................................................. 15 --
Net current deferred tax assets ........................................................ 1,796 2,979
Other current assets ................................................................... 1,677 1,493
------------- -------------
Total current assets ......................................................... 88,967 76,872
Equipment and improvements, net .............................................................. 2,697 2,012
Capitalized software costs, net .............................................................. 4,334 3,608
Deferred tax assets .......................................................................... -- 1,104
Goodwill ..................................................................................... 1,840 1,840
Other ........................................................................................ 1,604 1,242
------------- -------------
Total assets ................................................................. $ 99,442 $ 86,678
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable ....................................................................... $ 2,284 $ 1,655
Deferred revenue ....................................................................... 24,115 16,060
Accrued compensation and related benefits .............................................. 3,436 2,610
Income taxes payable ................................................................... -- 273
Other current liabilities .............................................................. 4,021 2,859
------------- -------------
Total current liabilities .................................................... 33,856 23,457
Deferred revenue ....................................................................... 1,362 1,203
Deferred tax liability ................................................................. 291 --
Deferred compensation ..................................................................... 1,202 1,013
------------- -------------
Total liabilities ............................................................ 36,711 25,673
------------- -------------
Commitments and contingencies ................................................................ -- --
Shareholders' equity:
Common stock, $0.01 par value; 20,000 shares authorized; 13,111 and
12,650 shares issued and outstanding at March 31, 2005 and
March 31, 2004, respectively ....................................................... 131 127
Additional paid-in capital ............................................................. 44,499 39,671
Retained earnings ...................................................................... 19,213 22,750
Deferred compensation .................................................................. (1,112) (1,543)
------------- -------------
Total shareholders' equity ................................................... 62,731 61,005
------------- -------------
Total liabilities and shareholders' equity ................................... $ 99,442 $ 86,678
============= =============