Quality Systems Reports Third-Quarter Results

TUSTIN, Calif. — (BUSINESS WIRE) — January 24, 2002 — Quality Systems, Inc. (NASDAQ: QSII) today announced the results of operations for its fiscal 2002 third quarter ended December 31, 2001.

For the quarter, the Company posted record revenues of $11 million. Net income was a record $1,382,000, which represents an increase of 43% over net income of $966,000 for the comparable quarter of the prior year. Fully diluted earnings per share was a record $0.22 in the quarter, an increase of 38% over the fully diluted $0.16 per share earnings recorded in the same quarter last year.

Quarterly results were driven by record revenues posted by the Company's NextGen Healthcare Information Systems division and EDI/Connectivity segment, as well as record operating income at the Company's QSI division.

Quality Systems is a developer and provider of computer-based practice management and electronic medical records systems and e-business applications for dental and medical group practices marketed under the QSI and NextGen product names.

This news release contains forward-looking statements, including those related to revenue and net income, that involve a number of risks and uncertainties. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are volume and timing of systems sales and installations, length of sales cycles and installation process, seasonal patterns of sales and customer buying behavior, the development by competitors of new or superior technologies, delays in product development, undetected errors or bugs in software, product liability, changing economic, political or regulatory influences on the healthcare industry, changes in product pricing policies, competitive pressures, possible regulation of the company's software by the U.S. Food and Drug Administration, 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 as applied to the company as of the date hereof.

Quality Systems, Inc.
Consolidated Statements of Operations and Comprehensive Income (unaudited)

	Three Months Ended December 31,	Year Ended December 31,
Numbers by 1000's	---------------- 2001 2000 ------ ------	---------------- 2001 2000 ------ ------
Net Revenues: Sales of computer systems, upgrades and supplies Maintenance and other services	5,458,000 5,230,000 5,585,000 5,103,000 ------ ------ 11,043,000 10,333,000	16,162,000 14,419,000 16,287,000 14,839,000 ------ ------ 32,499,000 29,258,000
Cost of Products and Services	4,900,000 4,459,000 ------ ------	14,181,000 12,854,000 ------ ------
Gross Profit	6,143,000 5,874,000	18,268,000 16,404,000
Selling, General and Administrative Expenses Research and Development Costs	3,019,000 3,451,000 1,057,000 1,010,000 ------ ------	9,558,000 10,060,000 3,164,000 2,989,000 ------ ------
Income from Operations	2,067,000 1,413,000	5,546,000 3,355,000
Investment Income	147,000 261,000 ------ ------	543,000 758,000 ------ ------
Income before Provision for Income Taxes	2,214,000 1,674,000	6,089,000 4,113,000
Provision for Income Taxes	832,000 708,000 ------ ------	2,315,000 1,778,000 ------ ------
Net Income	$1,382,000 $966,000 ====== ======	$3,774,000 $2,335,000 ====== ======
Income per Share - Basic	$ 0.23 $ 0.16 ======= =======	$ 0.63 $ 0.38 ======= =======
Income per Share - Diluted	$ 0.22 $ 0.16 ======= =======	$ 0.61 $ 0.37 ======= =======
Weighted average number of shares outstanding - Basic	6,026,000 6,119,000 ======= =======	6,007,000 6,179,000 ======= =======
Weighted average number of shares outstanding - Diluted	6,224,000 6,162,000 ======= =======	6,191,000 6,245,000 ======= =======

Quality Systems, Inc.
Consolidated Balance Sheets
(in thousands)
ASSETS

	Dec. 31, 2001	March 31, 2001
	----	----
Current Assets: Cash and cash equivalents Short-term investments Accounts receivable, net Inventories Other current assets	$ 23,397 275 12,866 772 2,415 -------	$ 18,471 258 13,335 1,030 2,098 -------
Total current assets	39,725	35,192
Equipment and Improvements, net Capitalized Software Costs, net Deferred Tax Asset Excess of Cost Over Net Assets of Acquired Business, net Other Assets	1,550 1,972 2,960 1,772 1,264 -------	1,819 1,769 2,960 1,772 1,371 -------
Total assets	$ 49,243 =======	$ 44,883 =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities: Accounts payable Deferred service revenue Other current liabilities	$ 1,178 6,119 3,924 --------	$ 1,829 5,595 3,572 --------
Total liabilities	11,221	10,996
Commitments and Contingencies
Shareholders' Equity: Common stock, $0.01 par value, 20,000 shares authorized, 6,208 and 6,201 shares issued and outstanding, respectively Additional paid-in capital Accumulated deficit	62 34,139 3,821 --------	60 33,780 47 --------
Total shareholders' equity	38,022	33,887
Total liabilities and Shareholders' equity	$ 49,243 =======	$ 44,883 =======

Contact:
Quality Systems Inc., Irvine
Lou Silverman, 949/255-2600
www.qsii.com
or
Coffin Communications Group, Sherman Oaks, Calif.
William F. Coffin/Sean Collins, 818/789-0100
www.coffincg.com