Quality Systems Reports Fourth-Quarter and Fiscal Year-End Results

IRVINE, Calif.--(BUSINESS WIRE) -- May 22, 2003 -- Quality Systems Inc. (QSII:NASDAQ) today announced the results of operations for its fiscal 2003 fourth quarter and year ended March 31, 2003. The Company posted record net revenue of $15.1 million for the fourth quarter, an increase of 26% over the $12.0 million generated during the comparable quarter of the prior year. The Company reported net income of $1,763,000, an increase of 18% over net income of $1,494,000 earned during the prior year's fourth quarter. Fully diluted earnings per sharetotaled $0.27 in the current quarter, an increase of 13% over the fully diluted $0.24 per share recorded in the same quarter last year.
Revenue for fiscal year ended March 31, 2003 was $54,769,000, an increase of 23% over the prior year. Net income for fiscal 2003 was $7,035,000, an increase of 34% over fiscal 2002's net income of $5,268,000. Fully diluted earnings per share increased to $1.10 in FY 2003 from $0.84 earned during FY 2002, an increase of 31%.

Results for the year and the quarter were driven by record performance at the Company's NextGen Division. Quarterly revenues increased 39% over the prior year's fourth quarter, while quarterly operating income rose 59%. For fiscal 2003, NextGen's revenue increased 37% over fiscal 2002, while operating income increased 91% over the prior year.

Quality Systems, Inc. will hold a conference call to discuss fourth-quarter and year-end financial results today, Thursday, May 22, 2003 at 1:00 p.m. EDT (10:00 a.m. PDT). To participate in the call, please call 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 Thursday, May 22 at 1:00 p.m. PDT, through Thursday, May 30 at 1:00 p.m. PDT; call 800-642-1687 and enter the conference ID number 369124.

A transcript of the conference call will be made available on the QSII Web site (www.qsii.com). Quality Systems, Inc. and its NextGen Healthcare Information Systems subsidiary are developers and providers of 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.

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

	Three Months Ended March 31,	Year Ended March 31,
Numbers by 1000's	---------------- 2003 2002 ------ ------	---------------- 2003 2002 ------ ------
Net Revenues: Sales of computer systems, upgrades and supplies Maintenance and other services	8,264,000 6,358,000 6,804,000 5,615,000 ------ ------ 15,068,000 11,973,000	29,169,000 22,520,000 25,600,000 21,902,000 ------ ------ 54,769,000 44,422,000
Cost of Products and Services	6,822,000 5,072,000 ------ ------	23,755,000 19,253,000 ------ ------
Gross Profit	8,246,000 6,901,000	31,014,000 25,169,000
Selling, General and Administrative Expenses Research and Development Costs	4,260,000 3,510,000 1,367,000 1,079,000 ------ ------	15,293,000 13,068,000 5,062,000 4,243,000 ------ ------
Income from Operations	2,619,000 2,312,000	10,659,000 7,858,000
Investment Income	98,000 100,000 ------ ------	434,000 643,000 ------ ------
Income before Provision for Income Taxes	2,717,000 2,412,000	11,093,000 8,501,000
Provision for Income Taxes	954,000 918,000 ------ ------	4,058,000 3,233,000 ------ ------
Net Income	$1,763,000 $1,494,000 ====== ======	$7,035,000 $5,268,000 ====== ======
Income per Share - Basic	$ 0.29 $ 0.25 ======= =======	$ 1.15 $ 0.87 ======= =======
Income per Share - Diluted	$ 0.27 $ 0.24 ======= =======	$ 1.10 $ 0.84 ======= =======
Weighted average number of shares outstanding - Basic	6,144,000 6,078,000 ======= =======	6,127,000 6,025,000 ======= =======
Weighted average number of shares outstanding - Diluted	6,431,000 6,320,000 ======= =======	6,389,000 6,240,000 ======= =======

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

	March 31, 2003	March 31, 2002
	----	----
Current Assets: Cash and cash equivalents Short-term investments Accounts receivable, net Inventories Other current assets	$ 36,443 17,561 667 4,115 -------	$ 25,443 255 13,695 1,118 2,579 -------
Total current assets	58,786	43,090
Equipment and Improvements, net Capitalized Software Costs, net Deferred Tax Asset Excess of Cost Over Net Assets of Acquired Business, net Other Assets	1,777 2,511 1,819 1,840 869 -------	1,578 2,103 2,960 1,772 1,419 -------
Total assets	$ 67,602 =======	$ 52,922 =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities: Accounts payable Deferred service revenue Other current liabilities	$2,477 11,699 5,893 --------	$2,657 6,155 4,159 --------
Total liabilities	20,069	12,971
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 35,121 12,350 --------	61 34,575 5,315 --------
Total shareholders' equity	47,533	39,951
Total liabilities and Shareholders' equity	$67,602 =======	$52,922 =======

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

This news release may contain 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 impact actual results are volume and timing of systems sales and installations; length of sales cycles and installation process; the possibility that the products will not achieve market acceptance; 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 in the health-care 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.