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Quality Systems Reports Third
Quarter Results
IRVINE, Calif.--(BUSINESS WIRE)--Feb.
7, 2005--Quality Systems,
Inc. (NASDAQ:QSII - News) today announced
the results of operations for its fiscal
2005 third quarter ended December 31,
2004.
The Company posted net revenues of $22.1
million in the third quarter, an increase
of 21% from $18.2 million generated during
the same quarter last year. The Company
reported net income of $4.2 million, an
increase of 62% over net income of $2.6
million earned in the comparable quarter
of the prior year. Fully diluted earnings
per share was $0.64 in the quarter, an
increase of 60% over the fully diluted
$0.40 per share earnings recorded in the
same quarter last year.
The revenue and net income results achieved
in the quarter were records for the Company.
Results in the third quarter were driven
by record revenue and operating profit
in the Company's NextGen Healthcare Information
Systems division. For the quarter, the
Company's NextGen Healthcare Information
Systems division posted record revenue
of $18.3 million, up 31% over the same
quarter prior year, and record operating
income of $6.7 million, up 78% over the
same quarter of the prior year.
Quality Systems, Inc. will hold a conference
call to discuss third quarter financial
results today at 4:30 p.m. EST (1:30 p.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 7, at 6:30 p.m. EST
through Monday, February 14, at midnight
EST. To access the replay, dial 800-642-1687
and enter the conference ID number 3400595.
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, and 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.
Quality
Systems, Inc.
Consolidated Statements of Operations
and Comprehensive Income
(In thousands, except per share data)
(Unaudited)
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Three
Months Ended
December
31,
|
Nine
Months Ended
December
31, |
| Numbers
by 1000's |
| ---------------- |
| 2004 |
2003 |
| ------ |
------ |
|
| ---------------- |
| 2004 |
2003 |
| ------ |
------ |
|
|
Revenues:
Software, hardware and supplies, Implementation
and training services
|
| $9,781 |
$8,068 |
| 1,889 |
1,791 |
| ------ |
------ |
|
| $27,891 |
$24,130 |
| 6,455 |
5,229 |
| ------ |
------ |
|
|
| System
Sales |
|
|
|
| Maintenance
and other services |
| 10,418 |
8,340 |
| ------ |
------ |
|
| 29,089 |
22,788 |
| ------ |
------ |
|
| Total
Revenue |
|
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| Cost
of revenue: Software,
hardware and supplies, Implementation
and training services |
| 1,384 |
1,966 |
| 1,575 |
1,427 |
| ------ |
------ |
|
| 5,428 |
6,541 |
| 4,546 |
3,964 |
| ------ |
------ |
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| Total
cost of system sales |
|
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| Total
cost of maintenance and other services |
| 4,556 |
4,130 |
| ------ |
------ |
|
| 13,580 |
11,120 |
| ------ |
------ |
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| Total
Cost of Revenue |
| 7,515 |
7,523 |
| ------ |
------ |
|
| 23,554 |
21,625 |
| ------ |
------ |
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| Gross
Profit |
| 14,573 |
10,676 |
| ------ |
------ |
|
| 39,881 |
30,522 |
| ------ |
------ |
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| Operation
expenses: Selling, general and administrative |
|
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| Research
and Development |
| 1,707 |
1,628 |
| ------ |
------ |
|
| 5,137 |
4,496 |
| ------ |
------ |
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| Total
operation expenses |
| 8,127 |
6,530 |
| ------ |
------ |
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| 21,923 |
18,906 |
| ------ |
------ |
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| Income
from operations |
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| Interest
income |
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| Income
before provision for income taxes |
|
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| Provision
for income taxes |
| 2,488 |
1,630 |
| ------ |
------ |
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| 7,193 |
4,604 |
| ------ |
------ |
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| Net
Income |
| $4,221 |
$2,611 |
| ====== |
====== |
|
| $11,318 |
$7,296 |
| ====== |
====== |
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| Net
Income per Share - Basic |
| $
0.65 |
$
0.42 |
| ======= |
======= |
|
| $
1.77 |
$
1.18 |
| ======= |
======= |
|
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| Income
per Share - Diluted |
| $
0.64 |
$
0.40 |
| ======= |
======= |
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| $
1.72 |
$
1.13 |
| ======= |
======= |
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Weighted
average
number of shares
outstanding - Basic |
| 6,476 |
6,237 |
| ======= |
======= |
|
| 6,400 |
6,162 |
| ======= |
======= |
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Weighted
average
number of shares
outstanding
- Diluted |
| 6,641 |
6,549 |
| ======= |
======= |
|
| 6,567 |
6,476 |
| ======= |
======= |
|
Quality Systems, Inc.
Consolidated Balance Sheets
(in thousands, except per share data)
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December.
31,
2004 |
March
31,
2004 |
| |
---- |
---- |
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Current
Assets:
Cash and cash equivalents
Accounts receivable, net
Inventories, net
Deferred tax assets
Other current assets |
$66,432
|
| 27,929 |
| 1,405 |
| 2,979 |
| 1,353 |
| ------- |
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$ 51,395
|
| 20,336 |
| 725 |
| 2,979 |
| 1,437 |
| ------- |
|
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| Total
current assets |
100,098 |
76,872 |
|
Equipment
and Improvements, net
Capitalized Software Costs, net
Deferred Tax Asset
Goodwill
Other Assets |
| 2,406 |
| 3,961 |
| 1,104 |
| 1,840 |
| 1,616 |
| ------- |
|
| 2,012 |
| 3,608 |
| 1,104 |
| 1,840 |
| 1,242 |
| ------- |
|
| Total
assets |
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LIABILITIES
AND SHAREHOLDERS' EQUITY
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Current
Liabilities:
Accounts payable
Deferred service revenue
Accrued compensation and related benefits
Income taxes payable
Other current liabilities |
|
$2,269
|
| 22,599 |
2,304 |
1,806 |
| 4,478 |
| -------- |
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|
$1,655
|
| 16,016 |
2,985 |
273 |
| 3,497 |
| -------- |
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| Total
liabilities |
33,456 |
24,426 |
|
| Deferred
revenue |
|
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| Total
liabilities |
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| Commitments
and Contingencies |
-- |
-- |
|
| Shareholders'
Equity:
Common
stock, $0.01 par value; authorized
20,000
shares; issued and outstanding
6,525 and 6,325 shares at
December 31, 2004 and March 31,
2004, respectively
Additional paid-in capital
Accumulated deficit
Deferred Compensation |
65
43,553
34,068
(1,220)
|
63
39,735
22,750
(1,543)
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| Total
shareholders' equity |
76,466 |
61,005 |
Total liabilities and
Shareholders' equity |
$111,025
======= |
$86,678
======= |
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
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