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, 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)

	Three Months Ended March 31,	Twelve Months Ended March 31,
Numbers by 1000's	---------------- 2005 2004 ------ ------	---------------- 2005 2004 ------ ------
Revenues: Software, hardware and supplies, Implementation and training services	$11.765 $8,501 2,402 1,665 ------ ------	$39,672 $32,632 8,856 6,893 ------ ------
System Sales	14,167 10,166	48,528 39,525
Maintenance and other services Electronic data interchange services	8,483 6,446 2,876 2,175 ------ ------	29,945 23,117 10,488 8,292 ------ ------
Maintenance, EDI and other servces	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, Implementation and training services	2,097 1,600 1,754 1,388 ------ ------	7,525 8,141 6,300 5,197 ------ ------
Total cost of system sales	3,851 2,988	13,825 13,338
Total cost of maintenance and other services Total cost of maintenance, EDI and other services	3,394 2,739 1,871 1,321 ------ ------ 5,265 4,060	12,120 10,313 6,724 5,022 ------ ------ 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 ------ ------
Operation expenses: Selling, general and administrative	7,989 5,702	24,776 19,482
Research and Development	1,766 1,643 ------ ------	6,903 6,139 ------ ------
Total operation expenses	9,755 6,715 ------ ------	31,679 25,621 ------ ------
Income from operations	6,655 5,024	24,613 16,640
Interest 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 ======= =======
Income per Share - Diluted	$ 0.36 $ 0.24 ======= =======	$ 1.22 $0.80 ======= =======
Weighted average number of shares outstanding - Basic	13,089 12,624 ======= =======	12,872 12,436 ======= =======
Weighted average number of shares outstanding - Diluted	13,370 13,164 ======= =======	13,203 12,996 ======= =======

Quality Systems, Inc.
Consolidated Balance Sheets
(in thousands, except per share data)

	March. 31, 2005	March 31, 2004
	----	----
Current Assets: Cash and cash equivalents Accounts receivable, net Inventories, net Deferred tax assets Other current assets	$51,157 33,362 960 15 1,796 1,677	$ 51,395 20,280 725 -- 2,979 1,493
Total current assets	88,967	76,872
Equipment and Improvements, net Capitalized Software Costs, net Deferred Tax Asset Goodwill Other Assets	2,697 4,334 -- 1,840 1,604 -------	2,012 3,608 1,104 1,840 1,242 -------
Total assets	$99,442 =======	$86,678 =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities: Accounts payable Deferred service revenue Accrued compensation and related benefits Income taxes payable Other current liabilities	$2,284 24,115 3,436 -- 4,021 --------	$1,655 16,060 2,610 273 2,859 --------
Total liabilities	33,856	23,457
Deferred revenue Deferred tax liability Deferred compensation	1,362 291 1,202	1,203 -------- 1,013
Total liabilities	36,711 --------	25,673 --------
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	131 44,499 19,213 (1,112)	127 39,671 22,750 (1,543)
Total shareholders' equity	62,731	61,005
Total liabilities and Shareholders' equity	$99,442 =======	$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