Quality Systems, Inc. Reports Fiscal 2013 Second Quarter Results
Company Also Appoints Mark H. Davis to Board of Directors
IRVINE, Calif.--(BUSINESS WIRE)--
Quality Systems, Inc. (NASDAQ:QSII) announced today results for its
fiscal 2013 second quarter ended September 30, 2012.
The Company reported revenues of $116.1 million for the fiscal 2013
second quarter, an increase of 8 percent, versus $107.6 million for the
fiscal 2012 second quarter. Net income for the fiscal 2013 second
quarter was $15.7 million, down 23 percent when compared with net income
of $20.5 million for the comparable period last year. Fully diluted
earnings per share for the fiscal 2013 second quarter was $0.26, a 26
percent decrease from $0.35 for the fiscal 2012 second quarter. While
revenues increased in the quarter, profitability was impacted by lower
software license sales.
"Quality Systems continues to make investments and position the company
to capture the significant opportunities that lie ahead in our
healthcare information technology sector. Recently, we named Dan
Morefield, a seasoned technology executive, as our new chief operating
officer; restructured our sales and marketing functions under Gary
Voydanoff, one of our veteran sales executives; and promoted Steve
Puckett to a newly created chief technology officer role to manage our
development-related resources. For more than 20 years, Steve has served
a critical role in bringing industry-leading technology to the company,"
stated Steven T. Plochocki, president and chief executive officer.
Quality Systems will host a conference call to discuss its fiscal 2013
second quarter results on Friday, October 26, 2012 at 10:00 AM ET (7:00
AM PT). All participants should dial 1-800-762-8779 at least ten minutes
prior to the start of the call. International callers should dial
480-629-9818. To hear a live Web simulcast or to listen to the archived
webcast following completion of the call, please visit the Company's
website at www.qsii.com,
click on the "Investors" tab, then select "Conference Calls," to access
the link to the call. To listen to a telephone replay of the conference
call, please dial 800-406-7325 or 303-590-3030 and enter reservation
identification number 4571447. The replay will be available from
approximately 12:00 PM ET on Friday, October 26, 2012, through 11:59 PM
ET on Friday, November 2, 2012.
A transcript of the conference call will be made available on the
Company's website at www.qsii.com.
Quality Systems also announced that its Board of Directors declared a
quarterly cash dividend of Seventeen and One-Half Cents ($0.175) per
share on the Company's outstanding shares of Common Stock, payable to
shareholders of record as of December 14, 2012 with an anticipated
distribution date of January 4, 2013. The $0.175 per share cash dividend
is consistent with the Company's current policy to pay a regular
quarterly dividend on the Company's outstanding shares of Common Stock,
subject to Board review and approval.
In other news, Quality Systems reported that Mark H. Davis was appointed
to its Board of Directors, effective October 25, 2012. Davis fills the
seat vacated by Maureen Spivack, who resigned due to conflicting
employment obligations. Davis will also be appointed to serve on the
Board's Audit Committee and Transaction Committee.
Davis is a managing director at B. Riley & Co, LLC, an investment firm
specializing in research, sales and trading and corporate finance. He
brings more than 20 years of experience advising and financing
technology companies, including software, cloud infrastructure and
information technology firms, to the Quality Systems Board. In addition,
Davis was a practicing certified public accountant for nearly a decade
and his financial expertise and knowledge will prove beneficial to the
Board.
Previously, Davis served as head of technology investment banking at
Cantor Fitzgerald, managing director at Macquarie Capital, an Australian
merchant and investment banking firm, and managing director (as well as
in other senior leadership roles) at Citigroup. Earlier in his career,
Davis was an Audit Senior with Price Waterhouse. Davis holds a Master's
of Business Administration from the Wharton School of the University Of
Pennsylvania, and a Bachelor of Science degree in Accounting from the
University of Maryland.
"We welcome Mark to the Board. His two decades of experience advising
and financing technology-related businesses, coupled with his public
accounting background, will provide the Board with insights and
expertise in both technology and finance. We look forward to the
guidance he will bring to the Board and the contributions he will make
to the Company," Plochocki added.
About
Quality Systems, Inc.
Irvine, Calif.-based Quality
Systems, Inc. and its NextGen
Healthcare subsidiary develop and market computer-based practice
management, electronic health records and revenue cycle management
applications as well as connectivity products and services for medical
and dental group practices and small hospitals. Visit www.qsii.com
and www.nextgen.com
for additional information.
SAFE HARBOR PROVISIONS FOR FORWARD-LOOKING STATEMENTS
This news release may contain forward-looking statements within the
meaning of the federal securities laws, including but not limited to,
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, net income and
earnings per share). Risks and uncertainties exist that may cause the
results to differ materially from those set forth in these
forward-looking statements. Factors that could cause the anticipated
results to differ from those described in the forward-looking statements
are set forth in Part I, Item A of our most recent Annual Report on Form
10-K for the fiscal year ended March 31, 2012, including but not limited
to: 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; impact of incentive payments under
The American Recovery and Reinvestment Act on sales and the ability of
the Company to meet continued certification requirements; the
development by competitors of new or superior technologies; the timing,
cost and success or failure of new product and service introductions,
development and product upgrade releases; undetected errors or bugs in
software; product liability; 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; changes of accounting
estimates and assumptions used to prepare the prior periods' financial
statements; and general economic conditions. A significant portion of
the Company's quarterly sales of software product licenses and computer
hardware is concluded in the last month of a 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 INCOME
(IN
THOUSANDS. EXCEPT PER SHARE DATA)
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Six Months Ended September 30,
|
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Software, hardware and supplies
|
|
$
|
23,720
|
|
|
$
|
31,860
|
|
|
$
|
49,564
|
|
|
$
|
60,771
|
|
|
Implementation and training services
|
|
|
8,535
|
|
|
|
6,094
|
|
|
|
20,581
|
|
|
|
11,566
|
|
|
|
|
|
|
|
|
|
|
|
|
System sales
|
|
|
32,255
|
|
|
|
37,954
|
|
|
|
70,145
|
|
|
|
72,337
|
|
|
|
|
|
|
|
|
|
|
|
|
Maintenance
|
|
|
38,715
|
|
|
|
35,214
|
|
|
|
77,283
|
|
|
|
66,716
|
|
|
Electronic data interchange services
|
|
|
15,024
|
|
|
|
11,985
|
|
|
|
28,847
|
|
|
|
24,077
|
|
|
Revenue cycle management and related services
|
|
|
14,486
|
|
|
|
11,142
|
|
|
|
28,887
|
|
|
|
23,023
|
|
|
Other services
|
|
|
15,648
|
|
|
|
11,339
|
|
|
|
29,262
|
|
|
|
21,923
|
|
|
|
|
|
|
|
|
|
|
|
|
Maintenance, EDI, RCM and other services
|
|
|
83,873
|
|
|
|
69,680
|
|
|
|
164,279
|
|
|
|
135,739
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
116,128
|
|
|
|
107,634
|
|
|
|
234,424
|
|
|
|
208,076
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
Software, hardware and supplies
|
|
|
5,624
|
|
|
|
4,187
|
|
|
|
11,395
|
|
|
|
8,801
|
|
|
Implementation and training services
|
|
|
7,507
|
|
|
|
5,050
|
|
|
|
16,652
|
|
|
|
9,125
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost of system sales
|
|
|
13,131
|
|
|
|
9,237
|
|
|
|
28,047
|
|
|
|
17,926
|
|
|
|
|
|
|
|
|
|
|
|
|
Maintenance
|
|
|
4,741
|
|
|
|
3,994
|
|
|
|
9,552
|
|
|
|
7,848
|
|
|
Electronic data interchange services
|
|
|
9,151
|
|
|
|
7,964
|
|
|
|
18,399
|
|
|
|
15,926
|
|
|
Revenue cycle management and related services
|
|
|
10,556
|
|
|
|
8,456
|
|
|
|
21,426
|
|
|
|
17,282
|
|
|
Other services
|
|
|
8,785
|
|
|
|
6,369
|
|
|
|
17,335
|
|
|
|
11,966
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost of maintenance, EDI, RCM and other services
|
|
|
33,233
|
|
|
|
26,783
|
|
|
|
66,712
|
|
|
|
53,022
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost of revenue
|
|
|
46,364
|
|
|
|
36,020
|
|
|
|
94,759
|
|
|
|
70,948
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
69,764
|
|
|
|
71,614
|
|
|
|
139,665
|
|
|
|
137,128
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
|
|
37,832
|
|
|
|
32,169
|
|
|
|
74,513
|
|
|
|
61,555
|
|
|
Research and development costs
|
|
|
6,272
|
|
|
|
7,358
|
|
|
|
14,848
|
|
|
|
14,185
|
|
|
Amortization of acquired intangible assets
|
|
|
1,316
|
|
|
|
520
|
|
|
|
2,453
|
|
|
|
1,002
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
45,420
|
|
|
|
40,047
|
|
|
|
91,814
|
|
|
|
76,742
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
|
24,344
|
|
|
|
31,567
|
|
|
|
47,851
|
|
|
|
60,386
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income (expense), net
|
|
|
(62
|
)
|
|
|
75
|
|
|
|
(27
|
)
|
|
|
157
|
|
|
Other income (expense), net
|
|
|
220
|
|
|
|
(144
|
)
|
|
|
7
|
|
|
|
(182
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Income before provision for income taxes
|
|
|
24,502
|
|
|
|
31,498
|
|
|
|
47,831
|
|
|
|
60,361
|
|
|
Provision for income taxes
|
|
|
8,811
|
|
|
|
11,002
|
|
|
|
16,643
|
|
|
|
20,882
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
15,691
|
|
|
$
|
20,496
|
|
|
$
|
31,188
|
|
|
$
|
39,479
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.26
|
|
|
$
|
0.35
|
|
|
$
|
0.53
|
|
|
$
|
0.67
|
|
|
Diluted
|
|
$
|
0.26
|
|
|
$
|
0.35
|
|
|
$
|
0.53
|
|
|
$
|
0.67
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
59,347
|
|
|
|
58,664
|
|
|
|
59,314
|
|
|
|
58,511
|
|
|
Diluted
|
|
|
59,386
|
|
|
|
59,005
|
|
|
|
59,386
|
|
|
|
58,902
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per common share
|
|
$
|
0.175
|
|
|
$
|
0.175
|
|
|
$
|
0.350
|
|
|
$
|
0.350
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
QUALITY SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(IN
THOUSANDS)
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
March 31,
|
|
|
|
2012
|
|
2012
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
117,043
|
|
|
$
|
134,444
|
|
|
Restricted cash
|
|
|
5,223
|
|
|
|
1,962
|
|
|
Marketable securities
|
|
|
4,989
|
|
|
|
4,987
|
|
|
Accounts receivable, net
|
|
|
151,787
|
|
|
|
145,756
|
|
|
Inventories
|
|
|
3,858
|
|
|
|
3,715
|
|
|
Income taxes receivable
|
|
|
6,063
|
|
|
|
2,628
|
|
|
Deferred income tax assets, net
|
|
|
10,127
|
|
|
|
10,127
|
|
|
Other current assets
|
|
|
6,712
|
|
|
|
9,090
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
305,802
|
|
|
|
312,709
|
|
|
|
|
|
|
|
|
Equipment and improvements, net
|
|
|
20,296
|
|
|
|
17,841
|
|
|
Capitalized software costs, net
|
|
|
29,232
|
|
|
|
19,994
|
|
|
Intangibles, net
|
|
|
31,299
|
|
|
|
23,259
|
|
|
Goodwill
|
|
|
63,161
|
|
|
|
60,776
|
|
|
Other assets
|
|
|
6,860
|
|
|
|
5,773
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
456,650
|
|
|
$
|
440,352
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Accounts payable
|
|
$
|
8,955
|
|
|
$
|
4,532
|
|
|
Deferred revenue
|
|
|
67,968
|
|
|
|
83,108
|
|
|
Accrued compensation and related benefits
|
|
|
9,894
|
|
|
|
11,870
|
|
|
Dividends payable
|
|
|
10,382
|
|
|
|
10,354
|
|
|
Other current liabilities
|
|
|
31,108
|
|
|
|
19,568
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
128,307
|
|
|
|
129,432
|
|
|
|
|
|
|
|
|
Deferred revenue, net of current
|
|
|
1,225
|
|
|
|
1,293
|
|
|
Deferred income tax liabilities, net
|
|
|
4,500
|
|
|
|
5,351
|
|
|
Deferred compensation
|
|
|
3,208
|
|
|
|
3,497
|
|
|
Other noncurrent liabilities
|
|
|
7,103
|
|
|
|
5,602
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
144,343
|
|
|
|
145,175
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity:
|
|
|
|
|
|
Common stock
|
|
|
|
|
|
$0.01 par value; authorized 100,000 shares; issued and
outstanding
59,370 and 59,180 shares at September 30,
2012 and March 31,
2012, respectively
|
|
|
594
|
|
|
|
592
|
|
|
Additional paid-in capital
|
|
|
175,747
|
|
|
|
169,033
|
|
|
Accumulated other comprehensive loss
|
|
|
(55
|
)
|
|
|
(45
|
)
|
|
Retained earnings
|
|
|
136,021
|
|
|
|
125,597
|
|
|
|
|
|
|
|
|
Total shareholders' equity
|
|
|
312,307
|
|
|
|
295,177
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders' equity
|
|
$
|
456,650
|
|
|
$
|
440,352
|
|
Quality Systems, Inc.
Paul Holt, CFO, 949-255-2600
[email protected]
or
Susan
J. Lewis, 303-804-0494
[email protected]
Source: Quality Systems, Inc.
News Provided by Acquire Media
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