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May
22, 2003
Quality
Systems Reports Fourth-Quarter and Fiscal Year-End Results
IRVINE, Calif.- (BUSINESS WIRE) - May 22, 2003 - Quality Systems Inc. (Nasdaq:QSII - News) 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.
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.
Quality Systems, Inc.
Consolidated Statements of Operations and Comprehensive Income
Three Months Ended Year Ended
March 31, March 31,
2003 2002 2003 2002
Net Revenues:
Sales of computer
systems, upgrades
and supplies $8,264,000 $6,358,000 $29,169,000 $22,520,000
Maintenance and
other services 6,804,000 5,615,000 25,600,000 21,902,000
15,068,000 11,973,000 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 4,260,000 3,510,000 15,293,000 13,068,000
Research and
Development Costs 1,367,000 1,079,000 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, March 31,
2003 2002
Current Assets:
Cash and cash equivalents $36,443 $25,443
Short-term investments 255
Accounts receivable, net 17,561 13,695
Inventories 667 1,118
Other current assets 4,115 2,381
Total current assets 58,786 42,892
Equipment and Improvements, net 1,777 1,578
Capitalized Software Costs, net 2,511 2,103
Deferred Tax Asset 1,819 2,778
Goodwill, net 1,840 1,840
Other Assets 869 952
Total assets $67,602 $52,143
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $2,477 $2,657
Deferred service revenue 11,699 6,155
Other current liabilities 5,893 3,281
Total liabilities 20,069 12,093
Commitments and Contingencies
Shareholders' Equity:
Common stock, $0.01 par value, 20,000 shares
authorized, 6,152 and 6,105 shares issued
and outstanding, respectively 62 61
Additional paid-in capital 35,121 34,674
Retained Earnings 12,350 5,315
Total shareholders' equity 47,533 40,050
Total liabilities and
shareholders' equity $67,602 $52,143
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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