IRVINE, Calif.--(BUSINESS WIRE)�August 3, 2004--Quality Systems, Inc. (NASDAQ:QSII - news) today announced the results of operations for its fiscal 2005 first quarter ended June 30, 2004. The Company posted net revenues of $20.1 million in the first quarter of fiscal 2005, an increase of 23% from $16.3 million for the same quarter last year. The Company reported net income of $3,382,000 for the first quarter, an increase of 49% over net income of $2,277,000 for the comparable quarter of the prior year. Fully diluted earnings per share totaled $0.51 in the quarter, an increase of 46% over the fully diluted $0.35 per share earnings recorded in the same quarter of last year.
The revenue and net income results achieved in the quarter were records for the company. Results in the first quarter were driven by record results achieved by the company�s NextGen Healthcare Information Systems division. For the quarter, the Company�s NextGen Healthcare division posted record revenue of $16.1 million, up 32% over the same quarter prior year, and record operating income of $5.2 million, up 53% over the same quarter prior year.
Quality Systems, Inc. will hold a conference call to discuss first quarter financial results today, August 3, 2004 at 10 a.m. PDT. To participate in the call, please 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 Tuesday, August 3 at 3:00 p.m. PDT, through Tuesday, August 10 at 9:00 p.m. PDT; call 800-642-1687 and enter the conference ID number 9161498.
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, 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.
[financial highlights follow]
Quality Systems, Inc.
Consolidated Statements of Operations and Comprehensive Income (Unaudited)
Three Months Ended
June 30,
2004 2003
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Net Revenues:
Sales of computer systems,
Upgrades and supplies 11,084,000 9,474,000
Maintenance and other services 9,046,000 6,832,000
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20,130,000 16,306,000
Cost of Products and Services 8,101,000 6,610,000
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Gross Profit 12,029,000 9,696,000
Selling, General and
Administrative Expenses 4,953,000 4,740,000
Research and Development Costs 1,612,000 1,366,000
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Income from Operations 5,464,000 3,590,000
Investment Income, net 120,000 100,000
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Income before Provision for
Income Taxes 5,584,000 3,690,000
Provision for Income
Taxes 2,202,000 1,413,000
Net Income $ 3,382,000 $ 2,277,000
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Income per Share - Basic $ 0.53 $ 0.37
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Income per Share - Diluted $ 0.51 $ 0.35
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Weighted average number
of shares outstanding - Basic 6,333,000 6,157,000
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Weighted average number
of shares outstanding - Diluted 6,577,000 6,466,000
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Quality Systems, Inc.
Consolidated Balance Sheets
(in thousands)
ASSETS
June 30, March 31,
2004 (unaudited) 2004
Current Assets:
Cash and cash equivalents $54,941 $51,395
Accounts receivable, net 23,013 20,336
Inventories 784 725
Net current deferred tax assets 2,979 2,979
Other current assets 1,439 1,437
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Total current assets 83,156 76,872
Equipment and improvements, net 2,213 2,012
Capitalized software costs, net 3,732 3,608
Deferred long term tax assets 1,104 1,104
Goodwill, net 1,840 1,840
Other assets 1,226 1,242
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Total assets $ 93,271 $ 86,678
LIABILITIES AND SHAREHOLDER�S EQUITY
Current Liabilities:
Accounts payable $3,222 $1,655
Deferred revenue 19,442 17,263
Accrued employee compensation and
benefits 2,092 2,985
Other current liabilities 3,753 3,770
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Total current liabilities 28,509 25,673
Commitments and Contingencies
Shareholders' Equity:
Common stock, $0.01 par value, 20,000
shares authorized, 6,361 and 6,325 shares
issued and outstanding, respectively 64 63
Additional paid-in capital 40,002 39,735
Retained earnings 26,132 22,750
Deferred compensation (1,436) (1,543)
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Total shareholders' equity 64,762 61,005
Total liabilities and
shareholders' equity $ 93,271 $ 86,678
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