IRVINE, Calif.--(BUSINESS WIRE)�November 3, 2004--Quality Systems, Inc. (NASDAQ:QSII) today announced the results of operations for its fiscal 2005 second quarter ended September 30, 2004.
The Company posted net revenues of $21.2 million in the second quarter, an increase of 20% from $17.6 million generated during the same quarter last year. The Company reported net income of $3,715,000 an increase of 54% over net income of $2,408,000 earned in the comparable quarter of the prior year. Fully diluted earnings per share was $0.56 in the quarter, an increase of 51% over the fully diluted $0.37 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 second quarter were driven by record revenue and 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 $17.3 million, up 28% over the same quarter prior year and record operating income of $6.1 million, up 58% over the same quarter of the prior year.
Quality Systems, Inc. will hold a conference call to discuss second quarter financial results on Wednesday, November 3, 2004 at 1:00 p.m. EST. To participate in the call, please dial 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 Wednesday, November 3 at 3:30 p.m. EST, through Wednesday, November 10 at midnight EST. To access replay dial (800) 642-1687 and enter the conference ID number 1822543.
Please note that beginning with the reporting of the Company�s third-quarter fiscal 2005 results, future earnings releases and conference calls will occur after the market close.
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 Income (Unaudited)
Three Months Ended Six Months Ended
September 30, September 30,
2004 2003 2004 2003
----------- ---------- ---------- ----------
Net Revenues:
Sales of computer systems,
Upgrades and supplies 11,607,000 10,026,000 22,676,000 19,500,000
Maintenance and other services 9,610,000 7,616,000 18,671,000 14,448,000
----------- ---------- ---------- ----------
21,217,000 17,642,000 41,347,000 33,948,000
Cost of Products and Services 7,937,000 7,492,000 16,038,000 14,102,000
----------- ---------- ---------- ----------
Gross Profit 13,280,000 10,150,000 25,309,000 19,846,000
Selling, General and
Administrative Expenses 5,414,000 4,768,000 10,367,000 9,508,000
Research and Development Costs 1,818,000 1,502,000 3,430,000 2,868,000
----------- ---------- ---------- ----------
Income from Operations 6,048,000 3,880,000 11,512,000 7,470,000
Investment Income 170,000 89,000 290,000 189,000
----------- ---------- ---------- ----------
Income before
Provision for Income Taxes 6,218,000 3,969,000 11,802,000 7,659,000
Provision for Income Taxes 2,503,000 1,561,000 4,705,000 2,974,000
----------- ---------- ---------- ----------
Net Income $3,715,000 $2,408,000 7,097,000 4,685,000
=========== ========== ========== ==========
Income per Share - Basic $0.58 $0.39 $1.12 $0.76
=========== ========== ========== ==========
Income per Share - Diluted $0.56 $0.37 $1.08 $0.72
=========== ========== ========== ==========
Weighted average number
of shares outstanding - Basic 6,390,000 6,167,000 6,361,000 6,162,000
=========== ========== ========== ==========
Weighted average number
of shares outstanding - Diluted 6,598,000 6,491,000 6,580,000 6,479,000
=========== ========== ========== ==========
Quality Systems, Inc.
Consolidated Balance Sheets
(in thousands)
ASSETS
September 30, March 31,
2004 (unaudited) 2004
Current Assets:
Cash and cash equivalents $59,522 $51,395
Accounts receivable, net 25,198 20,336
Inventories 1,058 725
Net current deferred tax assets 2,979 2,979
Other current assets 1,595 1,437
--------- ---------
Total current assets 90,352 76,872
Equipment and improvements, net 2,302 2,012
Capitalized software costs, net 3,707 3,608
Deferred long term tax assets 1,104 1,104
Goodwill, net 1,840 1,840
Other assets 1,282 1,242
--------- ---------
Total assets $100,587 $86,678
========= =========
LIABILITIES AND SHAREHOLDER�S EQUITY
Current Liabilities:
Accounts payable $2,068 $1,655
Deferred revenue 20,933 17,263
Accrued employee compensation and benefits 2,594 2,985
Other current liabilities 5,882 3,770
--------- ---------
Total current liabilities 31,477 25,673
Commitments and Contingencies
Shareholders' Equity:
Common stock, $0.01 par value, 20,000
shares authorized, 6,431 and 6,325
shares issued and outstanding,
respectively 64 63
Additional paid-in capital 40,527 39,735
Retained earnings 29,847 22,750
Deferred compensation (1,328) (1,543)
--------- ---------
Total shareholders' equity 69,110 61,005
Total liabilities and
shareholders' equity $100,587 $86,678
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