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, 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

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

 

 

 

 

		THREE MONTHS ENDED				TWELVE MONTHS ENDED
		MARCH 31, 2005		MARCH 31, 2004		MARCH 31, 2005		MARCH 31, 2004
Revenues:
Software, hardware and supplies......		$ 11,765		$ ��8,501		$ 39,672		$ 32,632
Implementation and training services.		��2,402		�1,665		8,856		6,893
System sales...........................		14,167		�10,166		48,528		39,525
� Maintenance and other services.......		�8,483		6,446		29,945		23,117
� Electronic data interchange services.		2,876		2,175		10,488		��8,292
Maintenance, EDI and other services....		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......		2,097		1,600		7,525		8,141
Implementation and training services.		1,754		�1,388		6,300		5,197
Total cost of system sales.............		3,851		�2,988		13,825		13,338
� Maintenance and other services.......		3,394		2,739		12,120		10,313
Electronic data interchange services.		1,871		1,321		6,724		5,022
Total cost of maintenance, EDI and other services.........................		� 5,265		� 4,060		�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
Operating expenses:
Selling, general and administrative.		7,989		5,072		24,776		19,482
Research and development............		1,766		1,643		6,903		6,139
Total operating expenses..........		9,755		6,715		31,679		25,621
Income from operations..............		6,655		5,024		24,613		16,640
Investment 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
Diluted.............................		$ 0.36		$ 0.24		$ ���1.22		$ 0.80
Weighted�average shares used in per share calculation:
Basic...............................		13,089		12,624		12,872�		12,436
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
ASSETS					(UNAUDITED)
Current assets:
	Cash and cash equivalents.............................................			$ 51,157				$ 51,395
	Accounts receivable, net..............................................			33,362				� 20,280
	Inventories, net......................................................			960				���� 725
	Income tax receivable.................................................			15				����� --
	Net current deferred tax assets.......................................			1,796				�� 2,979
	Other current assets..................................................			1,677				�� 1,493
	Total current assets........................................			�88,967				� 76,872
Equipment and improvements, net..........................................				2,697				�� 2,012
Capitalized software costs, net..........................................				4,334				�� 3,608
Deferred tax assets......................................................				���--				�� 1,104
Goodwill.................................................................				1,840				�� 1,840
Other....................................................................				1,604				�� 1,242
	Total assets................................................			$ �99,442				$ 86,678
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
	Accounts payable......................................................			$ 2,284			$ 1,655
	Deferred revenue......................................................			24,115			� 16,060
	Accrued compensation and related benefits.............................			3,436			2,610
	Income taxes payable..................................................			���--			273
	Other current liabilities.............................................			4,021			2,859
	Total current liabilities...................................			33,856			23,457
	Deferred revenue......................................................			1,362			1,203
	Deferred tax liability................................................			��291			���--
Deferred compensation.................................................				1,202			1,013
	Total liabilities...........................................			36,711			25,673
Commitments and contingencies.............................................				--			--
Shareholders� equity:
	Common stock, $0.01 par value; 20,000 shares authorized; 13,111 and 12,650 shares issued and outstanding at March 31, 2005 and March 31, 2004, respectively.......................................			131			�� �127
	Additional paid-in capital............................................			44,499			39,671
	Retained earnings.....................................................			19,213			22,750
	Deferred compensation.................................................			(1,112)			(1,543)
	Total shareholders' equity..................................			62,731			61,005
	Total liabilities and shareholders� equity..................			$ �99,442			$ 86,678

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