Quality Systems, Inc. ("QSI") and its wholly-owned subsidiary, MicroMed Healthcare Information Systems, Inc. ("MicroMed"), develop and provide computer-based practice management, medical records, and e-business applications for medical and dental group practices.
   

June 9 , 1999

Quality Systems Inc. Announces Fiscal 1999 Year-End Results
— Q-4 and FY-99 revenues reach record $9.8 million and $33.8 million, respectively
— Recurring maintenance revenues grew 39% in Q-4 1999 vs. Q-4 1998
— Q-4 1999 EPS increases to $0.12 vs. $0.06 for Q-3 1999

Quality Systems Inc. (Nasdaq:QSII - news) Wednesday announced the results of operations for the fiscal year ended March 31, 1999.

Revenues for the fiscal 1999 fourth quarter increased 9 percent to a record $9,833,000, compared with revenues of $9,014,000 for the fiscal 1998 fourth quarter. Income from operations for the fiscal 1999 fourth quarter was $1,113,000 and net income reached $755,000, or 12 cents per share.

This compares with a loss from operations of $4,209,000, and a net loss of $2,462,000, or 41 cents per share, in last year's fourth quarter. The 1998 fourth quarter included a charge of $5,480,000 for purchased in-process research and development. For the year ended March 31, 1999, revenues increased 8 percent to a record $33,816,000 resulting in net income of $584,000, or 9 cents per share. This compares with revenues in fiscal 1998 of $31,216,000, and a net loss of $4,616,000, or 77 cents per share. The fiscal 1998 results of operations include a charge of $10.2 million for purchased in-process research and development.

Sheldon Razin, chairman and CEO of Quality Systems, said: "We are encouraged by the much-improved performance of the company in the last half, and particularly in the fourth quarter, of the fiscal year. Current fourth-quarter revenues grew 11 percent over the prior improved third quarter. Also, our gross profit margin increased almost 200 basis points, and earnings per share doubled in the current fourth quarter over the previous third quarter.

"We experienced particularly strong growth in recurring maintenance and other services, which increased 39 percent to $4,296,000, or 44 percent of total revenues in the current fourth quarter, compared with $3,095,000 and 34 percent of total revenues in the fiscal 1998 fourth quarter.

"This improvement was primarily the result of the steady expansion of our client base, including the growing revenue base from our MicroMed Healthcare Information Systems Division. Another important revenue contribution came from our growing electronic data interchange services.

"During the quarter, we completed the integration of our MicroMed and Clinitec subsidiaries' sales forces into one team. One important result of this integration has been an acceleration in the number of cross-sold electronic medical records systems with our practice management products. In the fourth quarter alone, we contracted to sell 7 integrated practice management and clinical systems compared to 5 in the third quarter, and 3 in the fiscal 1998 fourth quarter.

"Consolidation in our dental market continues to benefit Quality Systems. Today we are the practice management system vendor to over 50 percent of the identified consolidator market. During the quarter, we were pleased to announce being appointed the exclusive vendor of choice for practice management systems and electronic data interchange services for InterDent Inc., the largest provider of dental management services in the U.S. We believe this consolidation trend will continue into the future, and will remain a focus of our company.

"Our financial condition continues to remain strong with cash and short-term investments of $14.4 million and shareholders' equity of $29.7 million, or $4.77 per share," said Razin.

Quality Systems is one of the leading developers and providers of computer-based practice management and medical records systems for medical and dental group practices, with a customer base of approximately 500 clients in 45 states, Canada and Saudi Arabia.

This news release contains 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 cause actual results to differ materially from those indicated by such forward-looking statements are volume and timing of systems sales and installations; length of sales cycles and installation process; 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 on 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 as applied to the company as of the date hereof.