Transcript
of the QSI Conference Call
Moderator: Louis Silverman
November 2, 2000
2:00 pm EST
OPERATOR:
Good afternoon, and welcome the Quality Systems , Incorporated
<Company: Quality Systems Inc.;� Ticker: QSII;� URL: http://www.qsii.com/>
second quarter fiscal 2001 earnings results conference call.
At
this time, all participants have been placed on a listen-only
mode, and the floor will be open for questions and comments, following
the presentation.�
It
is now my pleasure to introduce your host, Mr. Lou Silverman,
President and CEO.�
Sir,
you may begin.�
LOU
SILVERMAN, PRESIDENT/CEO, QUALITY SYSTEMS, INC:� Thank you, Stephanie
(ph).�
I'd
like to welcome everyone to Quality Systems' second quarter conference
call.� On today's call, I have here in our Tustin, California,
facility, Greg Flynn, who is the Executive Vice President and
General Manager of our QSI division, which includes our dental
business, EDI business, and legacy medical systems operation,
and Paul Holt, who is our Interim CFO.� Pat Cline, who is President
of our MicroMed divisions, joins us remotely from our offices
in the Philadelphia area.�
Before
we begin, let me point out that comments made on this call may
includes statements that are forward-looking, within the meaning
of the securities laws, including statements related to anticipated
industry trends, the companies plans and strategies and projected
operating results.� Actual results may differ materially form
our expectations and projections, and our should refer to our
SEC Forms 10-K and 10-Q for discussions of the risk factors which
could impact our actual performance.�
The
announcement of our second quarter results, Wednesday, reflected
revenues of 9.663 million, compared to $9.709 million in the same
quarter, last year.� That was up 4.3 percent, from 9.262 million
in the previous quarter.� Earnings-per-share came in at 12 cents
per basic and diluted share, which was even with the 12 cents
earned in the same quarter, prior year, and up sequentially from
the 10 cents announced for our fiscal first quarter.�
Looking
briefly at divisional performance, the MicroMed division, coming
off a 30 percent growth year last fiscal year, set a new all-time
high of 5.12 million in revenues for the quarter.� The QSI division
rebounded from a very difficult quarter one, with revenues of
4.5 million, which was up 8.4 percent over the prior quarter.
That said, signaling the continued softness in our target dental
market, the QSI division's revenues were down 6.7 percent, over
the year prior.�
By
line of business, maintenance and other services, which is or
recurring revenue stream, was up 20 percent, year-over-year.
Systems sales dropped off in the quarter, versus the year prior,
although that was against a very strong systems quarter in the
year prior.� Sequentially, the systems line was up 9 percent,
versus Q1, and recurring revenues were flat.�
Overall,
we look at the quarter as a continuation of the positive revenue,
profit, earnings-per-share, and product progress that we've made,
coming from a somewhat difficult third and fourth quarter of the
prior year.� We also look at the quarter as confirmation that
there is much more to be accomplished.�
Our
quarter war marked by a number of notable achievements, including
the revenue record for the MicroMed division, which I've mentioned,
something that we're obviously very proud of, and something that
we're working very hard to build upon.� Our EDI business was another
highlight, up 47 percent on a year-over-year basis.� The product
line also shows good sequential growth, up over nine percent over
the prior quarter.� Also encouraging in our EDI space is the fact
that we're beginning to see some penetration of EDI services within
our MicroMed division.� We piloted several promising new product
extensions in EDI during the quarter, and feel that there is good
reason for optimism that some of these will become significant
contributors to our future growth.�
The
quarter included a significant installation into the home health
market, and further progress with our ASP initiative.� On the
ASP front, MicroMed signed one additional ASP VAR account during
the quarter, which gives us a total of five accounts of this type
signed so far.� We also show good progress on the QSINET dental
ASP initiative during the quarter, including some initial breakthroughs
in revenue-generating patients' online payment, and online appointment
registration.� Clearly, these revenue streams are not significant
for us, now — that is, the ASP revenue streams — nor are they
likely to be significant revenue generators in the near term future;
however, we do continue to feel that the business model has significant
potential to, over time, allow us to reach into and penetrate
the smaller-practice market.�
While
not yet ready for broad release, new versions of some of our flagship
software suites are progressing through our development and testing
queues on schedule, and our wireless initiatives also continue
to make good progress.� Significant organizational events include,
as of yesterday, we have completed a reorganization in our ASI
division, which is intended to position that division to better
capture available growth opportunities.�
A
little more specifically, we have consolidated our sales and service
operations under one of our senior managers, so that we bring
more resources to bear on selling new clients and products, in
addition to getting improved product penetration in our existing
client relationships.� We will have another of our senior managers
spending the majority of his time pursuing the growth of our EDI
business, our QSINET business, and pursuing alliances and partnerships
on a company-wide basis.�
Further,
we've consolidated our key software maintenance and development
initiative under another of our key senior managers.� Again, these
changes position us to more aggressively capitalize on the opportunities
for growth in this business unit.�
Also,
during the quarter and continuing into the current quarter, we've
worked to achieve a continued and significant streamlining of
our accounting operations and processes.� Proof of the ongoing
improvements in the area, is the fact that our earnings release
and this call are something on the order of 11 days earlier than
in the year prior.� We've also begun to implement some very significant
enhancements to our internal management reporting processes, and
our AR management process.�
I'd
also like to add that I feel like our new management team is coming
together very nicely.� We've accomplished a lot in a very short
time, and I only see that continuing into the future.�
At
this time, I'll turn things over to Paul Holt for additional comments
on our financial statement.�
PAUL
HOLT, INTERIM CHIEF FINANCIAL OFFICER, QUALITY SYSTEMS, INC.:
Greetings to all those on the call.� I'm going to discuss each
component of our income statement, and also hit on certain highlights
of our balance sheet.�
As
Lou mentioned, our second quarter revenue totaled $9.66 million.
This represents a four percent increase from our prior quarter,
and was roughly unchanged from the year-ago quarter.� The composition
of our revenues, this quarter, are very different from where we
were a year ago, reflecting the consistent growth we've been experiencing
in EDI maintenance revenue.� Recurring revenues now make up approximately
50 percent of our revenue, compared with 40 percent, a year ago.
I
want to add that our year-ago quarter benefited from a couple
of� very large contracts, which resulted in a very strong quarter,
in terms of systems sales.� Total computer systems sales, upgrades,
and supplies, grew by 9.1 percent, compared to the June quarter.
Our total maintenance and other services revenue was unchanged,
compared to the June quarter.�
EDI
revenue growth — EDI revenue came to approximately 1.25 million,
in the quarter, as Lou has already mentioned.� This represents
a nine percent growth rate, compared to the June quarter.� However,
our growth in EDI revenue was offset by a decline in the somewhat
volatile time-and-materials revenue category.�
Our
gross profit margins declined slightly, from 56.5 percent in the
June quarter, to 54.8 percent in our current quarter.� The September
quarter included an increase in hardware and third-party software
sales, which lowered our gross profit margin.� As I have mentioned
in our last call, the sale of hardware and third-party software
carries much smaller gross profit margins, compared to software-only,
and can have a disproportionate effect on gross margins.� Our
year-ago gross margin was 54 percent, reflecting an even greater
level of hardware content in the year-ago quarter.�
Overall,
SG&A expense declined by $12,000 in this quarter, coming a
t$3,244,000; compared to 3,365,000 in the June quarter.� This
decline was expected, as the prior quarter included a significant
amount of marketing expenses related to two major trade shows
attended in the quarter.�
Also,
as mentioned in our prior conference call, we've initiated selective
cost cuts, primarily in our ASI division.� The impact of these
cuts have been partially offset by growth in certain expenses
in our MicroMed division related to the development and maintenance
of our Internet portal, as well as ongoing marketing expenses
of the NextGen product line.� As a percentage of total revenue,
SG&A expense declined this quarter, to 33.6 percent, compared
to 36.3 percent in the June quarter.�
Our
R&D expense came in at 974,000 compared to a million-five,
in the June quarter.� R&D expense as a percentage of revenue
was 10.1 percent in the September quarter, compared to 10.9 percent
in the June quarter.� The year-ago quarter R&D expense was
965,000; or 9.9 percent of revenue.� As can be seen by our numbers,
our level of R&D expense has stayed consistently within our
target of 10 percent of revenue.�
Investment
income rose two percent, to 251,000, compared to 246,000 in the
June quarter.� For the past several quarters, the company has
kept its cash invested in money market accounts, which have yielded
consistent rates of return, in both the September and June quarters.
Investment income in the year-ago quarter was 182,000.� This was
lower primarily due to a lower interest rate a year ago.�
Now
I am going to change gears here and talk about a couple of key
items on our balance sheet.� Cash and cash equivalents rose to
$16.6 million, as of September 30, compared to 15.9 million as
of March 31.� The company has generated approximately 1.8 million
in cash from operations, in the six-month period.� We've also
invested 1.1 million in capitalized software and equipment, resulting
in an ongoing net positive cash flow of approximately 700,000
in the six-month period.� Accounts receivable rose to approximately
15.1 million as of September 30, compared to 13.7 million.�
Our
days sales outstanding now stands at 143 days.� We — as Lou has
mentioned, we are making some procedural changes which we believe
will help us reduce our DSOs.� As I mentioned in the last call,
we've also started to work on shortening some of our payment terms,
which we are starting to do.� However, it takes time for some
of these terms to begin their way through in lower DSOs.�
Our
intangible assets include goodwill and capitalized software costs.
And these assets are continuing to decline, as we amortize goodwill,
and continue to capitalize less software development costs than
we are amortizing.� Capitalized software as of September 30 was
1,894,000, compared to 1,936,000 at the end of the June quarter.
For
those of you who are really checking out the details of our balance
sheet, you'll find that other current assets and other current
liability both declined by approximately $1 million, comparing
the September quarter to the March quarter.� This is due to the
timing of certain income tax payments which result in a large
swing in certain deferred income tax assets and liabilities.
To
update the companies stock buy-back program � during the September
quarter, we purchased 5,000 shares of our stock, at a cost of
approximately $35,000.� During the month of October, we've purchased
24,400 shares, at a cost of approximately $175,000.�
Our
total shareholder's equity, as of September 30, is $33,500,000.
That equates to a book value of $5.40 per share, and total cash
per share of $2.68.� We have no debt.� Deferred revenue of approximately
$5.7 million, and working capital of approximately $23 million.
I
want to thank all of your for being on the call, and for your
interest in the company.�
I
will now turn things over to Greg Flynn, Executive Vice President
and General Manger of our QSI division, who will provide you with
an update of the QSI division.�
GREG
FLYNN, SENIOR EXECUTIVE VICE PRESIDENT/GENERAL MANAGER, QUALITY
SYSTEMS, INC.:� Thank you, Paul.�
Good
afternoon to everyone on the call.�
First,
let me expand a bit further on some of the specifics on the QSI
numbers, and our improvements over the previous quarter.�
On
the new systems sales side, we saw improvement in our dental sales,
with five systems sales, totaling $266,000 in recognized revenue
for the quarter.� This includes one sale that we had reported
on our last call had pushed for that quarter.� Additionally, we
made a medical systems sale into our niche FQAC market, of $124,000
of recognizable revenue.� Also, the quarter saw improved sales
of court licenses.� Particularly noteworthy were large buys, an
expanding dental consolidator.� Also, as mentioned, we are pleased
that EDI remains an exciting growth area for the company, with
revenues for the quarter of approximately $1,250,000.� We will
continue to make a strong, ongoing, dedicated effort to further
grow our EDI revenues.�
Switching
to the expense side, we have made significant� strides in this
area.� Comparatively, the QSI operating expenses in Q3, 2000 were
$3,039,000.� In Q4, 2000, they were $2,864,000.� In Q1, 2001,
they were $2,735,000; and in this last quarter, they were $2,541,000.
We'll continue to focus heavily on our cost structure, while at
the same time, pursuing avenues of new growth for our business.
In
reference to our reorganization here at QSI, I'm very excited
that this new structure should maximize the strengths of our management
team and staff, and positions us well for potential growth.� Our
various departmental units are now better aligned to realize the
synergies that exist between them.� In particular, I believe this
new structure better supports our new systems sales efforts, our
sales of new and current products and services to our existing
client base, and provides a more focused, dedicated approach to
both our EDI and Internet opportunities.�
Now
I will turn the call over to Pat Cline, leader of our MicroMed
division.�
PATRICK
CLINE, PRESIDENT/MICROMED, QUALITY SYSTEMS, INC.:� Thank you,
Greg.�
I'm
happy with the record revenue that MicroMed delivered in the September
quarter, but I'm certain we can do better.� During the quarter,
we executed 11 new contracts, including a couple that, I think,
are noteworthy that I'll tell you about.�
One
is an agreement with a physician practice-management company that's
going to be rolling our software out to well over 200 physicians,
nationally.� Another was an agreement, as Lou, I think, briefly
mentioned, with an ASP partner, a new relationship there.� We
also executed an agreement with a large managed care company that
intends to deploy our medical record technology to hundreds of
users within their organization.� A couple of these new relationships,
we think, has — have significant potential for downstream revenue.
We've
now started to connect customers � real customers, to our NextMD
Internet portal, and we've now successfully tested the physician-to-patient
communications features in a live setting.� There's a lot more
work to do in that regard, and there are a lot of additional features
to bring on line, but we think we are making good progress.�
We've
also changed the look-and-feel of the site, and we hope to have
these changes, which have been developed here internally, in production
probably mid- to the end of December.�
Another
thing I'll mention is we've recently seen an industry trend that
we anticipated some time ago, and that is a trend toward hand-held
wireless devices becoming more popular in healthcare, and the
convergence of PDA and wireless Internet technology.� As a company,
we've been working on wireless technology and solutions for PDAs
for a couple of years — wireless technology for four five years,
and our PDA solution for a couple of years.� And though we haven't
made any formal announcements yet, we feel pretty strongly that
we're ahead of competition in this area.�
In
the MicroMed division, the pipeline remains pretty strong.� Over
the next couple of quarters, the figure at this point stands at
23 million, and that's the same as it was, I believe, on the last
call, and I think, even the call before that.� The good news is,
as we increase revenues quarter-to-quarter, we're bringing more
potential deals into our pipeline.� And at this point, I think,
based on the pipeline that I see, the outlook for the current
quarter is positive.�
And
I'll close by just saying that I'm focusing on growing revenues,
increasing the top line, and also keeping the costs in line.
With
that, Stephanie, I think we're ready to take questions.�
OPERATOR:
Thank you.�
The
floor is now open for questions.� If you do have a question or
a comment, please press the numbers one, followed by four, on
your touch-tone telephone at this time.� If at any point your
question has been answered, you may remove yourself from the queue
by pressing the pound key.� Questions will be taken in the order
they are received.� If you are listening on a speaker phone, please
pick up your handset while posing your question, to ensure proper
sound quality.�
Please
hold they line while we poll for questions.�
Once
again, if you do have a question or a comment, please press the
numbers one, followed by four, on your touch-tone telephone at
this time.�
The
first question is coming from Andrew Shapiro.�
Sir,
please pose your question.�
ANDREW
SHAPIRO, LAWNDALE CAPITAL MANAGEMENT:� Hi.�
A
few questions � we'll back off, and then come back to us; let
some other people in here.�
If
we could just compare apples-to-apples, Pat and Greg; I'm not
sure if I missed a dental, the QSI division pipeline, if you gave
it, but if you could provide the pipeline and the definition of
that?�
As
well as, Pat, provide the definition of the $23 million pipeline
your have set forth?�
GREG
FLYNN:� Yes, I'll go ahead first, Pat.� Our sales pipeline is
approximately 6.4 million, and those are prospects that were amongst
the finalists that we expect will make a decision in the next180
days, which is consistent with our past goals.�
PATRICK
CLINE:� And on this side, Andy � this is Pat � our pipeline consists
of deals that we feel are 50 percent or more likely to close within
the next 120 days.� As I've mentioned on previous calls, it never
quite turns out that way.� What's important is the relativity
in the growth, or the shrinking of the number, because sales cycles
tend to become a little more protracted, as customers do more
due diligence and those types of things.�
ANDREW
SHAPIRO:� OK, and if you, in particular, because the marketing
effort had been made, here, and you had a record amount of leads
on the medical side, Pat, can you — at MicroMed — can you give
us an update, I guess, as to the maturation, or the milestones
and progression, of the big record amount of leads that you had
brought in, via the trade show flow you had about six months ago?
PATRICK
CLINE:� Sure.� Though I can't give you a lot of specifics, we
do have a heck of a lot of not only trade show leads, but leads
from other sources.� We are moving through — we're moving those
leads through the sales process.� We think that we probably have
more maturity in the pipeline, use your word, than we've had in
a long, long time, perhaps in our history, and we are hopeful
that we'll sell a number of them.� In fact, we've already sold
a couple of them, I believe, in the current quarter.�
ANDREW
SHAPIRO:� OK, so the new contacts made at the shows, I guess,
six months to nine months ago, they're just now starting to be
closed sales?�
PATRICK
CLINE:� I would say that that's generally true, although some
of the smaller leads that we might attract at a trade show will
have shorter sales cycles, so it's possible that we've already
closed some of those.� Larger deals tend to take a little bit
more time, and very typically, have six month to a 12 month process,
probably more typical than the six to nine month process that
you — timeframe that you indicated.�
ANDREW
SHAPIRO:� OK, I'll back off.� I have some more questions, so please
come back to us.�
OPERATOR:
Once again, if there will be any further questions or comments,
please press one, followed by four, at this time.�
The
next question is coming from Neal Bradsher.�
Sir,
please pose your question.�
NEAL
BRADSHER, WHITEHALL ASSET MANAGEMENT:� I'm only jumping in because
—you seem to have a dearth of questions.� Unfortunately, another
of my conference calls overlapped with yours, so I only got onto
your call just as you were finishing your preamble, and got to
begin the Q&A.� So therefore, I apologize if anything that
I ask covers something you've already covered.�
Earlier
in the year, the company was considering the possibility of being
acquired or merging with another company.� Clearly you have a
strong growth plan, currently.� I'm wondering how we should look
at the possibility of an acquisition or merger in the future?
LOU
SILVERMAN:� Neal, this Lou.� I would say that those would be Board
matters that we would be referred to the board for action.� And
I would say that we would have an obligation to look at any entreaties
that came in from outside parties, about buying us.� And we also
feel a very strong obligation to look at opportunities to acquire
— to be an "acquiror" for businesses that would be
additive to our current business model.�
NEAL
BRADSHER:� Are you actively looking at potential acquisitions
at this point —acquisitions that you would make of other companies?
LOU
SILVERMAN:� I would say that we would not put an acquisition search
at the very top of our corporate priority list, but we certainly
are on the dance card for a lot of the bankers who represent potentially
interesting opportunities, and we regularly look at those, and
pursue discussions of those that look interesting.�
NEAL
BRADSHER:� OK.� With respect to your answer on the main part of
the question, regarding a response if you were approached � I
take it, then, that it is not the board's priority at this point
to look at sale in the near term.� It will be a response to something;
it is not a priority to seek such an activity?�
LOU
SILVERMAN:� I think it's really difficult for me to speak for
what the board's priority is, or whatever.� I would just leave
it to say that any matters on the sale of the business are handled
by the board, and I think the matter is in good hands, there.
NEAL
BRADSHER:� OK.�
Then
turning to the results you're reported � again, apologies in advance,
if I'm asking anything that you already covered in your discussion.
The effort on the maintenance and other services line seems to
be very successful.� My guess is a bunch of that is being driven
by continued growth of EDI and some of your other recurring revenue
streams.� Could you just specifically highlight how those revenue
elements are doing?�
LOU
SILVERMAN:� Sure.� I'm not sure I'm exactly clear on what your
getting at, but certainly we are comfortable and pleased with
the way that the maintenance dollars are coming in � a little
flatter, quarter-over-quarter, than we would have hoped, but certainly,
with a base of around 50percent of our revenues, and some quarters
a little higher, some quarters a little lower.�
We
very much enjoy having the stability and the foundation on maintenance.
Clearly the big driver there has been EDI.� We had mentioned a
couple of times that EDI was 1.25 million in the quarter, which
is up roughly 47 percent over the prior year, and nine percent
sequentially from Q1.� There's a few other specific categories
that go into the maintenance line, where we have the predictable
ups and downs, but the headlines, I'd say, are that we're at 4.9
million for the quarter, of which EDI was 1.25.�
NEAL
BRADSHER:� OK, you said EDI was up 47 percent?�
LOU
SILVERMAN:� Year-over-year.�
NEAL
BRADSHER:� OK.� Great.�
What
is the status of the buy-back.�
LOU
SILVERMAN:� Paul has those numbers.� We've purchased 5,000 in
the quarter, and then so far in Q3, we told people on the call
that we had purchased another 24,400 shares through 10/31.�
NEAL
BRADSHER:� And what were the price ranges of the purchases?�
PAUL
HOLT:� Neal, this is Paul.� The total cost of the purchases during
October was $175,000,so you can do the math and figure out what
the average price was.�
NEAL
BRADSHER:� OK.� That's in October.� That was the 24,000 — how
many?�
PAUL
HOLT:� Twenty-four-thousand-four-hundred shares at cost of $175,000.
Now also ...�
NEAL
BRADSHER:� That's in October, and then the 5,000 in the quarter?
PAUL
HOLT:� Yes, in the quarter, the average cost was — well, it was
$35,000 is what the cost was, for the quarter.� That's an easy
one:� seven bucks a share.�
NEAL
BRADSHER:� Understood.� Good.� That answers my questions for now.
Thank you.�
PAUL
HOLT:� Thanks, Neal.�
OPERATOR:
We have another question coming from Andrew Shapiro.�
Sir,
please pose your question.�
ANDREW
SHAPIRO:� Hi.�
OK,
if I could, understand the — what your penetrated market is if
a few areas, and what is left for you to penetrate.� What percentage
of our customers — and they may be different on the dental and
the medical side?� I'm not sure exactly, I think, where most of
the EDI is being done right now?� What percent of your customers
would you estimate are doing EDI through you?�
UNKNOWN
MALE #1:� Andy, that's a number we're gong to have to get back
to you on.� I do not have that readily available, but I know where
to get it.�
ANDREW
SHAPIRO:� OK, how about just back-of-the-hand kind of estimate?
Would you say more than half, or less than half of your customers
are using you for EDI?�
UNKNOWN
MALE #1:� It's a bit more complex than that, because I think the
way you'd want to analyze it is, we may have more than half our
clients using our EDI services ...�
ANDREW
SHAPIRO:� Oh, I'm going to get — I was going to get the next
question, where you and I are both thinking, here, which is what
percent of their business are they actually running through you?
But I'm trying to get, first off, the penetration.� Would you
say more than half of your customers use you?�
UNKNOWN
MALE #1:� I'm going to guess, and again, we'll get you more precise
numbers.� And probably it's half, or a little bit better.�
ANDREW
SHAPIRO:� OK, and is that the same on the medical side, or is
that just something that's starting up now?�
UNKNOWN
MALE #2:� Dental is very much in the early stages of its penetration.
ANDREW
SHAPIRO:� Oh, mean medical that is?�
UNKNOWN
MALE #2:� Medical, I mean.�
ANDREW
SHAPIRO:� And then, Greg, then, on the percentage of your customers'
business that they're using an EDI, in other words, how much they're
using your for EDI versus, I guess, someone else, or not using
EDI at all, again, any estimate of more than half?� Less than
half?�
GREG
FLYNN:� That number, I'm more unclear on.� I'm just being straightforward;
we'll have to get back to you on that, Andy.�
ANDREW
SHAPIRO:� OK.� In terms of the untapped marketplace, I understand
also, on the medical side, this is in the medical records, Pat.
Before the Y2K issue, electronic medical records — hello?�
PATRICK
CLINE:� Yes.�
ANDREW
SHAPIRO:� Before Y2K, it seemed that EMR and clinical-medical
was an area people were holding off for, and there was an opportunity
more in the MicroMed PMS side of the equation.� And since Y2K
is behind us, it seems that the big buzzword everyone's talking
about is clinical and medical records, et cetera.� Is that your
experience now in the MicroMed division, is that the medical record
side is generally — that product line is leading product sales,
and PMS is the tag-along that comes as an integrated product?
PATRICK
CLINE:� Well, I'm not sure I'd put it that way.� To speak to the
first part of your question, certainly the EMR market is beginning
to heat up.� The leads that we're seeing seem to be more qualified,
more bona fide interest, rather than the tire-kicking that we
saw just a year ago, or two years ago.� And there are many more
organizations that have been kicking tires for a couple of years
that are now getting around to seriously looking.� So that has
to do with some of that maturity — lead maturity that we talked
about.�
With
that said, we do still see fairly strong interest, also I was
talking about market trend in the Windows-based client server
end-tier practice management system market as well.� A lot of
the practice management systems that are in operation today, probably
more than four out of five, are Legacy systems.� And there is
a desire on the part of the overall market, in our opinion, to
move toward newer technology.� So, sometimes we'll see a lead
come in through the practice management door, and we'll introduce
them to the medical records side, and sometimes we'll see the
reverse.�
ANDREW
SHAPIRO:� It's not — is there a predominance that you're seeing?
PATRICK
CLINE:� I would say, in the quarter that we're talking about,
there was a little more on the EMR side.� That will range, though
� or vary, Andy, quarter-to-quarter.�
ANDREW
SHAPIRO:� OK and in terms of penetrated market, understand in
the two different areas.� When you're making a PMS sale, is that
now generally replacing an existing system?�
PATRICK
CLINE:� Yes it is, in almost every case.�
ANDREW
SHAPIRO:� OK, and the factors that gain you entree for your little
QSI, little MicroMed, what are your competitive advantages to
make that kind of sale?� And then I want to then segue over and
hear the similar issue, which I think is more virgin territory,
in the EMR side?�
UNKNOWN
MALE #3:� I'm sorry, Andy.� Could you rephrase that?� I'm not
sure I understood the first part of the question.�
ANDREW
SHAPIRO:� Let's look at the PMS side.� On the PMS side, if you're
replacing existing systems � OK, you know, MicroMed is not really
a large enterprise; there's a lot larger players out there � so
what is the competitive advantage, or what are the success factors
that get the MicroMed PMS, practice management product in there
to replace someone's Legacy system?�
UNKNOWN
MALE #3:� OK.� While MicroMed as a company is not a large enterprise,
compared to an IDX <Company:� IDX Systems Corporation;� Ticker:
IDXC;� URL:� http://www.idx.com/> or an HBOC, or that type
of firm, our system is far superior to what we see in the practice
management market, with respect to managing an enterprise, a large
healthcare enterprise, a hospital PHO, or large network of physician.
Unlike
most of the practice management systems on the market and in use
today, the MicroMed system was developed from the ground up with
a large enterprise in mind.� The first customer was actually a
fairly large enterprise, so there are a lot of enterprise features
built into the system, that large healthcare prospects like to
see, and I would say that's one reason that folks buy the MicroMed
practice management system.�
Other
features � just the fact that it's a graphical user interface,
based on the Windows operating system, and Microsoft <Company:
Microsoft Corporation ; Ticker: MSFT ; URL: http://www.microsoft.com/>
Tools, the Microsoft SQL database provides an openness that's
unmatched by most of the Legacy systems, allowing customers to
get at their data, and slice their data, and analyze their data
in ways that they generally can not do so today.�
ANDREW
SHAPIRO:� OK.� And then moving into the EMR side, the EMR side,
when you're making an EMR sale, that — my assumption is � please
correct me if I'm wrong � is that you're selling an EMR product
into someone who doesn't have anything like it, previously.�
UNKNOWN
MALE #4:� That's control.� That's correct.�
ANDREW
SHAPIRO:� OK, is there � are there market estimates out there
as to what the prospective market is?� How much of the prospective
market has already been penetrated — in other words, how virgin
territory is this?� And what would your estimates be as to next
— you know, NextGen EMR's position and market share that has
been penetrated?�
UNKNOWN
MALE #4:� That's � there are three or four questions in there;
I'll try to get to each one of them.�
With
respect to the market itself, and saturation, by most counts,
most consultants and folks that look at this thing in the market
are saying that we're about four percent saturated; that is, about
of the outpatient physician world, medical practice world, is
using an electronic medical record, or some type of computer system
to document care.�
There
are probably 450 to 525,000 potential targets — physicians that
are potential targets.� There are more physicians than that, but
some of them are in education and some in research.� Our system
does have applicability to some areas of research; that's why
I give you a range of the number of physicians that might be targets.
And we have probably a few thousand of them that we've sold licenses
to, so you'd have to do some math to figure out what our market
share is, but it's relatively small.�
ANDREW
SHAPIRO:� OK, you have, understand, a few thousand of the broad
market, but only four percent have been saturated.� Right? �
UNKNOWN
MALE #4:� That's correct.� Four percent of the total market is
saturated at this point, so there are � there's another 96 percent
of the market that most people feel that over a period of time,
whatever that time is — it might be five years, it might be longer
— that will move largely an electronic medical record.�
ANDREW
SHAPIRO:� OK, so if you could then help me fill in two blanks
here:� Is there a monetary estimate as to the size of the EMR
market, the whole hundred percent?� What it might be in the five-
to ten-year range?�
UNKNOWN
MALE #4:� Yes.� I can't tell you what that is, off the top of
my head.� I could probably get back to you.� There are a couple
of industry reports and consulting reports that I've seen that
contain numbers. �
ANDREW
SHAPIRO:� Is it in the hundreds of millions, or in the billions?
UNKNOWN
MALE #4:� It's in the hundreds of millions.�
ANDREW
SHAPIRO:� OK � hundreds of millions.� OK, that's the market size.
And
then the other hole, the fill-in-the-blank, here, if you could
help me, is:� Will you have about a thousand, I guess, placements,
you say, approximately in EMR?� Or a thousand doctors?�
UNKNOWN
MALE #4:� As far as physicians are concerned, we have probably
between 2,000 and 3,000 physicians that have licensed the software,
at this point.� I don't want to get into a sort of a quarterly-by-quarterly
update on ...�
ANDREW
SHAPIRO:� No.� I'm just trying to just get a handle on what, you
know, are you number-one in the market?� Are you number-10 in
the market?� You're a small-time player in the PMS area, but it
seems like you're a much bigger market player here in electronic
medical records.�
UNKNOWN
MALE #4:� I would say we're a fairly big player in the medical
records market.� We're probably � with respect to sales of systems
in our core market, we're probably among the top three of four
companies.� We may be in the top one or two.� I just � I don't
know; a couple of our competitors in the EMR world are private
companies, and it's harder for me to get their numbers.�
ANDREW
SHAPIRO:� OK, I'll back off.� I have some more questions, if you'll
please come back to me.�
OPERATOR:
The next question is coming from Thomas Kikis.�
Sir,
please pose your question.�
THOMAS
KIKIS, KIKIS ASSET MANAGEMENT:� Hi.�
I
was wondering if you could comment on your revenue projections
through the next two quarters, and potentially into the next fiscal
year, given the new pipelines and leads, et cetera?�
LOU
SILVERMAN:� Yes, this is Lou.� We've historically refrained from
giving out specific numbers and guidance.� I would leave it to
say that we are pleased with the recent trend lines that we've
developed in the past few quarters.� We're not content to rest
on our laurels, and we continue to be very optimistic that our
best months are ahead of us.� But we're not going to give out
specific numbers on a go-forward basis.�
THOMAS
KIKIS:� That's fine.�
And
do you break out the hardware-versus-software component of the
— on the sales line?�
UNKNOWN
MALE #5:� Not on our reported sales line.� You want to know what
an actual ...�
THOMAS
KIKIS:� I'd like to know the breakdown of the four-three � or
the four-million-four, on the sales of computers systems upgrades
and supplies.� Can you break that down between hardware and software?
UNKNOWN
MALE #5:� That's a level of detail I think that we're not going
to get into on a call like this.�
THOMAS
KIKIS:� OK, have you ever done that in the past?�
THOMAS
KIKIS:� Do you anticipate doing it in the future.�
UNKNOWN
MALE #6:� I don't think so.� And the reason is � we're not trying
to be shut into the bunker, here, at all � but they way our deals
are put together, we — many of them are package deals.� And it's
sometimes a little hard to do a really accurate accounting job
of figuring out exactly what dollars in a deal you want to say
are hardware, in terms of the revenue line, versus software versus
services.� And so we've elected to choose an accounting convention
that we think fairly represents the nature of the sale of we're
making, which is a new systems sale, understanding that, you know,
in any given sale and in any given quarter, the absolute breakdown,
or breakouts between those categories will vary, and certainly
how we decide to dis-aggregate a particular deal, you know, is
not an insignificant issue.�
THOMAS
KIKIS:� All right, would you � would you anticipate your gross
margin staying the same, or increasing as we go forward?�
UNKNOWN
MALE #6:� If you look back, our gross margin has been in a fairly
narrow band, over the last several quarters.�
THOMAS
KIKIS:� Right.�
UNKNOWN
MALE #6:� And I say that the best guidance I could give you is
that we'd expect to stay in that band, but the fact is that, you
know, if the next big sale had a lot of hardware in it, it would
probably be in the lower end of that band.� If we had very little
hardware in a very big sale or two that hit in the quarter, we'd
be at the higher end of the band.�
So
I think � the fact is � the fact that it is a tight band is helpful
to you in putting together your models, and I feel like — I feel
comfortable in saying that based on expectations and our foreseeable
future here, we very much expect to stay in the band.�
THOMAS
KIKIS:� If I could ask one more question � I know you've just
sort of signed on, Lou, but have you — do you have any plans
to bring this company to any sell-side analysts, or anything of
that nature, in order to try to raise what has been an extremely
limited visibility?�
LOU
SILVERMAN:� Absolutely.� That's a process that, believe it or
not, began my very first week here.� We had some meetings set
up that we took, and they went well.� It does take a little while
to percolate these relationships and contacts.� Now that this
quarter's release is out, we'll be picking up that process again.
I
think, more broadly, you're on a great point, and everybody on
the call, and our employees and investors should know that this
is a priority for me and for the company, and we're treating it
� treating it and acting accordingly.�
THOMAS
KIKIS:� OK, should we expect to see something in the near future,
or is that sort of up in the air, so to speak?�
LOU
SILVERMAN:� Well, I'd say that I'd love it if we did, but I'd
say that, you know, back to the point that I made earlier, it
takes a little bit of time to percolate these relationships, you
know, if we could simply put an ad in the paper that said we were
looking for analysts, and sign them all up when they came in �
yes, we'd do that.� But it does take a while to get the story
out, and develop some relationships, develop some mutual confidence,
let's say.� And we're working hard on that, and we'd love to see
results as soon as possible.�
THOMAS
KIKIS:� That's fair enough.� Thanks a lot.�
OPERATOR:
We have another question coming from Andrew Shapiro.�
Sir,
please pose your question.�
ANDREW
SHAPIRO:� Hi, thanks.�
Lou,
can you go a little bit in greater detail, or help us understand,
I guess, how the org chart now, as you've mentioned some reorganization
as of yesterday, how that's laid out?� And in particular, if I
could a handle on how many people you would be considering as
direct sales reps, that are out there selling the products, by
division � that� would be helpful?�
LOU
SILVERMAN:� We'll give you those numbers, but before we do, let
me kind of preface.� One of the things that I think is very important
to know about the company is that you sell despite whatever your
title is, so people that have title of manager, or client support,
or what have you, we routinely bring the top broad parts of our
employee base to help us close sales.�
Having
said that � and Pat and Greg, you can help me out here on some
details � but I believe that we're in the 10 to 12 range on the
MicroMed side for titled sales.�
PATRICK
CLINE:� Yes, that's � that's close.�
LOU
SILVERMAN:� And then, on the QSI side, we're probably in the four
to five range.�
GREG
FLYNN:� Five to six.�
LOU
SILVERMAN:� OK, five to six range.�
GREG
FLYNN:� You know, there's some partial deployment, there; that's
why it's not a precise.�
LOU
SILVERMAN:� We also, on the point, and I think this is directionally
very important, and consistent with what we've talked about; we
are, and we have as a priority, to add to those numbers.� We've
made a couple of transitions both the MicroMed and the QSI division
to take folks that have the right product knowledge and the right
personalities.� We've taken them from prior positions that they've
been in with the company, and put them into direct revenue-generating
roles.� Those have been fairly recent occurrences, but directionally,
we'd like to continue in that mode.�
We
think that we need to — I know that we need to very much focus
on growing the top line, and one very effective way to do that
is actually have people out selling, more people out selling.
So, we're not really content to stop where we are.� We're going
to continue to add to that number, over time.�
ANDREW
SHAPIRO:� OK, going off of that, with that base, and the comments
made by Pat abut superior PMS product, in particular, and in dental,
the need to grow this thing into additional clients, as long as
the consolidators are slowly but surely coming back to life.
Can you go into a little bit more the strategic alliances and
the focus that you have, and how some of these alliances you feel
will serve to help leverage and facilitate this revenue growth?
LOU
SILVERMAN:� Yes, if you're speaking prospectively, let me say
that if I'm speaking prospectively in terms of the reorganization
here, we've got one of our senior people spending a part of their
time pursuing partnerships and affiliations that we think will
help us, down the road, not just on the QSI side, but as I mentioned,
the company as a whole.�
We're
certainly looking out to our competitors to perhaps capture some
ideas from them on some of the partnerships that they're looking
at.� We certainly have, I think, a very deep well of ideas internally
on some, I think, creative things that we want to pursue, and
we are just as in the very beginning process of pursuing those.
As I mentioned, the reorg was just announced yesterday.�
ANDREW
SHAPIRO:� Well, I guess what I'm trying to get a handle on is
the examples of what types of things would be value-added, and
how they would be value-added, either for us to see, look out
for, or as you then announce them, will understand better why
those announcements are good things.�
LOU
SILVERMAN:� Well, I think it's a fair question.� I guess what
I prefer to do, Andy, is to let us do our work in the background
and secure these partnerships and alliances, and then announce
them to you in a forthright, expeditious fashion.� And then if
the connections are obvious, we can talk about those.� If they're
not so obvious, we'll certainly be happy to answer questions about
that.�
I
would add that we are not partnerships- and alliance-free at this
point.� We do have some good partnerships and alliances out there.
And
Pat, do you want to speak about the partnership that we just revised,
during the quarter?�
PATRICK
CLINE:� Well, I wouldn't want to get into specific partnerships,
I don't think, and what the potential is for this one versus that
one.� But as Lou mentioned, we do have four or five, for example,
ASP partners.� These are partners focused providing our solutions
to the market, and partners that we're trying to make — or trying
to help them be successful.�
We
think that there's a lot of downstream revenue opportunity with
these relationships.� These partners that — or these alliances
that we've developed are with reasonable companies, good companies,
have reasonably strong people.� And they're out there pushing
our products, using the ASP model, where you're leasing the software
or renting the software on a monthly basis, with subscription
type of fee structure.�
And
that reduces the up-front investment that a customer has to make,
and provides nice visibility with respect to revenues, and takes
that ongoing revenue stream up, and gives us the stability and
predictability in our business model.� It also helps open up,
obviously, the low end of the market that traditionally can't
afford the huge capital investment that it takes in hardware and
infrastructure and personnel to operate sophisticated systems.
LOU
SILVERMAN:� I would add to that, Andy, that if you divided the
world into kind of horizontal partnerships and vertical partnerships,
where, at least, in my definition, horizontal would be adding
to the breadth of your product offering, and vertical would be
taking our same product and trying to move up or down market.
I feel, like, both of those kinds of partnerships are on the radar
screen for us.� And both are very important.�
I
think the place where there's some really fun creativity is in
the horizontal partnerships to bring new products and services
to the installed base that we have, and increase the marketability
of the products that we're taking out to new prospects.�
ANDREW
SHAPIRO:� Well, with respect to the fact that you have a few —
now, it's not prospectively, but some relationships here, and
each one individually doesn't seem to have garnered announcement
status, as a whole, in their own discrete press release, and a
desire to increase visibility here for the company � wouldn't
these quarterly conference calls be the time to possibly summarize
the past achievements and past alignments that you've established
that haven't been individually announced?�
LOU
SILVERMAN:� Yes, I would say, with an asterisk, yes.�
ANDREW
SHAPIRO:� Is there a competitive reason not to?�
LOU
SILVERMAN:� There are some — there will be — there have been
and there will be some situations where there is a competitive
disadvantage to announcing the partnership in a forum like this.
There will be some places that at least I could imagine that their
will be some confidentiality issues, where we have a good partnership,
but for whatever set of reasons, the person on the other end may
not want to announce it publicly.�
And
� but I would say that a going-forward basis, relative to partnership
announcements � and really any other announcements of significance
that we do plan on having a higher level of public exposure and
press releases to keep folks like yourselves and other interested
parties out there � aware of what we're doing.� As you know, we
have operated for some time with what I'll call "Board-induced"
press release parameters.� I can tell you that those are starting
to loosen up in a meaningful way, and I'm looking forward to being
able to run with that — with that clearance, if you will, in
ensuing quarters.�
ANDREW
SHAPIRO:� OK.�
Another
question here � this is regarding dental, where we've known of
some new products, and also if you could update us on the medical
side, I guess, some of these new products.� But in dental, you've
had the clinical dental product, and what is the status of either
streamlining that product to have it more acceptable to your existing
installed base?� Or what is the milestones and the adoption rate,
now, in the existing installed base of what you've got?�
GREG
FLYNN:� A couple of questions there, obviously.� Let me tackle,
really, the streamlining, first.�
We
are currently in the process, right now, of looking at what I
call lower-cost hardware architecture.� As we've said before,
the product in terms of the architecture, the way it runs is pretty
hardware intensive.� We need to look at that.� We're also looking
at our price points, and consequently, our selling propositions.
In
terms of our market penetration within our base, it remains unchanged
from our last call.� We did not have any sales in the last quarter.
We do — we are involved in some exciting opportunities — can't
insure that those will develop.� They are large; they're more
on a statewide type of basis with various organizations.� We are
still aggressively pursuing marketing the product.� We are excited
about the functionality of it.� Again, we need to look at the
architecture; we are looking at the architecture.� Consequently,
that will generate, some look at our price points, and should
have a better return on investment for buyers, consequently, as
well.�
ANDREW
SHAPIRO:� And on the medical side?�
UNKNOWN
MALE #6:� Pat, you want to take that?�
PATRICK
CLINE:� I'm sorry; would you repeat the question?�
ANDREW
SHAPIRO:� Oh, that would be to discuss or give us a little bit
more color and detail with, I guess, the new product offerings
that have been fairly recently introduced.� And I guess, the milestones
or the adoption take by the customer base regarding them; that
would either be on the Web, wireless, or your various other initiatives,
here?�
PATRICK
CLINE:� OK, we haven't, other than the ones that we've talked
about, Andy, announced, for example, our wireless or PDA solutions.
As I mentioned, we look forward to doing that over the next —
well, in the coming months, let's say.�
The
NextMD consumer Internet portal � again, we have successfully
deployed that, now, where not only are we offering the six or
seven thousand pages of content on the net, but we're now starting
to connect physicians and their patients in live settings.� And
we're adding features to that; features where patients not only
can communicate securely to their physicians, but also request
appointments and confirm appointments and see lab results and
see their bills online and pay their bills online, and a whole
host of other things, and we're moving through and deploying that.
But
again, we're just starting that deployment at this point, so when
we talk about penetration or adoption, I think it's a little bit
too early.�
ANDREW
SHAPIRO:� OK and have you opened the online pharmacy on there
yet, or have you had some activity with drugstore.com, or something,
I think was previously once announced?�
PATRICK
CLINE:� Yes.� We have not seen yet revenues from the drugstore.com
relationship.� That relationship, if you'll remember, allows —
or provides for our system sending prescriptions directly from
the physician's exam rooms to drugstore.com, via the Internet,
and saving the patient from needing to go down to the pharmacy.
The prescription can be delivered.� The patient can pick it up
if they'd like to, but eliminates a lot of steps for the physician
and for the patient and provides some revenue to us, in between.
Again, as we've stated, we're looking at revenues in the future
from that; nothing meaningful at this point.�
With
respect to the online drugstore, it's something that we're committed
to.� We have seen — you may have seen some of the online pharmacy
companies and their recent difficulties, let me say.� They've
been beaten up pretty well.�
We've
had some difficulty with the third-party vendor — or the third
party that we contracted with to bring that portion of our site
up and handle the fulfillment.� And we're working with them and
we're also exploring a couple of other potential partnerships
in that area.� We're still committed to bringing it up, again,
as a convenience for the folks that are hitting that portal, mainly
the patients of our customers.�
Again,
we're not trying to become a � you know, a consumer portal for
all consumers, but to offer a much further advanced service that's
connected to our systems in the physician's offices.� So, the
online pharmacy portion of the site has been delayed somewhat;
we're still committed to it.�
ANDREW
SHAPIRO:� How many of your practices have moved onto this site,
and they interact with their patients?� Only a few?�
PATRICK
CLINE:� Yes.� Yes, I mentioned, I think, in the last call that
we had not yet deployed it in a live setting and that we were
testing it.� We've moved from the in-house testing to deploying
it live, and we've completed � and I'll say successfully completed
some of that testing, and now we're continuing the roll-out.
ANDREW
SHAPIRO:� OK, great.� And the last thing � if I might ask, and
back off, because there may be other questions here � is in analysts'
reports following other companies, often what is cited is the
number of doctors, physicians, et cetera, that use — that are
on the system.� I know you, with your practice management in particular,
you have a lot of administrators or other individuals as such.
And
� but can you from the dental side as well as on the medical side,
give us a little bit of guidance here, as at least the number
of physicians you feel are on here, the number, I guess, of incremental
non-physician administrator type, and now, as you're adding consumers,
or shall we say, patients, the number of patients?�
GREG
FLYNN:� I'll take the first part, Pat, on the dental.�
We
have approximately 5,000 dentists on our system.� A very round
number you can use as somewhat � the dentists are supported by
between two and three staff members, users, approximately.�
ANDREW
SHAPIRO:� So, another 10 to 15,000 staffers?�
GREG
FLYNN:� And that's a round swag number.�
PATRICK
CLINE:� On the MicroMed side, Andy, we don't track the actual
number of users on our system.� We license the systems, both practice
management and medical records, by healthcare provider.� And you
generally will have one healthcare provider � let's say that's
a physician � and three or four other folks, nurses and office
people, that will utilize the systems.� I would say, probably
the average is about four workstations or four users per provider.
I can give you what might be a reasonable guess of around 8,000
users on our systems � maybe 10,000 users on our systems.�
But
let me say this when comparing to what you're seeing with analysts'
reports and competition's numbers:� There's a big difference between
paying customers, and customers that shell out dollars and pay
for ongoing support, and an ongoing relationship with the company,
and the number of fee downloads that are done.� Where � when we
report our numbers and we talk about our products and solutions,
we're talking about substance and not the hype.�
ANDREW
SHAPIRO:� OK, and so, when you said 8,000 to 10,000 users, that's
because you're in approximately 2,000 to 2,500 practices — or
providers, excuse me?�
PATRICK
CLINE:� Yes, I think that's a reasonable guess.�
ANDREW
SHAPIRO:� Thank you.� We'll back off, let others ask questions.
OPERATOR:
We have another question coming from Neal Bradsher.�
Sir,
please pose your question.�
NEAL
BRADSHER:� I wanted to follow up on Kikis's question earlier on
guidance.�
You
had indicated, Lou, that you're not going to provide guidance;
the company hasn't provided guidance in the past.� You'd also
said some things about your optimism for the months ahead.�
But
with respect to the issue of guidance, under Regulation FD, because
companies are precluded from commenting on the outlook privately,
many companies that did not formerly provide guidance on their
calls, have now begun to do so.� I recognize that at this point,
it's too late for this call, but I would like to ask you to reconsider
that policy for the future.� If you can simply provide some general
outlines, I do think that would be helpful to investors.� And
again, that is becoming standard practice.�
LOU
SILVERMAN:� I certainly appreciate the comment, and absolutely
will consider it on a go-forward basis.�
NEAL
BRADSHER:� Great, thank you.� And I realize that the Board probably
has been reluctant on these sorts of issues, but again, I hope
that they will adapt to the changing regulatory environment.
Thank you.�
LOU
SILVERMAN:� Thanks.�
OPERATOR:
We have another question coming from Andrew Shapiro.�
Sir,
please pose your question.�
ANDREW
SHAPIRO:� Yes, hi.� Actually, with respect to guidance, there
is something that you could probably provide us, Lou.� I don't
know if you could on this call.�
I
know one of your hesitations is the fact that the unfortunate
hockey-stick nature of the industry, all at the last week of the
quarter kind of thing, as well as what is hardware and software
is unpredictable.� But your deferred service revenue is probably
a revenue stream which is pretty much calculable, and predictable,
that one could say:� Well, we know we have X, you know, we have
this kind of backlog, or bookings, for the coming four quarters,
combined with whatever else people want to estimate for, you know,
a generalized sales level.�
So
there should be some predictability of revenues one could count
on, because of the deferred service revenue, as well as you know
that half of your revenue stream is pretty much recurring.� And
then, just let all of us know that they remainder of it is, you
know, unknown, that we have to see each quarter and we can't give
you guidance on it.�
LOU
SILVERMAN:� Again, I say, a real fair request.� Let me think on
that for a bit, and we'll see where we end up on the next call.
But it's not an unfair request at all.�
ANDREW
SHAPIRO:� Also, can I clarify, last quarter was the first quarter
we saw you had transcripts of the conference call up on the Web
site.� It was initially over on the MicroMed Web site, and then
ported over to QSI.� What is the status of � and when will you
be having, I guess, a more gutsy QSI investor relations kind of
page?� And I'm assuming this quarter and future and future quarter
calls' transcripts will be on the ...�
LOU
SILVERMAN:� Let me take you questions in the reverse order.� The
answer to whether the transcripts will be available � the answer
is yes, on the QSI site.� And then on when we're going to have
a more updated site, corporate site, we are working on that literally
as we speak.� It is one of he two top priorities for our corporate
marketing department.� I would say you can look for something
on that by year-end, or at the very — or the very first part
of 2001.�
ANDREW
SHAPIRO:� OK, great.� Thanks.�
LOU
SILVERMAN:� Thank you.�
OPERATOR:
Gentlemen, there appear to be no further questions at this time.
GREG
FLYNN:� Andy, this is Greg.� In terms of your EDI questions that
I need to get more detail on, I will have David Raisin (ph) get
that detail.� He runs that area for us.�
LOU
SILVERMAN:� I'd like to close by thanking everyone for their participation
and interest in today's call.�
Our
new management team is coming together.� As a company, with positive
earnings, positive cash flow, great products and great positioning
in our industry, we feel like we have a lot of good things going
on.� We look forward to sharing those with you in future calls.
Thanks
again for joining us.�
OPERATOR:
Thank you for your participation.�
That
does conclude this afternoon's teleconference.� You may disconnect
your lines at this time.�
And
have a great day.� Thank you.
