Quality Systems, Inc. Reports Fiscal 2013 Third Quarter Results
IRVINE, Calif.--(BUSINESS WIRE)--
Quality Systems, Inc. (NASDAQ:QSII) announced today results for its
fiscal 2013 third quarter ended December 31, 2012.
The Company reported revenues of $114.5 million for the fiscal 2013
third quarter, an increase of two percent, when compared with $112.8
million for the fiscal 2012 third quarter. Net income for the fiscal
2013 third quarter was $15.6 million, versus net income of $21.1 million
for the same period last year, a decrease of 26 percent. Fully diluted
earnings per share for the fiscal 2013 third quarter were $0.26, a 28
percent decrease from $0.36 for the fiscal 2012 third quarter. Although
revenues were slightly up in the quarter, profitability continued to be
affected by lower software license sales.
“We continue to execute on the restructuring plan we laid out in October
2012, which included the centralization of our sales and marketing
efforts as well as the business development and technology functions of
the organization. In addition, we have been strengthening our
operational structure under the direction of our recently appointed
chief operating officer, Dan Morefield,” explained Steven T. Plochocki,
president and chief executive officer.
“All these initiatives are starting to gain traction, and we are
confident in the anticipated benefits of these organizational changes.
Albeit early, we are beginning to see some impact from our
reorganization as we continue to maximize and leverage our multi-product
offering within the healthcare information technology marketplace,”
Plochocki concluded.
In other news, Quality Systems has set a new date for its Investment
Community Analyst Day, originally scheduled to be held in November 2012
but postponed due to Hurricane Sandy. The meeting has been rescheduled
for Monday, May 6, 2013 at the Le Parker Meridien Hotel in New York
City. More details to follow.
Quality Systems also announced that its Board of Directors declared a
quarterly cash dividend of Seventeen and One-Half Cents ($0.175) per
share on the Company’s outstanding shares of Common Stock, payable to
shareholders of record as of March 15, 2013 with an anticipated
distribution date of April 5, 2013. The $0.175 per share cash dividend
is pursuant to the Company’s current policy to pay a regular quarterly
dividend on the Company’s outstanding shares of Common Stock, subject to
further Board review and approval, and establishment of record and
distribution dates by the Board prior to the declaration and payment of
each such quarterly dividend.
Quality Systems will host a conference call to discuss its fiscal 2013
third quarter results on Thursday, January 24, 2013 at 10:00 AM ET (7:00
AM PT). All participants should dial 1-866-225-8754 at least ten minutes
prior to the start of the call. International callers should dial
1-480-629-9818. To hear a live Web simulcast or to listen to the
archived webcast following completion of the call, please visit the
Company’s website at www.qsii.com,
click on the "Investors” tab, then select "Conference Calls," to access
the link to the call. To listen to a telephone replay of the conference
call, please dial 800-406-7325 or 303-590-3030 and enter reservation
identification number 4591712. The replay will be available from
approximately 12:00 PM ET on Thursday, January 24, 2013, through 11:59
PM ET on Thursday, January 31, 2013.
A transcript of the conference call will be made available on the
Company’s website at www.qsii.com.
About
Quality Systems, Inc.
Irvine, Calif.-based Quality
Systems, Inc. and its NextGen
Healthcare subsidiary develop and market computer-based practice
management, electronic health records and revenue cycle management
applications as well as connectivity products and services for medical
and dental group practices and small hospitals. Visit www.qsii.com
and www.nextgen.com
for additional information.
SAFE HARBOR PROVISIONS FOR FORWARD-LOOKING STATEMENTS
This news release may contain forward-looking statements within the
meaning of the federal securities laws, including but not limited to,
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, net income and
earnings per share). Risks and uncertainties exist that may cause the
results to differ materially from those set forth in these
forward-looking statements. Factors that could cause the anticipated
results to differ from those described in the forward-looking statements
are set forth in Part I, Item A of our most recent Annual Report on Form
10-K for the fiscal year ended March 31, 2012, including but not limited
to: 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; impact of incentive payments under
The American Recovery and Reinvestment Act on sales and the ability of
the Company to meet continued certification requirements; the
development by competitors of new or superior technologies; the timing,
cost and success or failure of new product and service introductions,
development and product upgrade releases; undetected errors or bugs in
software; product liability; 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; changes of accounting
estimates and assumptions used to prepare the prior periods' financial
statements; and general economic conditions. A significant portion of
the Company's quarterly sales of software product licenses and computer
hardware is concluded in the last month of a 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.
QUALITY SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
Three Months Ended December 31,
Nine Months Ended December 31,
2012
2011
2012
2011
Revenues:
Software, hardware and supplies
$
21,899
$
35,074
$
71,463
$
95,845
Implementation and training services
7,266
6,555
27,847
18,121
System sales
29,165
41,629
99,310
113,966
Maintenance
39,463
36,245
116,746
102,961
Electronic data interchange services
15,209
12,101
44,056
36,178
Revenue cycle management and related services
15,015
11,147
43,902
34,170
Other services
15,658
11,643
44,920
33,566
Maintenance, EDI, RCM and other services
85,345
71,136
249,624
206,875
Total revenues
114,510
112,765
348,934
320,841
Cost of revenue:
Software, hardware and supplies
4,660
4,622
16,055
13,423
Implementation and training services
7,221
5,994
23,873
15,119
Total cost of system sales
11,881
10,616
39,928
28,542
Maintenance
5,259
4,412
14,811
12,260
Electronic data interchange services
9,852
7,890
28,251
23,816
Revenue cycle management and related services
10,918
8,405
32,344
25,687
Other services
8,686
7,011
26,021
18,977
Total cost of maintenance, EDI, RCM and other services
34,715
27,718
101,427
80,740
Total cost of revenue
46,596
38,334
141,355
109,282
Gross profit
67,914
74,431
207,579
211,559
Operating expenses:
Selling, general and administrative
35,532
33,096
110,045
94,651
Research and development costs
7,786
8,277
22,634
22,462
Amortization of acquired intangible assets
1,212
543
3,665
1,545
Total operating expenses
44,530
41,916
136,344
118,658
Income from operations
23,384
32,515
71,235
92,901
Interest income (expense), net
13
55
(14
)
212
Other expense, net
(122
)
(218
)
(115
)
(400
)
Income before provision for income taxes
23,275
32,352
71,106
92,713
Provision for income taxes
7,649
11,247
24,292
32,129
Net income
$
15,626
$
21,105
$
46,814
$
60,584
Net income per share:
Basic
$
0.26
$
0.36
$
0.79
$
1.03
Diluted
$
0.26
$
0.36
$
0.79
$
1.03
Weighted average shares outstanding:
Basic
59,400
58,847
59,343
58,623
Diluted
59,405
59,128
59,411
58,943
Dividends declared per common share
$
0.175
$
0.175
$
0.525
$
0.525
QUALITY SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
(UNAUDITED)
December 31,
March 31,
2012
2012
ASSETS
Current assets:
Cash and cash equivalents
$
101,702
$
134,444
Restricted cash
5,155
1,962
Marketable securities
4,987
4,987
Accounts receivable, net
151,495
145,756
Inventories
3,912
3,715
Income taxes receivable
1,864
2,628
Deferred income tax assets, net
10,127
10,127
Other current assets
7,276
9,090
Total current assets
286,518
312,709
Equipment and improvements, net
20,930
17,841
Capitalized software costs, net
32,881
19,994
Intangibles, net
29,415
23,259
Goodwill
63,161
60,776
Other assets
7,315
5,773
Total assets
$
440,220
$
440,352
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable
$
6,563
$
4,532
Deferred revenue
63,001
83,108
Accrued compensation and related benefits
8,595
11,870
Dividends payable
-
10,354
Other current liabilities
27,750
19,568
Total current liabilities
105,909
129,432
Deferred revenue, net of current
1,307
1,293
Deferred income tax liabilities, net
4,096
5,351
Deferred compensation
3,454
3,497
Other noncurrent liabilities
4,368
5,602
Total liabilities
119,134
145,175
Commitments and contingencies
Shareholders' equity:
Common stock
$0.01 par value; authorized 100,000 shares; issued and outstanding
59,535 and 59,180 shares at December 31, 2012 and March 31,
2012, respectively
595
592
Additional paid-in capital
179,306
169,033
Accumulated other comprehensive loss
(45
)
(45
)
Retained earnings
141,230
125,597
Total shareholders' equity
321,086
295,177
Total liabilities and shareholders' equity
$
440,220
$
440,352
Quality Systems, Inc. Paul Holt, CFO, 949-255-2600 pholt@qsii.com or Susan
J. Lewis, 303-804-0494 slewis@qsii.com
Press Release $QSII Quality Systems Inc.
IRVINE, Calif.--(BUSINESS WIRE)-- Quality Systems, Inc. (NASDAQ:QSII) announced today results for its fiscal 2013 third quarter ended December 31, 2012.
The Company reported revenues of $114.5 million for the fiscal 2013 third quarter, an increase of two percent, when compared with $112.8 million for the fiscal 2012 third quarter. Net income for the fiscal 2013 third quarter was $15.6 million, versus net income of $21.1 million for the same period last year, a decrease of 26 percent. Fully diluted earnings per share for the fiscal 2013 third quarter were $0.26, a 28 percent decrease from $0.36 for the fiscal 2012 third quarter. Although revenues were slightly up in the quarter, profitability continued to be affected by lower software license sales.
“We continue to execute on the restructuring plan we laid out in October 2012, which included the centralization of our sales and marketing efforts as well as the business development and technology functions of the organization. In addition, we have been strengthening our operational structure under the direction of our recently appointed chief operating officer, Dan Morefield,” explained Steven T. Plochocki, president and chief executive officer.
“All these initiatives are starting to gain traction, and we are confident in the anticipated benefits of these organizational changes. Albeit early, we are beginning to see some impact from our reorganization as we continue to maximize and leverage our multi-product offering within the healthcare information technology marketplace,” Plochocki concluded.
In other news, Quality Systems has set a new date for its Investment Community Analyst Day, originally scheduled to be held in November 2012 but postponed due to Hurricane Sandy. The meeting has been rescheduled for Monday, May 6, 2013 at the Le Parker Meridien Hotel in New York City. More details to follow.
Quality Systems also announced that its Board of Directors declared a quarterly cash dividend of Seventeen and One-Half Cents ($0.175) per share on the Company’s outstanding shares of Common Stock, payable to shareholders of record as of March 15, 2013 with an anticipated distribution date of April 5, 2013. The $0.175 per share cash dividend is pursuant to the Company’s current policy to pay a regular quarterly dividend on the Company’s outstanding shares of Common Stock, subject to further Board review and approval, and establishment of record and distribution dates by the Board prior to the declaration and payment of each such quarterly dividend.
Quality Systems will host a conference call to discuss its fiscal 2013 third quarter results on Thursday, January 24, 2013 at 10:00 AM ET (7:00 AM PT). All participants should dial 1-866-225-8754 at least ten minutes prior to the start of the call. International callers should dial 1-480-629-9818. To hear a live Web simulcast or to listen to the archived webcast following completion of the call, please visit the Company’s website at www.qsii.com, click on the "Investors” tab, then select "Conference Calls," to access the link to the call. To listen to a telephone replay of the conference call, please dial 800-406-7325 or 303-590-3030 and enter reservation identification number 4591712. The replay will be available from approximately 12:00 PM ET on Thursday, January 24, 2013, through 11:59 PM ET on Thursday, January 31, 2013.
A transcript of the conference call will be made available on the Company’s website at www.qsii.com.
About Quality Systems, Inc.
Irvine, Calif.-based Quality Systems, Inc. and its NextGen Healthcare subsidiary develop and market computer-based practice management, electronic health records and revenue cycle management applications as well as connectivity products and services for medical and dental group practices and small hospitals. Visit www.qsii.com and www.nextgen.com for additional information.
SAFE HARBOR PROVISIONS FOR FORWARD-LOOKING STATEMENTS
This news release may contain forward-looking statements within the meaning of the federal securities laws, including but not limited to, 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, net income and earnings per share). Risks and uncertainties exist that may cause the results to differ materially from those set forth in these forward-looking statements. Factors that could cause the anticipated results to differ from those described in the forward-looking statements are set forth in Part I, Item A of our most recent Annual Report on Form 10-K for the fiscal year ended March 31, 2012, including but not limited to: 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; impact of incentive payments under The American Recovery and Reinvestment Act on sales and the ability of the Company to meet continued certification requirements; the development by competitors of new or superior technologies; the timing, cost and success or failure of new product and service introductions, development and product upgrade releases; undetected errors or bugs in software; product liability; 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; changes of accounting estimates and assumptions used to prepare the prior periods' financial statements; and general economic conditions. A significant portion of the Company's quarterly sales of software product licenses and computer hardware is concluded in the last month of a 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.
QUALITY SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
QUALITY SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
(UNAUDITED)
$0.01 par value; authorized 100,000 shares; issued and
outstanding 59,535 and 59,180 shares at December 31,
2012 and March 31, 2012, respectively
Quality Systems, Inc.
Paul Holt, CFO, 949-255-2600
pholt@qsii.com
or
Susan J. Lewis, 303-804-0494
slewis@qsii.com
Source: Quality Systems, Inc.