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8-K - FORM 8-K - NEXTGEN HEALTHCARE, INC.d430733d8k.htm

Exhibit 99.1

 

LOGO

 

For Further Information, Contact:   
Quality Systems, Inc.    Susan J. Lewis
18111 Von Karman Avenue, Suite 700    Phone: (303) 804-0494
Irvine, CA 92612    slewis@qsii.com
Phone: (949) 255-2600   
Paul Holt, CFO, pholt@qsii.com   

FOR IMMEDIATE RELEASE

OCTOBER 26, 2012

QUALITY SYSTEMS, INC. REPORTS FISCAL 2013 SECOND QUARTER RESULTS

Company Also Appoints Mark H. Davis to Board of Directors

IRVINE, Calif. … October 26, 2012 …Quality Systems, Inc. (NASDAQ:QSII) announced today results for its fiscal 2013 second quarter ended September 30, 2012.

The Company reported revenues of $116.1 million for the fiscal 2013 second quarter, an increase of 8 percent, versus $107.6 million for the fiscal 2012 second quarter. Net income for the fiscal 2013 second quarter was $15.7 million, down 23 percent when compared with net income of $20.5 million for the comparable period last year. Fully diluted earnings per share for the fiscal 2013 second quarter was $0.26, a 26 percent decrease from $0.35 for the fiscal 2012 second quarter. While revenues increased in the quarter, profitability was impacted by lower software license sales.

“Quality Systems continues to make investments and position the company to capture the significant opportunities that lie ahead in our healthcare information technology sector. Recently, we named Dan Morefield, a seasoned technology executive, as our new chief operating officer; restructured our sales and marketing functions under Gary Voydanoff, one of our veteran sales executives; and promoted Steve Puckett to a newly created chief technology officer role to manage our development-related resources. For more than 20 years, Steve has served a critical role in bringing industry-leading technology to the company,” stated Steven T. Plochocki, president and chief executive officer.

Quality Systems will host a conference call to discuss its fiscal 2013 second quarter results on Friday, October 26, 2012 at 10:00 AM ET (7:00 AM PT). All participants should dial 1-800-762-8779 at least ten minutes prior to the start of the call. International callers should dial 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 4571447. The replay will be available from approximately 12:00 PM ET on Friday, October 26, 2012, through 11:59 PM ET on Friday, November 2, 2012.

A transcript of the conference call will be made available on the Company’s website at www.qsii.com.

 

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Quality Systems, Inc.

Fiscal 2013 Second Quarter Results

Page 2

 

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 December 14, 2012 with an anticipated distribution date of January 4, 2013. The $0.175 per share cash dividend is consistent with the Company’s current policy to pay a regular quarterly dividend on the Company’s outstanding shares of Common Stock, subject to Board review and approval.

In other news, Quality Systems reported that Mark H. Davis was appointed to its Board of Directors, effective October 25, 2012. Davis fills the seat vacated by Maureen Spivack, who resigned due to conflicting employment obligations. Davis will also be appointed to serve on the Board’s Audit Committee and Transaction Committee.

Davis is a managing director at B. Riley & Co, LLC, an investment firm specializing in research, sales and trading and corporate finance. He brings more than 20 years of experience advising and financing technology companies, including software, cloud infrastructure and information technology firms, to the Quality Systems Board. In addition, Davis was a practicing certified public accountant for nearly a decade and his financial expertise and knowledge will prove beneficial to the Board.

Previously, Davis served as head of technology investment banking at Cantor Fitzgerald, managing director at Macquarie Capital, an Australian merchant and investment banking firm, and managing director (as well as in other senior leadership roles) at Citigroup. Earlier in his career, Davis was an Audit Senior with Price Waterhouse. Davis holds a Master’s of Business Administration from the Wharton School of the University Of Pennsylvania, and a Bachelor of Science degree in Accounting from the University of Maryland.

“We welcome Mark to the Board. His two decades of experience advising and financing technology-related businesses, coupled with his public accounting background, will provide the Board with insights and expertise in both technology and finance. We look forward to the guidance he will bring to the Board and the contributions he will make to the Company,” Plochocki added.

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.

FINANCIAL TABLES ATTACHED


QUALITY SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF INCOME

(IN THOUSANDS. EXCEPT PER SHARE DATA)

(UNAUDITED)

 

     Three Months Ended
September 30,
    Six Months Ended
September 30,
 
     2012     2011     2012     2011  

Revenues:

        

Software, hardware and supplies

   $ 23,720      $ 31,860      $ 49,564      $ 60,771   

Implementation and training services

     8,535        6,094        20,581        11,566   
  

 

 

   

 

 

   

 

 

   

 

 

 

System sales

     32,255        37,954        70,145        72,337   

Maintenance

     38,715        35,214        77,283        66,716   

Electronic data interchange services

     15,024        11,985        28,847        24,077   

Revenue cycle management and related services

     14,486        11,142        28,887        23,023   

Other services

     15,648        11,339        29,262        21,923   
  

 

 

   

 

 

   

 

 

   

 

 

 

Maintenance, EDI, RCM and other services

     83,873        69,680        164,279        135,739   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     116,128        107,634        234,424        208,076   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cost of revenue:

        

Software, hardware and supplies

     5,624        4,187        11,395        8,801   

Implementation and training services

     7,507        5,050        16,652        9,125   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total cost of system sales

     13,131        9,237        28,047        17,926   

Maintenance

     4,741        3,994        9,552        7,848   

Electronic data interchange services

     9,151        7,964        18,399        15,926   

Revenue cycle management and related services

     10,556        8,456        21,426        17,282   

Other services

     8,785        6,369        17,335        11,966   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total cost of maintenance, EDI, RCM and other services

     33,233        26,783        66,712        53,022   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total cost of revenue

     46,364        36,020        94,759        70,948   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     69,764        71,614        139,665        137,128   

Operating expenses:

        

Selling, general and administrative

     37,832        32,169        74,513        61,555   

Research and development costs

     6,272        7,358        14,848        14,185   

Amortization of acquired intangible assets

     1,316        520        2,453        1,002   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     45,420        40,047        91,814        76,742   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     24,344        31,567        47,851        60,386   

Interest income (expense), net

     (62     75        (27     157   

Other income (expense), net

     220        (144     7        (182
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before provision for income taxes

     24,502        31,498        47,831        60,361   

Provision for income taxes

     8,811        11,002        16,643        20,882   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 15,691      $ 20,496      $ 31,188      $ 39,479   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income per share:

        

Basic

   $ 0.26      $ 0.35      $ 0.53      $ 0.67   

Diluted

   $ 0.26      $ 0.35      $ 0.53      $ 0.67   

Weighted average shares outstanding:

        

Basic

     59,347        58,664        59,314        58,511   

Diluted

     59,386        59,005        59,386        58,902   

Dividends declared per common share

   $ 0.175      $ 0.175      $ 0.350      $ 0.350   


QUALITY SYSTEMS, INC.

CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS)

(UNAUDITED)

 

     September 30,
2012
    March 31,
2012
 

ASSETS

    

Current assets:

    

Cash and cash equivalents

   $ 117,043      $ 134,444   

Restricted cash

     5,223        1,962   

Marketable securities

     4,989        4,987   

Accounts receivable, net

     151,787        145,756   

Inventories

     3,858        3,715   

Income taxes receivable

     6,063        2,628   

Deferred income tax assets, net

     10,127        10,127   

Other current assets

     6,712        9,090   
  

 

 

   

 

 

 

Total current assets

     305,802        312,709   

Equipment and improvements, net

     20,296        17,841   

Capitalized software costs, net

     29,232        19,994   

Intangibles, net

     31,299        23,259   

Goodwill

     63,161        60,776   

Other assets

     6,860        5,773   
  

 

 

   

 

 

 

Total assets

   $ 456,650      $ 440,352   
  

 

 

   

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

    

Current liabilities:

    

Accounts payable

   $ 8,955      $ 4,532   

Deferred revenue

     67,968        83,108   

Accrued compensation and related benefits

     9,894        11,870   

Dividends payable

     10,382        10,354   

Other current liabilities

     31,108        19,568   
  

 

 

   

 

 

 

Total current liabilities

     128,307        129,432   

Deferred revenue, net of current

     1,225        1,293   

Deferred income tax liabilities, net

     4,500        5,351   

Deferred compensation

     3,208        3,497   

Other noncurrent liabilities

     7,103        5,602   
  

 

 

   

 

 

 

Total liabilities

     144,343        145,175   

Commitments and contingencies

    

Shareholders’ equity:

    

Common stock

    

$0.01 par value; authorized 100,000 shares; issued and outstanding 59,370 and 59,180 shares at September 30, 2012 and March 31, 2012, respectively

     594        592   

Additional paid-in capital

     175,747        169,033   

Accumulated other comprehensive loss

     (55     (45

Retained earnings

     136,021        125,597   
  

 

 

   

 

 

 

Total shareholders’ equity

     312,307        295,177   
  

 

 

   

 

 

 

Total liabilities and shareholders’ equity

   $ 456,650      $ 440,352