SYS-CON MEDIA Authors: Kevin Benedict, Rich Waidmann, Pat Romanski, Michael Jannery, Javier Paniza

News Feed Item

Quality Systems, Inc. Reports Fiscal 2015 First Quarter Results

Quality Systems, Inc. (NASDAQ:QSII) announced today results for its fiscal 2015 first quarter ended June 30, 2014.

Revenues for the fiscal 2015 first quarter reached $117.9 million, an increase of 8 percent when compared with $109.5 million for the fiscal 2014 first quarter. Net income for the 2015 first quarter was $5.2 million, down from $12.9 million reported in the comparable period a year ago.

On a GAAP basis, fully diluted earnings per share was $0.08 in the fiscal 2015 first quarter versus fully diluted earnings per share of $0.22 for same period last year. On a non-GAAP basis, fully diluted earnings per share for the fiscal 2015 first quarter was $0.13, a decline from $0.24 reported in the first quarter a year ago.

At quarter-end, the Company held a strong liquidity position, with $116.4 million of cash and investments.

“As we kick off fiscal 2015, we are pleased that the Company has demonstrated significant progress this quarter. We are beginning to realize results from all the initiatives we have employed over the past year, including the restructuring of our functional organization, cross-selling of our products and services and the release of new solutions that cater to the changing healthcare market. Areas such as Revenue Cycle Management, Population Health and interoperability are positively impacting sales and marketing, both in the form of net new deals as well as cross-selling into our growing client base,” explained Steven T. Plochocki, president and chief executive officer.

“During the first quarter, our pipeline hit the highest level we have seen in the past two years, which we believe demonstrates the success of our growth initiatives. We are pleased to begin the new fiscal year with a positive start. As the healthcare information technology industry continues to evolve, Quality Systems/NextGen remains front and center in helping our clients meet necessary criteria for Meaningful Use qualifications and healthcare reform,” Plochocki added.

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 September 12, 2014 with an anticipated distribution date of October 3, 2014. The $0.175 per share cash dividend is pursuant to the Company’s current practice to pay a regular quarterly dividend on the Company’s outstanding shares of common stock, subject to 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 2015 first quarter results on Thursday, July 24, 2014 at 10:00 AM ET (7:00 AM PT). All participants should dial 1-866-900-9499 at least ten minutes prior to the start of the call and reference conference ID #73683318. International callers should dial 1-937-502-2136. 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 800-585-8367 or 404-537-3406 and enter conference ID #73683318. The replay will be available from approximately 1:00 PM ET on Thursday, July 24, 2014, through 11:59 PM ET on Thursday, July 31, 2014.

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 in the healthcare sector and regulatory framework, 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 and additional risks and uncertainties 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, 2014, 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.

USE OF NON-GAAP FINANCIAL MEASURES

This news release contains certain non-GAAP (Generally Accepted Accounting Principles) financial measures, which are provided only as supplemental information. Investors should consider these non-GAAP financial measures only in conjunction with the comparable GAAP financial measures. These non-GAAP measures are not in accordance with or a substitute for U.S. GAAP. Pursuant to the requirements of Regulation G, the Company has provided a reconciliation of non-GAAP financial measures to the most directly comparable financial measure in the accompanying financial tables. Other companies may calculate non-GAAP measures differently than Quality Systems, which limits comparability between companies.

The Company believes that its presentation of non-GAAP diluted earnings per share provides useful supplemental information to investors and management regarding the Company's financial condition and results. The Company calculates non-GAAP diluted earnings per share by excluding acquisition costs, amortization of acquired intangible assets, impairment of goodwill and other assets, securities litigation defense costs, and share-based compensation from GAAP income before provision for income taxes. The non-GAAP provision for income taxes is calculated by excluding the income tax effect of the non-GAAP adjustments.

   

QUALITY SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)

 
Three Months Ended June 30,
2014   2013
 
Revenues:
Software and hardware $ 14,743 $ 15,972
Implementation and training services   6,266   6,575
 
System sales 21,009 22,547
 
Maintenance 40,805 38,608
Electronic data interchange services 18,319 16,692
Revenue cycle management and related services 16,693 16,015
Other services   21,068   15,667
 
Maintenance, EDI, RCM and other services   96,885   86,982
 
Total revenues   117,894   109,529
 
Cost of revenue:
Software and hardware 6,641 4,934
Implementation and training services   7,151   7,134
 
Total cost of system sales 13,792 12,068
 
Maintenance 6,914 5,302
Electronic data interchange services 11,999 10,796
Revenue cycle management and related services 12,706 11,401
Other services   10,779   8,505
 
Total cost of maintenance, EDI, RCM and other services   42,398   36,004
 
Total cost of revenue   56,190   48,072
 
Gross profit 61,704 61,457
 
Operating expenses:
Selling, general and administrative 36,730 35,096
Research and development costs 16,236 5,614
Amortization of acquired intangible assets   983   1,194
 
Total operating expenses   53,949   41,904
 
Income from operations 7,755 19,553
 
Interest income, net 54 31
Other income (expense), net   9   (254)
 
Income before income taxes 7,818 19,330
Provision for income taxes   2,655   6,385
 
Net income $ 5,163 $ 12,945
 
Net income per share:
Basic $ 0.09 $ 0.22
Diluted $ 0.08 $ 0.22
 
Weighted-average shares outstanding:
Basic 60,230 59,559
Diluted 60,770 59,572
 
Dividends declared per common share $ 0.175 $ 0.175
 
     

QUALITY SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
(UNAUDITED)

 
June 30, March 31,
2014 2014
 
ASSETS
Current assets:
Cash and cash equivalents $ 107,748 $ 103,145
Restricted cash 2,605 4,351
Marketable securities 8,687 10,656
Accounts receivable, net 111,842 110,181
Inventories 755 834
Income taxes receivable 6,330 8,366
Deferred income taxes, net 11,757 11,690
Other current assets   9,768   11,135
 
Total current assets 259,492 260,358
 
Equipment and improvements, net 22,915 22,801
Capitalized software costs, net 38,452 39,152
Intangibles, net 31,175 33,016
Goodwill 72,804 72,804
Other assets   16,943   16,927
 
Total assets $ 441,781 $ 445,058
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 8,850 $ 7,888
Deferred revenue 70,692 71,077
Accrued compensation and related benefits 13,894 15,953
Dividends payable 10,690 10,686
Other current liabilities   20,616   18,282
 
Total current liabilities 124,742 123,886
 
Deferred revenue, net of current 2,001 2,187
Deferred compensation 5,182 4,809
Other noncurrent liabilities   19,316   19,086
 
Total liabilities 151,241 149,968
 
Commitments and contingencies
 
Shareholders' equity:
Common stock
$0.01 par value; authorized 100,000 shares; issued
and outstanding 60,221 and 60,206 shares at
June 30, 2014 and March 31, 2014, respectively 602 602
Additional paid-in capital 195,733 194,739
Accumulated other comprehensive loss (198) (182)
Retained earnings   94,403   99,931
 
Total shareholders' equity   290,540   295,090
 
Total liabilities and shareholders' equity $ 441,781 $ 445,058
 
     

QUALITY SYSTEMS, INC.
NON-GAAP FINANCIAL MEASURES

 

RECONCILIATION OF NON-GAAP DILUTED EARNINGS PER SHARE

(IN THOUSANDS, EXCEPT PER SHARE DATA)
Three Months Ended June 30,
2014 2013
 
Income before provision for income taxes - GAAP $ 7,818 $ 19,330
 
Plus items included in cost of revenue:
Amortization of acquired software technology 858 672
Share-based compensation   86   74
Total adjustments to cost of revenue 944 746
 
Plus items included in operating expenses:
Acquisition costs 1,123 65
Amortization of acquired intangible assets 983 1,194
Shareholder litigation expense 278 -
Share-based compensation   704   467
Total adjustments to operating expenses 3,088 1,726
   
Total adjustments to GAAP income before provision for income taxes:   4,032   2,472
 
Income before provision for income taxes - Non-GAAP 11,850 21,802
Provision for income taxes   4,061   7,216
 
Net income - Non-GAAP $ 7,789 $ 14,586
 
Diluted net income per share - Non-GAAP $ 0.13 $ 0.24
 
Weighted-average shares outstanding (diluted): 60,770 59,572
 

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
Entuity®, a provider of enterprise-class network management solutions, today announced that it solidifies its position as a market leader through global enterprise customer acquisitions and a refined channel strategy. In 2014, Entuity increased new license revenues in EMEA by over 75 percent, and LATAM by over 125 percent as customers embraced Entuity for its highly automated solution and unified architecture. Entuity’s refined channel strategy focuses on even deeper strategic alignment with ke...
The 3rd International Internet of @ThingsExpo, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that its Call for Papers is now open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
We are all here because we are sold on the transformative promise of The Cloud. But what good is all of this ephemeral, on-demand infrastructure if your usage doesn't actually improve the agility and speed of your business? How must Operations adapt in order to avoid stifling your Cloud initiative? In his session at DevOps Summit, Damon Edwards, co-founder and managing partner of the DTO Solutions, will highlight the successful organizational, process, and tooling patterns of high-performing c...
Technology is enabling a new approach to collecting and using data. This approach, commonly referred to as the "Internet of Things" (IoT), enables businesses to use real-time data from all sorts of things including machines, devices and sensors to make better decisions, improve customer service, and lower the risk in the creation of new revenue opportunities. In his General Session at Internet of @ThingsExpo, Dave Wagstaff, Vice President and Chief Architect at BSQUARE Corporation, discuss the ...
“We help people build clusters, in the classical sense of the cluster. We help people put a full stack on top of every single one of those machines. We do the full bare metal install," explained Greg Bruno, Vice President of Engineering and co-founder of StackIQ, in this SYS-CON.tv interview at 15th Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
At 15th Cloud Expo, Shrikant Pattathil, Executive Vice President at Harbinger Systems, demos a video delivery platform that helps you do interactive videos. He discusses how Harbinger is accomplishing it in the cloud world, the problems they faced and the choices they made to get around these problems.
"People are a lot more knowledgeable about APIs now. There are two types of people who work with APIs - IT people who want to use APIs for something internal and the product managers who want to do something outside APIs for people to connect to them," explained Roberto Medrano, Executive Vice President at SOA Software, in this SYS-CON.tv interview at Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
AppDynamics, the application intelligence leader for software-defined businesses, announced the general availability of the AppDynamics Fall '14 Release. Serving the combined needs of IT and business teams across the enterprise, the latest release provides a comprehensive view across all aspects of digital performance in ultra large scale deployments. AppDynamics delivers Application Intelligence by building out advanced capabilities across the key areas of analytics, unified monitoring and D...
CloudBees, Inc., has announced a $23.5 million financing round, led by longtime CloudBees investor Lightspeed Venture Partners. Existing investors Matrix Partners, Verizon Ventures and Blue Cloud Ventures also participated in the round. The latest funding announcement follows earlier rounds of $4 million, $10.5 million and $10.8 million, bringing the total investment in CloudBees to just under $50 million since the company’s inception in 2010. Previous venture investment rounds were led by Ma...
In this Women in Technology Power Panel at 15th Cloud Expo, moderated by Anne Plese, Senior Consultant, Cloud Product Marketing at Verizon Enterprise, Esmeralda Swartz, CMO at MetraTech; Evelyn de Souza, Data Privacy and Compliance Strategy Leader at Cisco Systems; Seema Jethani, Director of Product Management at Basho Technologies; Victoria Livschitz, CEO of Qubell Inc.; Anne Hungate, Senior Director of Software Quality at DIRECTV, discussed what path they took to find their spot within the tec...
We’re no longer looking to the future for the IoT wave. It’s no longer a distant dream but a reality that has arrived. It’s now time to make sure the industry is in alignment to meet the IoT growing pains – cooperate and collaborate as well as innovate. In his session at @ThingsExpo, Jim Hunter, Chief Scientist & Technology Evangelist at Greenwave Systems, will examine the key ingredients to IoT success and identify solutions to challenges the industry is facing. The deep industry expertise be...
The cloud is becoming the de-facto way for enterprises to leverage common infrastructure while innovating and one of the biggest obstacles facing public cloud computing is security. In his session at 15th Cloud Expo, Jeff Aliber, a global marketing executive at Verizon, discussed how the best place for web security is in the cloud. Benefits include: Functions as the first layer of defense Easy operation –CNAME change Implement an integrated solution Best architecture for addressing network-l...
DevOps Summit 2015 New York, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that it is now accepting Keynote Proposals. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long development cycles that produce software that is obsolete...
Amazon, Google and Facebook are household names in part because of their mastery of Big Data. But what about organizations without billions of dollars to spend on Big Data tools - how can they extract value from their data? In his session at 6th Big Data Expo®, Ali Ghodsi, Co-Founder and Head of Engineering at Databricks, discussed how the zero management cost and scalability of the cloud is addressing the challenges and pain points that data engineers face when working with Big Data. He also s...
The Industrial Internet revolution is now underway, enabled by connected machines and billions of devices that communicate and collaborate. The massive amounts of Big Data requiring real-time analysis is flooding legacy IT systems and giving way to cloud environments that can handle the unpredictable workloads. Yet many barriers remain until we can fully realize the opportunities and benefits from the convergence of machines and devices with Big Data and the cloud, including interoperability, ...