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)
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Three Months Ended December 31,
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Nine Months Ended December 31,
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2012
|
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2011
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2012
|
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|
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2011
|
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Revenues:
|
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|
|
|
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|
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|
|
|
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Software, hardware and supplies
|
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|
$
|
21,899
|
|
|
|
|
$
|
35,074
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|
|
|
|
|
$
|
71,463
|
|
|
|
|
$
|
95,845
|
|
|
Implementation and training services
|
|
|
|
|
7,266
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|
|
|
|
|
6,555
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|
|
|
|
|
|
27,847
|
|
|
|
|
|
18,121
|
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|
|
|
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|
|
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|
|
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|
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|
|
|
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System sales
|
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|
|
29,165
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|
|
|
|
|
41,629
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|
|
|
|
|
|
99,310
|
|
|
|
|
|
113,966
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Maintenance
|
|
|
|
|
39,463
|
|
|
|
|
|
36,245
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|
|
|
|
|
|
116,746
|
|
|
|
|
|
102,961
|
|
|
Electronic data interchange services
|
|
|
|
|
15,209
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|
|
|
|
|
12,101
|
|
|
|
|
|
|
44,056
|
|
|
|
|
|
36,178
|
|
|
Revenue cycle management and related services
|
|
|
|
|
15,015
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|
|
|
|
|
11,147
|
|
|
|
|
|
|
43,902
|
|
|
|
|
|
34,170
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|
|
Other services
|
|
|
|
|
15,658
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|
|
|
|
|
11,643
|
|
|
|
|
|
|
44,920
|
|
|
|
|
|
33,566
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Maintenance, EDI, RCM and other services
|
|
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|
|
85,345
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|
|
|
|
|
71,136
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|
|
|
|
|
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249,624
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|
|
|
|
206,875
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Total revenues
|
|
|
|
|
114,510
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|
|
|
|
|
112,765
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|
|
|
|
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|
348,934
|
|
|
|
|
|
320,841
|
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|
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|
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|
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|
|
|
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Cost of revenue:
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
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Software, hardware and supplies
|
|
|
|
|
4,660
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|
|
|
|
|
4,622
|
|
|
|
|
|
|
16,055
|
|
|
|
|
|
13,423
|
|
|
Implementation and training services
|
|
|
|
|
7,221
|
|
|
|
|
|
5,994
|
|
|
|
|
|
|
23,873
|
|
|
|
|
|
15,119
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Total cost of system sales
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|
|
|
|
11,881
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|
|
|
|
|
10,616
|
|
|
|
|
|
|
39,928
|
|
|
|
|
|
28,542
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Maintenance
|
|
|
|
|
5,259
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|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
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
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
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Gross profit
|
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|
|
|
67,914
|
|
|
|
|
|
74,431
|
|
|
|
|
|
|
207,579
|
|
|
|
|
|
211,559
|
|
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|
|
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|
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|
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|
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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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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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
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|
|
|
|
$
|
0.175
|
|
|
|
|
|
$
|
0.525
|
|
|
|
|
$
|
0.525
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
QUALITY SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
(UNAUDITED)
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
Source: Quality Systems, Inc.
News Provided by Acquire Media
