Quality Systems (QSII) reported first-quarter fiscal 2011 adjusted (excluding one-time items) earnings per share of 42 cents, lower than the Zacks Consensus Estimate of 47 cents but higher that the year-ago figure of 36 cents.
Revenue registered a record $82.9 million, up 24% year-over-year, ahead of the Zacks Consensus Estimate of $81 million.
System sales came in at $29.1 million, growing 37.3% year over year. Revenues from the two subcomponents were $24.8 million (up 39.3% year over year) from Software, Hardware and Supplies and of $4.3 million (up 22.9%) from Implementation and Training Services.
Maintenance, EDI, Revenue Cycle Management and other Services revenues were $53.9 million, an 18.7% year over year increase. Segment revenue was reported under four headings. Maintenance charges amounted to $25.5 million, up 18.1%. Electronic data interchange services sales stood at $9.8 million, an increase of 19.5%. Revenue Cycle Management grossed $10.8 million, leaping 19.8% and the “Other” sub-segment generated $7.8 million, up 18.2%.
Gross margin was 61.6% in the first quarter, slightly above 61.1% achieved in the prior-year quarter.
Cash and cash equivalents were $93.2 million at the end of the first quarter, up 10.2% on a year-over-year basis.
Quality Systems is optimistic that it will benefit from the incentives to be derived by medical practitioners under the American Recovery and Reinvestment Act (ARRA). It notes that the clarification provided by the U.S. Department of Health and Human Services regarding “meaningful use” criteria will encourage medical practitioners and hospitals to engage in constructive decision-making regarding implementation of electronic health records. In this regard, the company’s NextGen Healthcare know how is expected to be beneficial to healthcare providers.