Quality Systems (QSII) reported second-quarter fiscal 2011 (ended September 30) earnings per share of 46 cents, lower than the Zacks Consensus Estimate of 50 cents but higher that the year-ago figure of 41 cents.
Revenue registered a record $81.5 million, up 13.7% year over year, but still fell short of the Zacks Consensus Estimate of $86 million.
Segment-wise Results
System sales came in at $24.9 million, down 5% year over year. Revenues from the two subcomponents were $20.4 million (down 10.7% year over year) from Software, Hardware and Supplies and $4.5 million (up 32.4%) from Implementation and Training Services.
Maintenance, EDI, Revenue Cycle Management and other Services revenues were $56.6 million, a 24.4% year-over-year increase. Segment revenue was reported under four heads. Maintenance charges amounted to $27.5 million, up 27.9%. Electronic data interchange services sales stood at $10.1 million, an increase of 14.8%. Revenue Cycle Management grossed $11.2 million, leaping 26.1% and the “Other” sub-segment generated $7.7 million, up 22.2%.
Gross margin was 63% in the second quarter, above 60.5% achieved in the prior-year quarter.
Balance Sheet
Cash and cash equivalents were $106.9 million at the end of the second quarter, up 41.7% on a year-over-year basis.
Outlook
Quality Systems believes that with the completion of the requirements for Stage 1 of the “meaningful use” criteria, health care providers who have been hesitant thus far can confidently move forward with their selection of an Electronic Health Record (EHR). Overall, the company is optimistic that it is well positioned to benefit from the incentives to be derived by medical providers under the American Recovery and Reinvestment Act.
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