Steven T. Plochocki - Chief Executive Officer, President and Director Paul A. Holt - Chief Financial Officer, Principal Accounting Officer and Executive Vice President Daniel J. Morefield - Chief Operating Officer and Executive Vice President Monte L. Sandler - Executive Vice President of Nextgen Practice Solutions Gary Voydanoff

Zachary William Sopcak - Morgan Stanley, Research Division James Clark - ISI Group Inc., Research Division Gavin Weiss - JP Morgan Chase & Co, Research Division Jamie Stockton - Wells Fargo Securities, LLC, Research Division Ryan Daniels - William Blair & Company L.L.C., Research Division Gregory T. Bolan - Sterne Agee & Leach Inc., Research Division Donald Hooker - KeyBanc Capital Markets Inc., Research Division George Hill Glen J. Santangelo - Crédit Suisse AG, Research Division Mohan A. Naidu - Stephens Inc., Research Division Richard C. Close - Avondale Partners, LLC, Research Division David Larsen - Leerink Swann LLC, Research Division Eric W. Coldwell - Robert W. Baird & Co. Incorporated, Research Division Sean W. Wieland - Piper Jaffray Companies, Research Division Eugene M. Mannheimer - B. Riley Caris, Research Division

Welcome to Quality Systems Inc. Fiscal 2014 Second Quarter Results Conference Call. Hosting the call today from Quality Systems is Steven T. Plochocki, President and Chief Executive Officer. Today's call is being recorded. [Operator Instructions] It is now my pleasure to turn the floor over to Steven T. Plochocki, President and Chief Executive Officer. You may begin. Steven T. Plochocki: Thank you, Brandy, and welcome, everyone, to the Quality Systems Fiscal 2014 Second Quarter Results Call. With me this morning are Paul Holt, our CFO; Dan Morefield, our Chief Operating Officer; Monte Sandler, the Executive Vice President of RCM Services; and Gary Voydanoff, our Executive Vice President of Sales and Marketing. Please note that the comments made on this call may include statements that are forward-looking within the meaning of securities laws, including, without limitation, statements related to anticipated industry trends, the company's plans, products, perspective and strategies, preliminary and projected; and capital equity initiatives to the implementation of potential impacts of legal, regulatory or accounting principles. I'll provide some opening comments and then turn it over to the team. During the quarter, the company completed the acquisition of Mirth Corporation, a global leader in health information technology that aids in achieving interoperability and fosters connectivity. The acquisition enhances the company's current enterprise interoperability initiatives, while broadening its accountable and collaborative care, population health, disease management and clinical data exchange offerings. The second quarter results are indicative of the reorganization plan we put in place during fiscal 2013, and it's beginning to show traction. During this time, we employed a range of new techniques to foster leads. And over the past 2 quarters, this initiative started to reap results. This quarter, revenue, bookings and system sales have all increased versus prior quarter. This is the first time we've done this in 5 quarters, and we're pleased to see sequential improvement across all of these categories. The complementary acquisition of Mirth has been well received with strong interest from some of our largest customers. Mirth is bringing state-of-the-art interoperability technology to our clients and to the marketplace, which not only strengthens our competitive position, but also brings new potential products and opens the doors for expansion across other market segments in the future. We are quickly integrating Mirth's expertise and believe it will be a very strong contributor in fiscal 2015. Quality Systems also announced that its Board of Directors declared a quarterly cash dividend of $0.175 per share on the company's outstanding shares of common stock, payable to shareholders of record as of December 13, 2013, with an anticipated distribution date of January 3, 2014. 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 the establishment of record and distribution dates by the board prior to the declaration and payment of such quarterly dividend. Our management team remains greatly encouraged that the restructuring plan we put in place a year ago is clearly bearing fruit. The bottom line is that our leads are up. Our pipeline is up. And now in progression, our system sales, bookings and revenues are up on sequential quarters. I'll now turn it over to Paul Holt. Paul A. Holt: Thanks, Steve, and hello, everyone. I'm going to first make some comments regarding our sequential revenue and bookings trends, and then move over to my normal year-over-year review. We're happy to report sequential growth this quarter in revenue and bookings. Our consolidated revenue grew to $111.1 million versus $109.5 million last quarter, driven by growth in both system sales and recurring services revenue, which grew by $0.8 million and $0.7 million, respectively. I'll also point out one more important point about our sequential revenue numbers related to revenue cycle management services. While we'll still seeing continued momentum building in RCM, our momentum this quarter was masked by the departure of HMA, which contributed to the sequential decline in RCM revenue of $0.5 million. If the HMA departure had not occurred, we estimate that RCM revenue would likely have been up approximately 26% over prior year at approximately $18.2 million. Total bookings, excluding RCM, grew to $32.9 million this quarter, up from the $26.8 million we reported last quarter, and off from the $38.2 million a year ago. Note that our Mirth acquisition contributed approximately $0.6 million in revenue and $3.6 million in bookings this quarter. Mirth's revenue streams include software license fees, both perpetual and subscription-based, maintenance fees, implementation and training fees, as well as hosting services. Moving to year-over-year performance. Our consolidated September quarter revenue of $111.1 million was down 4% over the prior year of $116.1 million, primarily due to a decline in system sales of $8.9 million or 28%. This was partially mitigated by an increase in total maintenance, RCM, EDI and other services revenue of $3.8 million or 5%. Recurring revenue represented approximately 80% of total revenue compared to 72% in the prior year. Our consolidated gross profit margin this quarter came in at 57.1%, down from the year-ago quarter of 60.1%. Our gross margin was off primarily due to a decline in higher-margin software versus prior year, as well as investments we're making in implementation and training in advance of our rollout of the highest profile version release we've had in many years, version 5.8 and 8.4 (sic) [8.3], supporting the requirements of IC-10 and MU2. SG&A, excluding amortization expense, increased by approximately $0.7 million to $38.6 million in the second quarter compared to $37 million a year ago. The increase was driven primarily by proxy contest expenses. R&D expense increased to $7.6 million versus $6.3 million a year ago. The increase in our net expense reflects a number of factors including expanded investments in our new version 5.8 and actually a correction, 8.3, which are being released this quarter in time for our upcoming user group meeting in November. Our commitment to continued investment in product development is going to continue and even expand with our Mirth acquisition, which is opening up new opportunities to accelerate our product development efforts. Our effective tax rate for the September quarter was 35.1% compared to 36% for the prior year quarter. Our current quarter rate declined, primarily due to a little larger benefit from the federal R&D tax credit and our qualified production activities deduction. On a GAAP basis, fully diluted earnings per share for the fiscal 2014 second quarter was $0.17, a decline of 35% from $0.26 we reported a year ago. Our year-over-year decline in earnings was primarily driven by comparatively lower system sales, as well as the investments that I keep mentioning in R&D related to our new version release. Now this quarter, we're introducing non-GAAP earnings, which we believe will provide meaningful insight into our operating performance. Our non-GAAP earnings exclude amortization of intangible assets, acquisition costs, stock compensation and expenses related to our proxy contest election this summer. On a non-GAAP basis, fully diluted earnings per share was $0.22, a decline of 29% from the $0.31 we reported a year ago. I'll also mention that our non-GAAP EPS number for our last quarter was $0.24. So we had a decline of $0.02 on that measure, principally tied to some of the investments we've been making, again, in R&D. Cash and cash equivalents plus marketable securities ended the quarter at $84.3 million. That's down $33.7 million from the $118 million as of the start of our fiscal year, primarily due to the $34.8 million in cash paid as upfront consideration for Mirth. Our collections performance improved this quarter, and our turnover of receivables came in at 115 days versus 116 days last quarter and 119 days a year ago. Our pro forma DSO number, which would have excluded the Mirth acquisition, would have been 110 days, as we only owned Mirth for a portion of September. Our Mirth acquisition also contributed to growth in our deferred revenue, which grew to $6.8 million, up from $62.7 million last quarter. And I'm now going to move over to our business segment numbers for the second quarter. NextGen Ambulatory revenue, $84.7 million; NextGen Ambulatory operating income, $30.4 million. Our QSI Dental revenue, $4.9 million; operating income in that segment, $1.3 million; Hospital Solutions revenue, $4.7 million; operating loss there of $4.2 million; RCM Services revenue, $16.7 million; and operating income in that segment of $2.7 million. And for those of you who are tracking this, our noncash expenses for the quarter, amortization of capitalized software, $2.6 million; amortization of intangible assets, $2.2 million; depreciation expense, $1.9 million; and stock comp expense, $0.5 million. And our investing activities for the quarter were as follows: $8 million in capitalized software and $2.8 million in fixed assets. I want to thank you all for being on the call and your interest in our company. I look forward to seeing maybe some of you, customers that are out there at our user group meeting. And I'll turn things over to Dan Morefield, EVP and COO. Daniel J. Morefield: Thanks, Paul, and hello everybody. In the Hospital division, we continue to invest in this sector and to focus on customer satisfaction. We held our first ever CEO summit in early September, for which we received very positive feedback on our strategic direction and initiatives. Forums such as these allow us to expand our customers' involvement in our R&D process, as well as to encourage best practice sharing and active dialogues with each other. On the product side, we announced that the NextGen Inpatient Clinicals version 2.6 achieved compliance with the ONC 2014 Edition and supports Meaningful Use Stage 2 measures. This certification is part of a commitment by QSI to provide hospitals with quality tools to help improve care quality and operational efficiencies. Overall, we continue to see interest in our Inpatient Solutions and are rounding out our teams as we enhance our products and services to this sector. On the ambulatory side, I am pleased to announce that in Q2 we completed the development, testing and preparation for the NextGen Ambulatory EHR 5.8 and NextGen Practice Management 5.8 general release, which was announced on October 1. This is the accumulation of many months of incredible work by our teams. As you are aware, this release prepares our client partners for ICD-10 and Meaningful Use Stage 2. We are looking forward to our user group meeting next month as registration indicates we will have record attendance. Also, as many of you know, we use our user group meetings to introduce some new products and technology enhancements. I know there's always interest in our Hanger relationship. Hanger continues to rollout the EPM and EHR throughout their network. As part of our continued effort, a significant license purchase was made this quarter for the next project segments. With that, I'm going to turn the call over to Monte Sandler. Monte L. Sandler: Thanks, Dan. Good morning, everyone. RCM Services segment revenue for the second quarter was $16.7 million, representing a 6% growth over the prior year quarter. Given the materiality of the well-publicized de-install of HMA over the past few quarters, we estimate that Q2 revenue would have been in the $19.4 million range had HMA remained with NextGen RCM Services in the current quarter. That said, we continue to realize growth and revenue, gross margin and operating margin on a year-to-date basis. As a result of our sales focus, our bookings continue to grow at a rapid pace, with bookings up 175% in the first 2 quarters of this fiscal year. We have booked more deals in the past 4 quarters under Gary's leadership than the prior 10 quarters combined and continue to see strong interest in the market for multiple product sales bundled as part of our recurring revenue RCM Services offering. Our backlog of signed deals not implemented continue to trend positively as a result of the increase in bookings, and our RCM pipeline continues to grow as our customers and the overall market learn more about our comprehensive service offering. Our efforts to expand RCM Services into our small hospital and dental customer markets continue to advance as part of our overall corporate strategy. In fact, we have recently brought in an individual to lead our hospital RCM Service line. We continue to work with providers that remain concerned about their financial future as a result of pressures from ACA reforms, declining reimbursement and risk contracting. Our tailored RCM Services driven by people, process and technology make us a great solution to help providers position themselves successfully for future health care reimbursement models. Thank you for your time and interest in our company. I will now turn it over to Gary Voydanoff.

Thanks, Monte. Good morning, everyone. We continue to adapt and reposition our sales and marketing teams to take advantage of the evolving health care marketplace. The market demand for RCM and professional consulting services is evident by our growing pipeline for these service lines. Our efforts on cross selling our complete product suite into our client base continues to be successful, and we are pleased to see new products, such as Population Health, beginning to gain traction as a differentiator in net new sales within our client base. We continue to be optimistic about the replacement market as vendors continue to struggle to meet the ONC Stage 2 certification requirements. Only 79 vendors have met the Stage 2 certification criteria compared to 988 vendors that met the Stage 1 certification requirements. I am also very pleased with the activity we are seeing already as a result of the Mirth acquisition and look forward to bringing Mirth's solutions to our clients, as well as an entirely new set of clients looking for advanced connectivity solutions to drive interoperability. Our marketing efforts continue to be refined and focused on driving lead generation and product demand. The results are encouraging and indicate that the marketplace is very interested in the NextGen product suite and services portfolio as lead generation continues to rise. More specifically, lead generation was up approximately 167% in Q2 versus the same quarter 1 year ago when we started to revamp our marketing strategy and closely measure these metrics. The lead generation effort continues to expand the long-term funnel, which in turn has increased our sales pipeline incrementally, which now stands at $152 million. This pipeline figure represents the combined ambulatory RCM and inpatient division pipelines. We are pleased to announce today that we will be reporting the individual Mirth and Dental division pipelines. And then in the future, reporting them as part of the combined pipeline for all divisions. The pipeline for Dental is $5.8 million, while the pipeline for Mirth stands today at $6.1 million. The total combined pipeline across all divisions now stands at $164 million. Before I wrap up our call, I'd like to mention some of the notable success stories from last quarter. In Q2, we saw meaningful RCM sales to IASIS Healthcare, who significantly expanded their RCM relationship with NextGen in volume and length of term, as well as adding large group practices, Centennial Pediatrics and Community Health Care. The ambulatory division added very important new clients in Lifeline Medical Associates and Parkland Health, along with a substantial add-on sales to Hanger and Virtua Health. The inpatient division was very pleased to add East Adams Rural Hospital to their growing list of clients. Finally, the company executed 104 new arrangements on a consolidated basis versus 98 last quarter. 73% of the arrangements were greenfield and 27% were replacements. Discounting did not materially change in the quarter. And as of 9/30/13, there are 153 quota-carrying sales and management positions that now include the dental and inpatient teams, and there was no material increase in the ambulatory staff over Q2. We look to add headcount to support the expansion of Mirth and inside sales in the coming quarters. Thank you all for your time and continued interest in our company. Brandy, I'd like to turn it over to you now for questions.

[Operator Instructions] Your first question comes from Rick Goldwasser of Morgan Stanley. Zachary William Sopcak - Morgan Stanley, Research Division: This is Zach in for Ricky. I was just wondering if you could talk about your expectations for R&D spending for the rest of the year. With the Mirth acquisition in hand, do you expect it to continue to increase? Paul A. Holt: This is Paul. Yes, the Mirth acquisition really provides a new paradigm for us. And there's a lot of very exciting discussions going on here internally about what kinds of -- new kinds of technologies and products that we can work on and develop. So those discussions are ongoing. I think we're not going to quantify anything in particular here. But I think qualitatively, it's safe to say that given these opportunities that we're going to see continued investment and likely additional investment. Zachary William Sopcak - Morgan Stanley, Research Division: Okay. And can you give any details on what sort of revenue contribution you expect from the Mirth acquisition? Paul A. Holt: So clearly, the Mirth acquisition was -- at $600,000 not -- obviously, not a big contributor to the September quarter, but it's going -- that is going to grow. And that is an absolute certainty. When we purchased Mirth, we had to make some purchase accounting adjustments to their deferred revenue, which resulted in a run rate being something less than what they were before we bought them. So they were in excess of $12 million a year run rate revenue-wise when we purchased them, but the purchase accounting adjustments essentially wiped out a fair amount of their deferred revenue. So that has to be built back up. Now they made a lot of progress in a very short amount of time with $3.6 million in bookings there. So it will continue to grow, and it will likely in the next few quarters, we'll get back to that run rate. But again, we don't give formal guidance here, so I want to limit some of my commentary there to more qualitative.

Your next question comes from the line of Michael Cherny of ISI. James Clark - ISI Group Inc., Research Division: This is James on for Mike. I was just wondering if you guys could talk a little bit about some of the competitive dynamics in the market, particularly as you're seeing some smaller vendors coming in and building out their presence. Has that affected your ability to compete?

James, this is Gary Voydanoff. I'll take that one. Yes, there's some interesting technologies and some new vendors, but it's a difficult market to come in as a new player and to really gain a lot of traction. So more specifically, we haven't seen a lot of impact in our sales from a lot of those smaller vendors, particularly in the enterprise sales, the group practice sales. I think there's some of that activity on the small end. The difficulty is going to be the ability for the small vendors to meet Stage 2 requirements. And that's going to be the challenge. As I mentioned in my statement, only 79 vendors have met that criteria. And that's down from 988 with Stage 1. So they're out there. They're nimble, but we're very confident it's going to be tough for them to stick. James Clark - ISI Group Inc., Research Division: Okay. And then just curious, are you guys seeing any sort of change in the rate of pipeline conversion?

I would say what's really encouraging is the leads coming into the top of the funnel. And now we're really kind of going through that process of lead nurturing, where we score those leads and we get them to a place where they're sales ready. The important thing is that NextGen is top of mind to a lot of people. So they are wanting to learn about our solutions. They are wanting to hear what we're doing with Mirth and with our other products. So that's the part that excites us all, that there are -- they are still asking us a lot of questions and inviting us to the party, so to speak. So we'll probably see more in the next 2 or 3 quarters on how those start to convert. But obviously, the last 2 quarters have been encouraging with what we've been able to accomplish.

Your next question comes from the line of Gavin Weiss of JPMorgan. Gavin Weiss - JP Morgan Chase & Co, Research Division: First, I know that you cited that revenue has increased sequentially, but if I look more closely at the results, it was really only implementation and maintenance lines that were up sequentially. So I know there is some HMA loss in there, but can you help me reconcile this with your commentary on the growth in the pipeline and sales leads? Steven T. Plochocki: Well, Gavin, this is Steve. As we cited when we started talking about the reorganization of the company a year ago, our initial efforts were to develop new programs and models to increase lead flow. And we have been citing the lead flow improvements over the last several quarters, which have translated into pipeline. And now for the first time in 5 quarters, we were able to see some sequential growth in system sales, which are very important to us. And that's probably the key category, bookings and then revenue. So I think the system sales line is something that we're going to look at more intently over the next few quarters as Gary and his team have built up the leads and the pipeline profile. So again, we are taking the company through a turnaround. The turnaround is for us to be able to demonstrate and show sequential, continual, steady, methodical improvement, which we're on track to do. And we feel very comfortable and confident in an improving second half of our fiscal year. Gavin Weiss - JP Morgan Chase & Co, Research Division: Okay. That's helpful. It's been a few months since you've had the new board in place. Can you provide us with any update on where they are in the strategic review process? And any impact maybe the new board members have had on the turnaround in the business? Steven T. Plochocki: Well, I think the turnaround started way before this new board. I mean, this started over -- it started a year ago, but we had our first board meeting -- full board meeting yesterday. All of us in management are incredibly encouraged by the dialogue, the collegiality and the very substantive discussion we had in the board -- at the board session. In terms of the Clinton settlement, as previously stated in our press release on the Clinton settlement on August 15, 2013, the 2 new directors nominated by the Clinton Group did join the company's Transaction Committee. This committee is charged with undertaking an objective evaluation of the company's strategy, direction and alternatives. As a company, we do not believe it is appropriate to comment on internal board and committee initiatives or strategic deliberations and do not intend to provide market updates on the status of such ongoing initiatives or deliberations. We will, of course, publicly disclose any material events or developments when appropriate and as required by the securities laws. All that aside, we are all greatly encouraged. I think we've got a great board makeup presently. And I've been a member of this board for 9 years. And I am very encouraged by the collegiality and the very positive tone that has been brought to the board.

Your next question comes from the line of Jamie Stockton of Wells Fargo. Jamie Stockton - Wells Fargo Securities, LLC, Research Division: I guess maybe the first one, implementation was up a fair amount sequentially during the quarter. Could you talk about how much of that strength was driven by work by existing practices around Stage 2 versus some large deals like Hanger that might have driven more activity during the quarter? Daniel J. Morefield: Jamie, this is Dan. The bulk of that work was not yet related to upgrading clients for Stage 2. We will see that in the next 3 to 4 quarters. The bulk of the changes were normal course of business, executing contracts that were done in prior quarters and the timing associated with the revenue of the work that was being done. Jamie Stockton - Wells Fargo Securities, LLC, Research Division: Okay. And then maybe just on the inpatient business. I know you guys talked about how you're continuing to make investments there. The losses continue to be pretty significant. Can you give us any color on the timing of when you think those losses might be pared back or if there's any significant actions that you think you need to take from this point forward? I mean, are we just talking about waiting until revenue starts to recover for that business? Or is there something else that can start to pare back some of the losses there? Daniel J. Morefield: As we've said previously, we do not provide future guidance either as a company or under a specific business unit. However, we have also said that we continue to focus on the issues that drive client satisfaction. And those client satisfaction measures and the activity that surrounds them both in enhancement of the product, enhancement of the training implementation. All of these things, we believe, are the right and appropriate actions that will drive future, more positive results in that particular division. Jamie Stockton - Wells Fargo Securities, LLC, Research Division: Okay. And then here's my last question. You guys have talked about rolling out a new single database, web-based platform sometime next year, inpatient and ambulatory. If I remember correctly, you may start to communicate some of that at the user conference. Could you give us any update on strategy as far as selling that into the marketplace? Or how you might work with clients who are on the older platform to transition to the new platform? And that'll be my last one. Daniel J. Morefield: Again, this is Dan. Let me take those 2 in 2 separate points. First of all, we do have a practice of announcing these kind of initiatives at our user group meeting. And so the intent would be, is that we would do that again next month and not to try to preview that today. So I won't really respond to the first particular part of your question. On the issue of working with the clients on the existing platform, as part of our research and development process, we have regular engagements with a number of our clients on not only on the development of this particular platform, but as part of that is looking at how over a great deal of time, the platforms merge. As we have said before, we do not expect that this platform would, in any way, would require anytime in the foreseeable future of any kind of a massive movement from one platform to the other. These are complementary, and the technologies will be complementary over time.

Your next question comes from the line of Ryan Daniels of William Blair. Ryan Daniels - William Blair & Company L.L.C., Research Division: I want to start with a quick housekeeping just on the revenue cycle management business. I know you talked about the impact of the HMA wind down. Was there a full quarter impact of that or will that kind of continue to trend down in the upcoming quarter a little bit more as we get the full impact? Monte L. Sandler: So this is Monte. The transition has occurred. We're in the process of winding down receivables. So we will see some wind down that continues to happen, but I think the material portion was realized this quarter. Ryan Daniels - William Blair & Company L.L.C., Research Division: Okay. And then Paul, you mentioned the improvement in bookings during the quarter. I think it was about $28 million last quarter. And you may have given this and I missed it, but can you give us the actual bookings number? Paul A. Holt: Yes, $32.9 million. And that includes $3.6 million from Mirth. Ryan Daniels - William Blair & Company L.L.C., Research Division: Okay. And then lastly, just a little bit big picture. You highlighted this a couple of times in your comments. But can you talk a little bit about Mirth in more detail in regards to why the acquisition versus investing internally in an interoperability solution? And then, I guess, I'm also curious if, since the transaction, that has kind of attracted more enterprise-type deals, where the value-based care ACO-type model is going to be increasingly important. So I'm curious if that's opened up some doors for you already or if it's still too early to see that? Steven T. Plochocki: Ryan, this is Steve. I mean, your commentary right there answered all the questions. Essentially, we guesstimate that it would probably have taken 2 to 3 years to develop these products internally at a cost of anywhere between $30 million and $35 million. The ACO markets are emerging rapidly right now. It's probably the fastest growing trend in health care, as more and more of these ACOs are forming, becoming certified and are in rapid need of the tools that Mirth is bringing to our organization. So it was clearly a time to market, buy versus make, so that we would have the opportunity to move in step, in lockstep with this expansion of ACOs. And as you know, we have a lot of group practices that are scaled practices that are leading the ACOs. The physicians are the primary components of an ACO. Because as we all know, managing patients in low-cost settings is going to be one of the keys. And the product and service offerings of Mirth that they bring to the table for us are instrumental in that. So we made the decision to buy versus make for those very reasons.

Your next question comes from the line of Greg Bolan of Sterne Agee. Gregory T. Bolan - Sterne Agee & Leach Inc., Research Division: Going back to RCM, Dan, just kind of thinking about your penetration rate into the installed 90,000 physicians that you currently serve on the ambulatory side. I think the numbers that we've typically talked about have been around 5%. But as I look at the growth in RCM bookings this quarter, I guess, kind of on a -- maybe a pro forma basis, where do you think that penetration rate is going to be over the coming quarters? Daniel J. Morefield: Greg, I'll start this and then I'll turn it over to Monte. As we've talked before, we don't project out and provide guidance as to where those are going to be. Our penetration rate is slightly under 5% as we have indicated in the past. We see a great deal of bookings, a great deal of new deals and a great deal of backlog work that gives us a lot of confidence on what those numbers will look like in the future. Monte, anything you would add to that? Monte L. Sandler: Well, the only thing I would add is, there are some recent studies published by third parties around the physician RCM market estimating that 35% to 40% of physician practices currently use outsourced vendors for RCM services. So we think that, that is in line with the industry and the opportunity within the customer base, as well as the market at large. We also believe that over time that number is probably going to increase as the revenue cycle and reimbursement models continue to become more challenging, ICD-10 coming down the pike and so forth. It's getting more challenging for providers to manage their business. They're focused on Meaningful Use adoption, et cetera, and the opportunity to outsource the RCM to organizations that have the core competency in RCM just makes a lot of sense. Gregory T. Bolan - Sterne Agee & Leach Inc., Research Division: That's helpful. And Monte, just kind of -- if you could help us understand the per physician revenues that you guys are kind of bringing in right now on RCM. One of your peers that has more of a general practitioner-type bent is kind of ranging around the $14,000 per year per doc, but I understand you guys -- you all are a more multidiscipline-type environment. So I would assume that the billings per doctor, or the net patient revenues per doctor is higher. So can you maybe give us a feel for that metric if you have it in front of you? Monte L. Sandler: I'll preface it by saying that I'm an accountant. And I tend to be conservative. So I would tell you that the number that you have is somewhat in line. I think we may tick up a little bit higher than that because of the reasons you mentioned, but I think it's largely in line. Gregory T. Bolan - Sterne Agee & Leach Inc., Research Division: Okay. That's great. And then one of the things that doesn't really come up much in conversation is your EDI business. It just continues to grow quite nicely. Can you maybe walk us through what's driving that? And kind of how you see that business transforming over the years to come? Daniel J. Morefield: Greg, this is Dan again. First of all, one of the first things that is driving that business is, I go back to the restructure of the company and where we changed the philosophy of selling all of our products with a centralized sales force. So we've had great success on this. And one of the reasons associated with that was, really, is that our sales team really got behind it. And now it's included in somewhere near 90% or so of everything, every deal we put on the table has an EDI component. And I can tell you that a little over a year ago that number was radically lower. So part of it's -- the results have been the issues surrounding the restructure of the company. The other results associated with this is, we have an exceptional team in EDI. Ana Croxton who runs that business for us is an exceptional executive and does a phenomenal job for us. And we've got a strong development team on that. We don't talk about it much, but we have a relatively strong technology product roadmap associated with that to enhance the capabilities of that particular line of business. And in the future, we see it really in alignment much more of the services instead of a software sale. And so we see as the same drivers that are driving RCM business also drive EDI business, the complexity of the business environment. This is a piece that adds value in taking out complexity and adding productivity on the front end associated with business offices. Gary, what would you add to that?

I think the piece that I would add is, there's also a very unique kind of marriage that we see between the Mirth technology and our EDI technology. So the ability to bring those technologies and those teams together allow for different types of health care transactions to be monetized, we really feel, on a very large basis. So I think that's what I would add.

Your next question comes from the line of Donald Hooker of KeyBanc. Donald Hooker - KeyBanc Capital Markets Inc., Research Division: So with -- just a follow-up on your earlier comments around the revenue cycle management business. I think in prior quarters you talked about that as sort of leading kind of the overall sales effort. Is that kind of still the case? Or is it -- you talked about the penetration in your base or is it sort of following up on EHR installations?

Donald, this is Gary. I'll take that one again. So what's exciting in the sales effort is now that when a sales representative goes into either a client or in -- particularly in a net new sales opportunity, we go in with a very open attitude and a kind of a consultative approach. So that we want to find out what's the best sale. Is it RCM? Or is it a software sale? And we really like to look at it that way. And so the sales effort now has -- after a year of that kind of training and focus is much different than how we used to lead before. But what is great is, RCM is really kind of helping us lead the growth effort right now. We look at all situations really in a different light. How can we help the end user? How can we help the client improve their business and their financial position in a marketplace where margins are very slim for them and very tough? And so it's great to have all of those tools in our back pocket. Donald Hooker - KeyBanc Capital Markets Inc., Research Division: Got you. And on a separate topic, I think somebody said that there was 104 arrangements in the quarter. I know in prior quarters there's been this movement towards SaaS, I believe. And can you share with us, if you're willing to, kind of the percent of those arrangements that were SaaS? And to the extent that might be elongating the revenue rec?

This is Gary again. I would say -- while I wouldn't say what the exact percentage are, I would say that they're in line with previous quarters. So the percentage of SaaS system sales and RCM sales in terms of units are fairly similar. Donald Hooker - KeyBanc Capital Markets Inc., Research Division: Okay, got you. And I'll squeeze one last one in, if you don't mind. And I saw you guys released a new portal sort of upgrade, update I think early in September, I believe. And I assume going into sort of MU2, there's going to be some demand around sort of portal technologies and patient engagement and whatnot. Is there any way you can help us kind of size that opportunity in terms of kind of where you are in terms of penetration with your portal and kind of thinking about kind of maybe revenue per doc there?

Donald, this is Gary again. I would say the -- we see that we have probably about 39% penetration of portal into our current client base. We do see that accelerating driven by Stage 2 certification, certainly. I think going into our user group meeting, that's certainly a time when we'll see a lot of activity around that and would anticipate even, again, a greater bump in implementing -- in sales and implementation of the Patient Portal. And we'll have, as Dan mentioned, UGM is kind of a time where we have some new announcements. So we'll be able to talk to our client base about broadening that portal offer and extending it in some different fashions out into their patient populations to make it even more attractive for them.

Your next question comes from the line of George Hill of Deutsche Bank.

Just, Paul, forgive me if I missed this number, but can you give us an indication of the contribution of Hanger and IASIS to software sales in the quarter? Paul A. Holt: We do not typically provide that level of detail. I don't think we're going to start here on Hanger. Hanger, it's safe to say that Hanger is still a very large long-term opportunity because they have a rollout plan that is literally in the hundreds and may even grow from there substantially. So that is -- I think Dan probably would have a little bit more color on that as well. But no, we're not going to provide a transaction level detail of what happened last quarter on that point. But it's safe to say that we are early -- we are still relatively early in the overall revenue that we're going to see from that relationship. Steven T. Plochocki: And George, this is Steve. Just to reiterate what we said about Hanger in the past. I think we've rolled out about 45 of their operating units so far. We continue to do enhancements and upgrades based on customization that they require. They continue to acquire operations. So when we first talked to you about Hanger, I think they had 700 operating units. Now it's approaching 900. So we see Hanger as going to be a continual steady feeder into our system probably over the next couple of years.

Okay. So to that end, it sounds like you guys have only kind of 5% penetrated that account. So it should continue to grow kind of -- you guys should continue to grow that business for the foreseeable future? Steven T. Plochocki: That's a fair statement, yes.

And then maybe ask this -- just 2 quick follow-ups -- ask this another way. I guess, can you talk about the growth of the underlying business x Hanger because I guess that would seem to be weaker than the composite business that was reported? And then maybe for Gary or Dan, the pipeline conversion question was asked later, if pipeline and top of the funnel are up high-double, low-triple digits and software sales continue to fall, that would imply that pipeline conversion is plummeting pretty quickly. And I guess can you -- any further color that you can provide around that would be helpful. Steven T. Plochocki: Well, again, George, this is Steve. Again, the patterns of developing a lead profile, which then translates into pipeline, which then 6 to 8 months later translate into revenue conversion, we're kind of on track for that. We've long said that we'll be a second half of the year story. And we think that the development of our lead profiles translated into pipeline, which now we believe will start translating more consistently into revenue, is going to be the story that's going to be written about us. And we're still on that track. You got to remember, we've reversed some very negative trends over the last several quarters, including these last 2 quarters where we've had sequential improvement in system sales, revenue and bookings. And we believe with the funnel filling up, as Gary likes to refer to it, the funnel that funnels down into the pipeline, we think that our Q3 and Q4 will start representing that translation a little finer.

Your next question comes from the line of Glen Santangelo of Crédit Suisse. Glen J. Santangelo - Crédit Suisse AG, Research Division: Just a couple of quick ones. First, I was kind of curious to talk about the hospital business in a little bit more detail. Obviously, the negative operating income continues to be a little bit of a drag. And I think in your prepared remarks you talked about the fact that you guys continue to invest in that business. I'm kind of curious, could you elaborate a little bit more on these investments, the magnitude, and what you might think it would take to kind of get this business back to a profitable state? Daniel J. Morefield: Thanks, Glen. This is Dan. As we announced earlier, our investments into the Hospital Solutions division really falls within 2 major lines: One is increased R&D spend associated around enhancing the products, both for getting ready for Meaningful Use 2, as well as enhancing overall performance and client satisfaction with the product. The other area where we have done material enhancements or investments is in the area of training implementation. As we said earlier, we went to market fast. And we've got a lot of early successes with a relatively junior training and implementation team. And so we have invested significantly more in both the size of that team, as well as the training and the development of that team that we believe leads to greater client satisfaction, which we believe leads to greater revenue, greater retention and greater profitability. Glen J. Santangelo - Crédit Suisse AG, Research Division: Okay, that's fair. And maybe if I could just ask another follow-up. There's been obviously a lot of conversation around the RCM opportunity. But as we think about EHR, we don't talk about it as much anymore, but maybe could you give us some comments on what you're seeing in terms of greenfield opportunities or the replacement market in that aspect of your business?

This is Gary Voydanoff. The replacement market, based on what I had mentioned earlier, it remains pretty steady right now, right around the 28%, 29%, 30% mark over the last 4 quarters. So we saw it start to trend up a little bit prior to that. And so I think the Meaningful Use, the Stage 2 requirements are going to really impact that. We think that, again, as that vendor falloff starts to happen that, that's when that transition is going to begin to a greater replacement market. So there are an awful lot of vendors and an awful lot of providers on those systems. And that's where a lot of the inquiries we see today that are at the top of that funnel, they're from those providers that are uncertain of their future. And so that's going to start to feed those replacements.

Your next question comes from the line of Mohan Naidu of Stephens. Mohan A. Naidu - Stephens Inc., Research Division: Dan, for you. On the Meaningful Use Stage 2 on ICD-10, is that a new license or just a maintenance upgrade for you guys for existing customers? Daniel J. Morefield: For Meaningful Use 2 and ICD-10, it is not a new license sale. It is provided under the maintenance components, with the exception, if there are specific new modules that are outside of our normal and historical offering base. So there are some small components that will require purchasing. But as a general basis, they are included in as part of the maintenance component of our software. Mohan A. Naidu - Stephens Inc., Research Division: Okay. So do customers need to pay for the upgrade and the implementation? Daniel J. Morefield: They are provided the software as part of their maintenance. Traditionally, a number of our clients have asked us to assist them in the upgrade process and they pay us for that. And that would show up in the form of training and implementation services revenue in the future. Mohan A. Naidu - Stephens Inc., Research Division: Okay, got it. Gary, a quick one, on the pipeline number. We have seen good growth in the last couple of quarters. Can you talk to us about the mix in the pipeline, like what is ticking up? Is the RCM the big driver there? Or is the system sales still going through there?

It's really a combination of both. And as I said, now we kind of go into each of those new sales opportunities trying to figure out what is it that is going to be best for that client. So -- and in many cases, what initially looks like a software opportunity turns to an RCM opportunity and actually vice versa. We really have an opportunity to look at what that particular prospect needs from a financial standpoint. So that's what's been encouraging, that they are open to learning about the entire suite of our products and then how they can be deployed best.

Your next question comes from the line of Richard Close of Avondale Partners. Richard C. Close - Avondale Partners, LLC, Research Division: A little bit more on Mirth. Can you give us some details with respect to what buckets Mirth is going to fall in terms of the revenue and as well as what divisional segments that's going to fall into? Is it a license sale? Or is it a software service? And maybe average price of a contract on that? Paul A. Holt: Richard, this is Paul. Mirth has really a nice mix of software and services. They're actually -- a fairly significant amount of their bookings is software, but it's a combination of both subscription licenses and some amount of perpetual licenses. So they have maintenance revenue. They have subscription license revenue. They have software -- perpetual software revenue. And then they, of course, have implementation training and they have some hosting services. And there's a roughly even mix there amongst those 3. So most of that will end up showing up in system sales, but I also want to point out though that it's more recurring kinds of subscription license fees than perpetual license fees. And we also have -- not to get into too much technical detail about accounting here, but given the fact that they did not have vendor-specific evidence of objective value or VSOE, what they sell is deferred upfront. And so it's a very slow revenue recognition process, which is partly why we're -- I mentioned $3.6 million in bookings and $600,000 in revenue. So hopefully, that's helpful to you. I don't think we're going to get into average deal size with them or their pricing. Although I would say that they have some very interesting large opportunities, as well as many smaller kinds of transaction-based subscription renewal activity as well.

Your next question is from David Larsen of Leerink. David Larsen - Leerink Swann LLC, Research Division: Can you talk about your product portfolio now that you've acquired Mirth that builds your HIE capabilities? Are there other areas you're looking at? Can you maybe touch on the hospital RCM area, please? Daniel J. Morefield: This is Dan. I'll touch upon the hospital RCM, and I will invite Gary and Monte to respond as well. The hospital RCM is something we have stated that is an important product offering for us going forward. We see it as material value to our client base and material value to QSI as a whole. We also believe that we can leverage the expertise we have developed over the last number of years in our RCM offering and the people associated with that to be able to leverage to that. Monte will give you a little bit more detail, but we have hired some leadership to drive that for us, and we expect that to have a reasonable contribution for us in the future. Monte L. Sandler: This is Monte. Agreed, the market that we serve in the hospital segment tend to be smaller, more rural hospitals. And we see a large opportunity to help them do 2 things, really. And it's in line with what we do in the physician RCM. It's optimize revenue and it's maximize the use of our product and technology. So we are full steam ahead. We have leadership in place. And we are working to bring something to market that we think will contribute in fiscal '15.

Your next question comes from Steve Halper [ph] of FBR.

Paul, what was the operating cash flow in the quarter? Paul A. Holt: Stay tuned for the 10-Q. You'll have all those details as soon as we file that. It will be coming out shortly.

Your next question is from Eric Coldwell of Robert W. Baird. Eric W. Coldwell - Robert W. Baird & Co. Incorporated, Research Division: Just a few here. First off, I don't believe you gave the dental pipeline number for the last 2 quarters, but you returned to calling it out this period. Could you give us an update on what it was the last 2 periods?

Yes, Eric, this is Gary Voydanoff. Very similar over the last couple of prior quarters. Eric W. Coldwell - Robert W. Baird & Co. Incorporated, Research Division: Okay. So just make a rough assessment in that $6 million -- $5 million, $6 million range, $6 million, $7 million.

Sure. Eric W. Coldwell - Robert W. Baird & Co. Incorporated, Research Division: Okay. The pro forma presentation, I mean, let's face it, you're the only GAAP reporter historically in the group. So going to a pro forma model probably makes sense. Is this something you plan to do going forward? And when you do reinitiate guidance in the future, will it be on a pro forma basis? And also, if so, could you help us out with some -- maybe at a later date, giving us some historical recast so we can get our models in the right place? Paul A. Holt: Yes, this is Paul. So I don't -- no update on guidance there. There's no decision yet on whether we're going to give guidance. So it's not necessarily something we have to sort out right here. But our non-GAAP disclosure really doesn't change any of our GAAP reporting. We're just taking certain aspects in some of our numbers and presenting them in a non-GAAP -- adding them back to our GAAP numbers. So it shouldn't be hard. If we were to give guidance, that would not be a hard thing to do, to talk about it from a GAAP point of view and as well as a non-GAAP point of view. But getting back to your question on some of the history, if you were to pro forma back in time, I mentioned $0.24 was the number for the first quarter of our fiscal year. And if you go back further than that, you go to fourth quarter of fiscal '13, it would have been $0.24. You going back to the third quarter of fiscal '13, it was $0.29. So hopefully that helps you there.

Your next question is from Sean Wieland of Piper Jaffray. Sean W. Wieland - Piper Jaffray Companies, Research Division: So the HMA roll off, how much of this -- like what inning are we in there? How much is yet to come on that HMA roll off? Monte L. Sandler: This is Monte. As I indicated earlier, the transition has occurred, and we're winding down some receivables. So I think the material portion is complete. There'll be some residual over the next few quarters.

Your final question comes from the line of Gene Mannheimer of B. Riley. Eugene M. Mannheimer - B. Riley Caris, Research Division: Let's see, could you just give us the year ago pipeline number? I didn't hear what that was. Daniel J. Morefield: Gene, I don't know that we have that right on hand. I think if you will call us afterwards, we'll be glad to dig it up and provide it for you, but we just don't have that in front of us today. Eugene M. Mannheimer - B. Riley Caris, Research Division: That's fine. I'll look that up. And let's see, you talked a little bit about the cloud platform codenamed NextGen 7. Can you just give us an update on the timing of that debut? I think previously we talked about summer of 2014 and want to know if that's on schedule. Daniel J. Morefield: Again, this is Dan. I don't know that we have ever publicly announced the timing associated with any product offerings that would come off that platform. It is our expectation and our history to announce those kind of dates at our user group meeting, which will be happening middle of next month. Eugene M. Mannheimer - B. Riley Caris, Research Division: Okay. All right. And then last thing, you indicated that the percent of Software-as-a-Service agreements were sort of in line with historical percentages. What are those? Is that 25% to 30%? Is that about right? Paul A. Holt: It's a relatively smaller percentage of the total deals. And the other thing to mention there is that, generally, those SaaS deals are much smaller in terms of the number of licenses that are done. So that makes it to be even a smaller portion of actual licenses sold in any particular quarter. And that's been the case that we've seen for some time.

Yes, this is Gary. I would just also add that we've seen that, in the past, some of those opportunities that probably would have been SaaS opportunities are now becoming RCM opportunities. A little bit of a different transition and actually we like that kind of growth model.

There appear to be no other questions. I would now like to turn the floor back over to Mr. Steven Plochocki for any closing comments. Steven T. Plochocki: Thank you, Brandy, and thanks to all of you for joining us. Hopefully, you're starting to see the signs of the restructuring and turnaround that we embarked upon over a year ago. Again, lead profiles, pipeline profiles, system sales, bookings, all on the upward swing. We think that we've got enough operational muscle in the organization to be able to support further growth. And we think our sales organization, which is now, as Gary cited, approaching 150 members strong, selling all product lines and all service lines, is going to put us in an optimal position as we head into the second half of the year. So thanks for all of your support, and we look forward to seeing you in our travels. Take care.

This does conclude today's teleconference. If you'd like to listen to a replay of today's conference, please dial (800) 585-8367 and refer to conference ID 76516044. A webcast archive of this call can also be found at www.qsii.com. Please disconnect your lines at this time and have a wonderful day.