EX-99.1 3 a04-1745_2ex99d1.htm EX-99.1

Exhibit 99.1

 

 

 

 

 

 

 

FOR IMMEDIATE RELEASE

 

 

 

 

 

 

Dendrite Reports Another Strong Quarter of Revenue and Earnings Growth

GAAP EPS improves 17% to $0.14

Adjusted EPS of $0.20 at 3 year high (up 60% from prior year)

Morristown, N.J., January 29, 2004  - Dendrite International, Inc. (NASDAQ: DRTE) today announced another strong quarter, reporting fourth quarter GAAP diluted earnings of $0.14 per share, up 17% compared to GAAP earnings of $0.12 per share for the fourth quarter of 2002.  GAAP diluted earnings per share for the fourth quarter 2003 included approximately $0.06 of acquisition related non-cash charges and other acquisition-related costs.

Excluding these items, fourth quarter 2003 adjusted earnings were $0.20 per diluted share, an improvement of 60% from an adjusted $0.12 per diluted share reported in the same period of the prior year.

GAAP earnings per share for the full year 2003 were $0.51, up 33% versus prior year GAAP EPS of $0.38 per share.  Excluding the above acquisition-related items, adjusted EPS of $0.63 grew 50% versus prior year adjusted EPS of  $0.42.  A reconciliation of GAAP to adjusted results can be found on Table 7 of the accompanying financial tables.

“The fourth quarter marked the culmination of what was an exceptional year for Dendrite,” noted Chairman and CEO John Bailye.  “Our adjusted fourth quarter EPS was at a three year high, and we also recorded significant growth to both GAAP and adjusted EPS every quarter this year.  In addition to generating considerable value for our shareowners, we achieved many significant milestones in our business operations.  Concurrent with the rapid and effective

 

 

 



 

 

integration of the former Synavant business, we completed a very large sales force integration for a major U.S. customer and successfully supported a large Siebel roll-out in the United States.  We also experienced several significant events on the international front by signing a key global agreement with a large pharmaceutical company and winning a record five new SFA deals in Japan.  We are quite proud of all of our accomplishments and feel we are well positioned to continue the momentum in 2004.”

 

 

 

FOURTH QUARTER RESULTS

 

 

 

Revenues for the quarter increased to $99.0 million, up 74% from prior year and 7% sequentially.  While a key contributor of the year-over-year increase was the revenue contribution from the Synavant acquisition, the company also indicated that revenue from its core businesses showed strong growth versus the prior year as well.

Dendrite delivered GAAP operating income of $9.0 million in the fourth quarter, an 18% improvement over the prior year’s fourth quarter GAAP operating income of $7.7 million.  The company indicated that there were several items impacting its fourth quarter GAAP operating income.  The company finalized its valuation of the Synavant acquisition and recorded an additional $0.9 million of expense relating to the amortization of definite lived intangibles, bringing total intangible amortization expense in the fourth quarter to $2.1 million, versus $0.3 million in 2002.  The company also recorded approximately $2.0 million of charges relating to Dendrite severance, facility closure costs, and other integration costs incurred as a result of the Synavant acquisition.

Excluding these items, operating income was $13.1 million, up 63% from the $8.0 million adjusted operating income generated in the prior year. Chief Financial Officer, Kathy Donovan, attributed the profit growth to increased revenue, in combination with “the successful results of previous cost-saving initiatives and international cost synergies realized from the Synavant integration.” A reconciliation of GAAP operating income to adjusted operating income can be found on Tables 2 and 10 of the accompanying financial tables.

 

2



 

 

KEY OPERATING STATISTICS

 

 

 

Dendrite ended the fourth quarter with $30.4 million in cash and cash equivalents.  The company noted that the $4.9 million of cash from operations reported for the fourth quarter also included $3.9 million of payments related to acquisition and restructuring activities.  Accounts receivable days sales outstanding (DSO) was reported at 68 days.  The company stated that the DSO figure included approximately 4 days of invoices related to advance billings and long-term receivables.

FOURTH QUARTER HIGHLIGHTS

Dendrite reported success in many aspects of its business. Highlights included:

 

 

•     

Signing more than 15 new agreements with customers in North America, Europe, Latin America and Asia/Pacific Rim.   Additionally, the company achieved a record level of activity in its Data and Analytics business by entering into agreements for more than 20 studies using its Longitudinal Prescription Data

 

 

•     

Adding almost 3,000 additional sales force automation user licenses through business with new customers and expanded business with existing customers - an increase in line with historical Dendrite new user growth

 

 

•     

Securing a major U.S. services contract extension with Novartis, under which Dendrite’s CRM Center of Excellence will deliver a broad range of hardware and software support during one of the largest implementations of Siebel software ever conducted in the pharmaceutical industry

 

 

•     

Launching its analytically driven interactive marketing business to enhance pharmaceutical promotional effectiveness

 

 

•     

Bringing together more than 100 industry executives from leading drug manufacturers during the company’s Pharmaceutical Sales and Marketing Leadership Summit, which reviewed critical issues shaping the industry today

 

 

 

OUTLOOK

 

 

 

The company provided its customary six-month rolling outlook. “We currently believe that the combined revenue for the first and second quarters of 2004 will be in the range of approximately $190 to $194 million,” said Dendrite Chief Financial Officer, Ms. Donovan.  “This outlook includes the recently announced acquisition of Uto Brain in Japan, which is expected to add

 

3



 

 

approximately $8 million to 2004 revenue.  We expect the second quarter to be seasonally stronger than the first as we anticipate an increase in international revenues.  Based on achieving this targeted revenue, we anticipate delivering GAAP earnings in the range of $0.27 to $0.29 per diluted share and adjusted earnings of $0.29 to $0.31 per diluted share over the next six months.”  Please refer to table 8 of this press release for a reconciliation of GAAP and adjusted EPS.

This current outlook is based on current expectations and assumptions and constitutes “forward-looking information.”  The company can give no assurance that such expectations and assumptions will prove to be correct.  The company does not intend to update such outlook other than in connection with regularly scheduled earnings releases.

Please visit our website at www.dendrite.com to participate in our earnings call web cast on January 29, 2004 at 5 p.m. EST.

ABOUT DENDRITE

Dendrite develops and delivers solutions that increase the productivity of sales, marketing, and clinical processes for pharmaceutical and other life science clients . For more information, visit www.dendrite.com.

Investor Relations

Christine Croft
908-541-5865
christine.croft@dendrite.com

Media Relations

Erik Kopp

908-541-5850

erik.kopp@dendrite.com

Note: Dendrite is a registered trademark of Dendrite International, Inc.

This document contains forward-looking statements may be identified by such forward-looking terminology as “expect,” “believe,” “anticipate,” “will,” “intend,” “plan,” “outlook,” “guidance,” and similar statements or variations. Such forward-looking statements are based on our current expectations, estimates, assumptions and projections and involve significant risks and uncertainties, including risks which may result from our dependence on the pharmaceutical industry; fluctuations in quarterly

 

4



 

 

revenues due to lengthy sales and implementation cycles for our products; our fixed expenses in relation to fluctuating revenues and variations in customers’ budget cycles; dependence on major customers; changes in demand for our products and services attributable to the extended weakness experienced in the  economy or mergers, acquisitions and consolidations in the pharmaceutical industry; successful and timely development and introduction of new products and versions; rapid technological changes; increased competition; international operations; acquisitions, including the success of the June 2003 acquisition of Synavant and the risks associated with the integration of acquisitions; our ability to effectively manage our growth; the protection of our proprietary technology; our ability to compete in the Internet-related products and services market; the continued demand for Internet-related products and services; the ability of our third party vendors to respond to technological change; our ability to maintain our relationships with third-party vendors;  less favorable than anticipated results from strategic relationships; dependence of data solutions on strategic relationships; events which may affect the U.S. and world economies; and catastrophic events which could negatively affect our information technology infrastructure. Other important factors that should be reviewed and carefully considered are included in the Company’s 10-K, 10-Qs, and other reports filed with the SEC. Actual results may differ materially. The Company assumes no obligation for updating any such forward-looking statements to reflect actual results, changes in assumptions or other changes affecting such forward-looking statements.

 

5



TABLE 1
DENDRITE INTERNATIONAL, INC.

 

CONSOLIDATED STATEMENTS OF OPERATIONS - GAAP

 

(IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)

 

 

 

Three Months Ended December 31,

 

Year Ended December 31,

 

 

 

2003

 

%

 

2002

 

%

 

Change

 

2003 (1)

 

%

 

2002

 

%

 

Change

 

 

 

Unaudited

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

License fees

 

$

2,849

 

2.9

%

$

5,745

 

10.1

%

-50

%

$

10,860

 

3.4

%

$

13,507

 

6.0

%

-20

%

Services

 

96,158

 

97.1

%

51,295

 

89.9

%

87

%

310,247

 

96.6

%

212,249

 

94.0

%

46

%

 

 

99,007

 

100.0

%

57,040

 

100.0

%

74

%

321,107

 

100.0

%

225,756

 

100.0

%

42

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of license fees

 

1,510

 

1.5

%

1,954

 

3.4

%

-23

%

4,915

 

1.5

%

4,730

 

2.1

%

4

%

Cost of services

 

50,428

 

50.9

%

25,333

 

44.4

%

99

%

158,597

 

49.4

%

106,817

 

47.3

%

48

%

 

 

51,938

 

52.5

%

27,287

 

47.8

%

90

%

163,512

 

50.9

%

111,547

 

49.4

%

47

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

License fees gross margin

 

1,339

 

47.0

%

3,791

 

66.0

%

(19.0

)Pt

5,945

 

54.7

%

8,777

 

65.0

%

(10.3

)Pt

Services gross margin

 

45,730

 

47.6

%

25,962

 

50.6

%

(3.0

)Pt

151,650

 

48.9

%

105,432

 

49.7

%

(0.8

)Pt

 

 

47,069

 

47.5

%

29,753

 

52.2

%

(4.7

)Pt

157,595

 

49.1

%

114,209

 

50.6

%

(1.5

)Pt

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

35,171

 

35.5

%

19,161

 

33.6

%

84

%

111,139

 

34.6

%

77,301

 

34.2

%

44

%

Research and development

 

2,858

 

2.9

%

2,950

 

5.2

%

-3

%

11,633

 

3.6

%

10,396

 

4.6

%

12

%

Restructuring benefit

 

 

0.0

%

(47

)

-0.1

%

-100

%

 

0.0

%

(47

)

0.0

%

-100

%

Asset impairment

 

 

0.0

%

 

0.0

%

0

%

 

0.0

%

1,832

 

0.8

%

-100

%

 

 

38,029

 

38.4

%

22,064

 

38.7

%

72

%

122,772

 

38.2

%

89,482

 

39.6

%

37

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

9,040

 

9.1

%

7,689

 

13.5

%

18

%

34,823

 

10.8

%

24,727

 

11.0

%

41

%

Interest income

 

119

 

0.1

%

229

 

0.4

%

-48

%

731

 

0.2

%

1,085

 

0.5

%

-33

%

Other income/(expense)

 

581

 

0.6

%

(43

)

-0.1

%

1451

%

560

 

0.2

%

(149

)

-0.1

%

476

%

Income before income taxes

 

9,740

 

9.8

%

7,875

 

13.8

%

24

%

36,114

 

11.2

%

25,663

 

11.4

%

41

%

Income taxes

 

3,896

 

3.9

%

3,150

 

5.5

%

24

%

15,054

 

4.7

%

10,265

 

4.5

%

47

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

5,844

 

5.9

%

$

4,725

 

8.3

%

24

%

$

21,060

 

6.6

%

$

15,398

 

6.8

%

37

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.14

 

 

 

$

0.12

 

 

 

21

%

$

0.52

 

 

 

$

0.39

 

 

 

35

%

Diluted

 

$

0.14

 

 

 

$

0.12

 

 

 

17

%

$

0.51

 

 

 

$

0.38

 

 

 

33

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

40,680

 

 

 

39,910

 

 

 

 

 

40,340

 

 

 

39,872

 

 

 

 

 

Diluted

 

42,385

 

 

 

39,966

 

 

 

 

 

41,415

 

 

 

40,127

 

 

 

 

 

 


(1) Includes Synavant’s operating results for the period June 16, 2003 to December 31, 2003.

 

6



 

TABLE 2
DENDRITE INTERNATIONAL, INC.

 

ADJUSTED CONSOLIDATED STATEMENT OF OPERATIONS (NON-GAAP)

 

(IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)

 

 

 

Three Months Ended December 31,

 

Year Ended December 31,

 

 

 

2003 (1)

 

%

 

2002 (2)

 

%

 

Change

 

2003 (3)

 

%

 

2002 (4)

 

%

 

Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

License fees

 

$

2,849

 

2.9

%

$

5,745

 

10.1

%

-50

%

$

10,860

 

3.4

%

$

13,507

 

6.0

%

-20

%

Services

 

96,158

 

97.1

%

51,295

 

89.9

%

87

%

310,247

 

96.6

%

212,249

 

94.0

%

46

%

 

 

99,007

 

100.0

%

57,040

 

100.0

%

74

%

321,107

 

100.0

%

225,756

 

100.0

%

42

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of license fees

 

1,357

 

1.4

%

1,789

 

3.1

%

-24

%

4,305

 

1.3

%

4,565

 

2.0

%

-6

%

Cost of services

 

50,363

 

50.9

%

25,333

 

44.4

%

99

%

158,456

 

49.3

%

107,756

 

47.7

%

47

%

 

 

51,720

 

52.2

%

27,122

 

47.5

%

91

%

162,761

 

50.7

%

112,321

 

49.8

%

45

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

License Gross Margin

 

1,492

 

52.4

%

3,956

 

68.9

%

(16.5

)Pt

6,555

 

60.4

%

8,942

 

66.2

%

(5.8

)Pt

Services Gross Margin

 

45,795

 

47.6

%

25,962

 

50.6

%

(3.0

)Pt

151,791

 

48.9

%

104,493

 

49.2

%

(0.3

)Pt

Gross margin

 

47,287

 

47.8

%

29,918

 

52.5

%

(4.7

)Pt

158,346

 

49.3

%

113,435

 

50.2

%

(0.9

)Pt

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

31,338

 

31.7

%

18,933

 

33.2

%

66

%

104,667

 

32.6

%

75,836

 

33.6

%

38

%

Research and development

 

2,858

 

2.9

%

2,950

 

5.2

%

-3

%

11,633

 

3.6

%

10,396

 

4.6

%

12

%

 

 

34,196

 

34.5

%

21,883

 

38.4

%

56

%

116,300

 

36.2

%

86,232

 

38.2

%

35

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

13,091

 

13.2

%

8,035

 

14.1

%

63

%

42,046

 

13.1

%

27,203

 

12.0

%

55

%

Interest income

 

119

 

0.1

%

229

 

0.4

%

-48

%

731

 

0.2

%

1,085

 

0.5

%

-33

%

Other income/(expense)

 

581

 

0.6

%

(43

)

-0.1

%

1451

%

560

 

0.2

%

(149

)

-0.1

%

476

%

Income before income taxes

 

13,791

 

13.9

%

8,221

 

14.4

%

68

%

43,337

 

13.5

%

28,139

 

12.5

%

54

%

Income taxes

 

5,516

 

5.6

%

3,289

 

5.8

%

68

%

17,336

 

5.4

%

11,256

 

5.0

%

54

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

8,275

 

8.4

%

$

4,932

 

8.6

%

68

%

$

26,001

 

8.1

%

$

16,883

 

7.5

%

54

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.20

 

 

 

$

0.12

 

 

 

65

%

$

0.64

 

 

 

$

0.42

 

 

 

52

%

Diluted

 

$

0.20

 

 

 

$

0.12

 

 

 

60

%

$

0.63

 

 

 

$

0.42

 

 

 

50

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

40,680

 

 

 

39,910

 

 

 

 

 

40,340

 

 

 

39,872

 

 

 

 

 

Diluted

 

42,385

 

 

 

39,966

 

 

 

 

 

41,415

 

 

 

40,127

 

 

 

 

 

 

Note:      The non-GAAP financial information set forth above is not prepared in accordance with U.S. generally accepted accounting principles (GAAP).  These non-GAAP financial measures may be different from non-GAAP financial measures used by other companies.  Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.  The Company believes that disclosing non-GAAP statements of operations provide further insight into the operating performance of the Company and are useful to investors to help them analyze operating trends and perform comparisons across periods.  Management uses the adjusted numbers to manage the business and evaluate operating performance on a period-to-period comparative basis.

 


(1) See Table 3 for the Statement of Operations reconciliation from GAAP to non-GAAP for the three months ended December 31, 2003.

 

(2) See Table 10 for the Statement of Operations reconciliation from GAAP to non-GAAP for the three months ended December 31, 2002.

 

(3) See Table 4 for the Statement of Operations reconciliation from GAAP to non-GAAP for the year ended December 31, 2003.

 

(4) See Table 11 for the Statement of Operations reconciliation from GAAP to non-GAAP for the year ended December 31, 2002.

 

7



 

TABLE 3

DENDRITE INTERNATIONAL, INC.

 

RECONCILIATION OF GAAP TO ADJUSTED (NON-GAAP) STATEMENT OF OPERATIONS

 

THREE MONTHS ENDED DECEMBER 31, 2003

 

(IN THOUSANDS EXCEPT PER SHARE DATA)

(UNAUDITED)

 

 

 

Total Adjusted Q4

 

% of
Rev.

 

Amortization (2)

 

Other Charges (3)

 

GAAP

 

% of
Rev.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

License fees

 

$

2,849

 

2.9

%

$

 

$

 

$

2,849

 

2.9

%

Services

 

96,158

 

97.1

%

 

 

96,158

 

97.1

%

 

 

99,007

 

100.0

%

 

 

99,007

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of license fees

 

1,357

 

1.4

%

153

 

 

1,510

 

1.5

%

Cost of services

 

50,363

 

50.9

%

65

 

 

50,428

 

50.9

%

 

 

51,720

 

52.2

%

218

 

 

51,938

 

52.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

License Gross Margin

 

1,492

 

52.4

%

(153

)

 

1,339

 

47.0

%

Services Gross Margin

 

45,795

 

47.6

%

(65

)

 

45,730

 

47.6

%

Gross margin

 

47,287

 

47.8

%

(218

)

 

47,069

 

47.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

31,338

 

31.7

%

1,850

 

1,983

 

35,171

 

35.5

%

Research and development

 

2,858

 

2.9

%

 

 

2,858

 

2.9

%

 

 

34,196

 

34.5

%

1,850

 

1,983

 

38,029

 

38.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

13,091

 

13.2

%

(2,068

)

(1,983

)

9,040

 

9.1

%

Interest income

 

119

 

0.1

%

 

 

119

 

0.1

%

Other income

 

581

 

0.6

%

 

 

581

 

0.6

%

Income before income taxes

 

13,791

 

13.9

%

(2,068

)

(1,983

)

9,740

 

9.8

%

Income taxes

 

5,516

 

5.6

%

827

 

793

 

3,896

 

3.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

8,275

 

8.4

%

$

(1,241

)

$

(1,190

)

$

5,844

 

5.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.20

 

 

 

$

(0.03

)

$

(0.03

$

0.14

 

 

 

Diluted

 

$

0.20

(1)

 

 

$

(0.03

)

$

(0.03

)

$

0.14

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing net income (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

40,680

 

 

 

40,680

 

40,680

 

40,680

 

 

 

Diluted

 

42,385

 

 

 

42,385

 

42,385

 

42,385

 

 

 

 


(1) See Table 7 for a more detailed reconciliation of net income for the three months ended December 31, 2003.

 

(2) Represents amortization expense of definite lived intangible assets resulting from the acquisitions of Synavant and SAI.

 

(3) Includes Dendrite severance and facility closure costs incurred as a result of the acquisition of Synavant along with other integration costs.

 

8



 

TABLE 4

DENDRITE INTERNATIONAL, INC.

 

RECONCILIATION OF GAAP TO ADJUSTED (NON-GAAP) STATEMENT OF OPERATIONS

 

YEAR ENDED DECEMBER 31, 2003

 

(IN THOUSANDS EXCEPT PER SHARE DATA)

(UNAUDITED)

 

 

 

Total Adjusted YTD

 

% of
Rev.

 

Amortization (2)

 

Other Charges (3)

 

GAAP

 

% of
Rev.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

License fees

 

$

10,860

 

3.4

%

$

 

$

 

$

10,860

 

3.4

%

Services

 

310,247

 

96.6

%

 

 

310,247

 

96.6

%

 

 

321,107

 

100.0

%

 

 

321,107

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of license fees

 

4,305

 

1.3

%

610

 

 

4,915

 

1.5

%

Cost of services

 

158,456

 

49.3

%

141

 

 

158,597

 

49.4

%

 

 

162,761

 

50.7

%

751

 

 

163,512

 

50.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

License Gross Margin

 

6,555

 

60.4

%

(610

)

 

5,945

 

54.7

%

Services Gross Margin

 

151,791

 

48.9

%

(141

)

 

151,650

 

48.9

%

Gross margin

 

158,346

 

49.3

%

(751

)

 

157,595

 

49.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

104,667

 

32.6

%

3,283

 

3,189

 

111,139

 

34.6

%

Research and development

 

11,633

 

3.6

%

 

 

11,633

 

3.6

%

 

 

116,300

 

36.2

%

3,283

 

3,189

 

122,772

 

38.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

42,046

 

13.1

%

(4,034

)

(3,189

)

34,823

 

10.8

%

Interest income

 

731

 

0.2

%

 

 

731

 

0.2

%

Other income

 

560

 

0.2

%

 

 

560

 

0.2

%

Income before income taxes

 

43,337

 

13.5

%

(4,034

)

(3,189

)

36,114

 

11.2

%

Income taxes

 

17,336

 

5.4

%

1,614

 

668

 

15,054

 

4.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

26,001

 

8.1

%

$

(2,420

)

$

(2,521

)

$

21,060

 

6.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.64

 

 

 

$

(0.06

)

$

(0.06

)

$

0.52

 

 

 

Diluted

 

$

0.63

(1)

 

 

$

(0.06

)

$

(0.06

)

$

0.51

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing net income (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

40,340

 

 

 

40,340

 

40,340

 

40,340

 

 

 

Diluted

 

41,415

 

 

 

41,415

 

41,415

 

41,415

 

 

 

 

Note:      Includes Synavant’s operating results for the period June 16, 2003 to December 31, 2003.

 


(1)    See Table 7 for a more detailed reconciliation of net income for the year ended December 31, 2003.

 

(2)    Represents amortization expense of definite lived intangible assets resulting from the acquisitions of SAI and Synavant.

 

(3)    Includes Dendrite severance and facility closure costs as a result of the acquisition of Synavant and other integration costs as well as a foreign tax valuation adjustment made in connection with the integration of Synavant.

 

9



 

TABLE 5

DENDRITE INTERNATIONAL, INC.

 

CONSOLIDATED BALANCE SHEETS

 

(IN THOUSANDS EXCEPT SHARE DATA)

 

 

 

 

December 31,

 

 

 

2003

 

2002 (1)

 

 

 

 

 

 

 

Assets

 

 

 

 

 

Current Assets:

 

 

 

 

 

Cash and cash equivalents

 

$

30,405

 

$

68,308

 

Short-term investments

 

 

1,295

 

Accounts receivable, net

 

71,383

 

39,853

 

Prepaid expenses and other current assets

 

8,483

 

4,962

 

Deferred taxes

 

8,844

 

3,380

 

Facility held for sale

 

6,900

 

6,900

 

Total current assets

 

126,015

 

124,698

 

 

 

 

 

 

 

Property and equipment, net

 

27,858

 

26,377

 

Other assets

 

2,004

 

1,713

 

Long-term receivable

 

3,157

 

6,314

 

Goodwill

 

70,685

 

12,353

 

Intangible assets, net

 

18,574

 

2,973

 

Purchased capitalized software, net

 

1,666

 

2,275

 

Capitalized software development costs, net

 

6,126

 

5,605

 

Deferred taxes

 

6,372

 

6,168

 

 

 

$

262,457

 

$

188,476

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

Accounts payable

 

$

4,990

 

$

1,274

 

Income taxes payable

 

6,194

 

5,659

 

Capital lease obligations

 

1,033

 

615

 

Accrued compensation and benefits

 

16,104

 

5,055

 

Other accrued expenses

 

29,203

 

16,749

 

Purchase accounting restructuring accrual

 

3,203

 

1,188

 

Accrued restructuring charge

 

 

260

 

Deferred revenues

 

16,379

 

7,861

 

Total current liabilities

 

77,106

 

38,661

 

 

 

 

 

 

 

Capital lease obligations

 

187

 

275

 

Purchase accounting restructuring accrual

 

8,627

 

2,064

 

Other non-current liabilities

 

402

 

717

 

 

 

 

 

 

 

Stockholders’ Equity:

 

 

 

 

 

Preferred stock, no par value, 15,000,000 shares authorized, none issued

 

 

 

Common Stock, no par value, 150,000,000 shares authorized, 43,013,428 and 42,156,344 shares issued; 40,790,728 and 39,933,644 shares outstanding

 

100,448

 

93,037

 

Retained earnings

 

97,936

 

76,876

 

Deferred compensation

 

(56

)

(76

)

Accumulated other comprehensive loss

 

(1,317

)

(2,202

)

Less treasury stock, at cost

 

(20,876

)

(20,876

)

 

 

 

 

 

 

Total stockholders’ equity

 

176,135

 

146,759

 

 

 

$

262,457

 

$

188,476

 

 


(1) Amounts reflect reclassifications to conform to current year presentation.

 

10



 

TABLE 6

DENDRITE INTERNATIONAL, INC.

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

(IN THOUSANDS)

 

 

 

Year Ended December 31,

 

 

 

2003

 

2002

 

Operating activities:

 

 

 

 

 

Net income

 

$

21,060

 

$

15,398

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

Depreciation and amortization

 

21,717

 

14,096

 

Asset impairment

 

 

1,832

 

Restructuring benefit

 

 

(47

)

Amortization of deferred compensation, net of forfeitures

 

(30

)

68

 

Deferred taxes

 

608

 

(469

)

Changes in assets and liabilities, net of effects from acquisitions:

 

 

 

 

 

Decrease/(increase) in accounts receivable

 

6,105

 

(4,889

)

Increase in prepaid expenses and other

 

(1,090

)

 

Decrease/(increase) in other non-current assets

 

482

 

(22

)

Decrease in prepaid income taxes

 

 

4,744

 

Decrease in accounts payable and accrued expenses

 

(20,775

)

(5,076

)

Decrease in purchase accounting restructuring accrual

 

(10,883

)

 

Increase in income taxes payable

 

3,320

 

4,257

 

Decrease in accrued restructuring charge

 

(260

)

(2,643

)

Decrease in deferred revenue

 

(2,161

)

(3,260

)

Decrease/(increase) in other non-current liabilities

 

(279

)

200

 

 

 

 

 

 

 

Net cash provided by operating activities

 

17,814

 

24,189

 

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

Purchases of short-term investments

 

 

(14,710

)

Sales of short-term investments

 

1,294

 

19,798

 

Acquisitions, net of cash acquired

 

(53,458

)

(13,117

)

Increase in other non-current assets

 

(50

)

(700

)

Purchases of property and equipment

 

(6,350

)

(11,113

)

Additions to capitalized software development costs

 

(3,182

)

(2,678

)

 

 

 

 

 

 

Net cash used in investing activities

 

(61,746

)

(22,520

)

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

Borrowings from line of credit

 

8,000

 

 

Repayments of line of credit

 

(8,000

)

 

Purchases of treasury stock

 

 

(1,469

)

Payments on capital lease obligations

 

(999

)

(330

)

Issuance of common stock

 

6,235

 

2,807

 

 

 

 

 

 

 

Net cash provided by financing activities

 

5,236

 

1,008

 

 

 

 

 

 

 

Effect of foreign exchange rate changes on cash

 

793

 

137

 

 

 

 

 

 

 

Net (decrease)/increase in cash and cash equivalents

 

(37,903

)

2,814

 

Cash and cash equivalents, beginning of year

 

68,308

 

65,494

 

 

 

 

 

 

 

Cash and cash equivalents, end of year

 

$

30,405

 

$

68,308

 

 

11



 

TABLE 7

DENDRITE INTERNATIONAL, INC.

 

RECONCILIATION OF GAAP TO ADJUSTED (NON-GAAP) RESULTS

 

(IN THOUSANDS EXCEPT PER SHARE DATA)

(UNAUDITED)

 

 

 

Three Months Ended December 31,

 

Year Ended December 31,

 

 

 

2003

 

2002

 

2003

 

2002

 

 

 

 

 

 

 

 

 

 

 

Net income (See Table 1)

 

$

5,844

 

$

4,725

 

$

21,060

 

$

15,398

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Adjustments:

 

 

 

 

 

 

 

 

 

Purchased capitalized software amortization, net of tax (1)

 

 

 

 

 

 

 

 

 

SAI

 

92

 

99

 

366

 

99

 

Intangible assets amortization, net of tax (1)

 

 

 

 

 

 

 

 

 

Synavant

 

1,048

 

 

1,649

 

 

SAI

 

101

 

101

 

406

 

101

 

Integration costs, net of tax (2)

 

140

 

 

427

 

 

Dendrite related acquisition costs, net of tax (3)

 

1,050

 

 

1,485

 

 

Reduction in workforce, net of tax (4)

 

 

7

 

 

749

 

Asset impairment, net of tax (5)

 

 

 

 

1,099

 

Reversal of loss contracts, net of tax (6)

 

 

 

 

(563

)

Income taxes (7)

 

 

 

608

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Net income

 

$

8,275

 

$

4,932

 

$

26,001

 

$

16,883

 

 

 

 

 

 

 

 

 

 

 

Adjusted Net income per share:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.20

 

$

0.12

 

$

0.64

 

$

0.42

 

Diluted

 

$

0.20

 

$

0.12

 

$

0.63

 

$

0.42

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing net income per share :

 

 

 

 

 

 

 

 

 

Basic

 

40,680

 

39,910

 

40,340

 

39,872

 

Diluted

 

42,385

 

39,966

 

41,415

 

40,127

 

 

Note:      The non-GAAP financial information set forth above is not prepared in accordance with U.S. generally accepted accounting principles (GAAP).  These non-GAAP financial measures may be different from non-GAAP financial measures used by other companies.  Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.  The Company believes that disclosing non-GAAP adjusted results provide further insight into the operating performance of the Company and are useful to investors to help them analyze operating trends and perform comparisons across periods.  Management uses the adjusted numbers to manage the business and evaluate operating performance on a period-to-period comparative basis.

 


(1) Represents amortization expense, net of tax, for definite lived assets resulting from the acquisitions of SAI and Synavant.

 

(2)    Represents costs associated with the integration of the Synavant business into the Dendrite business.  These costs include but are not limited to, legal, consulting and moving charges as well as reconstruction of temporary facilities.

 

(3)    Represents costs related to workforce and facility redundancies identified in connection with the integration of the Synavant business into the Dendrite business.  If the redundancies involved the Dendrite workforce or facilities they were charged to operations and have been identified above.  If the redundancies involved the Synavant workforce or facilities they were recorded to goodwill.

 

(4)    Represents costs of severance related to a reduction in workforce during the third quarter 2002 due to a slower than expected growth in revenue.

 

(5)    Represents an adjustment to the fair value of a building held for sale during the third quarter 2002.

 

(6)    Represents the reversal, during the third quarter 2002, of costs previously recorded in 2001, which related to the recognition of anticipated future losses on selected contracts for which the Company’s obligations were favorably resolved.

 

(7)    Represents a foreign tax valuation adjustment in connection with the integration of Synavant.

 

12



 

TABLE 8

DENDRITE INTERNATIONAL, INC.

 

RECONCILIATION OF PROJECTED GAAP RESULTS TO PROJECTED ADJUSTED RESULTS *

 

(IN MILLIONS EXCEPT PER SHARE DATA)

(UNAUDITED)

 

 

 

Rolling 6 month outlook
January 1, 2004 - June 30, 2004

 

 

 

 

 

Projected Revenue Range

 

$190 to $194

 

 

 

 

 

Projected GAAP EPS Range

 

$0.27 to $0.29

 

 

 

 

 

Projected Per Share Impact of:

 

 

 

 

 

 

 

Intangible Asset Amortization (1)

 

$0.02 to $0.02

 

 

 

 

 

Projected Adjusted EPS Range

 

$0.29 to $0.31

 

 

Note:                   The non-GAAP financial information set forth above is not prepared in accordance with U.S. generally accepted accounting principles (GAAP).  These non-GAAP financial measures may be different from non-GAAP financial measures used by other companies.  Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.  The Company believes that disclosing non-GAAP adjusted results provide further into the operating performance of the Company and are useful to investors to help them analyze operating trends and perform comparisons across periods.  Management uses the adjusted numbers to manage the business and evaluate operating performance on a period-to-period comparative basis.

 


(1) Includes amortization of both purchased capitalized software and intangible assets from the  Synavant and SAI acquisitions.  The UTO Brain intangible valuation is in the process of being determined.  However, the Company currently estimates that the amortization impact of the UTO Brain acquisition should not materially affect the projected EPS range.

 

(2) Includes charges from Dendrite severance and facility closure costs as a result of the acquisition of Synavant as well as costs incurred as part of the integration of Synavant.

 

* - See “forward looking statement” disclaimer included as part of this press release.

 

13



 

TABLE 9

DENDRITE INTERNATIONAL, INC.

 

PURCHASED INTANGIBLE ASSET AMORTIZATION

 

(DOLLARS IN THOUSANDS)

(UNAUDITED)

 

 

 

 

 

 

 

Purchased Intangible Amortization Expense

 

 

 

Intangible
Value

 

Life
(Years)

 

2003 Actual

 

Full Year Projections

 

 

 

 

 

1st Qtr

 

2nd Qtr

 

3rd Qtr

 

4th Qtr(b)

 

2003

 

2004 (c)

 

2005 (c)

 

2006 (c)

 

2007 (c)

 

Thereafter

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Synavant Intangible Detail

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Covenants not to compete

 

$

2,100

 

2

 

$

 

$

27

 

$

175

 

$

365

 

$

567

 

$

1,050

 

$

481

 

$

 

$

 

$

 

Backlog

 

2,400

 

(a

)

 

62

 

376

 

1,360

 

1,798

 

516

 

87

 

 

 

 

Pharbase Database

 

2,600

 

10

 

 

10

 

65

 

65

 

140

 

260

 

260

 

260

 

260

 

1,419

 

Customer relationships

 

5,800

 

13

 

 

40

 

245

 

(44

)

241

 

446

 

446

 

446

 

446

 

3,774

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Synavant Amortization Total

 

 

 

 

 

 

139

 

861

 

1,746

 

2,746

 

2,272

 

1,274

 

706

 

706

 

5,193

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SAI Amortization

 

 

 

 

 

322

 

322

 

322

 

322

 

1,288

 

1,286

 

610

 

445

 

 

 

UTOBrain Amortization (d)

 

 

 

 

 

 

 

 

 

 

TBD

 

TBD

 

TBD

 

TBD

 

TBD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Amortization Expense(d)

 

 

 

 

 

$

322

 

$

461

 

$

1,183

 

$

2,068

 

$

4,034

 

$

3,558

 

$

1,884

 

$

1,151

 

$

706

 

$

5,193

 

 


(a)  Backlog is amortized as the backlog revenue is recognized.

(b)  Includes a onetime adjustment for final Synavant valuation adjustments.

(c)  Amortization is evenly spread throughout the year.

(d)  Since the Uto Brain acquisition closed on January 5, 2004, the purchase price allocation is currently in progress.

 

14



 

TABLE 10
DENDRITE INTERNATIONAL, INC.

 

RECONCILIATION OF GAAP TO ADJUSTED (NON-GAAP) STATEMENT OF OPERATIONS

 

THREE MONTHS ENDED DECEMBER 31, 2002

 

(IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)

 

 

 

Total Adjusted Q4

 

% of
Rev.

 

Amortization (2)

 

Other Charges (3)

 

GAAP

 

% of
Rev.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

License fees

 

$

5,745

 

10.1

%

$

 

$

 

$

5,745

 

10.1

%

Services

 

51,295

 

89.9

%

 

 

51,295

 

89.9

%

 

 

57,040

 

100.0

%

 

 

57,040

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of license fees

 

1,789

 

3.1

%

165

 

 

1,954

 

3.4

%

Cost of services

 

25,333

 

44.4

%

 

 

25,333

 

44.4

%

 

 

27,122

 

47.5

%

165

 

 

27,287

 

47.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

License Gross Margin

 

3,956

 

68.9

%

(165

)

 

3,791

 

66.0

%

Services Gross Margin

 

25,962

 

50.6

%

 

 

25,962

 

50.6

%

Gross margin

 

29,918

 

52.5

%

(165

)

 

29,753

 

52.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

18,933

 

33.2

%

169

 

59

 

19,161

 

33.6

%

Research and development

 

2,950

 

5.2

%

 

 

2,950

 

5.2

%

Restructuring benefit

 

 

 

 

(47

)

(47

0.0

%

 

 

21,883

 

38.4

%

169

 

12

 

22,064

 

38.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

8,035

 

14.1

%

(334

)

(12

)

7,689

 

13.5

%

Interest income

 

229

 

0.4

%

 

 

229

 

0.4

%

Other expense

 

(43

)

-0.1

%

 

 

(43

)

-0.1

%

Income before income taxes

 

8,221

 

14.4

%

(334

)

(12

)

7,875

 

13.8

%

Income taxes

 

3,289

 

5.8

%

134

 

5

 

3,150

 

5.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

4,932

 

8.6

%

$

(200

)

$

(7

)

$

4,725

 

8.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.12

 

 

 

$

(0.01

)

$

(0.00

)

$

0.12

(4)

 

 

Diluted

 

$

0.12

(1)

 

 

$

(0.01

)

$

(0.00

)

$

0.12

(4)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing net income (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

39,910

 

 

 

39,910

 

39,910

 

39,910

 

 

 

Diluted

 

39,966

 

 

 

39,966

 

39,966

 

39,966

 

 

 

 


(1)    See Table 7 for a more detailed reconciliation of net income for the three months ended December 31, 2002.

 

(2) Represents amortization expense of definite lived intangible assets resulting from the acquisition of SAI.

 

(3) Includes Dendrite severance and a revised estimate of the 2001 restructuring accrual.

 

(4) Diluted EPS does not appear to foot across due to the mathematical rounding of the individual calculations.

 

15



 

TABLE 11
DENDRITE INTERNATIONAL, INC.

 

RECONCILIATION OF GAAP TO ADJUSTED (NON-GAAP) STATEMENT OF OPERATIONS

 

YEAR ENDED DECEMBER 31, 2002

 

(IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)

 

 

 

Total Adjusted YTD

 

% of
Rev.

 

Amortization (2)

 

Other Charges (3)

 

GAAP

 

% of
Rev.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

License fees

 

$

13,507

 

6.0

%

$

 

$

 

$

13,507

 

6.0

%

Services

 

212,249

 

94.0

%

 

 

212,249

 

94.0

%

 

 

225,756

 

100.0

%

 

 

225,756

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of license fees

 

4,565

 

2.0

%

165

 

 

4,730

 

2.1

%

Cost of services

 

107,756

 

47.7

%

 

(939

)

106,817

 

47.3

%

 

 

112,321

 

49.8

%

165

 

(939

)

111,547

 

49.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

License Gross Margin

 

8,942

 

66.2

%

(165

)

 

8,777

 

65.0

%

Services Gross Margin

 

104,493

 

49.2

%

 

939

 

105,432

 

49.7

%

Gross margin

 

113,435

 

50.2

%

(165

)

939

 

114,209

 

50.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

75,836

 

33.6

%

169

 

1,296

 

77,301

 

34.2

%

Research and development

 

10,396

 

4.6

%

 

 

10,396

 

4.6

%

Restructuring benefit

 

 

 

 

 

(47

)

(47

)

0.0

%

Asset impairment

 

 

 

 

 

1,832

 

1,832

 

0.8

%

 

 

86,232

 

38.2

%

169

 

3,081

 

89,482

 

39.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

27,203

 

12.0

%

(334

)

(2,142

)

24,727

 

11.0

%

Interest income

 

1,085

 

0.5

%

 

 

1,085

 

0.5

%

Other expense

 

(149

)

-0.1

%

 

 

(149

)

-0.1

%

Income before income taxes

 

28,139

 

12.5

%

(334

)

(2,142

)

25,663

 

11.4

%

Income taxes

 

11,256

 

5.0

%

134

 

857

 

10,265

 

4.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

16,883

 

7.5

%

$

(200

)

$

(1,285

)

$

15,398

 

6.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.42

 

 

 

$

(0.01

)

$

(0.03

)

$

0.39

(4)

 

 

Diluted

 

$

0.42

(1)

 

 

$

(0.01

)

$

(0.03

)

$

0.38

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing net income (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

39,872

 

 

 

39,872

 

39,872

 

39,872

 

 

 

Diluted

 

40,127

 

 

 

40,127

 

40,127

 

40,127

 

 

 

 

Note:      Includes SAI’s operating results for the period September 19, 2002 to December 31, 2002.

 


(1)    See Table 7 for a more detailed reconciliation of net income for the twelve months ended December 31, 2002.

 

(2)    Represents amortization expense of definite lived intangible assets resulting from the acquisition of SAI.

 

(3)    Includes Dendrite severance; a reversal of costs previously recorded in 2001, in connection with certain customer contracts, which related to the recognition of anticipated future losses that were ultimately favorably resolved; a revised estimate of the 2001 restructuring accrual; and an asset impairment charge related to the facility held for sale.

 

(4)    Diluted EPS does not appear to foot across due to the mathematical rounding of the individual calculations.

 

16