-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LYMSHZw5ClEvcWmKKKd7mobog4bVKnKdXqlxSF+xEaX0k5/oG3h+pIyrttIMgNyz aMnTEuDF0DO7dT0CBk2OXg== 0001104659-04-011411.txt : 20040427 0001104659-04-011411.hdr.sgml : 20040427 20040427161145 ACCESSION NUMBER: 0001104659-04-011411 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20040427 ITEM INFORMATION: FILED AS OF DATE: 20040427 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DENDRITE INTERNATIONAL INC CENTRAL INDEX KEY: 0000880321 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 222786386 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-16379 FILM NUMBER: 04757185 BUSINESS ADDRESS: STREET 1: 1200 MOUNT KEMBLE AVE CITY: MORRISTOWN STATE: NJ ZIP: 07960 BUSINESS PHONE: 2014251200 MAIL ADDRESS: STREET 1: 1200 MOUNT KEMBLE AVE CITY: MORRISTOWN STATE: NJ ZIP: 07960-6797 8-K 1 a04-4836_18k.htm 8-K

 

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 


 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

 

Date of report (Date of earliest event reported)         April 27, 2004

 

DENDRITE INTERNATIONAL, INC.

(Exact Name of Registrant as Specified in Charter)

 

New Jersey

 

0-26138

 

22-2786386

(State or Other Jurisdiction
of Incorporation)

 

(Commission
File Number)

 

(I.R.S. Employer
Identification No.)

 

 

 

 

 

1200 Mount Kemble Avenue, Morristown, New Jersey

 

07960-6767

(Address of Principal Executive Offices)

 

(Zip Code)

 

 

 

 

 

Registrant’s telephone number, including area code      (973) 425-1200

 

 

 

 



 

INFORMATION TO BE INCLUDED IN THE REPORT

 

Item 12.  Results of Operations and Financial Condition

 

Attached and being furnished hereby as Exhibit 99.1 is a copy of a press release of Dendrite International, Inc. (“Dendrite”) dated April 27, 2004, reporting Dendrite’s financial results for the first quarter of 2004.

 

The discussion of Dendrite’s 2004 three month historical results as well as its outlook for future results include, and where indicated exclude, the impact of amortization of definite lived intangibles arising from Dendrite’s Synavant, SAI, Uto Brain and Pharma Vision acquisitions.  These adjustments are detailed in, and reconciled to generally accepted accounting principles (GAAP) as part of, the press release.

 

Dendrite believes that by reflecting the impact of these acquisition-related items, it provides investors with insight into the operating performance of Dendrite’s business as well as identifying the particular impact on operating results of amortization of definite lived intangibles in connection with the Synavant, SAI, Uto Brain and Pharma Vision acquisitions.

 

Dendrite management also internally uses these non-GAAP adjusted amounts to manage and evaluate its operating performance on a more comparative basis period-over-period.  These adjusted items provide management with an additional metric in order evaluate progress on its business excluding the acquisition-related amortization of definite lived intangibles in connection with the Synavant, SAI, Uto Brain and Pharma Vision acquisitions.  Management uses various methods to evaluate its operations and does not depend exclusively on such non-GAAP adjusted amounts or on any other single analysis model.

 

Dendrite has also provided its outlook information on both a GAAP basis and adjusted basis to account for these same items, to the extent applicable, and for the same reasons as described above.

 

The Company has detailed in its financial data tables accompanying the press release all such adjusted items and reconciliation items in order to assist investors in reviewing and identifying such non-GAAP adjusted amounts.  All such non-GAAP information is supplemental to information presented in accordance with GAAP and is not intended to represent a presentation in accordance with GAAP and should not be considered as a substitute for, or superior to, measures of financial performance prepared and presented in accordance with GAAP.

 

2



 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

DENDRITE INTERNATIONAL, INC.

 

 

Dated: April 27, 2004

By:

/s/ KATHLEEN E. DONOVAN

 

Name:

Kathleen E. Donovan

 

Title:

Senior Vice President and Chief

 

 

Financial Officer

 

3



 

EXHIBIT INDEX

 

Exhibit No.

 

Description

 

 

 

99.1

 

Press Release of Dendrite International, Inc., dated April 27, 2004.

 

4


EX-99.1 2 a04-4836_1ex99d1.htm EX-99.1

Exhibit 99.1

 

 

 

 

 

 

 

 

FOR IMMEDIATE RELEASE

 

 

 

 

 

Dendrite Posts Strong Growth in First Quarter Revenue and Earnings

 

 

 

 

 

GAAP EPS Improves 24% from prior year to $0.13

 

 

 

 

 

Adjusted EPS of $0.15 Exceeds First Call Consensus Estimate of $0.14

 

 

 

 

Morristown, N.J., April 27, 2004 – Dendrite International, Inc. (NASDAQ: DRTE) today announced another strong quarter, reporting first quarter 2004 GAAP diluted earnings of $0.13 per share, up 24% compared to GAAP earnings of $0.11 per share for the first quarter of 2003.

 

 

 

Excluding approximately $1 million of non-cash amortization pertaining to acquisition related intangibles, first quarter 2004 adjusted earnings were $0.15 per diluted share, an improvement of 31% from an adjusted $0.11 per diluted share reported in the same period of the prior year.

 

 

 

 

 

FIRST QUARTER RESULTS

 

 

 

 

 

Revenues for the quarter increased to $95.1 million, up 59% from the prior year.  While the Synavant acquisition was a key contributor to the year-over-year revenue increase, the company also indicated that it achieved strong growth across the business and saw particular strength in its domestic middle market accounts, consulting and longitudinal prescription data services, and Japan.

 

 

 

 

 

“We are pleased to report that our success this quarter spanned numerous geographies and solutions,” said Chairman and CEO John Bailye.  “We are not only continuing to expand and grow our SFA business, but also see momentum building in our non SFA solutions.  We believe our clients are beginning to recognize and take advantage of the unique value that Dendrite can provide

 

 

 

 

 

 



 

April 23, 2004

 

through integrated solutions specifically designed to meet the complex and growing needs of the global pharmaceutical industry.”

 

Dendrite delivered GAAP operating income of $9.4 million in the first quarter of 2004, a 35% improvement over the prior year’s first quarter GAAP operating income of $7.0 million.  First quarter 2004 GAAP operating income included acquisition-related intangible amortization expense of approximately $1.0 million, versus $0.4 million during the same period in 2003.  The increase from the prior year was due to both the Synavant and Uto Brain acquisitions.  Additional detail on acquisition-related intangible amortization expense can be found on table 6 of the accompanying financial tables.

 

Excluding intangible amortization expense, adjusted operating income in the first quarter of 2004 was $10.4 million, up 42% from the $7.3 million adjusted operating income generated in the prior year.

 

“We continue to remain focused on bottom line results,” stated Mr. Bailye.  “We are pleased with the operating income growth we have delivered while also continuing to make investments in the key initiatives we believe will help us achieve our long term revenue and operating profit goals.”

 

KEY OPERATING STATISTICS

 

Dendrite ended the first quarter of 2004 with $41.4 million in cash and cash equivalents.  The $15.5 million of cash from operations reported for the first quarter, which also included $2.6 million of payments related to acquisition liabilities, was at a three year high.

 

A key contributor to the strong operating cash flow was accounts receivable days sales outstanding (DSO) which decreased nine days from the previous quarter to 59 days.  The company indicated that approximately 3 days of the reduction was from receipt of a $3.2 million scheduled payment of a long-term receivable.  The remaining 6 days of improvement was credited to strong collections efforts around the world.  “Our DSO was exceptionally strong this quarter and at its lowest level in almost two years.  Dendrite has always placed great

 

2



 

emphasis on receivables management and we are very proud of our results this quarter,” said Chief Financial Officer Kathy Donovan.

 

RECENT HIGHLIGHTS

 

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

 

                  Signing more than 35 new agreements with customers in North America, Europe, Latin America and Asia/Pacific Rim.   Additionally, the company continued building momentum in its Data and Analytics business by entering into agreements for 13 new studies using its longitudinal prescription data

 

                  Adding approximately 2000 additional sales force automation user licenses through business with new customers and expanded business with existing customers

 

                  Winning a major sales and marketing data outsourcing contract with Sankyo Pharma, in which Dendrite will provide all aspects of data management, including server hosting, implementation, project management and production control as well as its industry-leading customer information management and business intelligence solutions

 

                  Completing its strategic acquisition in January 2004 of Uto Brain Co. in Japan to further broaden and enhance its product and service portfolio for the Japanese pharmaceutical industry and extend its leadership position in Japan.

 

                  Completing its strategic acquisition of Medical Data Management in April 2004 to create the preeminent supplier of pharmaceutical sales and marketing solutions for the rapidly growing Central and Eastern European market

 

                  Forming a services partnership in April 2004 with SAP America Inc. under which Dendrite will provide end-to-end support services to U.S. pharmaceutical companies deploying the SAP® for Pharmaceuticals solution

 

OUTLOOK

 

The company provided its customary six-month rolling outlook. “We currently believe that the combined revenue for the second and third quarters of 2004 will be in the range of approximately $200 to $206 million,” said Ms. Donovan.  “This outlook includes the recently announced acquisition of Medical Data Management in Europe, which is expected to contribute approximately $4 million of revenue in the second and third quarters combined.  Based on achieving this targeted revenue, we would anticipate delivering GAAP earnings

 

3



 

in the range of $0.31 to $0.33 per diluted share over the next six months.  Excluding approximately $0.04 of projected acquisition-related intangible expense, we would expect adjusted earnings to be in the range of $0.35 to $0.37 per diluted share for that same period.”

 

This outlook is based on our 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 April 27, 2004 at 5 p.m. EDT.

 

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

 

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

 

This document contains forward-looking statements that may be identified by such forward-looking terminology as “expect,” “believe,” “anticipate,” “will,” “intend,” “plan,”“target,” “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 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 certain major customers; changes in demand for our products and services attributable to any 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 acquisition of Synavant and other acquisitions and the risks associated with the integration of acquisitions; our ability to effectively manage our growth; the protection of our

 

4



 

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 March 31,

 

 

 

2004

 

%

 

2003

 

%

 

Change

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

License fees

 

$

3,346

 

3.5

%

$

2,562

 

4.3

%

31

%

Services

 

91,718

 

96.5

%

57,148

 

95.7

%

60

%

 

 

95,064

 

100.0

%

59,710

 

100.0

%

59

%

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales:

 

 

 

 

 

 

 

 

 

 

 

Cost of license fees

 

989

 

1.0

%

1,079

 

1.8

%

-8

%

Cost of services

 

49,036

 

51.6

%

28,741

 

48.1

%

71

%

 

 

50,025

 

52.6

%

29,820

 

49.9

%

68

%

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin:

 

 

 

 

 

 

 

 

 

 

 

License fees gross margin

 

2,357

 

70.4

%

1,483

 

57.9

%

12.5

Pt

Services gross margin

 

42,682

 

46.5

%

28,407

 

49.7

%

(3.2

)Pt

 

 

45,039

 

47.4

%

29,890

 

50.1

%

(2.7

)Pt

 

 

 

 

 

 

 

 

 

 

 

 

Operating expense (income):

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

32,966

 

34.7

%

20,239

 

33.9

%

63

%

Research and development

 

3,022

 

3.2

%

2,698

 

4.5

%

12

%

Other operating (income)

 

(339

)

-0.4

%

 

0.0

%

NM

 

 

 

35,649

 

37.5

%

22,937

 

38.4

%

55

%

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

9,390

 

9.9

%

6,953

 

11.6

%

35

%

Interest income

 

7

 

0.0

%

243

 

0.4

%

-97

%

Other income

 

43

 

0.0

%

9

 

0.0

%

NM

 

Income before income taxes

 

9,440

 

9.9

%

7,205

 

12.1

%

31

%

Income taxes

 

3,776

 

4.0

%

2,882

 

4.8

%

31

%

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

5,664

 

6.0

%

$

4,323

 

7.2

%

31

%

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.14

 

 

 

$

0.11

 

 

 

28

%

Diluted

 

$

0.13

 

 

 

$

0.11

 

 

 

24

%

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing net income per share:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

40,919

 

 

 

40,097

 

 

 

 

 

Diluted

 

42,515

 

 

 

40,269

 

 

 

 

 

 


NM — Not meaningful.

 

6



 

TABLE 2

DENDRITE INTERNATIONAL, INC.

 

ADJUSTED CONSOLIDATED STATEMENT OF OPERATIONS (NON-GAAP)

 

(IN THOUSANDS, EXCEPT PER SHARE DATA)

 

 

 

Unaudited
Three Months Ended March 31,

 

 

 

2004 (1)

 

%

 

2003 (1)

 

%

 

Change

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

License fees

 

$

3,346

 

3.5

%

$

2,562

 

4.3

%

31

%

Services

 

91,718

 

96.5

%

57,148

 

95.7

%

60

%

 

 

95,064

 

100.0

%

59,710

 

100.0

%

59

%

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales:

 

 

 

 

 

 

 

 

 

 

 

Cost of license fees

 

836

 

0.9

%

927

 

1.6

%

-10

%

Cost of services

 

48,971

 

51.5

%

28,741

 

48.1

%

70

%

 

 

49,807

 

52.4

%

29,668

 

49.7

%

68

%

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin:

 

 

 

 

 

 

 

 

 

 

 

License Gross Margin

 

2,510

 

75.0

%

1,635

 

63.8

%

11.2

Pt

Services Gross Margin

 

42,747

 

46.6

%

28,407

 

49.7

%

(3.1

)Pt

 

 

45,257

 

47.6

%

30,042

 

50.3

%

(2.7

)Pt

 

 

 

 

 

 

 

 

 

 

 

 

Operating expense (income):

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

32,157

 

33.8

%

20,000

 

33.5

%

61

%

Research and development

 

3,022

 

3.2

%

2,698

 

4.5

%

12

%

Other operating (income)

 

(339

)

-0.4

%

 

0.0

%

NM

 

 

 

34,840

 

36.6

%

22,698

 

38.0

%

53

%

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

10,417

 

11.0

%

7,344

 

12.3

%

42

%

Interest income

 

7

 

0.0

%

243

 

0.4

%

-97

%

Other income

 

43

 

0.0

%

9

 

0.0

%

NM

 

Income before income taxes

 

10,467

 

11.0

%

7,596

 

12.7

%

38

%

Income taxes

 

4,187

 

4.4

%

3,038

 

5.1

%

38

%

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

6,280

 

6.6

%

$

4,558

 

7.6

%

38

%

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.15

 

 

 

$

0.11

 

 

 

35

%

Diluted

 

$

0.15

 

 

 

$

0.11

 

 

 

31

%

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing net income per share:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

40,919

 

 

 

40,097

 

 

 

 

 

Diluted

 

42,515

 

 

 

40,269

 

 

 

 

 

 


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 March 31, 2004 and 2003.

 

NM                            - Not meaningful.

 

7



 

TABLE 3

DENDRITE INTERNATIONAL, INC.

 

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

 

THREE MONTHS ENDED MARCH 31, 2004 AND 2003

 

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

 

 

 

Three Months Ended March 31, 2004

 

Three Months Ended March 31, 2003

 

 

 

Total Adjusted

 

Adjustments (1)

 

GAAP

 

Total Adjusted

 

Adjustments (1)

 

GAAP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

License fees

 

$

 3,346

 

$

 

$

 3,346

 

$

 2,562

 

$

 —

 

$

 2,562

 

Services

 

91,718

 

 

91,718

 

57,148

 

 

57,148

 

 

 

95,064

 

 

95,064

 

59,710

 

 

59,710

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of license fees

 

836

 

153

 

989

 

927

 

152

 

1,079

 

Cost of services

 

48,971

 

65

 

49,036

 

28,741

 

 

28,741

 

 

 

49,807

 

218

 

50,025

 

29,668

 

152

 

29,820

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin:

 

 

 

 

 

 

 

 

 

 

 

 

 

License Gross Margin

 

2,510

 

(153

)

2,357

 

1,635

 

(152

)

1,483

 

Services Gross Margin

 

42,747

 

(65

)

42,682

 

28,407

 

 

28,407

 

 

 

45,257

 

(218

)

45,039

 

30,042

 

(152

)

29,890

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expense (Income):

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

32,157

 

809

 

32,966

 

20,000

 

239

 

20,239

 

Research and development

 

3,022

 

 

3,022

 

2,698

 

 

2,698

 

Other operating (income)

 

(339

)

 

(339

)

 

 

 

 

 

34,840

 

809

 

35,649

 

22,698

 

239

 

22,937

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

10,417

 

(1,027

)

9,390

 

7,344

 

(391

)

6,953

 

Interest income

 

7

 

 

7

 

243

 

 

243

 

Other income

 

43

 

 

43

 

9

 

 

9

 

Income before income taxes

 

10,467

 

(1,027

)

9,440

 

7,596

 

(391

)

7,205

 

Income taxes

 

4,187

 

411

 

3,776

 

3,038

 

156

 

2,882

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

 6,280

 

$

 (616

)

$

 5,664

 

$

 4,558

 

$

 (235

)

$

 4,323

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share (2)

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

 0.15

 

$

 (0.02

)

$

 0.14

 

$

 0.11

 

$

 (0.01

)

$

 0.11

 

Diluted

 

$

 0.15

 

$

 (0.01

)

$

 0.13

 

$

 0.11

 

$

 (0.01

)

$

 0.11

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

40,919

 

40,919

 

40,919

 

40,097

 

40,097

 

40,097

 

Diluted

 

42,515

 

42,515

 

42,515

 

40,269

 

40,269

 

40,269

 

 


(1)                                 Adjustments represent exclusion of acquisition related amortization expense of definite lived intangible assets.  See Table 6 for purchased intangible asset amortization schedule:

 

(2)                                 Net income per share does not appear to foot across due to the mathematical rounding of the individual calculations.

 

8



 

TABLE 4

DENDRITE INTERNATIONAL, INC.

 

CONSOLIDATED BALANCE SHEETS

 

(IN THOUSANDS, EXCEPT SHARE DATA)

 

 

 

 

March 31, 2004

 

December 31,
2003 (1)

 

 

 

(Unaudited)

 

 

 

Assets

 

 

 

 

 

Current Assets:

 

 

 

 

 

Cash and cash equivalents

 

$

41,396

 

$

30,405

 

Accounts receivable, net

 

62,239

 

71,383

 

Prepaid expenses and other current assets

 

8,555

 

8,483

 

Deferred taxes

 

8,844

 

8,844

 

Facility held for sale

 

6,900

 

6,900

 

Total current assets

 

127,934

 

126,015

 

 

 

 

 

 

 

Property and equipment, net

 

28,019

 

28,140

 

Other assets

 

2,120

 

2,004

 

Long-term receivable

 

 

3,157

 

Goodwill

 

76,666

 

70,403

 

Intangible assets, net

 

19,672

 

18,574

 

Purchased capitalized software, net

 

1,513

 

1,666

 

Capitalized software development costs, net

 

6,240

 

6,126

 

Deferred taxes

 

6,372

 

6,372

 

 

 

$

268,536

 

$

262,457

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

Current installments of long-term debt

 

$

834

 

$

 

Accounts payable

 

7,983

 

4,990

 

Income taxes payable

 

4,694

 

6,194

 

Capital lease obligations

 

722

 

1,033

 

Accrued compensation and benefits

 

15,810

 

16,104

 

Accrued professional and consulting fees

 

7,238

 

7,842

 

Other accrued expenses

 

18,330

 

21,038

 

Purchase accounting restructuring accrual

 

4,328

 

3,203

 

Deferred revenues

 

14,528

 

16,379

 

Total current liabilities

 

74,467

 

76,783

 

 

 

 

 

 

 

Capital lease obligations

 

102

 

187

 

Purchase accounting restructuring accrual

 

6,678

 

8,627

 

Deferred rent

 

447

 

369

 

Long-term debt, excluding current installments

 

1,405

 

 

Other non-current liabilities

 

69

 

356

 

 

 

 

 

 

 

Stockholders’ Equity:

 

 

 

 

 

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

 

 

 

Common stock, no par value, 150,000,000 shares authorized, 43,288,902 and 43,013,428 shares issued; 41,066,202 and 40,790,728 shares outstanding

 

103,577

 

100,448

 

Retained earnings

 

103,600

 

97,936

 

Deferred compensation

 

(70

)

(56

)

Accumulated other comprehensive loss

 

(863

)

(1,317

)

Less treasury stock, at cost

 

(20,876

)

(20,876

)

 

 

 

 

 

 

Total stockholders’ equity

 

185,368

 

176,135

 

 

 

 

 

 

 

 

 

$

268,536

 

$

262,457

 

 


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

 

9



 

TABLE 5

DENDRITE INTERNATIONAL, INC.

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

(IN THOUSANDS)

(UNAUDITED)

 

 

 

For the Three Months Ended March 31,

 

 

 

2004

 

2003

 

Operating activities:

 

 

 

 

 

Net income

 

$

5,664

 

$

4,323

 

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

 

 

 

 

 

Depreciation and amortization

 

5,196

 

4,031

 

Amortization of deferred compensation, net of forfeitures

 

109

 

(50

)

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

 

 

 

 

 

Decrease in accounts receivable

 

13,671

 

4,857

 

Decrease in prepaid expenses and other

 

737

 

1,927

 

Decrease (increase) in other non-current assets

 

254

 

(181

)

Decrease in accounts payable and accrued expenses

 

(4,027

)

(3,534

)

Decrease in purchase accounting restructuring accrual

 

(2,615

)

(190

)

Decrease in income taxes payable

 

(1,007

)

(3,399

)

(Decrease) increase in deferred revenue

 

(2,575

)

681

 

Increase in other non-current liabilities

 

114

 

27

 

 

 

 

 

 

 

Net cash provided by operating activities

 

15,521

 

8,492

 

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

Sales of short-term investments

 

 

796

 

Acquisitions, net of cash acquired

 

(1,990

)

 

Purchases of property and equipment

 

(2,530

)

(2,545

)

Additions to capitalized software development costs

 

(770

)

(664

)

 

 

 

 

 

 

Net cash used in investing activities

 

(5,290

)

(2,413

)

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

Repayments of long term debt

 

(1,120

)

 

Repayments of acquired loan

 

(624

)

 

Payments on capital lease obligations

 

(405

)

(125

)

Issuance of common stock

 

2,514

 

1,266

 

 

 

 

 

 

 

Net cash provided by financing activities

 

365

 

1,141

 

 

 

 

 

 

 

Effect of foreign exchange rate changes on cash

 

395

 

37

 

 

 

 

 

 

 

Net increase in cash and cash equivalents

 

10,991

 

7,257

 

Cash and cash equivalents, beginning of year

 

30,405

 

68,308

 

 

 

 

 

 

 

Cash and cash equivalents, end of period

 

$

41,396

 

$

75,565

 

 

10



 

TABLE 6

DENDRITE INTERNATIONAL, INC.

 

PURCHASED INTANGIBLE ASSET AMORTIZATION

 

(DOLLARS IN THOUSANDS)

(UNAUDITED)

 

 

 

 

 

 

 

2004

 

 

 

 

 

Intangible
Value

 

Life
(Years)

 

Actuals
1st Qtr

 

Projections

 

Full Year Projections

 

2nd Qtr

 

3rd Qtr

 

4th Qtr

 

2004

 

2005 (b)

 

2006 (b)

 

2007 (b)

 

2008 (b)

 

Thereafter

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Synavant Intangible Detail

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Covenants not to compete

 

$

2,100

 

2

 

$

263

 

$

263

 

$

263

 

$

263

 

$

1,052

 

$

481

 

$

 

$

 

$

 

$

 

Backlog

 

2,400

 

 

(a)

129

 

129

 

129

 

129

 

516

 

87

 

 

 

 

 

Pharbase Database

 

2,600

 

10

 

65

 

65

 

65

 

65

 

260

 

260

 

260

 

260

 

260

 

1,159

 

Customer relationships

 

5,800

 

13

 

112

 

112

 

112

 

112

 

448

 

446

 

446

 

446

 

446

 

3,328

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Synavant Amortization Total

 

 

 

 

 

569

 

569

 

569

 

569

 

2,276

 

1,274

 

706

 

706

 

706

 

4,487

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PharmaVision Amortization

 

 

 

 

 

76

 

76

 

76

 

76

 

304

 

344

 

201

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SAI Amortization

 

 

 

 

 

322

 

322

 

322

 

322

 

1,288

 

610

 

445

 

 

 

 

UTO Brain Amortization

 

 

 

 

 

60

 

60

 

60

 

60

 

240

 

176

 

176

 

176

 

176

 

927

 

MDM Amortization

 

 

 

 

 

 

TBD

 

TBD

 

TBD

 

TBD

 

TBD

 

TBD

 

TBD

 

TBD

 

TBD

 

Total Amortization Expense

 

 

 

 

 

$

1,027

 

$

1,027

 

$

1,027

 

$

1,027

 

$

4,108

 

$

2,404

 

$

1,528

 

$

882

 

$

882

 

$

5,414

 

 


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

(b) Amortization is evenly spread throughout the year.

(c) TBD - To be determined.

 

11


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-----END PRIVACY-ENHANCED MESSAGE-----