EX-99.1 2 a05-13731_1ex99d1.htm EX-99.1

 

Exhibit 99.1

 

 

Dendrite Reports Record Second Quarter Results

 

 

 

 

 

•     GAAP E.P.S. of $0.28, up 65% from prior year

 

 

 

 

 

•     Adjusted E.P.S. of $0.29, up 53% from prior year

 

 

 

 

 

•     Confirms full year business outlook of low double-digit revenue growth and greater than 25% adjusted E.P.S. growth

 

 

 

 

 

Bedminster, N.J., July 28, 2005 - Dendrite International, Inc. (NASDAQ: DRTE) today reported its financial results for the quarterly period ending June 30, 2005.

 

 

 

 

Financial Results

 

 

 

Revenues increased 15% versus the second quarter of 2004 to $115.1 million. Marketing solutions revenues of $27.1 million were up 17% versus the same period of the prior year. Sales solutions revenues, including $3.9 million of software license fee revenue, totaled $83.0 million in the second quarter of 2005 and increased 14% over the same period in 2004. Sales solutions revenues included $4.0 million resulting from an early contract termination by a mid-tier client that is ceasing its U.S. operations.

 

 

 

 

The Company reported second quarter 2005 GAAP diluted earnings of $0.28 per share, compared to GAAP diluted earnings of $0.17 per share for the second quarter of 2004. Excluding approximately $1.1 million of non-cash amortization expense pertaining to acquisition-related intangible assets, second quarter 2005 adjusted earnings were $0.29 per diluted share. Dendrite also indicated that without the $4.0 million contract settlement, adjusted earnings per share would have been $0.24 per diluted share. The Company previously reported adjusted earnings of $0.19 per diluted share in the second quarter of 2004. A reconciliation of GAAP results to adjusted results can be found on the unaudited financial tables included with this press release.

 

 

 

 

 

Dendrite ended the second quarter of 2005 with $56.1 million in cash and cash equivalents. Accounts receivable days sales outstanding (DSO) improved to 63

 

1405/1425 Route 206 South • Bedminster, NJ • 07921

P: 908.443.2000 • F: 908.443.2100

 


 

days, down three days from the prior quarter.  The Company generated approximately $13.7 million of cash from operations.

 

Business Highlights

 

Dendrite announced it completed the second quarter with a number of significant business achievements, including:

 

•                  Securing a strategic contract with AstraZeneca in the US for a broad range of Dendrite’s Integrated Marketing solutions, including PhysicanConnectSM thought leader identification analysis as well as Sample Fulfillment solutions. And, adding approximately 1,200 users in China for Dendrite’s First Source Sales Applications™

 

•                  Expanding the alliance with Sanofi-Aventis in the US for the Company’s sales support services for additional users, and sample management services including sample fulfillment and auditing services

 

•                  Expanding the alliance with Warner Chilcott through a three-year sales and services contract extension to upgrade more than 400 users on Dendrite’s Mobile Intelligence™ application (newly launched Version 4.0 platform)

 

•                  Extending its relationship with PDI Inc., to provide PDI’s dedicated sales teams with Dendrite’s ForceMobile™ an ForceAnalyzer™ solutions

 

•                  Winning a significant regional contract with UCB in Europe for over 600 users to adopt Dendrite’s WebForce™ solution

 

•                  Adding more than 1,000 users in Europe for Dendrite’s PharbaseSM solution

 

•                  Adding more than a 1,000 j-ForceNET™ users for support services across multiple pharmaceutical companies in Japan

 

•                  Securing multiple contracts with various pharmaceutical companies in the US for Regulatory, Compliance, and Validation solutions offered through Dendrite’s BuzzeoPDMA division

 

Outlook

 

The Company confirmed its 2005 full year outlook of low double-digit revenue growth excluding any 2005 acquisitions and, based on achieving this plan, targets adjusted E.P.S. growth of more than 25% versus prior year adjusted E.P.S.   Adjusted E.P.S. for 2005 excludes the $9.4 million of charges taken in the first quarter and approximately $4.2 million of non-cash amortization expense pertaining to acquisition-related intangible assets, which would result in expected GAAP E.P.S. growth of more than 11% versus the prior year.

 

2


 

This 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 to reflect actual results or changes in expectations or assumptions during the period other than in connection with regularly scheduled earnings releases.

 

Additionally, at such time in the future as the Company may provide additional revenue, earnings and other outlook information (including subsequent outlook provided as part of its quarterly sales and earnings releases), prior revenues, earnings or other related outlook (including any prior rolling 6-month outlook) should no longer be considered current.

 

To participate in Dendrite’s earnings call web cast on July 28, 2005 at 5 p.m. EDT, or to obtain replay information, please visit the Investors’ Highlights Section of our website at www.dendrite.com .

 

About Dendrite

 

Founded in 1986, Dendrite International (NASDAQ: DRTE) provides diversified sales, marketing, clinical and compliance solutions to the global life sciences and pharmaceutical industry.  With clients in more than 50 countries, including the world top 20 pharmaceutical companies, Dendrite strives to be the first source for expert promotional and sales effectiveness solutions.  For more information, please visit www.dendrite.com.

 

Investor Relations

Christine Croft
908-443-4265
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

 

3


 

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; risks associated with foreign currency fluctuations as they affect our non-U.S. operations; increased competition; risks associated with our expanded international operations and our ability to adopt and respond successfully to the unique risks involved in our non-U.S. operations; risks associated with 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 or acquisitions; 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 expectations or assumptions or other changes affecting such forward-looking statements.

 

4


 

TABLE 1

DENDRITE INTERNATIONAL, INC.

 

CONSOLIDATED STATEMENTS OF OPERATIONS - GAAP

 

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

 

2005

 

%

 

2004

 

%

 

Change

 

2005

 

%

 

2004

 

%

 

Change

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Services & Technology:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales solutions

 

$

83,036

 

72.2

%

$

72,633

 

72.7

%

14

%

$

153,213

 

71.4

%

$

143,044

 

73.4

%

7

%

Marketing solutions

 

27,094

 

23.5

%

23,212

 

23.2

%

17

%

51,705

 

24.1

%

44,013

 

22.6

%

17

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shipping

 

4,936

 

4.3

%

4,062

 

4.1

%

22

%

9,595

 

4.5

%

7,914

 

4.1

%

21

%

Total revenues

 

115,066

 

100.0

%

99,907

 

100.0

%

15

%

214,513

 

100.0

%

194,971

 

100.0

%

10

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Costs & Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating costs (including shipping)

 

58,829

 

51.1

%

50,422

 

50.5

%

17

%

112,480

 

52.4

%

100,229

 

51.4

%

12

%

Selling, general and administrative

 

34,075

 

29.6

%

33,934

 

34.0

%

0

%

69,863

 

32.6

%

66,091

 

33.9

%

6

%

Research and development

 

1,454

 

1.3

%

2,722

 

2.7

%

-47

%

3,272

 

1.5

%

5,744

 

2.9

%

-43

%

Facility and other charges

 

—

 

0.0

%

—

 

0.0

%

0

%

9,372

 

4.4

%

—

 

0.0

%

0

%

Amortization of acquired intangible assets

 

1,130

 

1.0

%

1,226

 

1.2

%

-8

%

2,380

 

1.1

%

2,253

 

1.2

%

6

%

Other operating income

 

—

 

0.0

%

—

 

0.0

%

0

%

—

 

0.0

%

(339

)

-0.2

%

-100

%

Total operating costs & expenses

 

95,488

 

83.0

%

88,304

 

88.4

%

8

%

197,367

 

92.0

%

173,978

 

89.2

%

13

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

19,578

 

17.0

%

11,603

 

11.6

%

69

%

17,146

 

8.0

%

20,993

 

10.8

%

-18

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest (income) expense, net

 

(24

)

0.0

%

4

 

0.0

%

NM

 

(165

)

-0.1

%

(3

)

0.0

%

NM

 

Other expense (income), net

 

20

 

0.0

%

(18

)

0.0

%

-211

%

(3

)

0.0

%

(61

)

0.0

%

-95

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income tax expense

 

19,582

 

17.0

%

11,617

 

11.6

%

69

%

17,314

 

8.1

%

21,057

 

10.8

%

-18

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

7,539

 

6.6

%

4,331

 

4.3

%

74

%

6,666

 

3.1

%

8,107

 

4.2

%

-18

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

12,043

 

10.5

%

$

7,286

 

7.3

%

65

%

$

10,648

 

5.0

%

$

12,950

 

6.6

%

-18

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.28

 

 

 

$

0.18

 

 

 

56

%

$

0.25

 

 

 

$

0.31

 

 

 

-19

%

Diluted

 

$

0.28

 

 

 

$

0.17

 

 

 

65

%

$

0.24

 

 

 

$

0.30

 

 

 

-20

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

42,592

 

 

 

41,464

 

 

 

 

 

42,531

 

 

 

41,192

 

 

 

 

 

Diluted

 

43,630

 

 

 

43,342

 

 

 

 

 

43,687

 

 

 

42,941

 

 

 

 

 

 

NM - Not meaningful.

 


 

TABLE 2

DENDRITE INTERNATIONAL, INC.

 

ADJUSTED CONSOLIDATED STATEMENT OF OPERATIONS (NON-GAAP)

 

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

 

 

 

Three Months Ended June 30, (1)

 

Six Months Ended June 30, (2)

 

 

 

2005

 

%

 

2004

 

%

 

Change

 

2005

 

%

 

2004

 

%

 

Change

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Services & Technology:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales solutions

 

$

83,036

 

72.2

%

$

72,633

 

72.7

%

14

%

$

153,213

 

71.4

%

$

143,044

 

73.4

%

7

%

Marketing solutions

 

27,094

 

23.5

%

23,212

 

23.2

%

17

%

51,705

 

24.1

%

44,013

 

22.6

%

17

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shipping

 

4,936

 

4.3

%

4,062

 

4.1

%

22

%

9,595

 

4.5

%

7,914

 

4.1

%

21

%

Total revenues

 

115,066

 

100.0

%

99,907

 

100.0

%

15

%

214,513

 

100.0

%

194,971

 

100.0

%

10

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Costs & Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating costs (including shipping)

 

58,829

 

51.1

%

50,422

 

50.5

%

17

%

112,480

 

52.4

%

100,229

 

51.4

%

12

%

Selling, general and administrative

 

34,075

 

29.6

%

33,934

 

34.0

%

0

%

69,863

 

32.6

%

66,091

 

33.9

%

6

%

Research and development

 

1,454

 

1.3

%

2,722

 

2.7

%

-47

%

3,272

 

1.5

%

5,744

 

2.9

%

-43

%

Other operating income

 

—

 

0.0

%

—

 

0.0

%

0

%

—

 

0.0

%

(339

)

-0.2

%

-100

%

Total operating costs & expenses

 

94,358

 

82.0

%

87,078

 

87.2

%

8

%

185,615

 

86.5

%

171,725

 

88.1

%

8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

20,708

 

18.0

%

12,829

 

12.8

%

61

%

28,898

 

13.5

%

23,246

 

11.9

%

24

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest (income) expense, net

 

(24

)

0.0

%

4

 

0.0

%

NM

 

(165

)

-0.1

%

(3

)

0.0

%

NM

 

Other expense (income), net

 

20

 

0.0

%

(18

)

0.0

%

-211

%

(3

)

0.0

%

(61

)

0.0

%

-95

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income tax expense

 

20,712

 

18.0

%

12,843

 

12.9

%

61

%

29,066

 

13.5

%

23,310

 

12.0

%

25

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

7,974

 

6.9

%

4,788

 

4.8

%

67

%

11,190

 

5.2

%

8,974

 

4.6

%

25

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

12,738

 

11.1

%

$

8,055

 

8.1

%

58

%

$

17,876

 

8.3

%

$

14,336

 

7.4

%

25

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.30

 

 

 

$

0.19

 

 

 

58

%

$

0.42

 

 

 

$

0.35

 

 

 

20

%

Diluted

 

$

0.29

 

 

 

$

0.19

 

 

 

53

%

$

0.41

 

 

 

$

0.33

 

 

 

24

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

42,592

 

 

 

41,464

 

 

 

 

 

42,531

 

 

 

41,192

 

 

 

 

 

Diluted

 

43,630

 

 

 

43,342

 

 

 

 

 

43,687

 

 

 

42,941

 

 

 

 

 

 

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 Reconciliation of Adjusted (NON-GAAP) to GAAP Statement of Operations for the three months ended June 30, 2005 and 2004.

(2)                                  See Table 4 for the Reconciliation of Adjusted (NON-GAAP) to GAAP Statement of Operations for the six months ended June 30, 2005 and 2004.

 

NM                           - Not meaningful.

 


 

TABLE 3

DENDRITE INTERNATIONAL, INC.

 

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

 

THREE MONTHS ENDED JUNE 30, 2005 AND 2004

 

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

 

 

 

Three Months Ended June 30, 2005

 

Three Months Ended June 30, 2004

 

 

 

Total Adjusted

 

Amortization (1)

 

GAAP

 

Total Adjusted

 

Amortization (1)

 

GAAP

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Services & Technology:

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales solutions

 

$

83,036

 

$

—

 

$

83,036

 

$

72,633

 

$

—

 

$

72,633

 

Marketing solutions

 

27,094

 

—

 

27,094

 

23,212

 

—

 

23,212

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shipping

 

4,936

 

—

 

4,936

 

4,062

 

—

 

4,062

 

Total revenues

 

115,066

 

—

 

115,066

 

99,907

 

—

 

99,907

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Costs & Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating costs (including shipping)

 

58,829

 

—

 

58,829

 

50,422

 

—

 

50,422

 

Selling, general and administrative

 

34,075

 

—

 

34,075

 

33,934

 

—

 

33,934

 

Research and development

 

1,454

 

—

 

1,454

 

2,722

 

—

 

2,722

 

Facility and other charges

 

—

 

—

 

—

 

—

 

—

 

—

 

Amortization of acquired intangible assets

 

—

 

1,130

 

1,130

 

—

 

1,226

 

1,226

 

Total operating costs & expenses

 

94,358

 

1,130

 

95,488

 

87,078

 

1,226

 

88,304

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

20,708

 

(1,130

)

19,578

 

12,829

 

(1,226

)

11,603

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest (income) expense, net

 

(24

)

—

 

(24

)

4

 

—

 

4

 

Other expense (income), net

 

20

 

—

 

20

 

(18

)

—

 

(18

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income tax expense

 

20,712

 

(1,130

)

19,582

 

12,843

 

(1,226

)

11,617

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

7,974

 

435

 

7,539

 

4,788

 

457

 

4,331

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

12,738

 

$

(695

)

$

12,043

 

$

8,055

 

$

(769

)

$

7,286

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share: (2)

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.30

 

$

(0.02

)

$

0.28

 

$

0.19

 

$

(0.02

)

$

0.18

 

Diluted

 

$

0.29

 

$

(0.02

)

$

0.28

 

$

0.19

 

$

(0.02

)

$

0.17

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

42,592

 

42,592

 

42,592

 

41,464

 

41,464

 

41,464

 

Diluted

 

43,630

 

43,630

 

43,630

 

43,342

 

43,342

 

43,342

 

 

(1)    Represents exclusion of acquisition related amortization expense of definite lived intangible assets.  This amortization was previously included within Total Costs of Sales and Selling, General & Administrative costs in our prior presentations.

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

 


 

TABLE 4

DENDRITE INTERNATIONAL, INC.

 

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

 

SIX MONTHS ENDED JUNE 30, 2005 AND 2004

 

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

 

 

 

Six Months Ended June 30, 2005

 

Six Months Ended June 30, 2004

 

 

 

Total Adjusted

 

Amortization (1)

 

Facility Charges

 

Severance Charges

 

GAAP

 

Total Adjusted

 

Amortization (1)

 

GAAP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Services & Technology:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales solutions

 

$

153,213

 

$

—

 

$

—

 

$

—

 

$

153,213

 

$

143,044

 

$

—

 

$

143,044

 

Marketing solutions

 

51,705

 

—

 

—

 

—

 

51,705

 

44,013

 

—

 

44,013

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shipping

 

9,595

 

—

 

—

 

—

 

9,595

 

7,914

 

—

 

7,914

 

Total revenues

 

214,513

 

—

 

—

 

—

 

214,513

 

194,971

 

—

 

194,971

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Costs & Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating costs (including shipping)

 

112,480

 

—

 

—

 

—

 

112,480

 

100,229

 

—

 

100,229

 

Selling, general and administrative

 

69,863

 

—

 

—

 

—

 

69,863

 

66,091

 

—

 

66,091

 

Research and development

 

3,272

 

—

 

—

 

—

 

3,272

 

5,744

 

—

 

5,744

 

Facility and other charges

 

—

 

—

 

7,649

 

1,723

 

9,372

 

—

 

—

 

—

 

Amortization of acquired intangible assets

 

—

 

2,380

 

—

 

—

 

2,380

 

—

 

2,253

 

2,253

 

Other operating income

 

—

 

—

 

—

 

—

 

—

 

(339

)

—

 

(339

)

Total operating costs & expenses

 

185,615

 

2,380

 

7,649

 

1,723

 

197,367

 

171,725

 

2,253

 

173,978

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

28,898

 

(2,380

)

(7,649

)

(1,723

)

17,146

 

23,246

 

(2,253

)

20,993

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest (income), net

 

(165

)

—

 

—

 

—

 

(165

)

(3

)

—

 

(3

)

Other (income), net

 

(3

)

—

 

—

 

—

 

(3

)

(61

)

—

 

(61

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

29,066

 

(2,380

)

(7,649

)

(1,723

)

17,314

 

23,310

 

(2,253

)

21,057

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income taxes

 

11,190

 

916

 

2,945

 

663

 

6,666

 

8,974

 

867

 

8,107

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

17,876

 

$

(1,464

)

$

(4,704

)

$

(1,060

)

$

10,648

 

$

14,336

 

$

(1,386

)

$

12,950

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share: (2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.42

 

$

(0.03

)

$

(0.11

)

$

(0.02

)

$

0.25

 

$

0.35

 

$

(0.03

)

$

0.31

 

Diluted

 

$

0.41

 

$

(0.03

)

$

(0.11

)

$

(0.02

)

$

0.24

 

$

0.33

 

$

(0.03

)

$

0.30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

42,531

 

42,531

 

42,531

 

42,531

 

42,531

 

41,192

 

41,192

 

41,192

 

Diluted

 

43,687

 

43,687

 

43,687

 

43,687

 

43,687

 

42,941

 

42,941

 

42,941

 

 

(1)     Represents exclusion of acquisition related amortization expense of definite lived intangible assets.  This amortization was previously included within Total Costs of Sales and Selling, General & Administrative costs in our prior presentations.

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

 


 

TABLE 5

DENDRITE INTERNATIONAL, INC.

 

CONSOLIDATED BALANCE SHEETS

 

(IN THOUSANDS, EXCEPT SHARE DATA)

(UNAUDITED)

 

 

 

June 30,

 

December 31,

 

 

 

2005

 

2004

 

Assets

 

Current Assets:

 

 

 

 

 

Cash and cash equivalents

 

$

56,138

 

$

64,020

 

Accounts receivable, net

 

80,239

 

71,653

 

Prepaid expenses and other current assets

 

5,822

 

6,935

 

Deferred income taxes

 

5,535

 

5,029

 

Facility held for sale

 

—

 

—

 

Total current assets

 

147,734

 

147,637

 

 

 

 

 

 

 

Property and equipment, net

 

55,719

 

45,283

 

Other assets

 

8,542

 

7,922

 

Long-term receivable

 

—

 

—

 

Goodwill

 

83,430

 

80,963

 

Intangible assets, net

 

22,363

 

19,876

 

Purchased capitalized software, net

 

751

 

1,056

 

Capitalized software development costs, net

 

9,851

 

9,170

 

Deferred income taxes

 

12,351

 

9,873

 

 

 

$

340,741

 

$

321,780

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

Current Liabilities:

 

 

 

 

 

Accounts payable

 

$

10,215

 

$

8,171

 

Income taxes payable

 

13,508

 

12,013

 

Capital lease obligations

 

1,616

 

1,689

 

Accrued compensation and benefits

 

15,497

 

16,058

 

Accrued professional and consulting fees

 

5,958

 

7,413

 

Accrued facility and other charges

 

2,653

 

—

 

Other accrued expenses

 

18,337

 

19,284

 

Purchase accounting restructuring accrual

 

2,262

 

3,000

 

Deferred revenues

 

13,921

 

13,347

 

Total current liabilities

 

83,967

 

80,975

 

 

 

 

 

 

 

Capital lease obligations

 

2,217

 

3,036

 

Purchase accounting restructuring accrual

 

3,437

 

4,143

 

Accrued facility and other charges

 

4,668

 

—

 

Deferred rent

 

2,371

 

2,070

 

Other non-current liabilities

 

3,784

 

3,967

 

 

 

 

 

 

 

Stockholders’ Equity:

 

 

 

 

 

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

 

—

 

—

 

Common stock, no par value, 150,000,000 shares authorized, 45,171,795 and 44,913,584 shares issued; 42,633,047 and 42,374,836 shares outstanding at June 30, 2005 and December 31, 2004, respectively

 

128,304

 

125,237

 

Retained earnings

 

138,149

 

127,501

 

Deferred compensation

 

(168

)

(123

)

Accumulated other comprehensive income

 

277

 

1,239

 

Less treasury stock, at cost

 

(26,265

)

(26,265

)

 

 

 

 

 

 

Total stockholders’ equity

 

240,297

 

227,589

 

 

 

 

 

 

 

 

 

$

340,741

 

$

321,780

 

 


 

TABLE 6

DENDRITE INTERNATIONAL, INC.

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

(IN THOUSANDS)

(UNAUDITED)

 

 

 

Six Months Ended June 30,

 

 

 

2005

 

2004

 

Operating activities:

 

 

 

 

 

Net income

 

$

10,648

 

$

12,950

 

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

 

 

 

 

 

Depreciation and amortization

 

11,135

 

10,446

 

Write-off of property and equipment

 

1,030

 

—

 

Amortization of deferred compensation, net of forfeitures

 

34

 

115

 

Deferred income tax benefit

 

(3,060

)

—

 

Other adjustments for non-cash items

 

—

 

901

 

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

 

 

 

 

 

(Increase) decrease in accounts receivable

 

(7,247

)

9,780

 

Decrease in prepaid expenses and other current assets

 

1,027

 

870

 

(Increase) decrease in other assets

 

(804

)

693

 

Decrease in accounts payable and accrued expenses

 

(102

)

(3,576

)

Increase in accrued facility and other charges

 

7,339

 

—

 

Decrease in purchase accounting restructuring accrual

 

(1,630

)

(4,278

)

Increase in income taxes payable

 

2,090

 

675

 

Increase (decrease) in deferred revenue

 

716

 

(3,787

)

(Decrease) increase in other non-current liabilities

 

(182

)

114

 

 

 

 

 

 

 

Net cash provided by operating activities

 

20,994

 

24,903

 

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

Acquisitions, net of cash acquired

 

(10,172

)

(6,812

)

Purchases of property and equipment

 

(17,753

)

(8,615

)

Additions to capitalized software development costs

 

(2,439

)

(2,074

)

 

 

 

 

 

 

Net cash used in investing activities

 

(30,364

)

(17,501

)

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

Repayments of long-term debt

 

—

 

(1,689

)

Repayments of acquired loan

 

—

 

(624

)

Payments on capital lease obligations

 

(890

)

(592

)

Issuance of common stock

 

2,527

 

5,580

 

 

 

 

 

 

 

Net cash provided by financing activities

 

1,637

 

2,675

 

 

 

 

 

 

 

Effect of foreign exchange rate changes on cash

 

(149

)

168

 

 

 

 

 

 

 

Net (decrease) increase in cash and cash equivalents

 

(7,882

)

10,245

 

Cash and cash equivalents, beginning of year

 

64,020

 

30,405

 

 

 

 

 

 

 

Cash and cash equivalents, end of period

 

$

56,138

 

$

40,650

 

 


 

TABLE 7

DENDRITE INTERNATIONAL, INC.

 

PURCHASED INTANGIBLE ASSET AMORTIZATION

 

(IN THOUSANDS)

(UNAUDITED)

 

 

 

2005

 

 

 

 

 

 

 

 

 

 

 

 

 

Actuals

 

Forecast

 

Full Year Projections* (b)

 

 

 

1st Qtr

 

2nd Qtr

 

3rd Qtr

 

4th Qtr

 

2005

 

2006

 

2007

 

2008

 

2009

 

Thereafter

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Synavant Intangible Detail

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Covenants not to compete

 

$

263

 

$

218

 

$

—

 

$

—

 

$

481

 

$

—

 

$

—

 

$

—

 

$

—

 

$

—

 

Backlog (a)

 

22

 

22

 

22

 

21

 

87

 

—

 

—

 

—

 

—

 

—

 

Pharbase Database

 

65

 

65

 

65

 

65

 

260

 

260

 

260

 

260

 

260

 

899

 

Customer relationships

 

112

 

111

 

112

 

111

 

446

 

446

 

446

 

446

 

446

 

2,882

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Synavant Amortization Total

 

462

 

416

 

199

 

197

 

1,274

 

706

 

706

 

706

 

706

 

3,781

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PharmaVision Amortization (c)

 

81

 

77

 

86

 

86

 

330

 

237

 

—

 

—

 

—

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Schwarzeck Amortization (c)

 

76

 

67

 

77

 

77

 

297

 

307

 

106

 

—

 

—

 

—

 

SAI Amortization

 

153

 

152

 

152

 

153

 

610

 

446

 

—

 

—

 

—

 

—

 

UTO Brain Amortization (c)

 

45

 

51

 

48

 

48

 

192

 

191

 

191

 

191

 

191

 

787

 

MDM Amortization

 

191

 

191

 

191

 

176

 

749

 

704

 

280

 

93

 

78

 

153

 

Buzzeo Amortization

 

242

 

176

 

174

 

174

 

766

 

777

 

692

 

604

 

479

 

1,432

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Amortization Expense

 

$

1,250

 

$

1,130

 

$

927

 

$

911

 

$

4,218

 

$

3,368

 

$

1,975

 

$

1,594

 

$

1,454

 

$

6,153

 

 

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

(b) Amortization is recorded on a straight-line basis within each respective year.

(c) Amortization expense will fluctuate based upon movements in foreign currency.

* See “forward-looking” statement included as part of this release.  It does not reflect or assume any additional acquisitions.

 


 

TABLE 8

DENDRITE INTERNATIONAL, INC.

 

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

 

YEAR ENDED DECEMBER 31, 2004

 

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

 

 

 

Year Ended December 31, 2004

 

 

 

Total Adjusted

 

Amortization (1)

 

GAAP

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Services & Technology:

 

 

 

 

 

 

 

Sales solutions

 

$

286,544

 

$

—

 

$

286,544

 

Marketing solutions

 

95,292

 

—

 

95,292

 

 

 

 

 

 

 

 

 

Shipping

 

17,361

 

—

 

17,361

 

Total revenues

 

399,197

 

—

 

399,197

 

 

 

 

 

 

 

 

 

Operating Costs & Expenses:

 

 

 

 

 

 

 

Operating costs (including shipping)

 

205,896

 

—

 

205,896

 

Selling, general and administrative

 

132,016

 

—

 

132,016

 

Research and development

 

9,316

 

—

 

9,316

 

Amortization of acquired intangible assets

 

—

 

4,851

 

4,851

 

Other operating (income)

 

(707

)

—

 

(707

)

Total operating costs & expenses

 

346,521

 

4,851

 

351,372

 

 

 

 

 

 

 

 

 

Operating income

 

52,676

 

(4,851

)

47,825

 

 

 

 

 

 

 

 

 

Interest (income), net

 

(64

)

—

 

(64

)

Other expense, net

 

277

 

—

 

277

 

 

 

 

 

 

 

 

 

Income before income taxes

 

52,463

 

(4,851

)

47,612

 

 

 

 

 

 

 

 

 

Income taxes

 

19,886

 

1,839

 

18,047

 

 

 

 

 

 

 

 

 

Net income

 

$

32,577

 

$

(3,012

)

$

29,565

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

Basic

 

$

0.78

 

$

(0.07

)

$

0.71

 

Diluted

 

$

0.76

 

$

(0.07

)

$

0.69

 

 

 

 

 

 

 

 

 

Shares used in computing net income per share:

 

 

 

 

 

 

 

Basic

 

41,503

 

41,503

 

41,503

 

Diluted

 

43,075

 

43,075

 

43,075

 

 

(1)               Represents exclusion of acquisition related amortization expense of definite lived intangible assets.  This amortization was previously included within Total Costs of Sales and Selling, General & Administrative costs in our prior presentations.