TABLE 1

DENDRITE INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS - GAAP

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

	Three Months Ended September 30,
	2006			%		2005			%		Change

Revenues:

Services & Technology:
Sales solutions	$	66,762		64.8	%	$	82,642		72.3	%	(19	)%
Marketing solutions	28,835			28.0	%	25,310			22.1	%	14	%
Emerging solutions	7,376			7.2	%	6,408			5.6	%	15	%
Total revenues	102,973			100.0	%	114,360			100.0	%	(10	)%

Operating Costs & Expenses:
Operating costs (including shipping)	56,172			54.6	%	61,252			53.6	%	(8	)%
Selling, general and administrative	39,816		(1)	38.7	%	33,395		(2)	29.2	%	19	%
Research and development	1,607			1.6	%	1,343			1.2	%	20	%
Restructuring and other charges	12,660		(3)	12.3	%	—			0.0	%	NM
Amortization of acquired intangible assets	1,074			1.0	%	960			0.8	%	12	%
Total operating costs & expenses	111,329			108.1	%	96,950			84.8	%	15	%

Operating (loss) income	(8,356		)	(8.1	)%	17,410			15.2	%	NM

Interest income, net	(644		)	(0.6	)%	(150		)	(0.1	)%	NM
Other expense, net	31			0.0	%	35			0.0	%	NM

(Loss) income before income tax (benefit) expense	(7,743		)	(7.5	)%	17,525			15.3	%	144	%

Income tax (benefit) expense	(1,698		)	(1.6	)%	6,747			5.9	%	125	%

Net (loss) income	$	(6,045	)	(5.9	)%	$	10,778		9.4	%	156	%

Net (loss) income per share:
Basic	$	(0.14	)			$	0.25				NM
Diluted	$	(0.14	)			$	0.24				NM

Shares used in computing net (loss) income per share:
Basic	43,713					42,944
Diluted	43,713					44,331

(1) Includes $937 out of $975 total stock-based compensation expense from the adoption of SFAS 123(R) and $887 out of $905 total restricted stock expense, respectively.

(2) Includes $69 of restricted stock expense.

(3) $8,206 of severance expense and $4,454 of an asset impairment charge.

NM - Not meaningful.

TABLE 2

DENDRITE INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS - GAAP

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

	Nine Months Ended September 30,
	2006			%		2005			%		Change

Revenues:

Services & Technology:
Sales solutions	$	202,316		64.7	%	$	230,641		70.1	%	(12	)%
Marketing solutions	90,414			28.9	%	79,091			24.0	%	14	%
Emerging solutions	19,753			6.3	%	19,141			5.8	%	3	%
Total revenues	312,483			100.0	%	328,873			100.0	%	(5	)%

Operating Costs & Expenses:
Operating costs (including shipping)	175,321			56.1	%	173,732			52.8	%	1	%
Selling, general and administrative	121,707		(1)	38.9	%	103,258		(2)	31.4	%	18	%
Research and development	4,835			1.5	%	4,615			1.4	%	5	%
Restructuring and other charges	15,238		(3)	4.9	%	9,372		(4)	2.8	%	63	%
Amortization of acquired intangible assets	3,131			1.0	%	3,340			1.0	%	(6	)%
Total operating costs & expenses	320,232			102.5	%	294,317			89.5	%	9	%

Operating (loss) income	(7,749		)	(2.5	)%	34,556			10.5	%	(122	)%

Interest income, net	(1,602		)	(0.5	)%	(315		)	(0.1	)%	NM
Other expense, net	77			0.0	%	32			0.0	%	NM

(Loss) income before income tax expense	(6,224		)	(2.0	)%	34,839			10.6	%	118	%

(Loss) income before income tax (benefit) expense	(174		)	(0.1	)%	13,413			4.1	%	101	%

Net (loss) income	$	(6,050	)	(1.9	)%	$	21,426		6.5	%	128	%

Net (loss) income per share:
Basic	$	(0.14	)			$	0.50				NM
Diluted	$	(0.14	)			$	0.49				NM

Shares used in computing net (loss) income per share:
Basic	43,638					42,670
Diluted	43,638					43,903

(1) Includes $3,392 out of $3,591 total stock-based compensation expense from the adoption of SFAS 123(R) and $2,213 out of $2,244 total restricted stock expense, respectively.

(2) Includes $103 of restricted stock expense.

(3) $10,248 of severance expense, $4,454 of an asset impairment charge and $536 of other expense.

(4) $7,649 of facility related charges and $1,723 of severance expense.

NM-Not Meaningful

TABLE 3

DENDRITE INTERNATIONAL, INC.

SUPPLEMENTAL FINANCIAL INFORMATION (SEE NOTES)

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2006		2005		% Change		2006		2005		% Change

Total revenue - GAAP	$	102,973	$	114,360	(10	)%	$	312,483	$	328,873	(5	)%

Impact of foreign exchange rates (1)	748		—				3,459		—

Total revenue - Adjusted	$	103,721	$	114,360	(9	)%	$	315,942	$	328,873	(4	)%

	Three Months Ended September 30,					Nine Months Ended September 30,
	2006			2005		2006			2005
Operating (loss) income - GAAP	$	(8,356	)	$	17,410	$	(7,749	)	$	34,556

Stock option expense (2)	1,023			—		3,750			—
Surplus facility charges (3)	—			—		—			7,649
Severance charges	8,206		(5)	—		10,248		(5)	1,723		(4)
Asset impairment	4,454		(7)	—		4,454		(7)	—
Other restructuring charges	—			—		536		(6)	—

Operating income - Adjusted	$	5,327		$	17,410	$	11,239		$	43,928

	Three Months Ended September 30,					Nine Months Ended September 30,
	2006			2005		2006			2005
Net income per share:
Diluted - GAAP	$	(0.14	)	$	0.24	$	(0.14	)	$	0.49

Stock option expense (2)	0.02		(8)	—		0.06		(8)	—
Surplus facility charges (3)	—			—		—			0.10		(9)
Severance charges	0.15		(10)	—		0.17		(10)	0.03		(11)
Asset impairment	0.06		(12)	—		0.06		(12)	—
Other restructuring charges	—			—		0.01		(13)	—

Diluted - Adjusted	$	0.09		$	0.24	$	0.17		$	0.62

Note: 2006 EPS does not foot down due to the mathematical rounding of the individual calculations.

(1) The impact of exchange rates are calculated by taking 2006 local currency revenue and applying the 2005 exchange rates for comparison purposes.

(2) Prior to January 1, 2006, the Company accounted for stock-based compensation under Accounting Principles Board, Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”). In accordance with APB 25, the Company historically used the intrinsic value method to account for stock-based compensation expense. Under APB 25, stock options and shares issued under the Company’s employee stock purchase plan were not an expense for accounting purposes and, as a result, no compensation expense is included in the 2005 reporting period related to these items. As of January 1, 2006, the Company accounts for stock-based compensation expense, including expense related to stock options and shares issued under the employee stock purchase program, under the fair value method of Statement of Financial Accounting No. 123(R), “Shared-Based Payment” (“FAS 123(R)”). As the Company adopted the modified prospective method, results for prior periods have not been restated under the fair value method for GAAP purposes.

(3) The surplus facility charges relates to vacating a New Jersey facility and for additional facilities vacated in previous periods due to changes in market conditions, as well as the write-off of leasehold improvements associated with the exited facility.

(4) The 2005 severance charges relates to the elimination of certain senior and mid-level management positions.

(5) The 2006 severance charges relates to the elimination of certain positions relating to our Operational Effectiveness initiative (“OE”).

(6) The 2006 other restructuring charges primarily relates to the refocusing of our Japanese business.

(7) The 2006 asset impairment charge relates to a facility held for sale that was reduced to its estimated fair market value less costs to sell.

(8) The tax effect using the marginal tax rate is $352 and $1,248 for the three and nine months ended September 30, 2006, respectively.

(9) The tax effect using the marginal tax rate is $3,075 for the nine months ended September 30, 2005.

(10) The tax effect using the marginal tax rate is $1,658 and $2,352 for the three and nine months ended September 30, 2006, respectively.

(11) The tax effect using the marginal tax rate is $487 for the nine months ended September 30, 2005.

(12) The tax effect using the marginal tax rate is $1,782 for the three and nine months ended September 30, 2006.

(13) The tax effect using the marginal tax rate is $226 for the nine months ended September 30, 2006.

TABLE 4

DENDRITE INTERNATIONAL, INC.

SEGMENT REVENUE, OPERATING INCOME (LOSS) AND RESTRUCTURING AND OTHER CHARGES

(IN THOUSANDS)

(UNAUDITED)

	For the Three Months Ended September 30, 2006
	Sales Solutions		Marketing Solutions			Emerging Solutions		Corporate			Total
Revenue	$	66,762	$	28,835		$	7,376	$	—		$	102,973
Operating income (loss)	$	7,570	$	(2,919	)	$	137	$	(13,144	)	$	(8,356	)
Restructuring charges	$	5,758	$	1,930		$	63	$	4,909		$	12,660

	For the Three Months Ended September 30, 2005
	Sales Solutions		Marketing Solutions			Emerging Solutions		Corporate			Total
Revenue	$	82,642	$	25,310		$	6,408	$	—		$	114,360
Operating income (loss)	$	23,019	$	(1,440	)	$	69	$	(4,238	)	$	17,410
Restructuring charges	$	—	$	—		$	—	$	—		$	—

	For the Nine Months Ended September 30, 2006
	Sales Solutions		Marketing Solutions			Emerging Solutions			Corporate			Total
Revenue	$	202,316	$	90,414		$	19,753		$	—		$	312,483
Operating income (loss)	$	33,751	$	(8,253	)	$	(379	)	$	(32,868	)	$	(7,749	)
Restructuring charges	$	6,517	$	2,884		$	67		$	5,770		$	15,238

	For the Nine Months Ended September 30, 2005
	Sales solutions		Marketing solutions			Emerging solutions		Corporate			Total
Revenue	$	230,641	$	79,091		$	19,141	$	—		$	328,873
Operating income (loss)	$	56,433	$	(3,566	)	$	970	$	(19,281	)	$	34,556
Restructuring charges	$	—	$	—		$	—	$	9,372		$	9,372

TABLE 5

DENDRITE INTERNATIONAL, INC.

CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT SHARE DATA)

(UNAUDITED)

	September 30,			December 31,
	2006			2005
Assets

Current Assets:
Cash and cash equivalents	$	84,147		$	66,145
Accounts receivable, net	67,106			80,167
Prepaid expenses and other current assets	7,945			8,544
Asset held for sale	8,545			—
Deferred income taxes	13,035			8,848
Total current assets	180,778			163,704

Property and equipment, net	38,578			52,592
Other assets	9,355			8,856
Goodwill	92,332			90,440
Intangible assets, net	27,038			25,083
Capitalized software development costs, net	10,380			10,341
Deferred income taxes	12,011			11,991
	$	370,472		$	363,007
Liabilities and Stockholders’ Equity

Current Liabilities:
Accounts payable	$	8,138		$	7,677
Income taxes payable	8,272			9,518
Capital lease obligations	1,408			1,383
Accrued compensation and benefits	18,887			17,950
Accrued professional and consulting fees	6,164			5,690
Accrued restructuring and other charges	8,138			1,490
Other accrued expenses	20,376			17,468
Purchase accounting restructuring accrual	960			1,601
Deferred revenues	15,430			18,680
Total current liabilities	87,773			81,457

Capital lease obligations	389			1,648
Purchase accounting restructuring accrual	2,269			3,009
Accrued restructuring and other charges	3,387			4,143
Deferred rent	5,425			5,740
Other non-current liabilities	5,617			5,595

Stockholders’ Equity:
Preferred stock, no par value, 15,000,000 shares authorized, none issued	—			—
Common stock, no par value, 150,000,000 shares authorized, 46,583,869 and 46,353,252 shares issued; 43,722,566 and 43,491,949 shares outstanding at September 30, 2006 and December 31, 2005, respectively	153,728			149,947
Retained earnings	142,899			148,948
Deferred compensation	—			(4,419		)
Accumulated other comprehensive income (loss)	722			(1,324		)
Less treasury stock, at cost	(31,737		)	(31,737		)

Total stockholders’ equity	265,612			261,415
	$	370,472		$	363,007

TABLE 6

DENDRITE INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)

(UNAUDITED)

	Nine Months Ended September 30,
	2006			2005
Operating activities:
Net (loss) income	$	(6,050	)	$	21,426
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization	19,090			18,026
Asset impairment	4,454			1,030
Stock-based compensation	5,941			103
Deferred income taxes	(3,869		)	(2,277		)
Excess tax benefits from stock-based awards	(229		)	—
Changes in assets and liabilities, net of effects from acquisitions:
Decrease (increase) in accounts receivable	14,725			(1,825		)
Decrease in prepaid expenses and other current assets	860			56
Increase in other assets	(368		)	(1,277		)
Increase in accounts payable and accrued expenses	567			1,599
Increase in accrued restructuring and other charges	5,829			6,618
Decrease in purchase accounting restructuring accrual	(1,118		)	(2,180		)
Decrease in income taxes payable	(1,004		)	(1,621		)
(Decrease) increase in deferred revenue	(3,579		)	221
Decrease in other non-current liabilities	(2		)	(70		)

Net cash provided by operating activities	35,247			39,829

Investing activities:
Acquisitions, net of cash acquired	(5,706		)	(21,439		)
Purchases of property and equipment	(9,863		)	(22,633		)
Additions to capitalized software development costs	(3,668		)	(3,845		)

Net cash used in investing activities	(19,237		)	(47,917		)

Financing activities:
Payments on capital lease obligations	(1,234		)	(1,241		)
Excess tax benefits from stock-based awards	229			—
Issuance of common stock	2,030			10,938

Net cash provided by financing activities	1,025			9,697

Effect of foreign exchange rate changes on cash	967			(1,011		)

Net increase in cash and cash equivalents	18,002			598
Cash and cash equivalents, beginning of year	66,145			64,020

Cash and cash equivalents, end of period	$	84,147		$	64,618

About Dendrite