Dendrite International (DRTE) 8-K/A Current report (amended)

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.

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	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

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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

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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.

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TABLE 1DENDRITE 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.

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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.

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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.

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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.

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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.

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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

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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.

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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.

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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.

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TABLE 10DENDRITE 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 11DENDRITE 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