SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
__________
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One):
/X/ ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EX-
CHANGE ACT OF 1934 [NO FEE REQUIRED, EFFECTIVE OCTOBER 7, 1996].
For the fiscal year ended December 31, 1997
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED].
For the transition period from ___________ to ___________
Commission file number 33-92434
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below: Dendrite 401(k) Retirement
Savings Plan.
B. Name of issuer of the securities held pursuant to the plan and
the address of its principal executive office: Dendrite Inter-
national, Inc., 1200 Mt. Kemble Avenue, Morristown, New Jersey
07960.
DENDRITE
401(k) RETIREMENT SAVINGS PLAN
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1997 AND 1996
TOGETHER WITH AUDITORS' REPORT
DENDRITE
401(k) RETIREMENT SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
Page
----
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS 1
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1997 2
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1996 3
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN
BENEFITS FOR THE YEAR ENDED DECEMBER 31, 1997 4
NOTES TO FINANCIAL STATEMENTS 5-9
SCHEDULES:
I. ITEM 27a--SCHEDULE OF ASSETS HELD FOR INVESTMENT
PURPOSES--AS OF DECEMBER 31, 1997 10
II. ITEM 27d--SCHEDULE OF REPORTABLE TRANSACTIONS FOR
THE YEAR ENDED DECEMBER 31, 1997 11
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Trustees and Plan Administrator
of the Dendrite 401(k) Retirement Savings Plan:
We have audited the accompanying statements of net assets available for plan
benefits of the Dendrite 401(k) Retirement Savings Plan (the "Plan") as of
December 31, 1997 and 1996, and the related statement of changes in net assets
available for plan benefits for the year ended December 31, 1997. These
financial statements and the schedules referred to below are the responsibility
of the Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1997 and 1996, and the changes in its net assets available for plan
benefits for the year ended December 31, 1997, in conformity with generally
accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes and reportable transactions are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. The Fund information in the
statement available for plan benefits and the statement of changes in net assets
available for plan benefits is presented for purposes of additional analysis
rather than to present the net assets available for plan benefits and changes in
net assets available for plan benefits of each fund. The supplemental schedules
and fund information have been subjected to the auditing procedures applied in
the audits of the basic financial statements and, in our opinion, are fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
Philadelphia, Pa.,
October 9, 1998
-1-
DENDRITE
401(k) RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AS OF DECEMBER 31, 1997
Goldman Goldman Goldman Goldman
Sachs Sachs Sachs Goldman Sachs
Capital International Growth & Sachs Money
Growth Equity Income Balanced Market
Fund Fund Fund Fund Fund
---------- ---------- ---------- ---------- ----------
CASH $ -- $ -- $ -- $ -- $ --
INVESTMENTS, at fair value 1,724,074 218,218 1,515,618 754,114 430,003
RECEIVABLES:
Contributions 59,934 12,291 63,030 20,978 6,223
Loans 3,735 1,105 1,472 310 131
LOANS TO PARTICIPANTS -- -- -- -- --
---------- ---------- ---------- ---------- ----------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS $1,787,743 $ 231,614 $1,580,120 $ 775,402 $ 436,357
========== ========== ========== ========== ==========
Dendrite
International
Common Loan
Stock Fund Other Total
---------- ---------- ---------- ----------
CASH $ 299 $ -- $ 39,051 $ 39,350
INVESTMENTS, at fair value 164,494 -- -- 4,806,521
RECEIVABLES:
Contributions 4,494 -- 174,453 341,403
Loans 55 -- -- 6,808
LOANS TO PARTICIPANTS -- 32,398 -- 32,398
---------- ---------- ---------- ----------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS $ 169,342 $ 32,398 $ 213,504 $5,226,480
========== ========== ========== ==========
The accompanying notes are an integral part of this statement.
-2-
DENDRITE
401(k) RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AS OF DECEMBER 31, 1996
Goldman Goldman Goldman Goldman
Sachs Sachs Sachs Goldman Sachs
Capital International Growth & Sachs Money
Growth Equity Income Balanced Market
Fund Fund Fund Fund Fund
----------- ----------- ----------- ----------- -----------
CASH $ -- $ -- $ -- $ -- $ --
INVESTMENTS, at fair value 1,205,313 162,026 1,097,504 677,163 300,057
RECEIVABLES:
Contributions 19,241 4,988 20,002 13,593 3,563
Loans 741 139 459 456 1,068
MANDATORY DISTRIBUTION
PAYABLE -- -- -- -- --
LOANS TO PARTICIPANTS -- -- -- -- --
----------- ----------- ----------- ----------- -----------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS $ 1,225,295 $ 167,153 $ 1,117,965 $ 691,212 $ 304,688
=========== =========== =========== =========== ===========
Dendrite
International
Common Loan
Stock Fund Other Total
----------- ----------- ----------- -----------
CASH $ 6,536 $ -- $ -- $ 6,536
INVESTMENTS, at fair value 38,363 -- -- 3,480,426
RECEIVABLES:
Contributions 4,973 -- 85,275 151,635
Loans 195 (3,058) -- --
MANDATORY DISTRIBUTION
PAYABLE -- -- (22,642) (22,642)
LOANS TO PARTICIPANTS -- 84,829 -- 84,829
----------- ----------- ----------- -----------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS $ 50,067 $ 81,771 $ 62,633 $ 3,700,784
=========== =========== ============ =============
The accompanying notes are an integral part of this statement.
-3-
DENDRITE
401(k) RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1997
Goldman Goldman Goldman
Sachs Sachs Sachs Goldman
Capital International Growth & Sachs
Growth Equity Income Balanced
Fund Fund Fund Fund
----------- ----------- ----------- -----------
ADDITIONS TO NET ASSETS:
Contributions by employees $ 281,055 $ 77,840 $ 274,634 $ 101,084
Contributions by employer 79,743 20,841 74,453 28,624
Rollovers 29,964 10,620 80,285 2,975
Interest and dividends 249,949 16,081 144,871 61,593
Loan repayments, including interest 9,728 5,596 15,772 3,949
Net unrealized appreciation
(depreciation) in fair value of
investments 194,318 (8,418) 189,518 74,451
----------- ----------- ----------- -----------
Total additions 844,757 122,560 779,533 272,676
----------- ----------- ----------- -----------
DEDUCTIONS FROM NET ASSETS:
Benefits paid to participants (234,250) (29,726) (313,643) (121,480)
Refunds to participants (7,800) (1,064) (7,118) (4,401)
Loans (23,000) (261) (18,922) (4,853)
----------- ----------- ----------- -----------
Total deductions (265,050) (31,051) (339,683) (130,734)
----------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN PLAN
BENEFITS PRIOR TO TRANSFERS 579,707 91,509 439,850 141,942
----------- ----------- ----------- -----------
NET INTERFUND TRANSFERS (17,259) (27,048) 22,305 (57,752)
----------- ----------- ----------- -----------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS, BEGINNING OF YEAR 1,225,295 167,153 1,117,965 691,212
----------- ----------- ----------- -----------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS, END OF YEAR $ 1,787,743 $ 231,614 $ 1,580,120 $ 775,402
=========== =========== =========== ===========
DENDRITE
401(k) RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1997
(continued)
Goldman
Sachs Dendrite
Money International
Market Common Loan
Fund Stock Fund Other Total
----------- ----------- ----------- ----------- -----------
ADDITIONS TO NET ASSETS:
Contributions by employees $ 35,943 $ 66,595 $ -- $ -- $ 837,151
Contributions by employer 6,642 16,532 -- 89,178 316,013
Rollovers 18,333 6,406 -- -- 148,583
Interest and dividends 16,516 491 -- -- 489,501
Loan repayments, including interest 791 12,521 (44,986) -- 3,371
Net unrealized appreciation
(depreciation) in fair value of
investments -- 94,453 -- -- 544,322
----------- ----------- ----------- ----------- -----------
Total additions 78,225 196,998 (44,986) 89,178 2,338,941
----------- ----------- ----------- ----------- -----------
DEDUCTIONS FROM NET ASSETS:
Benefits paid to participants (40,879) (18,011) (55,256) -- (813,245)
Refunds to participants (1,940) (319) -- 22,642 --
Loans (3,833) -- 50,869 -- --
----------- ----------- ----------- ----------- -----------
Total deductions (46,652) (18,330) (4,387) 22,642 (813,245)
----------- ----------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN PLAN
BENEFITS PRIOR TO TRANSFERS 31,573 178,668 (49,373) 111,820 1,525,696
----------- ----------- ----------- ----------- -----------
NET INTERFUND TRANSFERS 100,096 (59,393) -- 39,051 --
----------- ----------- ----------- ----------- -----------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS, BEGINNING OF YEAR 304,688 50,067 81,771 62,633 3,700,784
----------- ----------- ----------- ----------- -----------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS, END OF YEAR $ 436,357 $ 169,342 $ 32,398 $ 213,504 $ 5,226,480
=========== =========== =========== =========== ===========
The accompanying notes are an integral part of this statement.
-4-
DENDRITE
401(k) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
1. PLAN DESCRIPTION:
-----------------
The following description of the Dendrite 401(k) Retirement Savings Plan (the
"Plan") formerly the Dendrite Inc. 401(k) Profit Sharing Plan provides only
general information. Participants should refer to the Plan document as amended
and restated effective as of December 26, 1996, together with the amendments to
the Plan document and to the summary plan description for more complete
information.
The Plan is a defined contribution plan subject to the provisions of the
Employee Retirement Income Security Act of 1974 ("ERISA"), as amended. Those
eligible to participate in the Plan are salaried employees of Dendrite
International (the "Company") who have attained the age of 21.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
-------------------------------------------
Basis of Accounting
- -------------------
The accompanying financial statements have been prepared using the accrual basis
of accounting in accordance with the AICPA Audit and Accounting Guide, "Audits
of Employee Benefit Plans."
Use of Estimates in the Preparation of Financial Statements
- -----------------------------------------------------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of net assets and liabilities at the date of the
financial statements and the reported amounts of contributions, earnings and
disbursements during the reporting period. Actual results could differ from
those estimates.
Contributions
- -------------
Participants may make elective salary deferral contributions up to 15% of their
pretax compensation. Employee elected salary deferrals are limited to the
maximum allowable under the Internal Revenue Code ($9,500 in 1997).
Distributions from other qualified retirement plans can also be transferred into
the Plan and retained as a rollover contribution.
-5-
The Company makes matching contributions to the participant accounts of
participants who have completed one year of service with the Company. The match
is equal to 50% of the participant's contributions, which does not exceed 6% of
the participant's total compensation.
Participant Accounts
- --------------------
Each participant's account is credited with the participant's elected salary
deferral, employer matching contributions, and an allocation of the Plan's
earnings. Earnings are allocated by fund based on the ratio of a participant's
account invested in a particular fund to all participants' investments in that
fund. The benefit to which a participant is entitled is the balance in their
account. Terminated participants forfeit non-vested Company contributions.
Valuation of Investments
- ------------------------
Quoted market prices are used to value investments. All realized and unrealized
gains and losses are included as part of net unrealized appreciation
(depreciation) in fair value of investment in the Statement of Changes in Net
Assets Available for Plan Benefits. Cash equivalents are stated at cost which
approximate fair value.
Investment Options
- ------------------
Participants may elect to invest their salary deferrals, along with the employer
matching contribution, in five investment options with Goldman Sachs, & Co.
("Goldman Sachs") or in the Company's common stock.
Fund Name Description
- ---------------------------------- ------------------------------------
Goldman Sachs Capital Growth Objective is long-term capital
Fund growth. At least 65% of total assets
are invested in equity securities.
The investment adviser considers
long-term capital appreciation
potential in selecting investments.
Goldman Sachs International Equity Objective is long-term capital
Fund appreciation. Substantially all, and
at least 65% of total assets are
invested in equity securities of
companies organized outside the U.S.
or whose securities are principally
traded outside the U.S. The Fund may
invest in securities of issuers
located in countries with emerging
economies or securities markets and
employ certain currency management
techniques.
Goldman Sachs Growth & Income Objective is the long-term growth of
Fund capital appreciation and growth of
income. At least 65% of total assets
are invested in equity securities
that the investment adviser
considers to have favorable
prospects for
-6-
Goldman Sachs Balanced Fund capital appreciation and/or
dividend paying ability. Objective
is long-term capital growth and
current income. Between 45% and 65%
of total assets are invested in
equity securities and at least 25%
of total assets are invested in
fixed income senior securities.
Goldman Sachs Money Market Objective is to maximize current
Fund income to the extent consistent with
the preservation of capital and the
maintenance of liquidity by
investing exclusively in high
quality money market instruments.
Participants are allowed to redirect their future investment contributions or
exchange their existing account balances among investment options as defined in
the Plan document.
The fair market value of individual investments that represent 5% or more of the
Plan's total net assets available for benefits as of December 31, 1997, are as
follows:
Fair Market
Value
December 31,
------------------------------
Investment 1997 1996
- --------------------------------------------- ----------- -----------
Goldman Sachs:
Capital Growth Fund $1,724,074 $1,205,313
Growth & Income Fund 1,515,618 1,097,504
Balanced Fund 754,114 677,163
Money Market Fund 430,003 300,057
Vesting
- -------
Participants are immediately vested in 100% of their employee elected salary
deferrals and earnings thereon. Vesting in employer matching contributions,
forfeitures, and earnings on these amounts is based on years of service.
Participants vest at a rate of 20% per year, becoming fully vested after five
years of credited service or attainment of normal retirement age, as defined.
Forfeitures
- -----------
Forfeitures occur when participants terminate employment before becoming
entitled to their full benefits under the Plan. All forfeitures are "allocated"
or divided among participants eligible to share for a Plan year. Forfeitures are
allocated to each participant in the same proportion that his or her
compensation bears to the aggregate compensation of all
-7-
participants during the Plan year. As of December 31, 1997, the value of
employer matching contributions forfeited totaled $6,184, and the total
forfeitures allocated to participants during the year totaled $33,264.
Administrative Expenses
- -----------------------
Administrative expenses incurred in the operation of the Plan have been paid by
the Company and are not reflected in the accompanying financial statements.
3. PARTICIPANT LOANS:
------------------
Under defined conditions, participants are entitled to borrow in a limited
capacity from the Plan. Loans are limited to the lesser of the amount requested
or 50% of the participant's vested account balance or $50,000 with a minimum
loan amount of $1,000. Loan repayments are made in the form of direct
withdrawals from the participant's payroll funds. Loans bear interest at the
prime rate and are repayable over no more than five years, unless the loan
provides funding for the purchase of the participant's principal residence. As
of December 31, 1997, interest rates ranged from 6.0% to 8.5% on loans
outstanding.
4. DISTRIBUTIONS TO PARTICIPANTS:
------------------------------
Distributions to retiring or terminated participants are generally made in the
year following retirement or termination. Distributions due participants at
December 31, 1997 and 1996, amounted to $27,636 and $184,939, respectively. The
distributions due to participants are classified as a component of net assets
available for plan benefits in the accompanying financial statements.
5. TAX STATUS:
-----------
The Plan has been amended to include all changes to comply with the Tax Reform
Act of 1986. On January 16, 1998, the Plan, as amended, received a favorable
letter of determination from the Internal Revenue Service.
In 1994 and 1995, the Plan did not meet certain requirements to qualify as
non-discriminatory under the Internal Revenue Code. In order to meet these
requirements the Company will need to make qualified non-elective contributions
("QNEC") to the Plan. The Company is presently engaged in discussions with the
Internal Revenue Service regarding the exact amount of these QNEC contributions.
The Company presently believes that the amount of the QNEC contributions will be
no less than $26,570 and $73,023 for 1994 and 1995, respectively. Such amounts
have been included in Other in the statements of net assets available for plan
benefits. In addition to the QNEC the Company is also required to make a
contribution to the plan to compensate the participants for the appreciation on
the QNEC which would have been earned from 1994 and 1995 to the date the QNEC is
made. Such amount is estimated to be $67,279 and is included in Other in the
December 31, 1997 statement of net assets available for plan benefits.
In 1996, the Plan did not meet certain requirements to qualify as
non-discriminatory. In order to meet these requirements the Company refunded
$22,642 to participants subsequent
-8-
to December 31, 1996. Such amount has been reflected as a mandatory distribution
payable on the December 31, 1996 statement of net assets available for plan
benefits.
6. PLAN TERMINATION:
-----------------
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue their contributions at any time and to terminate
the Plan subject to the provisions of ERISA. In the event of Plan termination,
participants will become 100% vested in their accounts.
7. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500:
----------------------------------------------------
The following is a reconciliation of net assets available for plan benefits per
the financial statements to the Form 5500:
December 31,
--------------------------
1997 1996
----------- -----------
Net assets available for plan benefits per the
financial statements $5,226,480 $3,700,784
Less- Qualified non-elective contributions
receivable (166,872) (77,694)
Less- Benefit claims payable (27,636) (184,939)
Add- Mandatory distribution payable -- 22,642
----------- -----------
Net assets available for plan benefits per Form 5500 $5,031,972 $3,460,793
=========== ===========
-9-
SCHEDULE I
EIN #:22-2786386
PLAN #: 001
DENDRITE
401(k) RETIREMENT SAVINGS PLAN
ITEM 27a -- SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1997
Par Value
or Number Fair Market
Description of Investment of Shares Cost Value
- ------------------------------------------ --------- ---------- -----------
GOLDMAN SACHS INVESTMENTS:
Capital Growth Fund 95,305 $1,529,753 $1,724,074
International Equity Fund 11,330 226,635 218,218
Growth & Income Fund 59,092 1,326,100 1,515,618
Balanced Fund 37,518 679,663 754,114
Money Market Fund 430,003 430,003 430,003
DENDRITE INTERNATIONAL:
Common Stock 8,490 70,041 164,494
---------- -----------
$4,262,195 $4,806,521
---------- ----------
LOANS TO PARTICIPANTS (6.0% to 8.5%) $ 32,398 $ 32,398
========== ==========
-10-
SCHEDULE II
EIN #:22-2786386
PLAN #: 001
DENDRITE
401(k) RETIREMENT SAVINGS PLAN
ITEM 27d -- SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
Number
of Cost of
Trans- Purchase Asset Sale Gain
Identity of Party Asset Description actions Price Sold Price (Loss)
- ------------------- ------------------------ ----------- ------------- ------------- ------------- --------------
Series
- ------
Goldman Sachs Money Market Fund 39 $ 189,055 $ -- $ -- $ --
Investments 9 -- 59,109 59,109 --
Goldman Sachs Capital Growth Fund 23 712,310 -- -- --
Investments 21 -- 318,877 387,886 69,009
Goldman Sachs Growth & Income Fund 22 591,554 -- -- --
Investments 18 -- 293,719 358,138 64,419
Goldman Sachs International Fund 15 122,730 -- -- --
Investments 13 -- 54,067 58,090 4,023
Goldman Sachs Balanced Fund 21 218,618 -- -- --
Investments 17 -- 190,571 216,081 25,511
Goldman Sachs Dendrite International 13 162,410 -- -- --
Investments 8 -- 91,765 134,044 42,280
-11-
SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustees (or other persons who administer the employee benefit
plan) have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
DENDRITE 401(K) RETIREMENT SAVINGS PLAN
Date: March 17, 1999 By: /s/ Christopher J. French
------------------------------------
Name: Christopher J. French
Title: Trustee
-12-
EXHIBIT INDEX
Exhibit
No. Description
- ------- -----------
23.1 Consent of Arthur Andersen LLP, independent public accounts