<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                            ------------------------
 
                                   FORM 10-K
 
  /X/    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
         SECURITIES EXCHANGE ACT OF 1934
 
                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998
 
                                       OR
 
  / /    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
         SECURITIES EXCHANGE ACT OF 1934
 
        For the transition period from ______________ to ______________
 
                         COMMISSION FILE NUMBER 0-17920
                            ------------------------
 
                           BRITE VOICE SYSTEMS, INC.
 
             (Exact name of registrant as specified in its charter)
 
                   KANSAS                              48-0986248
          (State of Incorporation)                  (I.R.S. Employer
                                                   Identification No.)
 
                      250 INTERNATIONAL PARKWAY, STE. 300
                              LAKE MARY, FL 32746
                    (Address of principal executive offices)
 
       Registrant's telephone number, including area code: (407) 357-1000
 
        Securities registered pursuant to Section 12(b) of the Act: NONE
          Securities registered pursuant to Section 12(g) of the Act:
 
                           COMMON STOCK, NO PAR VALUE
                                (Title of class)
                            ------------------------
 
    Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes /X/  No / /
 
    Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K: /X/
 
    The aggregate market value of the voting stock held by non-affiliates of the
Registrant, as of March 1, 1999 was $88,043,274, based upon the last reported
sales price on such date. For purposes of this disclosure, shares of common
stock beneficially owned by executive officers and directors of the Registrant
have been excluded because such persons may be deemed to be affiliates. This
determination is not necessarily conclusive.
 
    On March 1, 1999, there were 12,271,053 shares of the Registrant's common
stock outstanding.
 
                      DOCUMENTS INCORPORATED BY REFERENCE
 
    Portions of the Registrant's Proxy Statement for the Annual Meeting of
Stockholders scheduled to be held May 11, 1999 are incorporated by reference
into Part III of this report. The Proxy Statement is expected to be filed with
the Commission not later than April 9, 1999.
 
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
                           BRITE VOICE SYSTEMS, INC.
 
                                 1998 FORM 10-K
 
                               TABLE OF CONTENTS
 
<TABLE>
<S>        <C>                                                                             <C>
Item 1.    Business......................................................................          1
 
Item 2.    Properties....................................................................         11
 
Item 3.    Legal Proceedings.............................................................         11
 
Item 4.    Submission of Matters to a Vote of Security Holders...........................         11
 
Item 5.    Market for the Company's Common Equity and Related Stockholder Matters........         12
 
Item 6.    Selected Financial Data.......................................................         13
 
Item 7.    Management's Discussion and Analysis of Financial Condition and Results of
           Operations....................................................................         14
 
Item 7a.   Quantitative and Qualitative Disclosures about Market Risk....................         20
 
Item 8.    Financial Statements and Supplementary Data...................................         21
 
Item 9.    Changes in and Disagreements with Accountants on Accounting and Financial
           Disclosure....................................................................         45
 
Item 10.   Directors and Executive Officers of the Registrant............................         45
 
Item 11.   Executive Compensation........................................................         45
 
Item 12.   Security Ownership of Certain Beneficial Owners and Management................         45
 
Item 13.   Certain Relationships and Related Transactions................................         45
 
Item 14.   Exhibits, Financial Statement Schedules and Reports on Form 8-K...............         46
</TABLE>
<PAGE>
                                     PART I
 
ITEM 1.   BUSINESS
 
GENERAL
 
    Brite Voice Systems, Inc. (the "Company" or "Brite") designs, integrates,
assembles, markets and supports voice processing and call processing systems and
services which incorporate prepaid/postpaid applications, voice response, voice
recognition, voice/facsimile messaging, audiotex and interactive computer
applications into both standard products and customized market solutions.
 
    Voice processing systems allow callers to use a telephone to leave or
retrieve messages, obtain information stored in a computer database, or input
and retrieve information from a host computer. A caller who accesses a voice
processing system is typically greeted by a message identifying the owner or
principal sponsor of the system, and is then requested to select options from a
menu of choices. Most callers using touch-tone telephones input responses by
pushing the keys on their telephone keypad. Many of the Company's systems use
voice recognition to allow input of information using spoken commands.
 
    Call processing systems allow a service provider to process and complete
subscribers' calls utilizing special features such as prepaid or calling card
billing, voice dialing, voice messaging, pager capabilities and short message
services. A call processing system may include certain voice processing
features.
 
    The Company's products can be divided into two categories: those that
increase its customers' revenues through increased subscription or user fees,
and those that reduce customers' costs or improve the efficiency of services
provided to end-user customers. Examples of revenue enhancing products are
systems developed for wireless and wireline network operators who provide voice
activated dialing and prepaid calling services to their subscriber base, thereby
increasing network usage and revenues. Typical applications that reduce
customers' costs or improve efficiency allow callers to access personalized
account balances for bank, credit card or mutual fund accounts, order products
or product literature for delivery by mail or by facsimile, pay bills, enroll
for college courses, apply for credit cards and receive stock quotes or other
personalized information. The use of the Company's systems to respond to routine
requests for information reduces customers' direct labor costs, and allows live
agents to handle more complex questions and problems, thereby improving customer
service.
 
    Incorporated in Kansas in 1984, the Company initially concentrated its
efforts on the provision of audiotex systems, primarily to newspaper publishers,
which used the systems to establish themselves as leading information providers
in their respective markets. In May 1991, the Company acquired substantially all
of the assets of the Voice Systems Group of Ferranti Business Communications,
Ltd. Through its subsidiaries, Brite Voice Systems Group, Limited, Brite Voice
Systems Group GmbH, Brite Voice Systems AG and Brite Voice Systems S.p.A.
(collectively "EMEA" or "Europe, the Middle East and Africa"), EMEA manufactures
and markets substantially all of the Company's products throughout these
regions. EMEA maintains design and production facilities in Manchester, England
and sales and support offices in Cambridge, England; France; Germany; Italy; the
Netherlands; South Africa; Switzerland and United Arab Emirates.
 
    In July 1993, the Company acquired one of its leading competitors,
Perception Technology Corporation ("Perception"). Perception's experience as a
provider of interactive voice response systems significantly broadened the
Company's participation in the voice processing industry.
 
    In March 1995, the Company acquired Touch-Talk, Incorporated ("Touch-Talk"),
based in Dallas, Texas. Prior to the merger, Touch-Talk had been the largest
provider of customized application software solutions used by the Company in
providing interactive voice response applications. The acquisition of Touch-Talk
broadened the Company's capabilities in providing turnkey voice processing
applications to customers seeking a single vendor for all of their voice
processing requirements.
 
                                       1
<PAGE>
    In August 1995, the Company acquired Telecom Services Limited (U.S.), Inc.,
Telecom Services Limited (West), Inc., TSL Software Services, Inc., and TSL
Management Group, Inc., (collectively the "TSL Companies" or "TSL"), which were
affiliated by common ownership. The Company's TSL division offered a broad array
of services and products which assist clients in managing various aspects of
their telecommunications functions, including controlling and reducing expenses,
developing management reports and applications, selecting service and equipment
vendors, designing and implementing telecommunications systems and managing
day-to-day operations.
 
    On October 30, 1997, the Company consummated the sale of certain assets used
in its electronic publishing business to IT Network, Inc. for $35 million in
cash. The business sold consisted primarily of the Company's information
services business, the sale of audiotex advertising sponsorships to yellow pages
advertisers, and the management of such advertisers on behalf of yellow pages
publishers.
 
    Effective December 1, 1998, the Company consummated the sale of the assets
of its TSL division to ProfitSource Corporation (subsequently named EPS
Solutions Corporation). The Company received $20 million in cash, and a
subordinated promissory note of EPS Solutions Corporation with a face value of
$5 million. The Company also received a warrant to purchase 5,000 shares of TSL
Services, Inc., which in certain circumstances may be converted to shares of EPS
Solutions Corporation.
 
    The Company elected to sell these businesses because it believed that, while
profitable, the growth prospects of each business were limited. Further, the
Company was seeking to focus on fewer but larger market opportunities in the
voice processing industry. The Company was able to use the proceeds from each of
these transactions to retire all of its short-term debt and significantly
increase working capital and stockholders' equity.
 
    The Company believes that the transactions described above have positioned
the Company as a leading supplier of enhanced telecommunications products and
interactive information systems. The Company expects to continue to evaluate
prospects for future acquisitions or other corporate development activities to
supplement its internal technology and product development. In addition, the
Company regularly evaluates all of its product and services offerings for
profitability and growth potential, and will continue to redesign, redirect or
eliminate those products or services which fail to demonstrate profitability or
significant growth potential.
 
THE COMPANY'S PRODUCTS
 
PLATFORMS
 
    Brite believes that the wide variety of new applications and services being
sought by the telecommunications industry will cause a fundamental change in the
product architecture used to provide these services. This industry now generally
uses a topology consisting of a network with a series of attached products,
provided by different vendors, to provide the needed range of applications. The
Company believes that significant demand exists for a uniform architecture
consisting of a series of common components utilized for multiple applications.
This change will allow client companies to quickly offer new applications and
features on a common hardware architecture that can be expanded to add new
features and growth in capacity. In 1997, Brite focused on developing this
common architecture, known as BriteESP-TM-, and making its entire range of
applications available using "building block" components and a common high-level
applications language. A majority of the BriteESP development efforts were
completed in 1998. Upon completion, each product will have:
 
    - A common set of front-end telecommunication network interfaces providing
      switching and signaling for a variety of networks, such as SS7, ISDN and
      in-band signaling.
 
    - A common media-processing unit providing voice recording, playback and
      recognition services to all applications.
 
                                       2
<PAGE>
    - A common applications processing unit running a variety of call processing
      and applications software.
 
    - An operations, administration, maintenance and provisioning environment
      utilizing the Simple Network Management Protocol ("SNMP") standard,
      allowing a single manager to manage the entire suite of Brite products,
      and any other products that are SNMP compliant.
 
    - An application creation environment using Write-1-Registered Trademark-,
      Brite's fourth-generation language which allows easy, graphics-driven
      application development.
 
    - Integrated system administration, using state-of-the-art graphical user
      interface operator terminals.
 
    - A common relational database management environment.
 
APPLICATION CREATION ENVIRONMENT
 
    Write-1 is a language developed by Brite for writing voice processing and
call processing applications, and performing host connectivity, that runs under
a range of UNIX operating systems. It also contains a library of interfaces to
third party development tools such as databases, host connections and Dialogic's
CT Connect product. The Company has an application software development
environment with a graphical user interface running under Windows NT. This
package is designed to meet a wide variety of programming needs, from creating
simple menu-based call flows to developing complex network-based applications.
It also isolates the programmer from the operating system and hardware platform,
thus making applications more portable and expandable.
 
    Write-1 contains a range of features that enable customers to produce state
of the art applications. Examples of customer-developed applications include
consumer banking and financial transactions, and a large call center help desk
which includes automated display of pertinent caller information on the computer
screen of a customer service representative.
 
APPLICATIONS
 
    Applications currently in use by many of the Company's customers are as
follows:
 
    VOICE ACTIVATED DIALING.  This application allows wireless carriers to
provide a cellular telephone user access to telephone numbers using spoken
commands rather than the keys on the cellular telephone. The use of voice
activated dialing permits drivers to keep their hands on the wheel and eyes on
the road, promoting safety and convenience of use.
VoiceSelect-Registered Trademark- and BriteTalk-TM-are marketed to cellular
providers around the world.
 
    DEBIT/PREPAID CALLING.  BriteDebit-Registered Trademark- applications
deliver the ability for telecommunications companies to provide services to
subscribers extending beyond traditional monthly billed service. This capability
allows wireless and wireline companies to provide service through the use of
credit cards, debit cards or prepaid services requiring no card. Unlike
traditional telephone company services where service usage measurements are
collected and bills are generated offline at the end of the billing cycle,
prepaid or debit services require that this billing function occur as part of
the call processing system and in "real time" to allow the user to always have
access to a current balance record. Further, the system must have the ability to
"tell" the user the balance in the account. This ability to perform not only
voice processing and call processing, but also call costing and customer account
adjustment, is a technical task similar to the functionality provided by
telecommunications switches and billing systems operating simultaneously and in
real-time.
 
    BriteStar-TM-, developed during 1998, is a unique handset-based prepaid
solution, specifically for wireless providers. BriteStar uses powerful
encryption technology to store the user's credit within the handset itself, and
allows the handset to securely monitor the value of all calls made, so that the
user credit level is never exceeded. It allows network operators to launch a
prepaid service with a very short time to
 
                                       3
<PAGE>
market, simple network integration, highly efficient use of network resources,
and high resistance to fraud. BriteStar also offers key subscriber benefits,
such as credit display on the handset, and is the first prepaid solution capable
of full international roaming. BriteStar was developed jointly with Telemac
Corporation and Philips Consumer Communications, combining Brite's expertise in
system delivery and network integration with Telemac's leadership in switch
independent handset-based prepaid wireless technology and Philips' expertise in
handset production.
 
    VOICE MESSAGING.  Voice messaging (or voice mail) allows users to store,
send and receive information over the telephone or Internet. In addition to
voice mail, the systems provide call answering, call routing, paging, short
message delivery, dictation and automated attendant features. The Company's
range of voice messaging services can be combined to offer a wide range of
value-added services for public telephone network operators.
 
    ENHANCED CALLING CARD.  BriteCall-TM-, developed in 1998, offers postpaid
and enhanced calling card capabilities, including voice activated dialing and
speed dialing. BriteCall is a robust, distributed and network grade product
integrating multiple services on the same platform.
 
    INTERACTIVE VOICE RESPONSE ("IVR") APPLICATIONS.  Designed for use with the
Company's IVR platforms, these applications are often customized, and can be
written by the Company, by the customer, or written in cooperation with a series
of independent software vendors ("ISVs"). ISVs typically have specialized
skills, which allow the Company to economically obtain specialized,
industry-specific programming. Many application software packages can be used to
create products targeted for specific vertical markets. Examples include higher
education, where the Company's systems enable university and college students to
register for courses 24 hours a day via touch-tone phones; the financial
services market, where the Company's systems allow callers to perform a wide
range of banking transactions by phone 24 hours a day; and utility companies,
where the Company's systems provide automated customer service functions such as
power outage reporting, billing inquiries and meter reading.
 
SERVICES
 
    The Company offers a wide range of services in conjunction with its voice
processing and call processing systems. These services are typically available
on either an annual or quarterly basis and generally complement or support the
Company's products. The Company also provides a variety of telecommunications
management services.
 
MANAGED SERVICES
 
    As a complement to its system sales, the Company provides certain voice and
call processing services on a managed services basis. In a typical managed
service relationship, the Company provides all necessary equipment and
operational personnel, allowing the customer to avoid both the front-end cost of
purchasing equipment, and the continuing cost of adding personnel to staff a
function that is outside its expertise. Charges for these services may be based
on fixed rates per month, per call or per minute, or may consist of a share of
the revenue or profits generated by the service.
 
    The Company's TeleRent-Registered Trademark- service provides readers of
apartment rental guides access to information concerning rental properties in
the local area. Callers to the system may receive more detailed information
about an apartment or complex than can be conveyed in a printed ad. Callers can
direct connect to the leasing agent, leave messages, or receive a fax of a floor
plan or contract. The Company receives a monthly fee for each listing sold in
the rental guide.
 
    The Company provides its prepaid calling application (BriteDebit and
BriteStar) to network operators on a managed service basis in addition to
offering a system purchase option. Under these arrangements, the Company
provides the hardware platform which carries traffic on the prepaid network,
rates calls and keeps track of individual subscriber balances, processes account
replenishment and provides customer
 
                                       4
<PAGE>
support representatives to assist subscribers with problems. The Company's
platform can be easily expanded to meet increased demand and combines many
features in a manner that the Company believes are unmatched in the industry.
The advantage to the network provider is a completely bundled service, which
requires no front-end purchase of equipment, a fixed cost to provide the
service, and the avoidance of continuing costs of operational personnel on
staff.
 
SERVICE CONTRACT AND REPAIR
 
    The Company's systems are generally sold with limited warranties, which
usually range from 90 days to one year. All systems contain built-in modems,
allowing Company personnel to perform diagnostic procedures and many software
upgrades and enhancements remotely. Customers may contract for extended warranty
coverage under any of several plans.
 
    The Company maintains a customer service department consisting of a help
desk function, a field service organization and a training department. The help
desk function is staffed by professionals with specialized skills in hardware
diagnostics, software support and applications programming, who respond to
customer questions regarding software warranty claims and assist customers in
developing and debugging application programs.
 
    A geographically dispersed field service staff is responsible for system
installation and on-site hardware maintenance, including warranty claims. To
date, warranty claims have not been significant.
 
    The training department provides beginning and advanced training sessions
for both customers and employees on topics such as product orientation, system
operation and programming and advanced software and technical development.
 
    During 1998, the Company introduced a new program called "BriteCare-TM-",
which consists of a range of additional services. This program includes both
basic maintenance/warranty services and advanced professional services that can
assist the customer in business planning, source marketing, service planning and
deployment. The Company believes that BriteCare is an important differentiating
factor in reducing customers' risks and costs, or increasing their revenues.
 
SALES AND MARKETING
 
MARKETS SERVED
 
    The Company's hardware systems are sold to two principal markets: the
business systems or commercial market and the network operator market.
 
    The business systems market is broadly defined to include organizations that
service large volumes of telephone callers on a regular basis. These
organizations are generally seeking to streamline operations, improve efficiency
and reduce costs. The Company markets systems that fall into one of three
categories: audiotex, IVR, or computer telephony integration ("CTI"). Audiotex
systems typically broadcast the same information to each caller, while IVR
systems allow callers to access or change account-specific information. CTI
systems generally apply computer intelligence to telecommunications devices to
improve the efficiency of customer service representatives by providing
telephone access and control of computer functions, and computer access and
control of telephone functions. The Company markets its products primarily to
specific industries with needs that can be easily satisfied with highly
automated solutions. The Company has principally served the call center,
education, financial services, government, health care, publishing,
telecommunications and utility markets.
 
    Network operators purchase and install the Company's systems in or near
their central switching offices and use the Company's systems to offer what are
known as "enhanced network" or "enhanced telecommunications services" to their
subscriber base. Subscribers have access to voice messaging, voice activated
dialing, prepaid calling and other services that produce additional revenue to
the operator.
 
                                       5
<PAGE>
DOMESTIC SALES
 
    Revenues within North America amounted to $75,673,000, $58,643,000 and
$55,077,000 in 1998, 1997 and 1996, respectively. The Company sells its systems
and services domestically primarily through a direct sales force, with
individual personnel being responsible for either a specific industry, territory
or product line. Direct sales personnel are located throughout the United
States, including the Company's offices in Canton, Massachusetts; Lake Mary,
Florida; and Wichita, Kansas. During 1998, 16% of consolidated revenues was
derived from AT&T Corp. for delivery of an enhanced telecommunications services
application.
 
    The Company also markets its systems through companies offering integrated
systems or services for sale to end users using the Company's hardware
platforms. These companies include Amarex Technology, Digital Data Voice,
Intecom, Quotient Systems, Southwestern Bell Telecom and U.S. West
Communications Services.
 
INTERNATIONAL SALES
 
    International revenues were $60,042,000, $44,730,000 and $39,089,000 in
1998, 1997 and 1996, respectively, and amounted to 44%, 43% and 42% of revenues
for such periods.
 
    Sales outside the United States are made through a number of sources. Sales
into Europe are made by the Company's EMEA sales force. Sales into Canada and
South America are made by the Company's U.S.-based sales force, and sales into
other areas of the world are made through a combination of the Company's
U.S.-based sales force, distributors and local agents. The Company has employees
based in Dubai, United Arab Emirates; Almelo, Netherlands; Paris, France; Buenos
Aires, Argentina and Singapore.
 
    The Company's European subsidiaries market systems to the same sectors of
the voice processing market as addressed in the United States. A dedicated sales
staff targets corporate users for the sale of audiotex and interactive voice
response systems. The Company concentrates its efforts on five different
vertical markets: telecommunications, home shopping, travel and transport,
finance and utilities. The Company also relies on indirect distribution of its
systems through prominent call center switch manufacturers such as Bosch, BSW,
Ericsson and Siemens.
 
    The Company also maintains a dedicated sales staff for the sale of systems
to network operators throughout Europe, the Middle East and Africa. The
principal products sold to these markets are voice messaging, voice activated
dialing and prepaid calling. Historically, the revenues from EMEA were dependent
upon a small number of customers. The Company has concentrated on expanding its
customer base to lessen its dependence on relatively few customers.
Nevertheless, during 1998, 69% of the sales by the Company's European
subsidiaries were concentrated in ten customers. In addition, one customer,
Cellnet, represented 11% of consolidated revenues in 1998, and 12% of
consolidated revenues for each of 1997 and 1996. The loss of any of these
customers could have a material impact on the Company's international revenues
and results of operations.
 
    The Company sells its audiotex, IVR and network products throughout the rest
of the world through its direct sales force, independent sales agents and
value-added resellers ("VARs"). Where possible, the Company uses the services of
agents and VARs in foreign markets because of their familiarity with local
markets and their knowledge of, and abilities to work within, local governmental
regulations. VARs typically purchase the Company's hardware and license the
operating software. In some instances, VARs provide additional software
programming or information packages to complete the systems. Agents used by the
Company typically receive a commission on sales made into their territories.
 
    The Company faces a number of risks in conducting its international business
that do not affect its domestic business, including greater concentration of
business with fewer customers, longer payment cycles, greater difficulty in
accounts receivable collection and difficulty in staffing and managing foreign
 
                                       6
<PAGE>
subsidiary operations. Installation of the Company's products outside the United
States requires that the Company conform to local telephone and electrical
regulations. The Company has traditionally relied on its suppliers to obtain the
necessary registration in order for the Company to install products within an
individual country. There can be no assurance that these factors will not have
an adverse impact on the Company's future international sales or operating
results. See Note 15 to the Consolidated Financial Statements contained herein
for additional information with respect to foreign and domestic sales and
assets.
 
SEGMENT INFORMATION AND FOREIGN AND DOMESTIC OPERATIONS
 
    The information set forth in Notes 14 and 15 to the accompanying
consolidated financial statements is incorporated herein by reference.
 
RESEARCH AND ENGINEERING
 
    The voice and call processing industries are subject to rapid technological
change, including continuing improvements in hardware and software performance.
In order to maintain its competitive position, the Company must continually
release new products and develop enhancements and new features for its existing
products on a timely basis. There can be no assurance that the Company will be
successful in developing and marketing, on a timely basis, product modifications
or enhancements, or new products that respond to technological advances by
others, or that such new or enhanced products or features will adequately and
competitively address the needs of the marketplace. Because of the increasing
complexity of the Company's products, these efforts can be expected to continue
to increase in technical difficulty. Moreover, the Company must manage product
transitions successfully, since announcements or introductions, or the
perception that such events are likely to occur by either the Company or its
competitors, could adversely affect sales of existing Company products.
 
    Research and product engineering activities are conducted in Canton,
Massachusetts; Manchester, England; Lake Mary, Florida; and Wichita, Kansas.
During 1998, principal activities were the development of the common
architecture known as BriteESP; including the completion of BriteTalk, the
Company's new voice activated dialing product; BriteConnect, the Company's new
IVR product; and BriteStar, the Company's handset-based prepaid system, each of
which uses the BriteESP architecture. The Company completed the development of
BriteCall, a new enhanced credit card product. The Company also completed
additional enhancements to its voice messaging and prepaid calling applications.
During 1998, 1997 and 1996, the Company spent approximately $15,795,000,
$13,036,000 and $9,810,000, respectively, on research and engineering. As a
percentage of revenues, these amounts represent 11.6%, 12.6% and 10.4%,
respectively. The Company expects that to be successful, it will be required to
continue to increase its level of research and engineering expenditures in
absolute terms, and that such increases may also increase as a percentage of
sales.
 
MANUFACTURING
 
    The Company's manufacturing operations consist primarily of assembly of
board-level and subsystem-level components, burn-in, testing and quality
assurance functions, which are performed at both its Canton, Massachusetts and
Manchester, England facilities.
 
    Manufacturing is performed on only one shift, and the Company devotes less
than 25% in each of its Canton and Manchester facilities to manufacturing;
therefore, the Company believes its production facilities are adequate for the
foreseeable future.
 
                                       7
<PAGE>
    For product standardization, quality control and volume purchasing
efficiencies, the Company has elected to purchase certain components from sole
suppliers. Although the Company historically has been able to obtain supplies of
these components in a timely manner, the interruption in supply of any of these
components could have an adverse impact on the Company's revenues and operating
results. While the Company believes that other suppliers could provide required
components in the event of an interruption in supply, a change in suppliers
could cause a delay in manufacturing and a possible loss of sales, which would
adversely affect operating results.
 
BACKLOG
 
    The Company maintains an inventory of component parts which generally
enables it to assemble, test and ship most systems within two weeks of receipt
of an order. The short lead time prior to shipment of systems generally results
in a minimal backlog of systems orders. As of December 31, 1998, the Company had
a systems backlog of $36,200,000 compared to $39,900,000 as of December 31,
1997, and $17,900,000 as of December 31, 1996. All of the backlog at December
31, 1998 is scheduled to be shipped in 1999. There can be no assurance that any
such orders will not be canceled or rescheduled. Because of the possibility of
customer changes in delivery schedules or cancellation of orders, the Company's
backlog as of any particular date may not be indicative of actual revenues for
any future period.
 
    Because of the short length of its contracts for many of its services, the
Company has not historically valued its backlog of service revenues.
 
COMPETITION
 
    The markets for telecommunication enhanced services and business enterprise
systems are highly competitive and include numerous suppliers of hardware and
software of varying specifications. The Company's competition includes a number
of companies for whom voice and call processing systems are their primary
business, including Boston Communications Group, Comverse Technology, Edify,
InterVoice, Periphonics and Syntellect, and other manufacturers. The Company
also competes with larger companies, such as Compaq, IBM and Lucent
Technologies, for whom voice and call processing is a small portion of their
overall business. In addition, as the Company's markets continue to grow,
increasing numbers of applications will be introduced by existing and new
competition.
 
    The Company believes that the principal factors affecting competition in
these markets are ease of use flexibility, reliability, applications
integration, overall technical performance, price, customer service and the
availability of professional services that can help customers reduce cost and
time-to-market and increase revenues. The Company believes that it competes
favorably as to these factors.
 
    The Company expects that additional competition will develop, and such
competition may include large companies with substantially greater financial,
marketing and technical resources than those available to the Company. Such
competition could adversely affect the revenues and operating results of the
Company.
 
SOFTWARE PROTECTION, SERVICE MARKS AND PATENTS
 
    The Company regards its software as proprietary and has implemented measures
of both a legal and practical nature to ensure that the software retains that
status. The Company derives considerable practical protection for its software
by licensing only the object code to customers and keeping the source code
confidential. In addition, by licensing the software rather than transferring
title, the Company in most cases has been able to incorporate restrictions in
licensing agreements which impose limitations on disclosure and transferability
of the software. No determination has yet been made, however, as to the legal or
practical enforceability of these restrictions or the extent of customer
liability for violations.
 
                                       8
<PAGE>
    Like many other companies in the industry, the Company does not have patent
protection for its software. However, protection against unauthorized copying of
the source and object code portions of the software is sought through reliance
upon copyright laws. Despite these protections, competitors may be able to copy
aspects of the Company's products or to obtain information which the Company
regards as trade secret.
 
    The Company has periodically received, and may receive in the future,
communications from third parties asserting patent rights or copyrights on
certain of the Company's products and product features. In certain instances,
the Company's customers have also received similar communications. The Company
believes that its products and other proprietary rights do not infringe the
proprietary rights of third parties. There can be no assurance, however, that
third parties will not assert infringement claims against the Company in the
future, or that any such claims will not require the Company to enter into
license arrangements or result in protracted and costly litigation, regardless
of the merits of such claims. In addition, it is possible that one or more of
the Company's customers may encourage the Company to obtain licenses or
indemnify them against loss should a liability arise from the utilization of a
Company product which is determined to have infringed. There also can be no
assurance that the Company will be able to obtain licenses to disputed third
party technology or that such licenses, if available, would be available on
commercially reasonable terms.
 
    The Company has registered with the United States Patent and Trademark
Office trademarks on Brite & Design, VoiceSelect, TeleRent, TeleSchool,
BriteMail, Value Added Classifieds, BriteFax, BriteDebit, BriteConnect,
BriteStar, BriteTalk, BriteCare, BriteESP, M-Cubed, Perception, Write-1 and
Bringing People and Information Together.
 
EXECUTIVE OFFICERS
 
    The executive officers of the Company, their ages and the period during
which each has served in his present office are as follows:
 
    Stanley G. Brannan (49), the Company's founder, served as President, Chief
Executive Officer and Chairman of the Board from the Company's inception until
resigning as President and Chief Executive Officer in December 1996. Mr. Brannan
subsequently resigned as Chairman of the Board in January 1998. In November
1998, Mr. Brannan resumed his role as Chairman, President and Chief Executive
Officer on an interim basis. Prior to founding the Company, Mr. Brannan founded
Mycro-Tek, Inc., a company specializing in the manufacture of
microprocessor-based products used in electronic newsroom systems and television
character generators. When Mycro-Tek, Inc. was acquired by Allied Corporation in
1980, Mr. Brannan was employed by Allied and eventually became president of the
company's Merganthaler USA Division.
 
    Gerald V. Butler (58) has served as Senior Vice President of Worldwide
Operations since April 1997 and, as Executive Vice President of Engineering and
Worldwide Operations from May 1996 to April 1997. Mr. Butler joined the Company
in November 1994 as Senior Vice President at the Company's Canton, Massachusetts
facility. From 1992 until joining the Company in 1994, Mr. Butler operated
Business Basics, a project and data management consulting service. Mr. Butler
served as president of the systems integration business unit of
Prime/Computervision from 1988 to 1992, as president and chief executive officer
of Culler Scientific from 1984 to 1988, and as vice president of computer
special systems at Digital Equipment Corp. from 1979 to 1984.
 
    Garrett Digman (50) became Vice President of Marketing in October 1997. In
November 1998, Mr. Digman was appointed to the additional position of General
Manager of the Enterprise Solutions Group. From May 1995 until joining Brite, he
served as president of Kinetic Technologies, a telecommunications consulting
firm specializing in development of the infrastructure for PCS deployment. From
1992 to 1995, Mr. Digman was general manager of North American operations for
GPT Video Systems.
 
                                       9
<PAGE>
    Glenn A. Etherington (44) has served as Chief Financial Officer of the
Company since August 1988. He was treasurer from August 1988 until August 1993,
and has been secretary since August 1993. From April 1984 until joining the
Company, he served in various capacities including vice president of finance,
controller and treasurer of American City Business Journals, Inc., a publisher
of weekly business newspapers. Mr. Etherington is a certified public accountant.
 
    Victoria C. Farris (42) has served as Vice President of Finance and
Treasurer since September 1995. From 1988 until 1995 she was general manager and
vice president-finance of Sun Publications in Overland Park, Kansas, a publisher
of community newspapers. From 1985 until 1988, she was controller of American
City Business Journals, a publisher of weekly business newspapers. Ms. Farris is
a certified public accountant.
 
    Brian Klumpp (58) was named Senior Vice President of Human Resources for the
Company in March 1997. Prior to joining Brite, Mr. Klumpp served as chief
executive officer and chairman of AWPI, a high technology water purifying
company from December 1993 to 1997 and chief executive officer and chairman of
Pawnee Industries, a diversified manufacturer of plastics from 1988 to 1993.
Prior to Pawnee, Mr. Klumpp held a number of executive management positions in
the areas of human resources, sales, marketing and public affairs with the Dow
Chemical Company.
 
    Ray S. Naeini (48) joined the Company in December 1995 as Vice President of
Advanced Technologies and has served as Vice President/General Manager of
Network Products. In November 1998, Mr. Naeini was appointed Executive Vice
President of Global Products. Mr. Naeini has 22 years of experience in the
telecommunications, voice processing and the computer industry, most recently
with Intellicall from 1991 to December 1995, and has held various senior
business executive and chief technology positions with Northern Telecom, Bell
Northern Research, Honeywell and Network Assess Corp.
 
    Donald R. Walsh (62) joined the Company as Executive Vice President in
August 1990 and became Executive Vice President of Business Systems in January
1998. In November 1998, Mr. Walsh was appointed Executive Vice President of
Worldwide Sales. From 1987 to August 1990, he served as president of the
Information Services subsidiary of Philadelphia Suburban Corporation. Prior to
1987 he was employed by IBM, where he held several management positions,
primarily relating to sales and marketing.
 
    The Company's executive officers are elected by, and serve at the discretion
of, the Board of Directors.
 
EMPLOYEES
 
    As of December 31, 1998, the Company and its subsidiaries had 679 employees,
of which 652 were full-time employees. Of the full-time employees, 365 were
located in the United States, and 287 were located in Europe, the Middle East,
Africa, Latin America or Singapore.
 
    The Company believes that future growth is dependent in large part on its
ability to attract and retain key management, technical and sales personnel. The
Company has never had a work stoppage, no employees are represented by a labor
organization and the Company considers its employee relations to be good.
 
                                       10
<PAGE>
ITEM 2. PROPERTIES
 
    The Company owns its building in Wichita, Kansas, which contains 40,000
square feet and houses its network products research and engineering staff.
Other facilities are leased by either the Company or, in foreign countries,
certain of its subsidiaries, as follows:
 
<TABLE>
<CAPTION>
LOCATION                                 SQUARE FEET                    USE                      LEASE EXPIRES
---------------------------------------  -----------  ---------------------------------------  ------------------
<S>                                      <C>          <C>                                      <C>
 
Lake Mary, Florida                           31,083   corporate headquarters housing           June 2002
                                                      administrative, sales and marketing
                                                      activities
 
Lake Mary, Florida                           33,107   engineering and customer support         May 2003
                                                      activities
 
Canton, Massachusetts                        42,600   administrative, research and             March 2003
                                                      engineering, and manufacturing
                                                      facilities
 
Manchester, England                          27,400   administrative, engineering,             December 2002
                                                      manufacturing facilities and customer
                                                      support
 
Manchester, England                          21,000   sales, marketing, product development,   June 2003
                                                      training and human resources
 
Cambridge, England                           12,000   administrative offices and call center   September 2011
                                                      activities
 
Wiesbaden, Germany                            5,500   office space for administrative and      September 2001
                                                      sales staff
 
Rome, Italy                                     700   office space for administrative and      March 2001
                                                      sales staff
 
Glattbrugg, Switzerland                       2,500   office space for administrative and      September 1999
                                                      sales staff
 
Singapore                                     1,350   office space for administrative and      May 2001
                                                      sales staff
</TABLE>
 
    The Company maintains regional sales and support offices in Newington,
Connecticut; Framingham, Massachusetts; Allendale, Michigan; Gold River,
California; New Brighton, Minnesota; Woodstock, Georgia; and Carrollton, Plano
and Denton, Texas. These facilities are generally subject to short-term leases
of one year or less.
 
ITEM 3. LEGAL PROCEEDINGS
 
    The Company is subject to claims and litigation from time to time arising in
the normal operation of its business. Management believes that the ultimate
resolution of any pending claim will not result in any material loss to the
Company.
 
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
    No information is required in response to this Item, as no matter was
submitted to a vote of the registrant's security holders during the fourth
quarter of the fiscal year covered by this report.
 
                                       11
<PAGE>
                                    PART II
 
ITEM 5. MARKET FOR THE COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
 
    The Company's common stock is traded on The Nasdaq Stock
Market-Registered Trademark- under the symbol BVSI. Prices per share reflected
in the following table represents the range of high and low sales prices
reported by The Nasdaq Stock Market for the quarters indicated.
 
<TABLE>
<CAPTION>
                                                                             HIGH        LOW
                                                                           ---------  ---------
<S>                                                                        <C>        <C>
 
1998
 
March 31.................................................................  $   11.13  $    7.63
 
June 30..................................................................      14.00       8.81
 
September 30.............................................................      13.25       7.13
 
December 31..............................................................      10.13       7.00
 
1997
 
March 31.................................................................  $   18.00  $   10.50
 
June 30..................................................................      10.88       6.75
 
September 30.............................................................      11.63       7.00
 
December 31..............................................................      12.25       8.38
</TABLE>
 
    Since becoming a public company in 1989, the Company has not paid cash
dividends on its common stock, and does not plan to pay cash dividends to its
stockholders in the near future. The Company is not bound by any contractual
terms that prohibit or restrict the payment of dividends; however, the Company
presently intends to retain its earnings to finance future growth of its
business.
 
    As of March 1, 1999, the Company had 621 stockholders of record, excluding
individual participants in security position listings.
 
                                       12
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
 
    The following table contains certain selected financial data which should be
read in conjunction with the Company's financial statements and notes thereto
and with Management's Discussion and Analysis of Financial Condition and Results
of Operations. The selected financial data have been derived from the financial
statements of the Company audited by Arthur Andersen LLP, independent certified
public accountants.
<TABLE>
<CAPTION>
                                                                         YEARS ENDED DECEMBER 31,
                                                          -------------------------------------------------------
 
<S>                                                       <C>         <C>         <C>        <C>        <C>
                                                             1998        1997       1996       1995       1994
                                                          ----------  ----------  ---------  ---------  ---------
 
<CAPTION>
 
                                                                   (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                                       <C>         <C>         <C>        <C>        <C>
 
STATEMENT OF OPERATIONS DATA:
 
  Revenues..............................................  $  135,715  $  103,373  $  94,166  $  81,287  $  66,304
 
  Operating income (loss)...............................       2,218     (10,737)     7,339      7,170      6,878
 
  Net income (loss)
 
    Continuing operations...............................       1,773      10,437      5,837      5,785      5,569
 
    Discontinued operations.............................      11,344       1,245      2,718     (1,835)    (1,144)
                                                          ----------  ----------  ---------  ---------  ---------
 
    Total...............................................  $   13,117  $   11,682  $   8,555  $   3,950  $   4,425
 
  Diluted earnings (loss) per share
 
    From continuing operations..........................  $     0.15  $     0.87  $    0.48  $    0.48  $    0.48
 
    Discontinued operations.............................        0.92        0.10       0.23      (0.15)     (0.10)
                                                          ----------  ----------  ---------  ---------  ---------
 
    Total...............................................  $     1.07  $     0.97  $    0.71  $    0.33  $    0.38
 
  Weighted average shares used in computation...........      12,310      12,068     12,127     11,925     11,526
 
BALANCE SHEET DATA:
 
  Working capital.......................................  $   62,037  $   52,879  $  37,671  $  26,934  $  23,772
 
  Total assets..........................................     122,119     104,226     74,493     58,577     51,888
 
  Long term debt........................................          --          --         --         --         --
 
  Stockholders' equity..................................      84,913      70,114     54,181     40,446     35,547
</TABLE>
 
    The 1998 results include an after tax gain of $9,122,000 relating to the
sale of the Company's TSL division, which was consummated effective December 1,
1998. The operating results of this division, and the gain, have been
reclassified and reported in discontinued operations for each of the years
presented above. The 1998 results also include charges of $1,410,000 related to
the termination of certain executives. These charges are included in operating
income (loss).
 
    The 1997 results include a pre-tax gain of $29,091,000 relating to the sale
of certain assets of the Company's electronic publishing business, which was
consummated on October 30, 1997. The operating results of this division and the
gain on the sale are included in net income from continuing operations. The 1997
results also include $10,980,000 in charges related to the restructuring of
operations and the relocation of the Company's headquarters to Lake Mary,
Florida. These charges are included in operating income (loss).
 
    The 1995 results include costs associated with the acquisition of the TSL
division of $8,630,000, which are reported in discontinued operations.
 
                                       13
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
  OF OPERATIONS
 
FORWARD-LOOKING STATEMENTS
 
    From time to time, information provided by the Company, statements made by
its employees or information included in its filings with the Securities and
Exchange Commission, including this Form 10-K report, may contain certain
"forward-looking" information, as that term is defined by the Private Securities
Litigation Reform Act of 1995 (the "Act"). The words "expects," "anticipates,"
"believes" and similar words generally signify a "forward-looking" statement.
These forward-looking statements are made pursuant to the safe harbor provisions
of the Act. The reader is cautioned that all forward-looking statements are
necessarily speculative and that there are certain risks and uncertainties that
could cause actual events or results to differ materially from those referred to
in such forward-looking statements. Such risks and uncertainties include those
inherent generally in the voice processing and call processing industries, such
as product demand, pricing, market acceptance, reliance on significant
customers, intellectual property rights, risks in product and technology
developments, and other risk factors detailed elsewhere in this report,
including the section below entitled "Certain Factors to be Considered". The
Company undertakes no obligation to publicly revise any forward-looking
statement due to changes in circumstances after the date of this report, or to
reflect the occurrence of unanticipated events.
 
BASIS OF PRESENTATION
 
    On October 31, 1997, the Company consummated the sale of certain assets used
in its electronic publishing business to IT Network, Inc. for $35 million in
cash. The business sold consisted primarily of the Company's information
services business, the sale of audiotex advertising sponsorships to yellow pages
advertisers, and the management of such advertisers on behalf of yellow pages
publishers.
 
    Effective December 1, 1998, the Company consummated the sale of the assets
of its TSL division to ProfitSource Corporation (subsequently named EPS
Solutions Corporation). The Company received $20 million in cash and a
subordinated promissory note of EPS Solutions Corporation with a face value of
$5 million. The Company also received a warrant to purchase 5,000 shares of TSL
Services, Inc., which in certain circumstances may be converted to shares of EPS
Solutions Corporation.
 
    The consolidated statements of income include the results of the electronic
publishing division through the date of the sale. The TSL division has been
accounted for as a discontinued operation in the accompanying financial
statements for each of the three years ended December 31, 1998, 1997 and 1996.
 
RESULTS OF OPERATIONS
 
    The Company derives revenue from the sale of voice processing and call
processing systems to domestic and international customers and the provision of
services related to the operation of these systems. The Company's systems
products can be divided into two categories: those that increase its customers'
revenues through increased subscription or user fees ("network systems"), and
those that reduce customers' costs or improve the efficiency of services
provided to end-user customers ("business systems").
 
    Total revenues increased $32,342,000, or 31.3%, for the year ended December
31, 1998 and increased $9,207,000, or 9.8%, in 1997. Revenues of the Company's
electronic publishing division were $11,171,000 for the year ended December 31,
1997. The electronic publishing division was sold in October 1997, and no
revenues were recorded for this division during 1998. With revenues from this
division excluded from 1997 results, total revenues would have increased
$43,513,000, or 47.2%, for the year ended December 31, 1998.
 
                                       14
<PAGE>
    Systems revenues increased $28,640,000, or 41.3%, for the year ended
December 31, 1998 and $5,364,000, or 8.4%, in 1997, as shown in the following
table:
 
<TABLE>
<CAPTION>
                                                                      SYSTEMS REVENUES               % INCREASE
                                                                   YEAR ENDED DECEMBER 31,           (DECREASE)
                                                               -------------------------------  --------------------
                                                                 1998       1997       1996       1998       1997
                                                               ---------  ---------  ---------  ---------  ---------
<S>                                                            <C>        <C>        <C>        <C>        <C>
                                                                       (IN THOUSANDS)
Business systems.............................................  $  27,644  $  22,948  $  27,480       20.5%     (16.5)%
Network systems..............................................     70,340     46,396     36,500       51.6%      27.1%
                                                               ---------  ---------  ---------
Total........................................................  $  97,984  $  69,344  $  63,980       41.3%       8.4%
                                                               ---------  ---------  ---------
                                                               ---------  ---------  ---------
</TABLE>
 
    Business systems revenues increased $4,696,000, or 20.5%, for the year ended
December 31, 1998, primarily due to the sale of several large systems to new and
existing customers. Business systems revenues decreased $4,532,000, or 16.5%,
for the year ended December 31, 1997, due to delays in purchasing upgrades by
existing customers for the Company's IVR equipment, the discontinuation of sales
of small voice messaging systems during late 1996, and to a decline in sales of
the Company's audiotex systems. Network systems revenues increased $23,944,000,
or 51.6%, for the year ended December 31, 1998, and $9,896,000, or 27.1%, for
the year ended December 31, 1997. The increase in 1998 was due primarily to the
recognition of the major portion of the revenues from a large contract with AT&T
(the "AT&T Contract"), as well as several other large shipments to new and
existing customers.
 
    Services revenues increased $3,702,000, or 10.9%, for the year ended
December 31, 1998, and $3,843,000, or 12.7%, for the year ended December 31,
1997. In 1997, services revenues included revenues of the electronic publishing
division, which was sold in October 1997. Revenues of this division are included
in managed services and information services. With revenues of this division
excluded from the 1997 results, services revenues would have increased
$14,873,000, or 65.1%. The breakdown of services revenues is shown in the
following table:
 
<TABLE>
<CAPTION>
                                                                      SERVICES REVENUES              % INCREASE
                                                                   YEAR ENDED DECEMBER 31,           (DECREASE)
                                                               -------------------------------  --------------------
                                                                 1998       1997       1996       1998       1997
                                                               ---------  ---------  ---------  ---------  ---------
                                                                       (IN THOUSANDS)
<S>                                                            <C>        <C>        <C>        <C>        <C>
Managed services.............................................  $  20,333  $  13,769  $  11,058       47.7%      24.5%
Service contract and repair..................................     17,398     15,343     13,407       13.4%      14.4%
Information services.........................................         --      4,917      5,721         --      (14.1)%
                                                               ---------  ---------  ---------
Total........................................................  $  37,731  $  34,029  $  30,186       10.9%      12.7%
                                                               ---------  ---------  ---------
                                                               ---------  ---------  ---------
</TABLE>
 
    Managed services revenues increased $6,564,000, or 47.7%, for the year ended
December 31, 1998, and increased $2,711,000, or 24.5%, for the year ended
December 31, 1997. The 1997 results included revenues of $6,254,000 that are
attributed to the electronic publishing division. Excluding these revenues from
1997, managed services revenues would have increased $12,818,000, or 170.6%, for
the year ended December 31, 1998. This increase was primarily due to the
commencement of contracts for the Company to provide prepaid calling services to
North American and European telecommunications providers.
 
    Service contract and repair revenues increased $2,055,000, or 13.4%, for the
year ended December 31, 1998 and $1,936,000, or 14.4%, for the year ended
December 31, 1997. The increases in revenues are due primarily to an increase in
installation revenues for new systems and an increase in the installed base of
customers who subscribe to quarterly or annual maintenance contracts.
 
    No information services revenue was recorded in 1998 due to the sale of the
electronic publishing division in October 1997. The decline in information
services revenue between 1996 and 1997 was due primarily to the presence of ten
months of activity during 1997 compared to a full year in 1996.
 
                                       15
<PAGE>
    Cost of systems sales increased $18,549,000, or 58.0%, for the year ended
December 31, 1998, and $4,278,000, or 15.4%, for the year ended December 31,
1997. As a percentage of systems sales, actual costs increased to 51.6% in 1998,
compared to 46.2% in 1997, and 43.3% in 1996. Actual costs increased due
primarily to an increase in the number of systems shipped by the Company,
including costs related to the AT&T Contract during 1998. The increases as a
percentage of revenues were due primarily to the lower margin recognized on the
AT&T Contract, and an increase in costs associated with the Company's European
operations. Systems sales in 1998 included a larger number of customized sales,
which have a higher cost of sales and lower margins.
 
    Cost of services increased $4,973,000, or 28.3%, for the year ended December
31, 1998, and $836,000, or 5.0%, for the year ended December 31, 1997. As a
percentage of services revenues, these costs were 59.8% in 1998, compared to
51.7% in 1997, and 55.5% in 1996. The increases in actual costs and costs as a
percentage of revenue were due primarily to the commencement of contracts under
which the Company provides prepaid calling services on a managed services basis,
which are expected to generate lower gross margins than the Company's other
services businesses.
 
    Research and engineering expenses increased $2,759,000, or 21.2%, for the
year ended December 31, 1998, and $3,226,000, or 32.9%, for the year ended
December 31, 1997. The increases in actual expenditures were due to an increase
in engineering personnel, including outside consultants, dedicated to designing
new products and enhancing existing products, including upgrading existing
products for Year 2000 compliance. As a percentage of revenues, these expenses
decreased to 11.6% in 1998, compared to 12.6% in 1997, but increased from 10.4%
in 1996. The Company typically targets its annual engineering expenditures based
upon annual revenue goals. Fluctuations in engineering expenditures as a
percentage of sales in a given year are generally due to fluctuations from
revenue goals, or variances from budgeted expenditures. The Company believes
that it must continue to increase spending on research and engineering
activities in absolute terms in order to remain competitive in the voice and
call processing market. Such expenses could continue to increase as a percentage
of revenues as well.
 
    Selling, general and administrative expenses increased $2,676,000, or 6.6%,
for the year ended December 31, 1998, and $7,963,000, or 24.5%, for the year
ended December 31, 1997. The Company executed a restructuring program in June
1997, which resulted in an approximate 12% decrease in the number of employees
performing sales and marketing activities. Since the restructuring, the Company
has begun increasing the number of employees in the sales and marketing area
with a goal of increasing its costs at a rate slower than anticipated revenue
growth. As a percentage of revenues, these expenses decreased to 31.8% in 1998,
compared to 39.2% in 1997 and 34.6% in 1996. This decline as a percentage of
revenues was due to increased controls over expenditures, and a larger revenue
base over which to spread the fixed costs of operations.
 
    The effective income tax rate for the year ended December 31, 1998 was
37.7%, compared to 42.4% in 1997, and 27.9% in 1996. The variance from the
United States statutory rate for 1998 and 1997 was due primarily to the
provision for state income taxes and utilization of certain credit
carryforwards. The variance from the expected combined statutory rate in 1996
was primarily due to a reduction of the Company's deferred tax valuation
allowance and utilization of certain net operating losses and credit
carryforwards.
 
LIQUIDITY AND CAPITAL RESOURCES
 
    As of December 31, 1998, the Company had a current ratio of 2.8 to 1 and
working capital of $62,037,000, compared to a current ratio of 2.6 to 1 and
working capital of $52,879,000 at December 31, 1997.
 
    Cash flows from operating activities utilized net cash of $26,157,000 for
the year ended December 31, 1998, principally due to increased accounts
receivable and inventory. The increase in accounts receivable is due to an
increase in sales, and to a number of large contracts with payment terms which
extend beyond
 
                                       16
<PAGE>
the dates on which revenue is recognized for financial reporting purposes.
Certain of these contracts require payment to begin in early 1999, and the
Company believes that accounts receivable will decline both in absolute terms
and in the number of days of sales outstanding. Inventory increased $7,890,000
during 1998, due principally to the purchase of parts required to fulfill a
large contract to be delivered in stages throughout the first quarter of 1999,
and a general increase in inventory carrying requirements due to expected
increases in system sales. The Company believes that the increase in inventory
is consistent with the increase in cost of sales during the period.
 
    The Company's capital expenditures relating to continuing operations during
1998 were $9,466,000. These expenditures were primarily related to the Company's
expansion of its base of customers for which it provides managed services.
During 1998, the Company introduced BriteStar in the United Kingdom and expanded
its BriteDebit installations in the United States. In addition, the Company
purchased significant amounts of test and development equipment to expand and
enhance its development activities.
 
    On October 30, 1997, the Company consummated the sale of certain assets used
in its electronic publishing business to IT Network, Inc. for $35 million in
cash. Effective December 1, 1998, the Company consummated the sale of the assets
of its TSL division to ProfitSource Corporation (subsequently named EPS
Solutions Corporation), for which the Company received $20 million in cash and a
subordinated note with a face value of $5 million. The Company was able to use
the cash proceeds from each of these transactions to retire all of its
short-term debt and significantly increase working capital and stockholders'
equity.
 
    The Company regularly invests excess funds in short-term securities, such as
bankers' acceptances, government obligations and variable rate demand notes,
having maturities up to one year. Management believes that restricting
investments to these types of securities maximizes financial flexibility and
minimizes exposure to interest rate and other market risks. The Company utilizes
these investments as sources of liquidity, to the extent that cash requirements
exceed short-term cash receipts.
 
    The Company has maintained a line of credit that is used from time to time
to fund short-term cash requirements. In December 1998, this line of credit was
increased from $10 million to $25 million. There were no borrowings outstanding
under the line as of December 31, 1998.
 
    The Company has no additional capital commitments, and believes that funds
on hand and the availability of its line of credit will provide sufficient
sources of funds to meet all capital requirements for at least the next twelve
months. The Company believes that it has adequate borrowing capacity to fund its
long-term objectives as well.
 
INFLATION
 
    Inflation has not had a material impact on the Company's results of
operations. Because of the competitive nature of the computer industry, the
costs of parts used in the Company's products have remained relatively stable.
However, should inflation rise to higher levels, the Company believes that such
inflationary costs would be passed on to customers by both the Company and its
competition.
 
CERTAIN FACTORS TO BE CONSIDERED
 
    UNCERTAINTY OF REVENUES.  The Company has no significant long-term supply
agreements with customers and, as a result, revenues in any quarter are
dependent upon orders that are received and shipped during the quarter. Further,
a large percentage of any quarter's system shipments are recorded in the last
month of the quarter. Consequently, quarterly revenues and operating results
will depend on the volume and timing of new orders received during a quarter,
which are difficult to predict. Failure to receive adequate amounts of new
orders could adversely affect revenues and operating results, and such
shortfalls may not be known until very late in any quarter.
 
                                       17
<PAGE>
    INTERNATIONAL OPERATIONS.  The Company faces a number of risks in conducting
its international business that do not affect its domestic business, including
greater concentration of business with fewer customers, longer payment cycles,
greater difficulty in accounts receivable collection and difficulty in staffing
and managing foreign subsidiary operations.
 
    Installation of the Company's products outside the United States requires
that the Company conform to local telephone and electrical regulations. The
Company has traditionally relied on its suppliers to obtain the necessary
registrations in order for the Company to install products within specific
countries. There can be no assurance that these factors will not have an adverse
impact on the Company's future international sales or operating results.
 
    PRODUCT DEVELOPMENT.  The voice processing and call processing industries
are subject to rapid technological change, including continuing improvements in
hardware and software performance. In order to maintain its competitive
position, the Company must continually release new products and develop
enhancements and new features for its existing products on a timely basis. There
can be no assurance that the Company will be successful in developing and
marketing, on a timely basis, product modifications or enhancements, or new
products that respond to technological advances by others, or that such new or
enhanced products or features will adequately and competitively address the
needs of the marketplace. Because of the increasing complexity of the Company's
products, these efforts can be expected to continue to increase in technical
difficulty. Moreover, the Company must manage product transitions successfully,
since announcements or introductions, or the perception that such events are
likely to occur, by either the Company or its competitors, could adversely
affect sales of existing products.
 
    DEPENDENCE ON CERTAIN PERSONNEL.  The Company's success is largely dependent
upon its ability to attract and retain qualified employees, especially technical
employees and executives. There exists substantial competition for highly
qualified personnel and there can be no assurance that the Company will be
successful in hiring and retaining the required personnel.
 
    ENHANCED NETWORK SERVICES CONTRACTS.  The Company's enhanced network
services products are used by its customers to retain existing subscribers,
recruit new subscribers and increase the revenue generated by each subscriber.
As a result, failure of these customers to provide the services acquired from
the Company to its customers on a timely and uninterrupted basis could cause a
loss of revenue or erosion of customer base. The Company has entered into
contracts in the past, and anticipates entering into contracts in the future,
which provide for penalties in the event the Company fails to deliver products
in the time frame contracted for, fails to meet service availability
requirements, or causes a network outage. The Company has incurred penalties,
but has generally been able to negotiate with its customers to obtain reductions
or waivers of such penalties. There is no assurance that any of the Company's
customers will continue to waive or reduce such penalties, nor is there any
assurance that customers will not assert such penalties in the future. Because
the Company's customers are generally large telecommunications providers with
significant subscriber bases, the Company's failure to perform under its
contracts and the assertion of penalties could materially and adversely affect
the Company's operating results and financial condition.
 
    In December 1997, the Company announced that it had entered into an
agreement to provide enhanced telecommunications products to AT&T Corp.
("AT&T"). The initial order under the agreement was for approximately $25
million, representing the largest single contract in the Company's history. The
Company has completed the software development, integration and testing phases
of the contract; however, the Company was late in delivering the product, and
believes it may have been subject to penalties relating to late delivery. In
March 1999, in conjunction with an additional order under the agreement, AT&T
waived its rights to assert any such penalties.
 
    SOLE SOURCE OF SUPPLY.  For quality control, ease of development and
purchasing efficiencies, the Company has elected to purchase components from one
supplier. Although the Company has been able to obtain supplies of these
components in a timely manner, the interruption in supply of any of these
 
                                       18
<PAGE>
components could have an adverse impact on the Company's revenues and operating
results. While the Company believes that other suppliers could provide required
components in the event of an interruption in supply, a change in suppliers
could cause a delay in manufacturing and a possible loss of sales, which would
adversely affect operating results.
 
    PROPRIETARY RIGHTS.  The Company has periodically received, and may receive
in the future, communications from third parties asserting patent rights or
copyrights on certain of the Company's products and product features. In certain
instances, the Company's customers have also received similar communications.
The Company believes that its products and other proprietary rights do not
infringe the proprietary rights of third parties. There can be no assurance,
however, that third parties will not assert infringement claims against the
Company in the future, or that any such claims will not require the Company to
enter into license arrangements or result in protracted and costly litigation,
regardless of the merits of such claims. In addition, it is possible that one or
more of the Company's customers may encourage the Company to obtain licenses or
indemnify them against loss should a liability arise from the utilization of a
Company product which is determined to have infringed. There also can be no
assurance that the Company will be able to obtain licenses to disputed third
party technology or that such licenses, if available, would be available on
commercially reasonable terms.
 
    VOLATILITY OF COMMON STOCK PRICE.  The market for the Company's stock is
highly volatile. Any variance in operating results from analysts' expectations
or changes in estimated results by industry analysts could have an adverse
affect on the trading price of the Company's common stock in a given period.
Furthermore, in recent years the market prices of securities of many high
technology companies have experienced extreme fluctuations, in many cases for
reasons unrelated to the operating performance of the specific companies. These
broad market fluctuations may adversely affect the market price of the Company's
common stock.
 
    YEAR 2000 COMPLIANCE.  In 1997, the Company began the process of identifying
and determining the appropriate resolution to all of the Company's issues
relating to the "Millennium Bug". These issues arise because of date sensitive
software programs which use two digits to define the applicable year, resulting
in interpretation of a date using "00" as the year 1900 rather than 2000. This
could result in miscalculations or a major system failure. The Company has
concluded that if no action is taken to avoid the consequences, its Year 2000
issues will have a material affect on the Company's results of operations and
financial condition.
 
    Areas which require remediation are: 1) in-house systems and software
programs used to run the business; 2) products sold to the Company's customers;
and 3) systems and services provided by vendors.
 
    The Company has reviewed its in-house systems for compliance and determined
that all systems will be affected. During 1998, the Company converted its
accounting, inventory, manufacturing control and human resources systems to a
new system in order to provide more efficient management information throughout
the Company. The conversion cost approximately $2 million and the new system is
warranted by the vendor to be Year 2000 compliant. Testing of this system is
currently in process to verify compliance. All remaining in-house computer
systems have been classified as mission critical and non-mission critical. The
Company has elected to focus on only the mission critical systems, including
operating systems and applications software. Studies are currently being
conducted to determine which mission critical systems are compliant and which
are not. The Company estimates that approximately half of its systems are
currently compliant, and believes that any remaining systems that have been
identified as mission critical will be compliant by the third quarter of 1999.
Non-compliant systems must be replaced or abandoned prior to the beginning of
2000. The Company estimates the cost of bringing the remaining systems into
compliance or replacing non-compliant systems to be approximately $1.5 million.
 
    Each of the Company's products sold or licensed to customers must be
evaluated for Year 2000 compliance. The Company must determine which products
will be discontinued, and which products will
 
                                       19
<PAGE>
be made compliant. The Company has completed an inventory of its products in the
field, and has established revision levels and dates by which each product will
be Year 2000 compliant. Each product must have an agreed upon test plan,
engineering plan, and a plan for notifying customers of product revisions and
phase-outs. The Company expects that all products to be updated for Year 2000
compliance will be completed before the end of the second quarter of 1999, and
the Company intends to charge for integration and installation of compliant
systems. The Company is unable to predict the eventual cost of achieving Year
2000 compliance. However, failure to complete plans for each product, or failure
to execute such plans, will have a material impact on the Company's sales, as it
will be unable to compete with companies which offer Year 2000 compliant
products.
 
    The Company purchases components and services which must be evaluated for
Year 2000 compliance. The Company has divided its vendors into those who supply
critical services, manufacturing suppliers and manufacturing contractors. The
Company intends to obtain certification from each of its material vendors as to
its Year 2000 compliance. The Company believes that the costs to evaluate its
key vendors and obtain certification will not be material.
 
    The Company has not developed contingency plans related to Year 2000
compliance. The Company believes that the steps being taken are adequate to
detect and correct all material Year 2000 issues related to systems sold to
customers, and all mission critical internal systems. The Company intends to
continue to test for Year 2000 compliance, and will handle exceptions on a
case-by-case basis.
 
    Despite the Company's intent to complete the modifications necessary to be
Year 2000 compliant, there is a risk that the Company will be unable to complete
all tasks required in a timely manner, or that certain systems could be
overlooked. Should the required modifications not be made, or should they not be
completed in a timely manner, this issue could materially and adversely affect
the Company's operating results and financial condition. Furthermore, the
majority of the effort described above will be performed by the Company's
employees. During the period such employees are completing Year 2000
remediation, they will be unavailable to perform their normal tasks.
 
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
    The Company transacts business in various foreign currencies. Accordingly,
the Company is subject to exposure from adverse movements in foreign currency
exchange rates. The Company generally mitigates this risk by transacting
business in the functional currency of each of its subsidiaries, thus creating a
natural hedge by paying expenses incurred in the local currency in which
revenues will be received.
 
    The Company uses derivative financial instruments selectively to offset
exposure to market risks arising from changes in foreign exchange rates.
Derivative financial instruments currently utilized by the Company include
foreign currency forward contracts to hedge receivables denominated in a
currency other than the functional currency of the business.
 
    As of December 31, 1998, the Company had entered into forward exchange
contracts to sell a notional amount of $12,304,000 in Japanese Yen for delivery
at various dates during the first six months of 1999. Changes in the market
value of these contracts are highly correlated with changes in the market value
of the underlying accounts receivable. Accordingly, the Company believes there
is no material risk to its financial position or results of operations in the
event of a material change in the relative value of the U.S. dollar against
foreign currencies.
 
    The Company does not use derivative financial instruments for speculative
trading purposes, nor does it hedge its balance sheet exposure related to the
Company's investments in its foreign subsidiaries.
 
                                       20
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 
<TABLE>
<CAPTION>
                                                                                                                PAGE
                                                                                                                -----
<S>                                                                                                          <C>
Report of Independent Certified Public Accountants.........................................................          22
 
Consolidated Balance Sheets as of December 31, 1998 and 1997...............................................          23
 
Consolidated Statements of Income for the Years Ended December 31, 1998, 1997 and 1996.....................          24
 
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 1998, 1997 and 1996.......          25
 
Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 1998, 1997 and 1996.......          26
 
Consolidated Statements of Cash Flows for the Years Ended December 31, 1998, 1997 and 1996.................          27
 
Notes to Consolidated Financial Statements.................................................................          28
 
Supplemental Schedules:
 
Schedule II--Valuation and Qualifying Accounts.............................................................          44
</TABLE>
 
------------------------
 
NOTE: Schedules not listed above have been omitted because the information
      required to be set forth therein is not applicable or is included in the
      Financial Statements or notes thereto.
 
                                       21
<PAGE>
               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
 
To Brite Voice Systems, Inc.:
 
We have audited the accompanying consolidated balance sheets of Brite Voice
Systems, Inc. (a Kansas corporation) and subsidiaries as of December 31, 1998
and 1997, and the related consolidated statements of income, comprehensive
income, stockholders' equity and cash flows for each of the three years in the
period ended December 31, 1998. These financial statements and the schedule
referred to below are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
schedule 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 financial position of Brite Voice Systems, Inc. and
subsidiaries as of December 31, 1998 and 1997, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1998, in conformity with generally accepted accounting principles.
 
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The schedule listed in the index to the financial
statements is presented for purposes of complying with the Securities and
Exchange Commission's rules and is not a required part of the basic financial
statements. This information has been subjected to the auditing procedures
applied in our audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the financial statements
taken as a whole.
 
                                          Arthur Andersen LLP
 
Orlando, Florida,
    February 5, 1999
 
                                       22
<PAGE>
                   BRITE VOICE SYSTEMS, INC. AND SUBSIDIARIES
 
                                  ------------
 
                          CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 1998 AND 1997
 
<TABLE>
<CAPTION>
                                                                                               1998        1997
                                                                                            ----------  ----------
<S>                                                                                         <C>         <C>
                                                                                                (IN THOUSANDS)
                                                      ASSETS
CURRENT ASSETS
  Cash and cash equivalents...............................................................  $   11,208  $   26,979
  Accounts receivable, less allowance for doubtful accounts: 1998--$1,761;
    1997--$1,134..........................................................................      57,559      32,760
  Inventories (Note 4)....................................................................      21,676      13,788
  Prepaid expenses and other (Note 7).....................................................       6,967       8,593
  Net current assets--discontinued operations (Note 2)....................................          --       3,038
                                                                                            ----------  ----------
    Total current assets..................................................................      97,410      85,158
                                                                                            ----------  ----------
PROPERTY AND EQUIPMENT
  Land, building and improvements.........................................................       3,074       3,074
  Furniture and equipment.................................................................      24,581      15,112
                                                                                            ----------  ----------
                                                                                                27,655      18,186
  Less accumulated depreciation...........................................................     (10,480)     (6,059)
                                                                                            ----------  ----------
                                                                                                17,175      12,127
                                                                                            ----------  ----------
NET PROPERTY AND EQUIPMENT--DISCONTINUED OPERATIONS (Note 2)..............................          --       1,103
                                                                                            ----------  ----------
OTHER ASSETS (Note 3).....................................................................       7,534       5,838
                                                                                            ----------  ----------
    TOTAL ASSETS..........................................................................  $  122,119  $  104,226
                                                                                            ----------  ----------
                                                                                            ----------  ----------
                                       LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
  Accounts payable........................................................................  $   13,916  $   10,431
  Accrued salaries and wages..............................................................       2,791       2,414
  Other accrued expenses..................................................................       3,947       3,578
  Deferred revenue (Note 2)...............................................................       3,648       3,093
  Customer deposits.......................................................................       2,860      11,504
  Income taxes payable....................................................................       8,211       1,259
                                                                                            ----------  ----------
    Total current liabilities.............................................................      35,373      32,279
                                                                                            ----------  ----------
LONG-TERM DEFERRED REVENUE (Note 2).......................................................       1,833       1,833
COMMITMENTS AND CONTINGENCIES (Notes 7 and 12)............................................
STOCKHOLDERS' EQUITY (Note 9)
  Preferred stock, no par value; authorized 10,000,000 shares; none outstanding...........          --          --
  Common stock, no par value; authorized 30,000,000 shares; issued and outstanding
    1998--12,258,678 shares; 1997--12,032,280 shares......................................      45,221      43,714
  Retained earnings.......................................................................      39,737      26,620
  Cumulative foreign currency translation adjustment......................................         (45)       (220)
                                                                                            ----------  ----------
    Total stockholders' equity............................................................      84,913      70,114
                                                                                            ----------  ----------
      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY..........................................  $  122,119  $  104,226
                                                                                            ----------  ----------
                                                                                            ----------  ----------
</TABLE>
 
                       See Notes to Financial Statements
 
                                       23
<PAGE>
                   BRITE VOICE SYSTEMS, INC. AND SUBSIDIARIES
 
                                  ------------
 
                       CONSOLIDATED STATEMENTS OF INCOME
                  YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
 
                       (IN THOUSANDS, EXCEPT SHARE DATA)
 
<TABLE>
<CAPTION>
                                                                                    1998        1997       1996
                                                                                 ----------  ----------  ---------
<S>                                                                              <C>         <C>         <C>
REVENUES
  Systems......................................................................  $   97,984  $   69,344  $  63,980
  Services.....................................................................      37,731      34,029     30,186
                                                                                 ----------  ----------  ---------
                                                                                    135,715     103,373     94,166
                                                                                 ----------  ----------  ---------
COSTS AND EXPENSES
  Cost of sales:
    Systems....................................................................      50,556      32,007     27,729
    Services...................................................................      22,549      17,576     16,740
  Research and engineering.....................................................      15,795      13,036      9,810
  Selling, general and administrative..........................................      43,187      40,511     32,548
  Restructuring and other nonrecurring charges (Note 11).......................       1,410      10,980         --
                                                                                 ----------  ----------  ---------
                                                                                    133,497     114,110     86,827
                                                                                 ----------  ----------  ---------
OPERATING INCOME (LOSS)........................................................       2,218     (10,737)     7,339
                                                                                 ----------  ----------  ---------
OTHER INCOME (EXPENSE)
  Gain on sale of assets (Note 2)..............................................          --      29,091         --
  Interest income..............................................................         742         537        432
  Interest expense.............................................................        (204)       (566)       (80)
  Other, net...................................................................          90        (198)      (192)
                                                                                 ----------  ----------  ---------
                                                                                        628      28,864        160
                                                                                 ----------  ----------  ---------
INCOME BEFORE INCOME TAXES.....................................................       2,846      18,127      7,499
 
INCOME TAX PROVISION (Note 8)..................................................       1,073       7,690      1,662
                                                                                 ----------  ----------  ---------
INCOME FROM CONTINUING OPERATIONS..............................................       1,773      10,437      5,837
                                                                                 ----------  ----------  ---------
 
DISCONTINUED OPERATIONS (Note 2)
  Income from discontinued operations prior to disposal, net of income taxes...       2,222       1,245      2,718
  Gain on disposal of discontinued operations, net of income taxes.............       9,122          --         --
                                                                                 ----------  ----------  ---------
                                                                                     11,344       1,245      2,718
                                                                                 ----------  ----------  ---------
NET INCOME.....................................................................  $   13,117  $   11,682  $   8,555
                                                                                 ----------  ----------  ---------
                                                                                 ----------  ----------  ---------
BASIC EARNINGS PER SHARE
  Income from continuing operations............................................  $     0.15  $     0.88  $    0.50
  Discontinued operations......................................................        0.93        0.10       0.23
                                                                                 ----------  ----------  ---------
  Net income...................................................................  $     1.08  $     0.98  $    0.73
                                                                                 ----------  ----------  ---------
                                                                                 ----------  ----------  ---------
DILUTED EARNINGS PER SHARE
  Income from continuing operations............................................  $     0.15  $     0.87  $    0.48
  Discontinued operations......................................................        0.92        0.10       0.23
                                                                                 ----------  ----------  ---------
  Net income...................................................................  $     1.07  $     0.97  $    0.71
                                                                                 ----------  ----------  ---------
                                                                                 ----------  ----------  ---------
</TABLE>
 
                       See Notes to Financial Statements
 
                                       24
<PAGE>
                   BRITE VOICE SYSTEMS, INC. AND SUBSIDIARIES
 
                                  ------------
 
                CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                  YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
 
                                 (IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                                                      1998       1997       1996
                                                                                    ---------  ---------  ---------
<S>                                                                                 <C>        <C>        <C>
NET INCOME........................................................................  $  13,117  $  11,682  $   8,555
 
OTHER COMPREHENSIVE INCOME (EXPENSE)
  Foreign currency translation....................................................        175     (1,046)     1,140
                                                                                    ---------  ---------  ---------
 
COMPREHENSIVE INCOME..............................................................  $  13,292  $  10,636  $   9,695
                                                                                    ---------  ---------  ---------
                                                                                    ---------  ---------  ---------
</TABLE>
 
                       See Notes to Financial Statements
 
                                       25
<PAGE>
                   BRITE VOICE SYSTEMS, INC. AND SUBSIDIARIES
 
                                  ------------
 
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                  YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
 
                                 (IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                                                            CUMULATIVE
                                                                                              FOREIGN
                                                                                             CURRENCY
                                                                       COMMON    RETAINED   TRANSLATION
                                                                        STOCK    EARNINGS   ADJUSTMENT     TOTAL
                                                                      ---------  ---------  -----------  ---------
<S>                                                                   <C>        <C>        <C>          <C>
Balance, December 31, 1995..........................................  $  34,377  $   6,383   $    (314)  $  40,446
  Net income........................................................         --      8,555          --       8,555
  Issuance of common stock..........................................      3,970         --          --       3,970
  Tax benefit of stock option transactions..........................         70         --          --          70
  Foreign currency translation adjustment...........................         --         --       1,140       1,140
                                                                      ---------  ---------  -----------  ---------
 
Balance, December 31, 1996..........................................     38,417     14,938         826      54,181
  Net income........................................................         --     11,682          --      11,682
  Issuance of common stock..........................................      1,197         --          --       1,197
  Stock warrant.....................................................      4,042         --          --       4,042
  Tax benefit of stock option transactions..........................         58         --          --          58
  Foreign currency translation adjustment...........................         --         --      (1,046)     (1,046)
                                                                      ---------  ---------  -----------  ---------
 
Balance, December 31, 1997..........................................     43,714     26,620        (220)     70,114
  Net income........................................................         --     13,117          --      13,117
  Issuance of common stock..........................................      1,472         --          --       1,472
  Tax benefit of stock option transactions..........................         35         --          --          35
  Foreign currency translation adjustment...........................         --         --         175         175
                                                                      ---------  ---------  -----------  ---------
 
Balance, December 31, 1998..........................................  $  45,221  $  39,737   $     (45)  $  84,913
                                                                      ---------  ---------  -----------  ---------
                                                                      ---------  ---------  -----------  ---------
</TABLE>
 
                       See Notes to Financial Statements
 
                                       26
<PAGE>
                   BRITE VOICE SYSTEMS, INC. AND SUBSIDIARIES
 
                                  ------------
 
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                  YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
 
                                 (IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                                                     1998        1997       1996
                                                                                  ----------  ----------  ---------
<S>                                                                               <C>         <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income....................................................................  $   13,117  $   11,682  $   8,555
  Items not requiring (providing) cash:
    Depreciation and amortization...............................................       4,459       3,525      3,640
    Income from discontinued operations.........................................      (2,222)     (1,245)    (2,718)
    Gain on disposition of discontinued operations..............................      (9,122)         --         --
    (Gain) loss on disposition of assets........................................          --     (29,568)       162
    Discount recorded for warrant...............................................       1,870          --         --
    Deferred taxes..............................................................      (1,131)     (1,690)      (738)
  Changes in:
    Accounts receivable.........................................................     (24,768)     (2,521)    (4,789)
    Inventories.................................................................      (7,890)     (2,341)    (1,364)
    Accounts payable and accrued expenses.......................................       4,523       5,775      1,001
    Other current assets and liabilities........................................      (1,572)      3,678      1,955
                                                                                  ----------  ----------  ---------
      Net cash provided by (used in) continuing activities......................     (22,736)    (12,705)     5,704
      Net cash provided by (used in) discontinued operations....................      (3,421)      2,144      2,201
                                                                                  ----------  ----------  ---------
      Net cash provided by (used in) operating activities.......................     (26,157)    (10,561)     7,905
                                                                                  ----------  ----------  ---------
CASH FLOWS FROM INVESTING ACTIVITIES
  Purchase of property and equipment, net.......................................      (9,466)     (4,429)    (5,358)
  Capital expenditures of discontinued operations...............................        (216)       (285)    (1,063)
  Proceeds from sale of property................................................          --      35,016        411
  Proceeds from disposal of discontinued operations.............................      18,428          --         --
  Increase (decrease) in other assets...........................................          66      (1,208)      (500)
                                                                                  ----------  ----------  ---------
      Net cash provided by (used in) investing activities.......................       8,812      29,094     (6,510)
                                                                                  ----------  ----------  ---------
CASH FLOWS FROM FINANCING ACTIVITIES
  Issuance of common stock......................................................       1,472         827      3,970
  Principal payments on debt....................................................          --          --       (551)
                                                                                  ----------  ----------  ---------
      Net cash provided by financing activities.................................       1,472         827      3,419
                                                                                  ----------  ----------  ---------
EFFECT OF EXCHANGE RATE CHANGES ON CASH.........................................         102        (465)      (135)
                                                                                  ----------  ----------  ---------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS................................     (15,771)     18,895      4,679
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR....................................      26,979       8,084      3,405
                                                                                  ----------  ----------  ---------
CASH AND CASH EQUIVALENTS, END OF YEAR..........................................  $   11,208  $   26,979  $   8,084
                                                                                  ----------  ----------  ---------
                                                                                  ----------  ----------  ---------
</TABLE>
 
                       See Notes to Financial Statements
 
                                       27
<PAGE>
                   BRITE VOICE SYSTEMS, INC. AND SUBSIDIARIES
 
                                  ------------
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
                  YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
 
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
NATURE OF BUSINESS AND PRINCIPLES OF CONSOLIDATION
 
    Brite Voice Systems, Inc. (the "Company" or "Brite") designs, integrates,
assembles, markets and supports voice processing and call processing systems and
services which incorporate prepaid/postpaid applications, voice response, voice
recognition, voice/facsimile messaging, audiotex and interactive computer
applications into both standard products and customized market solutions.
 
    The consolidated financial statements include the accounts of Brite Voice
Systems, Inc., Brite Voice Systems Group, Ltd. and other immaterial wholly-owned
subsidiaries. All significant intercompany accounts and transactions have been
eliminated in consolidation.
 
ESTIMATES
 
    The preparation of financial statements in conformity with generally
accepted accounting principles requires that management make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. Significant
estimates included in these financial statements include allowances for
uncollectible accounts and obsolete inventory, and warranty and other accrued
liabilities.
 
CASH AND CASH EQUIVALENTS
 
    Cash and cash equivalents include cash investments with an original maturity
of three months or less.
 
DERIVATIVE FINANCIAL INSTRUMENTS AND FOREIGN CURRENCY TRANSACTIONS
 
    The Company uses derivative financial instruments selectively to offset
exposure to market risks arising from changes in foreign exchange rates.
Derivative financial instruments currently utilized by the Company include
foreign currency forward contracts to hedge receivables denominated in a
currency other than the functional currency of the business. Gains and losses on
hedges of existing assets are included in the carrying amounts of those assets
and are ultimately recognized in income as part of those carrying amounts.
 
    Effective for fiscal year 2000, the Company will be required to adopt
Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for
Derivative Instruments and Hedging Activities." This Statement establishes
accounting and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts (collectively referred to as
derivatives) and for hedging activities, and it requires that an entity
recognizes all derivatives as either assets or liabilities in the statement of
financial position and measures those instruments at fair value. Management does
not anticipate that the adoption of this statement will have a material affect
on its operations or financial position.
 
                                       28
<PAGE>
                   BRITE VOICE SYSTEMS, INC. AND SUBSIDIARIES
 
                                  ------------
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                  YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
 
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INVENTORIES
 
    Inventories are stated at the lower of cost or market. Cost is determined
using the first-in, first-out method and includes the cost of materials, direct
labor and manufacturing overhead. Provision is made for obsolete or slow moving
items where appropriate.
 
PROPERTY AND EQUIPMENT
 
    Property and equipment are stated at cost. Depreciation is computed using
the straight-line method over the estimated useful lives of the assets which
range from three to 10 years for furniture and equipment and 35 years for
buildings and improvements.
 
DEFERRED REVENUE
 
    Deferred revenue includes noncompete and other agreements entered into as a
result of dispositions. The amounts are being amortized over the lives of the
agreements. (See Note 2.)
 
RESEARCH AND ENGINEERING
 
    Costs associated with internal development of new products or enhancements
of existing products are expensed as incurred because the marketability of such
products is not determinable until substantially all the costs are incurred.
 
REVENUE RECOGNITION
 
    During fiscal 1998, the Company adopted Statement of Position ("SOP") 97-2,
"Software Revenue Recognition," as amended by SOP 98-4, "Deferral of the
Effective Date of a Provision of SOP 97-2, Software Revenue Recognition," with
respect to software revenue recognition. The adoption of this SOP did not have a
material impact on the Company's revenue recognition policies.
 
    Revenue is recognized when a contract has been executed, the product has
been shipped, all significant contractual obligations have been satisfied,
uncertainty surrounding customer acceptance becomes insignificant and collection
of the related receivable is probable. When a contract requires significant
production, modification or custom software development revenue is recognized
using the percentage-of-completion method of contract accounting. This method
recognizes income as work on a contract progresses. Recognition of revenues and
profits generally is based on output measures. Revenues from maintenance
contracts for installed systems are recognized ratably over the service period.
Revenues from service bureau operations are recognized when the services are
provided.
 
    The Company will be required to adopt SOP 98-9, "Modification of SOP 97-2,
Software Revenue Recognition, With Respect to Certain Transactions" in future
years. The Company does not anticipate that the adoption of this statement will
have a material affect on the Company's financial position or results of
operations.
 
                                       29
<PAGE>
                   BRITE VOICE SYSTEMS, INC. AND SUBSIDIARIES
 
                                  ------------
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                  YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
 
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
CREDIT RISK
 
    The Company extends unsecured credit to customers throughout the United
States and in certain foreign countries.
 
INCOME TAXES
 
    The Company accounts for income taxes using an asset and liability approach
which requires the recognition of deferred tax assets and liabilities for the
expected future tax consequences of events that have been recognized in the
Company's financial statements or tax returns. In estimating future tax
consequences, the Company considers all expected future events other than
enactments of changes in the tax law or rates. Changes in tax laws or rates will
be recognized in the years in which they occur. (See Note 8.)
 
FOREIGN CURRENCY TRANSLATION ADJUSTMENT
 
    Financial statements of the Company's foreign subsidiaries have been
translated into U.S. dollars at current and average exchange rates. Resulting
translation adjustments are recorded as a separate component of stockholders'
equity. Any transaction gains or losses are included in the accompanying
consolidated statements of income and consolidated statements of comprehensive
income.
 
OTHER NONRECURRING CHARGES
 
    The Company accounts for costs incurred on business process reengineering
and information technology transformation in accordance with Emerging Issues
Task Force ("EITF") Issue No. 97-13, "Accounting for Costs Incurred in
Connection with a Consulting Contract or an Internal Project that Combines
Business Process Reengineering and Information Technology Transformation." EITF
Issue No. 97-13 requires that the costs of business process reengineering
activities be expensed as incurred.
 
    The Company accounts for costs incurred for involuntary termination benefits
of employees in accordance with EITF 94-3, "Liability Recognition for Certain
Employee Termination Benefits and Other Costs to Exit an Activity."
 
EARNINGS PER SHARE
 
    The Company has adopted SFAS No. 128, "Earnings Per Share". Basic earnings
per share was calculated by dividing net income by the weighted average number
of common shares outstanding during the period. Diluted earnings per share was
calculated by dividing net income available to common stockholders after assumed
conversion of dilutive securities by the sum of the weighted average number of
common shares outstanding plus additional common shares that would have been
outstanding if potentially dilutive common shares had been issued.
 
                                       30
<PAGE>
                   BRITE VOICE SYSTEMS, INC. AND SUBSIDIARIES
 
                                  ------------
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                  YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
 
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
    Following is a reconciliation of the weighted average shares used to compute
basic and diluted earnings per share (in thousands):
 
<TABLE>
<CAPTION>
                                                                       YEAR ENDED DECEMBER 31,
                                                                   -------------------------------
<S>                                                                <C>        <C>        <C>
                                                                     1998       1997       1996
                                                                   ---------  ---------  ---------
Basic weighted average shares outstanding........................     12,162     11,865     11,717
Options..........................................................        148        203        410
                                                                   ---------  ---------  ---------
Diluted weighted average shares outstanding......................     12,310     12,068     12,127
                                                                   ---------  ---------  ---------
                                                                   ---------  ---------  ---------
</TABLE>
 
    Options to purchase approximately 939,000 shares and warrants to purchase
1,400,000 shares were outstanding as of December 31, 1998, but were not included
in the computation of diluted EPS because they are not dilutive.
 
ACCOUNTING FOR STOCK OPTIONS
 
    The Company records compensation expense for stock options issued to
employees in accordance with APB No. 25. The Company has adopted the proforma
disclosure requirement provisions of SFAS No. 123. (See Note 9).
 
RECLASSIFICATIONS
 
    Certain amounts in the 1997 and 1996 consolidated financial statements have
been reclassified to conform with the current year presentation.
 
NOTE 2: DISPOSITIONS AND DISCONTINUED OPERATIONS
 
    Effective December 1, 1998, the Company consummated the sale of its TSL
division for $20,000,000 in cash and a subordinated note with a face value of
$5,000,000. This note has a three year maturity. The Company also received a
warrant to purchase 5,000 shares of the buyer. The Company has recorded the note
and warrant at their estimated fair value of $2,500,000 due to the business risk
associated with these instruments. The business sold included billing
verification, professional services and software services. The Company recorded
a gain on the sale of $9,122,000, net of taxes of $5,548,000. A noncompete
agreement was included in the sale in the amount of $1,500,000, and was recorded
as deferred revenue. This amount is being amortized over three years and
reflected in other income.
 
    The TSL division is reported as a discontinued operation, and the
consolidated financial statements have been reclassified to segregate the net
assets and operating results of the business. The components of
 
                                       31
<PAGE>
                   BRITE VOICE SYSTEMS, INC. AND SUBSIDIARIES
 
                                  ------------
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                  YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
 
NOTE 2: DISPOSITIONS AND DISCONTINUED OPERATIONS (CONTINUED)
the net current assets of discontinued operations included in the consolidated
balance sheet as of December 31, 1997, are as follows (in thousands):
 
<TABLE>
<CAPTION>
                                                                                        AMOUNT
                                                                                       ---------
<S>                                                                                    <C>
Current assets:
  Accounts receivable................................................................  $   3,697
  Prepaid expenses...................................................................        145
Less current liabilities:
  Accounts payable...................................................................       (121)
  Accrued salaries and wages.........................................................       (561)
  Deferred revenue...................................................................        (96)
  Customer deposits..................................................................        (26)
                                                                                       ---------
Net current assets--discontinued operations..........................................  $   3,038
                                                                                       ---------
                                                                                       ---------
</TABLE>
 
    Income from discontinued operations prior to disposal includes the following
(in thousands):
 
<TABLE>
<CAPTION>
                                                                   YEAR ENDED DECEMBER 31,
                                                               -------------------------------
<S>                                                            <C>        <C>        <C>
                                                                 1998       1997       1996
                                                               ---------  ---------  ---------
Revenues.....................................................  $  17,727  $  16,476  $  16,243
Costs and expenses...........................................     14,020     14,323     11,883
                                                               ---------  ---------  ---------
Income before taxes..........................................      3,707      2,153      4,360
Income tax provision.........................................      1,485        908      1,642
                                                               ---------  ---------  ---------
Net income...................................................  $   2,222  $   1,245  $   2,718
                                                               ---------  ---------  ---------
                                                               ---------  ---------  ---------
</TABLE>
 
    On October 30, 1997, the Company consummated the sale of certain assets used
in its electronic publishing business to IT Network, Inc. for $35,000,000 in
cash. The business sold consisted primarily of the Company's information
services business, the sale of audiotex advertising sponsorships to yellow pages
advertisers, and the management of such advertisers on behalf of yellow pages
publishers. The Company recorded a gain on the sale of $29,091,000. An agreement
to provide certain services and not to compete was included in the sale.
Deferred revenue in the amount of $3,000,000, was recorded related to this
agreement. This deferred revenue is being amortized over the three-year term of
the agreement and reflected as service revenue. Amortization was $1,000,000 and
$167,000 in 1998 and 1997, respectively.
 
                                       32
<PAGE>
                   BRITE VOICE SYSTEMS, INC. AND SUBSIDIARIES
 
                                  ------------
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                  YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
 
NOTE 3: OTHER ASSETS
 
    Other assets consist of the following (in thousands):
 
<TABLE>
<CAPTION>
                                                                               1998       1997
                                                                             ---------  ---------
<S>                                                                          <C>        <C>
Deferred tax asset (Note 8)................................................  $   2,206  $     961
Stock warrant (Note 9).....................................................      2,204      4,042
Subordinated note and warrant (Note 2).....................................      2,500         --
Deposits and other.........................................................        490        819
Goodwill...................................................................        343        322
                                                                             ---------  ---------
                                                                                 7,743      6,144
Accumulated amortization...................................................       (209)      (306)
                                                                             ---------  ---------
                                                                             $   7,534  $   5,838
                                                                             ---------  ---------
                                                                             ---------  ---------
</TABLE>
 
    Goodwill and other intangible assets are being amortized using the
straight-line method over the estimated useful lives of the assets or the
specific contract term, which range from three to 10 years. Amortization expense
was $40,000, $149,000 and $248,000 in 1998, 1997 and 1996, respectively.
 
NOTE 4: INVENTORIES
 
    Inventories consist of the following (in thousands):
 
<TABLE>
<CAPTION>
                                                                            1998       1997
                                                                          ---------  ---------
<S>                                                                       <C>        <C>
Purchased parts.........................................................  $   9,079  $   5,417
Work in progress........................................................     10,414      5,401
Finished goods..........................................................      2,183      2,970
                                                                          ---------  ---------
                                                                          $  21,676  $  13,788
                                                                          ---------  ---------
                                                                          ---------  ---------
</TABLE>
 
NOTE 5: LINE OF CREDIT
 
    The Company maintains a $25,000,000 unsecured line of credit that is used
from time to time to fund short-term cash requirements. The promissory note
becomes due on November 30, 2001. Borrowings bear interest at 30 days LIBOR plus
75 basis points, with an unused commitment fee in the amount of one-tenth
percent of the difference between the maximum principal amount and the average
principal amount outstanding under the loan for the preceding calendar quarter.
There were no borrowings outstanding under the line as of December 31, 1998.
 
NOTE 6: FINANCIAL INSTRUMENTS
 
    As of December 31, 1998, the Company had entered into forward exchange
contracts to sell a notional amount of $12,304,000 in Japanese Yen for delivery
at various dates during the first six months of 1999. Changes in the market
value of these contracts are highly correlated with changes in the market value
of the underlying accounts receivable. Therefore, the estimated fair value of
the foreign exchange contracts is approximately offset by the change in the fair
value of the underlying accounts receivable.
 
                                       33
<PAGE>
                   BRITE VOICE SYSTEMS, INC. AND SUBSIDIARIES
 
                                  ------------
 
                NOTES TO CONSOLIDATED BALANCE SHEETS (CONTINUED)
 
                     YEARS ENDED DECEMBER 31, 1998 AND 1997
 
NOTE 7:  LEASES
 
    The Company leases office space under noncancelable agreements expiring at
various times through 2006. Future minimum rental payments under these operating
leases are as follows (in thousands):
 
<TABLE>
<S>                                                                  <C>
1999...............................................................  $   4,581
2000...............................................................      4,321
2001...............................................................      3,165
2002...............................................................      2,218
2003...............................................................        438
Thereafter.........................................................         46
                                                                     ---------
                                                                     $  14,769
                                                                     ---------
                                                                     ---------
</TABLE>
 
    Rent expense recorded was approximately $4,311,000, $2,295,000 and
$1,544,000 for the years ended December 31, 1998, 1997 and 1996, respectively.
 
NOTE 8:  INCOME TAXES
 
    The income tax provision includes the following (in thousands):
 
<TABLE>
<CAPTION>
                                                                                           YEAR ENDED DECEMBER 31,
                                                                                       -------------------------------
                                                                                         1998       1997       1996
                                                                                       ---------  ---------  ---------
<S>                                                                                    <C>        <C>        <C>
Taxes currently payable:
  Federal............................................................................  $   1,649  $   7,711  $   1,472
  State..............................................................................        360      1,706        448
  Foreign............................................................................        195        (37)       791
Deferred taxes.......................................................................     (1,131)    (1,690)    (1,049)
                                                                                       ---------  ---------  ---------
                                                                                       $   1,073  $   7,690  $   1,662
                                                                                       ---------  ---------  ---------
                                                                                       ---------  ---------  ---------
</TABLE>
 
    United States income taxes have not been provided on the cumulative
undistributed earnings of the Company's foreign subsidiaries of $4,088,000 at
December 31, 1998. It is intended that these earnings will be permanently
invested in operations outside the United States.
 
                                       34
<PAGE>
                   BRITE VOICE SYSTEMS, INC. AND SUBSIDIARIES
 
                                  ------------
 
                NOTES TO CONSOLIDATED BALANCE SHEETS (CONTINUED)
 
                     YEARS ENDED DECEMBER 31, 1998 AND 1997
 
NOTE 8:  INCOME TAXES (CONTINUED)
    A reconciliation of income tax expense at the statutory rate to income tax
expense at the Company's effective rate, is as follows (in thousands):
 
<TABLE>
<CAPTION>
                                                                       YEAR ENDED DECEMBER 31,
                                                                   -------------------------------
                                                                     1998       1997       1996
                                                                   ---------  ---------  ---------
<S>                                                                <C>        <C>        <C>
Tax expense at the statutory rate................................  $     968  $   6,344  $   2,550
Effect of foreign tax rates......................................        103        (84)        50
Increase (decrease) in taxes resulting from:
  State income taxes, net of federal benefit.....................        110      1,297        273
  Foreign sales corporation benefit..............................       (145)       (25)       (34)
  Utilization of credit carryforwards............................        (30)        67        (48)
  Reduction of valuation allowance...............................         --         --     (1,049)
  Other permanent differences....................................         67         91        (80)
                                                                   ---------  ---------  ---------
                                                                   $   1,073  $   7,690  $   1,662
                                                                   ---------  ---------  ---------
                                                                   ---------  ---------  ---------
</TABLE>
 
    Deferred taxes are determined based on the estimated future tax effect of
differences between the financial statement and tax bases of assets and
liabilities given the provisions of the enacted tax laws. Current deferred taxes
are included in prepaid expenses and other. Noncurrent deferred taxes are
included in other assets. Deferred taxes consist of the following (in
thousands):
 
<TABLE>
<CAPTION>
                                                                               1998       1997
                                                                             ---------  ---------
<S>                                                                          <C>        <C>
Current deferred taxes
  Gross assets.............................................................  $   2,239  $   2,353
  Gross liabilities........................................................         --         --
                                                                             ---------  ---------
                                                                             $   2,239  $   2,353
                                                                             ---------  ---------
                                                                             ---------  ---------
Noncurrent deferred taxes
  Gross assets.............................................................  $   2,206  $   1,374
  Gross liabilities........................................................         --       (413)
                                                                             ---------  ---------
                                                                             $   2,206  $     961
                                                                             ---------  ---------
                                                                             ---------  ---------
</TABLE>
 
                                       35
<PAGE>
                   BRITE VOICE SYSTEMS, INC. AND SUBSIDIARIES
 
                                  ------------
 
                NOTES TO CONSOLIDATED BALANCE SHEETS (CONTINUED)
 
                     YEARS ENDED DECEMBER 31, 1998 AND 1997
 
NOTE 8:  INCOME TAXES (CONTINUED)
    The tax effect of significant temporary differences representing deferred
tax assets and liabilities is as follows (in thousands):
 
<TABLE>
<CAPTION>
                                                                               1998       1997
                                                                             ---------  ---------
<S>                                                                          <C>        <C>
Depreciation...............................................................  $      94  $    (413)
Inventory obsolescence reserve.............................................        681        484
Allowance for doubtful accounts............................................        446        415
Accrued vacation pay.......................................................        245        231
Restructuring and nonrecurring charge reserve..............................        396        989
Covenants not to compete...................................................      1,263      1,121
TSL sale...................................................................        947         --
Other, net.................................................................        373        487
                                                                             ---------  ---------
Net deferred taxes.........................................................  $   4,445  $   3,314
                                                                             ---------  ---------
                                                                             ---------  ---------
</TABLE>
 
NOTE 9:  STOCKHOLDERS' EQUITY
 
    The Company has four stock option plans: the 1984 Incentive Stock Option
Plan (the "1984 Option Plan"), the 1994 Stock Option Plan (the "1994 Option
Plan"), the 1990 Non-Employee Director Stock Option Plan (the "Director Stock
Option Plan"), and the 1994 Employee Stock Purchase Plan (the "Stock Purchase
Plan").
 
STOCK PURCHASE PLAN
 
    In 1994, the Board of Directors and stockholders approved the Stock Purchase
Plan. Under the Stock Purchase Plan, as amended, up to 500,000 shares of common
stock may be sold to employees. Eligible employees may authorize payroll
deductions of up to 10 percent of their compensation to purchase shares at the
lower of 85 percent of the fair market value of the common stock as of the date
of grant (first day of an offering period) or the last day of the six-month
offering period. The semi-annual offerings commenced on July 1, 1994. No
employee may purchase shares under the Stock Purchase Plan, in any one year,
having a fair market value on the offering date of more than $25,000, nor may an
employee purchase more than 500 shares in any offering period.
 
    During 1998, 58,588 shares were purchased at the weighted average price of
$7.33. On December 31, 1998, there were 277,899 shares reserved for issuance
under the Stock Purchase Plan.
 
STOCK OPTIONS
 
    In 1994, the Board of Directors and stockholders approved the 1994 Option
Plan. A maximum of 2,000,000 shares of common stock may be issued under the
Plan, as amended. Options are granted by the Board of Directors at prices not
less than fair market value as of the date of grant, generally vest ratably over
a four-year period and expire 10 years after the date of grant. At December 31,
1998, a total of 855,338 shares were available for future grants under the 1994
Option Plan. In addition, options covering 500,000 shares were granted to an
executive of the Company during 1996, of which 100,000 shares vested
 
                                       36
<PAGE>
                   BRITE VOICE SYSTEMS, INC. AND SUBSIDIARIES
 
                                  ------------
 
                NOTES TO CONSOLIDATED BALANCE SHEETS (CONTINUED)
 
                     YEARS ENDED DECEMBER 31, 1998 AND 1997
 
NOTE 9:  STOCKHOLDERS' EQUITY (CONTINUED)
immediately, an additional 100,000 shares vested during 1997 and 300,000 shares
were cancelled during 1998. At December 31, 1998, options covering 200,000
shares were exercisable.
 
    The 1984 Option Plan terminated on December 31, 1994, except as to
unexercised options remaining outstanding.
 
    The Director Stock Option Plan provides for the grant of options to purchase
up to 150,000 shares of common stock. Options under this plan are to be granted
at prices not less than fair market value as of the date of the grant, and vest
ratably over a three-year period. At December 31, 1998, there were options
granted to purchase 75,750 shares of common stock at prices ranging from $1.25
to $18.50 per share. At December 31, 1998, options covering 47,250 shares were
exercisable.
 
    Information regarding all outstanding stock options is as follows:
 
<TABLE>
<CAPTION>
                                                       1998                      1997                      1996
                                             ------------------------  ------------------------  ------------------------
                                                            WTD AVG                   WTD AVG                   WTD AVG
                                               SHARES         EX         SHARES         EX         SHARES         EX
                                               (000S)        PRICE       (000S)        PRICE       (000S)        PRICE
                                             -----------  -----------  -----------  -----------  -----------  -----------
<S>                                          <C>          <C>          <C>          <C>          <C>          <C>
Outstanding, beginning of year.............       2,200    $      12        2,162    $      13        1,249    $      12
Granted....................................         472           10          595            9        1,018           14
Exercised..................................        (195)           7          (91)           5          (67)           7
Cancelled..................................        (810)          12         (466)          14          (38)          13
                                                  -----                     -----                     -----
Outstanding, end of year...................       1,667           12        2,200           12        2,162           13
                                                  -----                     -----                     -----
                                                  -----                     -----                     -----
Exercisable, end of year...................         811           13          965           12          913           10
                                                  -----                     -----                     -----
                                                  -----                     -----                     -----
</TABLE>
 
    The Company accounts for the stock options under APB No. 25, under which no
compensation expense has been recognized. Had compensation expense for these
plans been determined consistent with FASB Statement No. 123, the Company's net
income and earnings per share would have been reduced to the following pro forma
amounts:
 
<TABLE>
<CAPTION>
                                                        1998           1997          1996
                                                    -------------  ------------  ------------
<S>                                                 <C>            <C>           <C>
Net income........................................  $  12,809,000  $  9,837,000  $  6,853,000
Basic earnings per share..........................  $        1.05  $       0.83  $       0.58
Diluted earnings per share........................  $        1.05  $       0.83  $       0.57
</TABLE>
 
    The resulting pro forma compensation expense for 1998, 1997 and 1996 may not
be representative of that to be expected in future years.
 
                                       37
<PAGE>
                   BRITE VOICE SYSTEMS, INC. AND SUBSIDIARIES
 
                                  ------------
 
                NOTES TO CONSOLIDATED BALANCE SHEETS (CONTINUED)
 
                     YEARS ENDED DECEMBER 31, 1998 AND 1997
 
NOTE 9:  STOCKHOLDERS' EQUITY (CONTINUED)
    The fair value of each option grant is estimated on the date of grant using
the Black-Scholes option pricing model with the following weighted-average
assumptions:
 
<TABLE>
<CAPTION>
                                                                                          1998       1997       1996
                                                                                        ---------  ---------  ---------
<S>                                                                                     <C>        <C>        <C>
Risk-free interest rate...............................................................       5.38%      6.39%      5.92%
Expected years until exercise.........................................................       6.27       5.30       7.90
Expected stock volatility.............................................................         66%        65%        65%
</TABLE>
 
    The following table summarizes information about fixed stock options
outstanding at December 31, 1998:
 
<TABLE>
<CAPTION>
                                                          OPTIONS OUTSTANDING                       OPTIONS EXERCISABLE
                                         -----------------------------------------------------  ----------------------------
                                            NUMBER             WEIGHTED            WEIGHTED        NUMBER        WEIGHTED
                                          OUTSTANDING           AVERAGE             AVERAGE      EXERCISABLE      AVERAGE
                                             AS OF             REMAINING           EXERCISE         AS OF        EXERCISE
RANGE OF EXERCISE PRICES                   12/31/98        CONTRACTUAL LIFE          PRICE        12/31/98         PRICE
---------------------------------------  -------------  -----------------------  -------------  -------------  -------------
<S>                                      <C>            <C>                      <C>            <C>            <C>
 $1.250- $9.000........................       423,210               7.83           $    7.76        137,528      $    6.54
 $9.625-$10.656........................       499,030               7.40           $   10.03        178,538      $    9.63
$11.000-$14.875........................       461,625               7.23           $   13.21        276,084      $   14.09
$15.750-$20.000........................       282,905               6.49           $   17.23        219,255      $   16.81
                                         -------------                                          -------------
 $1.250-$20.000........................     1,666,770               7.31           $   11.55        811,405      $   12.56
                                         -------------                                          -------------
                                         -------------                                          -------------
</TABLE>
 
STOCK WARRANT
 
    On December 12, 1997, the Company and AT&T Corp. ("AT&T") entered into a
Purchase Agreement pursuant to which AT&T will purchase from the Company certain
telecommunications products, software and services over a period of up to four
years. As partial consideration for the Agreement, AT&T acquired a warrant to
purchase up to 1,400,000 shares of the Company's common stock. One-third of the
warrant was immediately exercisable, an additional one-third became exercisable
on December 12, 1998 and the balance will become exercisable on December 12,
1999. Each tranche has a term of three years from the date it becomes
exercisable and has a strike price of $11.00 per share. The warrant was valued
at $4,042,000 using the Black-Scholes option pricing model. A corresponding
contra amount was recorded in other assets, and is being written off in the form
of a purchase discount as systems and equipment are delivered to AT&T. During
1998, $1,870,000 was amortized as a discount.
 
NOTE 10:  EMPLOYEE BENEFIT PLANS
 
    The Company sponsors defined contribution retirement plans which cover
substantially all of its employees in the United States and the United Kingdom.
Company contributions to the United Kingdom plan are based on the employee's
age, while contributions to the United States plan are a percentage of employee
contributions at rates determined by the Board of Directors of the Company.
Company contributions to these plans were $1,088,000, $1,105,000 and $835,000
for the years ended December 31, 1998, 1997 and 1996, respectively.
 
                                       38
<PAGE>
                   BRITE VOICE SYSTEMS, INC. AND SUBSIDIARIES
 
                                  ------------
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                  YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
 
NOTE 11:  RESTRUCTURING AND OTHER NONRECURRING CHARGES
 
    The Company recorded charges of $1,410,000 for the year ended December 31,
1998, related to the termination of certain executives. Of this amount, $364,000
had been paid by December 31, 1998.
 
    The Company recorded charges of $10,980,000 for the year ended December 31,
1997, related to the restructuring of the Company's operations and the
relocation of its headquarters to Lake Mary, Florida. Included in the charge was
approximately $3,327,000 in asset impairments as a result of the Company's
decision to discontinue certain product lines and abandon certain assets, and
the reevaluation of the net realizable value of certain intangible assets. The
Company also recorded severance costs of approximately $1,614,000 relating to
the elimination of certain product lines, the closing of its Dallas, Texas
facility and the transfer of certain functions from its facilities in Wichita,
Kansas and Canton, Massachusetts to its new headquarters in Lake Mary.
Concurrent with the restructuring, the Company initiated a process reengineering
effort which led to the selection and commencement of implementation of certain
new management information systems for which the Company has recorded charges of
approximately $2,718,000. Additionally, costs consisting principally of moving
expenses, temporary labor and travel amounted to approximately $3,321,000 during
the year ended December 31, 1997.
 
NOTE 12:  CONTINGENCIES
 
    The Company is subject to claims and litigation from time to time arising in
the normal operation of its business. Management believes that the ultimate
resolution of any pending claim will not be material to the results of
operations or the financial position of the Company.
 
    From time to time, the Company enters into contracts which provide for
liquidated damages. The failure of the Company to fulfill these contracts could
result in payments to customers or reductions of revenue, and such payments
could be material. Management believes that the ultimate resolution of potential
penalties in existing contracts as of December 31, 1998, will not be material to
the results of operations or the financial position of the Company.
 
NOTE 13:  ADDITIONAL CASH FLOW INFORMATION
 
<TABLE>
<CAPTION>
                                                                      YEAR ENDED DECEMBER 31,
                                                                  -------------------------------
                                                                    1998       1997       1996
                                                                  ---------  ---------  ---------
                                                                          (IN THOUSANDS)
<S>                                                               <C>        <C>        <C>
Interest paid...................................................  $     204  $     564  $      80
Income taxes paid, net..........................................        815     12,508      4,759
</TABLE>
 
SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS
 
<TABLE>
<CAPTION>
                                                                      YEAR ENDED DECEMBER 31,
                                                                  -------------------------------
                                                                    1998       1997       1996
                                                                  ---------  ---------  ---------
                                                                          (IN THOUSANDS)
<S>                                                               <C>        <C>        <C>
Subordinated note and warrant received in connection with the
  TSL sale (Note 2).............................................  $   2,500  $      --  $      --
Tax benefit of stock option transactions........................         35         58         70
Issuance of common stock........................................         --        371         --
</TABLE>
 
                                       39
<PAGE>
                   BRITE VOICE SYSTEMS, INC. AND SUBSIDIARIES
 
                                  ------------
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                  YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
 
NOTE 14: SEGMENT REPORTING
 
    Historically, the Company had four reportable segments: network products,
business systems, customer support and Europe, Middle East, Africa. The network
products segment includes domestically-sold products and managed services that
increase the customers' revenues through increased subscription or user fees.
Business systems includes domestically sold products and managed services that
reduce customers' costs or improve the efficiency of services provided to
end-user customers. Customer support includes the provision of services to both
network products and business systems customers through maintenance contracts,
installation services, time and materials billing and training. Europe, Middle
East, Africa includes all of the Company's products and services in that
geographic area. The Company evaluated performance based on profit or loss from
operations before corporate overhead. Intersegment sales are eliminated for
evaluation purposes.
 
    The Company's reportable segments offered different products and services.
They were managed separately because each required different marketing
strategies.
 
<TABLE>
<CAPTION>
                                                                            YEAR ENDED DECEMBER 31,
                                                                       ---------------------------------
BUSINESS SEGMENTS                                                         1998        1997       1996
---------------------------------------------------------------------  ----------  ----------  ---------
<S>                                                                    <C>         <C>         <C>
                                                                                (IN THOUSANDS)
Revenues:
  Network Products...................................................  $   52,402  $   20,893  $  13,650
  Business Systems...................................................      30,094      35,782     40,907
  Customer Support...................................................      12,469       9,080      8,895
  Europe, Middle East, Africa........................................      40,750      37,618     30,714
                                                                       ----------  ----------  ---------
                                                                       $  135,715  $  103,373  $  94,166
                                                                       ----------  ----------  ---------
                                                                       ----------  ----------  ---------
Contribution to Overhead:
  Network Products...................................................  $   10,939  $    1,805  $    (634)
  Business Systems...................................................      13,080       8,448     12,509
  Customer Support...................................................       5,930       2,987      3,239
  Europe, Middle East, Africa........................................      (3,204)        183      9,248
                                                                       ----------  ----------  ---------
                                                                       $   26,745  $   13,423  $  24,362
                                                                       ----------  ----------  ---------
                                                                       ----------  ----------  ---------
Capital Expenditures:
  Network Products...................................................  $    1,708  $      778  $     513
  Business Systems...................................................         118         619        540
  Customer Support...................................................         332         359        195
  Europe, Middle East, Africa........................................       4,063       1,485      2,856
  Corporate..........................................................       3,245       1,188      1,254
                                                                       ----------  ----------  ---------
                                                                       $    9,466  $    4,429  $   5,358
                                                                       ----------  ----------  ---------
                                                                       ----------  ----------  ---------
</TABLE>
 
                                       40
<PAGE>
                   BRITE VOICE SYSTEMS, INC. AND SUBSIDIARIES
 
                                  ------------
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                  YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
 
NOTE 14: SEGMENT REPORTING (CONTINUED)
 
<TABLE>
<CAPTION>
                                                                                 YEAR ENDED DECEMBER 31,
                                                                             -------------------------------
BUSINESS SEGMENTS                                                              1998       1997       1996
---------------------------------------------------------------------------  ---------  ---------  ---------
<S>                                                                          <C>        <C>        <C>
                                                                                     (IN THOUSANDS)
Depreciation Expense:
  Network Products.........................................................  $     416  $     586  $     525
  Business Systems.........................................................        180        876        962
  Customer Support.........................................................        204        171         99
  Europe, Middle East, Africa..............................................      1,991      1,473        962
  Corporate................................................................      1,625        347        857
                                                                             ---------  ---------  ---------
                                                                             $   4,416  $   3,453  $   3,405
                                                                             ---------  ---------  ---------
                                                                             ---------  ---------  ---------
</TABLE>
 
    During 1998, the Company restructured its operations, resulting in global
product management. Under the new operating structure, the Europe, Middle East,
Africa segment is included in the product business segments:
 
<TABLE>
<CAPTION>
BUSINESS SEGMENTS                                                                              1998
----------------------------------------------------------------------------------------  --------------
<S>                                                                                       <C>
                                                                                          (IN THOUSANDS)
Revenues:
  Network Products......................................................................   $     83,401
  Business Systems......................................................................         34,916
  Customer Support......................................................................         17,398
                                                                                          --------------
                                                                                           $    135,715
                                                                                          --------------
                                                                                          --------------
Contribution to Overhead:
  Network Products......................................................................   $     11,533
  Business Systems......................................................................          8,353
  Customer Support......................................................................          6,859
                                                                                          --------------
                                                                                           $     26,745
                                                                                          --------------
                                                                                          --------------
Capital Expenditures:
  Network Products......................................................................   $      3,460
  Business Systems......................................................................            133
  Customer Support......................................................................            464
  Corporate.............................................................................          5,409
                                                                                          --------------
                                                                                           $      9,466
                                                                                          --------------
                                                                                          --------------
Depreciation Expense:
  Network Products......................................................................   $      1,021
  Business Systems......................................................................            292
  Customer Support......................................................................            513
  Corporate.............................................................................          2,590
                                                                                          --------------
                                                                                           $      4,416
                                                                                          --------------
                                                                                          --------------
</TABLE>
 
                                       41
<PAGE>
                   BRITE VOICE SYSTEMS, INC. AND SUBSIDIARIES
 
                                  ------------
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                  YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
 
NOTE 15: FINANCIAL INFORMATION RELATING TO FOREIGN AND DOMESTIC OPERATIONS AND
EXPORT SALES
 
    Operations for the years ended December 31, 1998, 1997 and 1996 are as
follows (in thousands):
 
<TABLE>
<CAPTION>
                                                                          1998        1997       1996
                                                                       ----------  ----------  ---------
<S>                                                                    <C>         <C>         <C>
Sales from:
  United States......................................................  $   94,965  $   65,755  $  63,452
  Europe, Middle East, Africa........................................      40,750      37,618     30,714
                                                                       ----------  ----------  ---------
      Total..........................................................  $  135,715  $  103,373  $  94,166
                                                                       ----------  ----------  ---------
                                                                       ----------  ----------  ---------
 
Operating profit (loss):
  United States......................................................  $    2,784  $  (10,610) $   4,354
  Europe, Middle East, Africa........................................         923        (127)     2,985
                                                                       ----------  ----------  ---------
      Total..........................................................  $    2,218  $  (10,737) $   7,339
                                                                       ----------  ----------  ---------
                                                                       ----------  ----------  ---------
Identifiable assets:
  United States......................................................  $  101,341  $   73,079  $  49,712
  Europe, Middle East, Africa........................................      20,778      31,147     24,781
                                                                       ----------  ----------  ---------
      Total..........................................................  $  122,119  $  104,226  $  74,493
                                                                       ----------  ----------  ---------
                                                                       ----------  ----------  ---------
 
Export sales from United States......................................  $   19,293  $    7,113  $   8,355
                                                                       ----------  ----------  ---------
                                                                       ----------  ----------  ---------
</TABLE>
 
    One domestic customer represented 16% of total revenues in 1998 and one
international customer represented 11% of consolidated revenues in 1998, and 12%
of consolidated revenues for each of 1997 and 1996.
 
NOTE 16: UNAUDITED QUARTERLY FINANCIAL INFORMATION
 
<TABLE>
<CAPTION>
                                                                                     1998 QUARTER ENDED
                                                                        --------------------------------------------
<S>                                                                     <C>          <C>        <C>        <C>
                                                                         MARCH 31     JUNE 30   SEPT. 30    DEC. 31
                                                                        -----------  ---------  ---------  ---------
Revenues..............................................................   $  25,375   $  34,158  $  35,449  $  40,733
Operating income (loss)...............................................         249         778      1,286        (95)
Net income............................................................         696       1,219      1,314      9,888
Basic earnings per common share.......................................        0.06        0.10       0.11       0.81
Diluted earnings per common share.....................................        0.06        0.10       0.11       0.81
</TABLE>
 
<TABLE>
<CAPTION>
                                                                                     1997 QUARTER ENDED
                                                                        --------------------------------------------
<S>                                                                     <C>          <C>        <C>        <C>
                                                                         MARCH 31     JUNE 30   SEPT. 30    DEC. 31
                                                                        -----------  ---------  ---------  ---------
Revenues..............................................................   $  27,630   $  25,705  $  25,006  $  25,032
Operating income (loss)...............................................       1,798      (7,339)    (2,161)    (3,035)
Net income (loss).....................................................       1,291      (4,876)      (968)    16,235
Basic earnings (loss) per common share................................        0.11       (0.41)     (0.08)      1.36
Diluted earnings (loss) per common share..............................        0.11       (0.41)     (0.08)      1.34
</TABLE>
 
                                       42
<PAGE>
                   BRITE VOICE SYSTEMS, INC. AND SUBSIDIARIES
 
                                  ------------
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                  YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
 
NOTE 16: UNAUDITED QUARTERLY FINANCIAL INFORMATION (CONTINUED)
    The 1998 results included a pre-tax gain of $14,670,000 relating to the sale
of the Company's telecommunications management services division, which was
effective December 1, 1998, and nonrecurring charges of $1,410,000.
 
    The 1997 results included a pre-tax gain of $29,091,000 relating to the sale
of the Company's electronic publishing business, which was consummated on
October 30, 1997, and restructuring and other non-recurring charges of
$10,980,000.
 
                                       43
<PAGE>
                   BRITE VOICE SYSTEMS, INC. AND SUBSIDIARIES
 
                                  ------------
 
                                  SCHEDULE II
                       VALUATION AND QUALIFYING ACCOUNTS
                                 (IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                                    BALANCE AT   CHARGED TO                  BALANCE
                                                                     BEGINNING    COSTS AND                 AT END OF
DESCRIPTION                                                          OF PERIOD    EXPENSES    DEDUCTIONS     PERIOD
------------------------------------------------------------------  -----------  -----------  -----------  -----------
<S>                                                                 <C>          <C>          <C>          <C>
Allowance for doubtful accounts:
  Year ended December 31, 1998....................................   $   1,134    $   1,657    $   1,030    $   1,761
  Year ended December 31, 1997....................................   $     471    $   1,296    $     633    $   1,134
  Year ended December 31, 1996....................................   $     481    $     429    $     439    $     471
 
Allowance for obsolete inventory:
  Year ended December 31, 1998....................................   $   1,759    $     850    $     345    $   2,264
  Year ended December 31, 1997....................................   $   1,415    $     750    $     406    $   1,759
  Year ended December 31, 1996....................................   $   1,069    $     625    $     279    $   1,415
 
Restructuring Reserves
  Year ended December 31, 1998....................................   $   2,393    $   1,410    $   2,757    $   1,046
  Year ended December 31, 1997....................................   $      --    $  10,980    $   8,587    $   2,393
</TABLE>
 
                                       44
<PAGE>
ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE
 
    Not Applicable.
 
                                    PART III
 
ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
 
    DIRECTORS
 
    The information concerning Directors of the Company required by Item 401 of
Regulation S-K will be contained in the Company's 1999 Proxy Statement under the
heading "Election of Directors", and is incorporated herein by reference.
 
    EXECUTIVE OFFICERS
 
    The information concerning executive officers of the Company required by
this Item is set forth in Item 1 hereof under the heading "Executive Officers".
 
ITEM 11.  EXECUTIVE COMPENSATION
 
    The information required by Item 402 of Regulation S-K will be contained in
the Company's 1999 Proxy Statement under the headings "Compensation of Directors
and Executive Officers", "Compensation Committee Interlocks and Insider
Participation", "Report of Compensation Committee on Executive Compensation" and
"Company Performance", and is incorporated herein by reference.
 
ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
    The information required by Item 403 of Regulation S-K will be contained in
the Company's 1999 Proxy Statement under the heading "Common Stock Ownership",
and is incorporated herein by reference.
 
ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
    The information required by Item 404 of Regulation S-K will be contained in
the Company's 1999 Proxy Statement under the heading "Compensation Committee
Interlocks and Insider Participation", and is incorporated herein by reference.
 
                                       45
<PAGE>
                                    PART IV
 
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
 
    (a) The following documents are filed as part of this report:
 
       (1) Financial Statements. The financial statements, notes and independent
           auditors' reports described in Item 8, to which reference is hereby
           made.
 
       (2) Financial Statement Schedules. The financial statement schedules
           described in Item 8, to which reference is hereby made.
 
       (3) Exhibits. The following exhibits:
 
<TABLE>
<CAPTION>
EXHIBIT NO.                                                 DESCRIPTION
-------------  -----------------------------------------------------------------------------------------------------
<C>            <S>
       2.1     Agreement and Plan of Reorganization and Merger dated May 24, 1995 by and among Brite Voice Systems,
               Inc., Telecom Services Limited (U.S.), Inc., Telecom Services Limited (West), Inc., TSL Software
               Services, Inc., TSL Management Group, Inc. and Alan C. Maltz, Scott A. Maltz, Stephen B. Rockoff and
               Alan C. Maltz as custodian for Sari Maltz and Lori Maltz (incorporated by reference to Annex A to the
               Company's definitive proxy statement dated July 17, 1995).
 
       2.2     Asset Purchase Agreement dated September 23, 1997 between the Registrant and IT Network, Inc.
               (incorporated by reference to the Exhibit filed with the Registrant's Current Report on Form 8-K
               dated October 30, 1997).
 
       2.3     Amendment to Asset Purchase Agreement dated October 7, 1997 between the Registrant and IT Network,
               Inc. (incorporated by reference to the Exhibit filed with the Registrant's Current Report on Form 8-K
               dated October 30, 1997).
 
       2.4     Stock Purchase Agreement dated November 30, 1998, by and among Brite Voice Systems, Inc., BVS
               Investco, Inc., TSL Services, Inc. and ProfitSource Corporation, together with the related TSL
               Services, Inc. Agreement Re: Preferred Stock (incorporated by reference to the Exhibits filed with
               the Registrant's Current Report on Form 8-K dated December 14, 1998).
 
       3.1     Restated Articles of Incorporation of the Registrant (incorporated by reference to the Exhibit filed
               with the Registrant's Registration Statement on Form S-1, No. 33-29750).
 
       3.2     Bylaws of the Registrant (incorporated by reference to the Exhibit filed with Registrant's
               Registration Statement on Form S-1, No. 33-29750).
 
      10.1     Registrant's 1984 Incentive Stock Option Plan, as amended (incorporated by reference to the Exhibit
               filed with Registrant's Annual Report on Form 10-K for the year ended December 31, 1991).
 
      10.2     1993 Amendments to the Registrant's 1984 Incentive Stock Option Plan (incorporated by reference to
               the Exhibit filed with Registrant's Annual Report filed on Form 10-K for the year ended December 31,
               1993).
 
      10.3     Registrant's 1990 Non-Employee Director Stock Option Plan dated February 6, 1990 (incorporated by
               reference to the Exhibit filed with Registrant's Annual Report on Form 10-K for the year ended
               December 31, 1989).
 
      10.4     Registrant's Amended and Restated Non-Employee Director Stock Option Plan (incorporated by reference
               to the Exhibit filed with the Registrant's Annual Report on Form 10-K for the year ended December 31,
               1995).
</TABLE>
 
                                       46
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO.                                                 DESCRIPTION
-------------  -----------------------------------------------------------------------------------------------------
<C>            <S>
      10.5     Office Lease Agreement between the Registrant and Heathrow Office Building Corporation dated April
               16, 1997 pertaining to the Registrant's headquarters facility in Lake Mary, Florida (incorporated by
               reference to the Exhibit filed with the Registrant's Quarterly Report on Form 10-Q for the quarter
               ended March 31, 1997).
 
      10.6     First Amendment to Lease dated June 30, 1997 between the Registrant and Heathrow Office Building
               Corporation (incorporated by reference to the Exhibit filed with the Registrant's Quarterly Report on
               Form 10-Q for the quarter ended June 30, 1997).
 
      10.7     Sublease dated June 1, 1997 between the Registrant and Olsten Staffing Services, Inc. (incorporated
               by reference to the Exhibit filed with the Registrant's Quarterly Report on Form 10-Q for the quarter
               ended June 30, 1997).
 
      10.8     Lease covering the Registrant's facility at Brook House, Park Road, Gatley, England dated June 24,
               1996 (incorporated by reference to the Exhibit filed with the Registrant's Annual Report on Form 10-K
               for the year ended December 31, 1996).
 
      10.9     Lease covering the Registrant's facility at 40 Shawmut Road, Canton, Massachusetts, dated March 15,
               1993 (incorporated by reference to the Exhibit filed with the Registrant's Annual Report on Form 10-K
               for the year ended December 31, 1993).
 
      10.10    Registrant's 1994 Stock Option Plan (incorporated by reference to the Exhibit filed with the
               Registrant's Annual Report on Form 10-K for the year ended December 31, 1994).
 
      10.11    Registrant's 1994 Employee Stock Purchase Plan (incorporated by reference to the Exhibit filed with
               the Registrant's Registration Statement on Form S-8, No. 33-80478).
 
      10.12    Registrant's 1994 Employee Stock Purchase Plan (as amended through May 12, 1998) (incorporated by
               reference to the Exhibit filed with the Registrant's Registration Statement on Form S-8, No.
               333-70005).
 
      10.13    Employment Agreement dated December 4, 1996 between the Registrant and David S. Gergacz (incorporated
               by reference to the Exhibit filed with the Registrant's Annual Report on Form 10-K for the year ended
               December 31, 1996).
 
      10.14    Stock Option Agreement dated May 13, 1997 between the Registrant and David S. Gergacz (incorporated
               by reference to the Exhibit filed with the Registrant's Quarterly Report on Form 10-Q for the quarter
               ended June 30, 1997).
 
      10.15    Employment Agreement dated February 25, 1997 between the Registrant and Samuel J. Kline (incorporated
               by reference to the Exhibit filed with the Registrant's Quarterly Report on Form 10-Q for the quarter
               ended June 30, 1997).
 
      10.16    Employment Agreement dated March 22, 1997 between the Company and Christine King (incorporated by
               reference to the Exhibit filed with the Registrant's Quarterly Report on Form 10-Q for the quarter
               ended June 30, 1997).
 
      10.17    Employment Agreement dated March 27, 1997 between the Company and Brian Klumpp (incorporated by
               reference to the Exhibit filed with the Registrant's Quarterly Report on Form 10-Q for the quarter
               ended June 30, 1997).
 
      10.18    Employment Agreement dated June 23, 1997 between the Company and Glenn A. Etherington (incorporated
               by reference to the Exhibit filed with the Registrant's Quarterly Report on Form 10-Q for the quarter
               ended June 30, 1997).
</TABLE>
 
                                       47
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO.                                                 DESCRIPTION
-------------  -----------------------------------------------------------------------------------------------------
<C>            <S>
      10.19    Amendment to Employment Agreement dated June 1, 1997 between the Registrant and Alan C. Maltz
               (incorporated by reference to the Exhibit filed with the Registrant's Quarterly Report on Form 10-Q
               for the quarter ended September 30, 1997).
 
      10.20    Employment Agreement dated July 1, 1997 between the Registrant and Donald R. Walsh (incorporated by
               reference to the Exhibit filed with the Registrant's Quarterly Report on Form 10-Q for the quarter
               ended September 30, 1997).
 
      10.21    Employment Agreement dated July 23, 1997 between the Registrant and Ray S. Naeini (incorporated by
               reference to the Exhibit filed with the Registrant's Quarterly Report on Form 10-Q for the quarter
               ended September 30, 1997).
 
      10.22    Agreement between the Registrant and AT&T Corp. dated December 12, 1997. (incorporated by reference
               to the Exhibit filed with the Registrant's Annual Report on Form 10-K for the year ended December 31,
               1997). Confidential treatment has been granted with respect to portions of this exhibit.
 
      10.23    Supplemental Agreement between the Registrant and AT&T Corp. dated May 29, 1998. Confidential
               treatment has been requested with respect to portions of this Exhibit.
 
      10.24    Supplemental Agreement between the Registrant and AT&T Corp. dated September 8, 1998. Confidential
               treatment has been requested with respect to portions of this Exhibit.
 
      10.25    Office Lease Agreement between the Registrant and 701 International Parkway Development Corporation
               dated March 3, 1998 covering the Registrant's facility in Lake Mary, Florida (incorporated by
               reference to the Exhibit filed with the Registrant's Annual Report on Form 10-K for the year ended
               December 31, 1997).
 
      10.26    Agreement dated January 12, 1998 between the Registrant and Stanley G. Brannan (incorporated by
               reference to the Exhibit filed with the Registrant's Annual Report on Form 10-K for the year ended
               December 31, 1997).
 
      10.27    Amended and Restated Credit Agreement between the Registrant and NationsBank, N.A. dated December 9,
               1998, including the Amended and Restated Revolving Promissory Note, Negative Pledge Agreement and the
               Tax Indemnity Agreement.
 
      10.28    Employment Agreement dated October 12, 1997 between the Company and Garrett H. Digman (incorporated
               by reference to the Exhibit filed with the Registrant's Quarterly Report on Form 10-Q for the quarter
               ended March 31, 1998).
 
      21.1     Subsidiaries of the Registrant.
 
      23.1     Consent of Arthur Andersen LLP.
 
      27       Financial Data Schedule
</TABLE>
 
(b) Reports on Form 8-K.
 
    During the last quarter of the period covered by this Re port, the
    Registrant filed Current Reports on Form 8-K as follows:
 
    1.  Form 8-K dated November 16, 1998, wherein the Registrant announced the
       resignation of David S. Gergacz as Chairman of the Board of Directors,
       President and Chief Executive Officer. The Registrant also reported that
       Stanley G. Brannan, founder of the Company and member of the Board would
       replace Mr. Gergacz on an interim basis until a new CEO is hired.
 
    2.  Form 8-K dated December 23, 1998, wherein the Registrant reported the
       sale of its telecommunications management services division effective
       December 1, 1998 to EPS Solutions Corporation.
 
    3.  Form 8-K/A dated December 30, 1998, wherein the Registrant amended the
       Form 8-K filed on December 23, 1998, to include pro forma financial
       statements.
 
                                       48
<PAGE>
                                   SIGNATURES
 
    Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
 
<TABLE>
<S>                             <C>  <C>
                                BRITE VOICE SYSTEMS, INC.
 
DATED: MARCH 30, 1999           By:            /s/ STANLEY G. BRANNAN
                                     -----------------------------------------
                                                 Stanley G. Brannan
                                              CHIEF EXECUTIVE OFFICER
 
                                By:           /s/ GLENN A. ETHERINGTON
                                     -----------------------------------------
                                                Glenn A. Etherington
                                              CHIEF FINANCIAL OFFICER
</TABLE>
 
    Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons in the capacities and on
the dates indicated:
 
<TABLE>
<CAPTION>
          SIGNATURE                       TITLE                    DATE
------------------------------  --------------------------  -------------------
<C>                             <S>                         <C>
    /s/ STANLEY G. BRANNAN
------------------------------  Chairman of the Board,        March 30, 1999
      Stanley G. Brannan          CEO and President
 
  /s/ C. MACKAY GANSON, JR.
------------------------------  Director                      March 30, 1999
    C. MacKay Ganson, Jr.
 
     /s/ DAVID S. GERGACZ
------------------------------  Director                      March 30, 1999
       David S. Gergacz
 
    /s/ J. DARRELL KELLEY
------------------------------  Director                      March 30, 1999
      J. Darrell Kelley
 
   /s/ JOHN F. KELSEY, III
------------------------------  Director                      March 30, 1999
     John F. Kelsey, III
 
      /s/ ALAN C. MALTZ
------------------------------  Director                      March 30, 1999
        Alan C. Maltz
 
      /s/ SCOTT A. MALTZ
------------------------------  Director                      March 30, 1999
        Scott A. Maltz
</TABLE>
 
                                       49
<PAGE>
                               INDEX TO EXHIBITS
 
<TABLE>
<CAPTION>
EXHIBIT NO.    DESCRIPTION
-------------  -----------------------------------------------------------------------------------------------------
<S>            <C>
       2.1     Agreement and Plan of Reorganization and Merger dated May 24, 1995 by and among Brite Voice Systems,
                 Inc., Telecom Services Limited (U.S.), Inc., Telecom Services Limited (West), Inc., TSL Software
                 Service, Inc., TSL Management Group, Inc., and Alan C. Maltz, Scott A. Maltz, Stephen B. Rockoff
                 and Alan C. Maltz as custodian for Sari Maltz and Lori Maltz (incorporated by reference to Annex A
                 to the Company's definitive proxy statement dated July 17, 1995).
 
       2.2     Asset Purchase Agreement dated September 23, 1997 between the Registrant and IT Network, Inc.
                 (incorporated by reference to the Exhibit filed with the Registrant's Current Report on Form 8-K
                 dated October 30, 1997).
 
       2.3     Amendment to Asset Purchase Agreement dated October 7, 1997 between the Registrant and IT Network,
                 Inc. (incorporated by reference to the Exhibit filed with the Registrant's Current Report on Form
                 8-K dated October 30, 1997).
 
       2.4     Stock Purchase Agreement dated November 30, 1998, by and among Brite Voice Systems, Inc., BVS
                 Invesco, Inc., TSL Services, Inc. and ProfitSource Corporation, together with the related TSL
                 Services, Inc. Agreement Re: Preferred Stock (incorporated by reference to the Exhibits filed with
                 the Registrants's Current Report on Form 8-K dated December 14, 1998.
 
       3.1     Restated Articles of Incorporation of the Registrant (incorporated by reference to the Exhibit filed
                 with the Registrant's Registration Statement on Form S-1, No. 33-29750).
 
       3.2     Bylaws of the Registrant (incorporated by reference to the Exhibit filed with Registrant's
                 Registration Statement on Form S-1, No. 33-29750).
 
      10.1     Registrant's 1984 Incentive Stock Option Plan, as amended (incorporated by reference to the Exhibit
                 filed with Registrant's Annual Report on Form 10-K for the year ended December 31, 1991).
 
      10.2     1993 Amendments to the Registrant's 1984 Incentive Stock Option Plan (incorporated by reference to
                 the Exhibit filed with Registrant's Annual Report filed on Form 10-K for the year ended December
                 31, 1993).
 
      10.3     Registrant's 1990 Non-Employee Director Stock Option Plan dated February 6, 1990 (incorporated by
                 reference to the Exhibit filed with Registrant's Annual Report on Form 10-K for the year ended
                 December 31, 1989).
 
      10.4     Registrant's Amended and Restated Non-Employee Director Stock Option Plan (incorporated by reference
                 to the Exhibit filed with the Registrant's Annual Report on Form 10-K for the year ended December
                 31, 1995).
 
      10.5     Office Lease Agreement between the Registrant and Heathrow Office Building Corporation dated April
                 16, 1997 pertaining to the Registrant's headquarters facility in Lake Mary, Florida (incorporated
                 by reference to the Exhibit filed with the Registrant's Quarterly Report on Form 10-Q for the
                 quarter ended March 31, 1997).
 
      10.6     First Amendment to Lease dated June 30,1997 between the Registrant and Heathrow Office Building
                 Corporation (incorporated by reference to the Exhibit filed with the Registrant's Quarterly Report
                 on Form 10-Q for the quarter ended June 30, 1997).
 
      10.7     Sublease dated June 1, 1997 between the Registrant and Olsten Staffing Services, Inc. (incorporated
                 by reference to the Exhibit filed with the Registrant's Quarterly Report on Form 10-Q for the
                 quarter ended June 30, 1997).
</TABLE>
 
                                       50
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO.    DESCRIPTION
-------------  -----------------------------------------------------------------------------------------------------
<S>            <C>
      10.8     Lease covering the Registrant's facility at Brook House, Park Road, Gatley, England dated June 24,
                 1996 (incorporated by reference to the Exhibit filed with the Registrant's Annual Report on Form
                 10-K for the year ended December 31, 1996).
 
      10.9     Lease covering the Registrant's facility at 40 Shawmut Road, Canton, Massachusetts, dated March 15,
                 1993 (incorporated by reference to the Exhibit filed with the Registrant's Annual Report on Form
                 10-K for the year ended December 31, 1993).
 
      10.10    Registrant's 1994 Stock Option Plan (incorporated by reference to the Exhibit filed with the
                 Registrant's Annual Report on Form 10-K for the year ended December 31, 1994).
 
      10.11    Registrant's 1994 Employee Stock Purchase Plan (incorporated by reference to the Exhibit filed with
                 the Registrant's Registration Statement on Form S-8, No. 33-80478).
 
      10.12    Registrant's 1994 Employee Stock Purchase Plan (as amended through May 12, 1998) (incorporated by
                 reference to the Exhibit filed with the Registrant's Registration Statement on Form S-8, No.
                 333-70005).
 
      10.13    Employment Agreement dated December 4, 1996 between the Registrant and David S. Gergacz (incorporated
                 by reference to the Exhibit filed with the Registrant's Annual Report on Form 10-K for the year
                 ended December 31, 1996).
 
      10.14    Stock Option Agreement dated May 13, 1997 between the Registrant and David S. Gergacz (incorporated
                 by reference to the Exhibit filed with the Registrant's Quarterly Report on Form 10-Q for the
                 quarter ended June 30, 1997).
 
      10.15    Employment Agreement dated February 25, 1997 between the Registrant and Samuel J. Kline (incorporated
                 by reference to the Exhibit filed with the Registrant's Quarterly Report on Form 10-Q for the
                 quarter ended June 30, 1997).
 
      10.16    Employment Agreement dated March 22, 1997 between the Company and Christine King (incorporated by
                 reference to the Exhibit filed with the Registrant's Quarterly Report on Form 10-Q for the quarter
                 ended June 30, 1997).
 
      10.17    Employment Agreement dated March 27, 1997 between the Company and Brian Klumpp (incorporated by
                 reference to the Exhibit filed with the Registrant's Quarterly Report on Form 10-Q for the quarter
                 ended June 30, 1997).
 
      10.18    Employment Agreement dated June 23, 1997 between the Company and Glenn A. Etherington (incorporated
                 by reference to the Exhibit filed with the Registrant's Quarterly Report on Form 10-Q for the
                 quarter ended June 30, 1997).
 
      10.19    Amendment to Employment Agreement dated June 1, 1997 between the Registrant and Alan C. Maltz
                 (incorporated by reference to the Exhibit filed with the Registrant's Quarterly Report on Form 10-Q
                 for the quarter ended September 30, 1997).
 
      10.20    Employment Agreement dated July 1, 1997 between the Registrant and Donald R. Walsh (incorporated by
                 reference to the Exhibit filed with the Registrant's Quarterly Report on Form 10-Q for the quarter
                 ended September 30, 1997).
 
      10.21    Employment Agreement dated July 23, 1997 between the Registrant and Ray S. Naeini (incorporated by
                 reference to the Exhibit filed with the Registrant's Quarterly Report on Form 10-Q for the quarter
                 ended September 30, 1997).
 
      10.22    Agreement between the Registrant and AT&T Corp. dated December 12, 1997. (incorporated by reference
                 to the Exhibit filed with the Registrant's Annual Report on Form 10-K for the year ended December
                 31, 1997). Confidential treatment has been granted with respect to portions of this exhibit.
 
      10.23    Supplemental Agreement between the Registrant and AT&T Corp. dated May 29, 1998.
</TABLE>
 
                                       51
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO.    DESCRIPTION
-------------  -----------------------------------------------------------------------------------------------------
                 Confidential treatment has been requested with respect to portions of this Exhibit.
<S>            <C>
 
      10.24    Supplemental Agreement between the Registrant and AT&T Corp. dated September 8, 1998. Confidential
                 treatment has been requested with respect to portions of this Exhibit.
 
      10.25    Office Lease Agreement between the Registrant and 701 International Parkway Development Corporation
                 dated March 3, 1998 covering the Registrant's facility in Lake Mary, Florida (incorporated by
                 reference to the Exhibit filed with the Registrant's Annual Report on Form 10-K for the year ended
                 December 31, 1997).
 
      10.26    Agreement dated January 12, 1998 between the Company and Stanley G. Brannan (incorporated by
                 reference to the Exhibit filed with the Registrant's Annual Report on Form 10-K for the year ended
                 December 31, 1997).
 
      10.27    Amended and Restated Credit Agreement between the Registrant and NationsBank, N.A. dated December 9,
                 1998, including the Amended and Restated Revolving Promissory Note Negative Pledge Agreement and
                 the Tax Indemnity Agreement.
 
      10.28    Employment Agreement dated October 12, 1997 between the Company and Garrett H. Digman (incorporated
                 by reference to the Exhibit filed with the Registrant's Quarterly Report on Form 10-Q for the
                 quarter ended March 31, 1998).
 
      21.1     Subsidiaries of the Registrant.
 
      23.1     Consent of Arthur Andersen LLP.
 
      27       Financial Data Schedule
</TABLE>
 
                                       52