|UNITED STATESSECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q


[  X  ] Quarterly Report pursuant
to Section 13 or 15(d) of the Securities
Exchange Act of 1934For the quarterly period ended March 31, 2003

[   ] 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  0-26138
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Dendrite International, Inc. | 
| | ---------------------------- | 

| | (Exact name of registrant as specified in its Charter) | 
| | ------------------------------------------------------ | 

|New Jersey |  | 22-2786386
|---------- |  | ----------

|(State or other jurisdiction of 
incorporation or organization) |  | (I.R.S. Employer Identification No.)
|--------------------------------------------------------------- |  | ------------------------------------

|1200 Mount Kemble Avenue
Morristown, NJ 07960
(Address, including zip code, of
principal executive offices)




(973) 425-1200
(Registrants telephone number, including area code)



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.    [  X  ]


Indicate by check mark
whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act):
    [  X  ]


Indicate the number of shares outstanding of each of the
issuers classes of common stock, as of the latest practicable date: at May 7, 2003 there were 40,188,851 shares of
common stock outstanding.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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|DENDRITE INTERNATIONAL, INC.
INDEX
|----------------------------------

| |  |  | PAGE NO
| |  |  | -------

|PART I. |  | FINANCIAL INFORMATION | 
|------- |  | --------------------- | 

|ITEM 1. |  | Financial Statements | 3
|------- |  | -------------------- | -

| |  | Consolidated Statements of Operations (unaudited)
          
Three months ended March 31, 2003 and 2002 | 3
| |  | ------------------------------------------------------------------------------------------------------- | -

| |  | Consolidated Balance Sheets
          
March 31, 2003 (unaudited) and December 31, 2002 | 4
| |  | --------------------------------------------------------------------------------------- | -

| |  | Consolidated Statements of Cash Flows (unaudited)
          
Three months ended March 31, 2003 and 2002 | 5
| |  | ------------------------------------------------------------------------------------------------------- | -

| |  | Notes to Unaudited Consolidated Financial Statements | 6
| |  | ---------------------------------------------------- | -

|ITEM 2. |  | Managements Discussion and
Analysis of Financial Condition
and Results of Operations | 9
|------- |  | ------------------------------------------------------------------------------------- | -

|ITEM 4. |  | Controls and Procedures | 19
|------- |  | ----------------------- | --

|PART II. |  | OTHER INFORMATION | 
|-------- |  | ----------------- | 

|ITEM 1. |  | Legal Proceedings | 19
|------- |  | ----------------- | --

|ITEM 5. |  | Other Information | 19
|------- |  | ----------------- | --

|ITEM 6. |  | Exhibits and Reports on Form 8-K | 19
|------- |  | -------------------------------- | --

|Signatures |  |  | 21
|---------- |  |  | --

|2
|-

---

|PART I.     
FINANCIAL INFORMATION


ITEM 1.      Financial
Statements


DENDRITE
INTERNATIONAL, INC. 
CONSOLIDATED STATEMENTS OF OPERATIONS 
(IN THOUSANDS, EXCEPT PER SHARE DATA)(UNAUDITED)
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                          | Three Months Ended March 31,
|----------------------------------------- | ----------------------------
|
|Revenues:                                 |                             
|License fees                              |                             
|Services                                  |                             
|                                          |                             
|                                          |                             
|                                          |                             
|Cost of revenues:                         |                             
|Cost of license fees                      |                             
|Cost of services                          |                             
|                                          |                             
|                                          |                             
|                                          |                             
|Gross margin:                             |                             
|License gross margin                      |                             
|Services gross margin                     |                             
|                                          |                             
|                                          |                             
|                                          |                             
|Operating expenses:                       |                             
|Selling, general and administrative       |                             
|Research and development                  |                             
|                                          |                             
|                                          |                             
|                                          |                             
|Operating income                          |                             
|Interest income                           |                             
|Other income                              |                             
|                                          |                             
|Income before income taxes                |                             
|Income taxes                              |                             
|                                          |                             
|Net income                                |                             
|                                          |                             
|Net income per share:                     |                             
|Basic                                     |                             
|                                          |                             
|Diluted                                   |                             
|                                          |                             
|Weighted average shares used in computing |                             
|net income per share:                     |                             
|Basic                                     |                             
|                                          |                             
|Diluted                                   |                             
|                                          |                             
|                                          |                             

|The
accompanying notes are an integral part of these statements.


3
|--------------------------------------------------------------------

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|DENDRITE
INTERNATIONAL, INC. CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
|------------------------------------------------------------------------------------------

|                                                           | March 31,2003 | December 31,2002
|---------------------------------------------------------- | ------------- | ----------------
|
|Assets                                                     |               |                 
|Current Assets:                                            |               |                 
|Cash and cash equivalents                                  |               | $   75,565      
|Short-term investments                                     |               | 499             
|Accounts receivable, net                                   |               | 38,150          
|Prepaid expenses and other current assets                  |               | 4,225           
|Deferred taxes                                             |               | 3,380           
|Facility held for sale                                     |               | 6,900           
|                                                           |               |                 
|Total current assets                                       |               | 128,719         
|                                                           |              
|Property and equipment, net                                |               | 25,949          
|Other assets                                               |               | 703             
|Long-term receivable                                       |               | 3,157           
|Goodwill                                                   |               | 12,353          
|Intangible assets, net                                     |               | 2,837           
|Purchased capitalized software, net                        |               | 2,123           
|Capitalized software development costs, net                |               | 5,576           
|Deferred taxes                                             |               | 6,168           
|                                                           |               |                 
|                                                           |               | $ 187,585       
|                                                           |               |                 
|                                                           |              
|Liabilities and Stockholders Equity                       |              
|Current Liabilities:                                       |              
|Accounts payable                                           |               | $     2,219     
|Income taxes payable                                       |               | 2,290           
|Capital lease obligations                                  |               | 615             
|Accrued compensation and benefits                          |               | 6,073           
|Other accrued expenses                                     |               | 11,457          
|Purchase accounting restructuring accrual                  |               | 3,153           
|Accrued restructuring charge                               |               | 70              
|Deferred revenues                                          |               | 8,544           
|                                                           |               |                 
|Total current liabilities                                  |               | 34,421          
|                                                           |               |                 
|Capital lease obligations                                  |               | 150             
|Other non-current liabilities                              |               | 754             
|                                                           |              
|Stockholders Equity                                       |              
|Preferred Stock, no par value, 15,000,000 shares           |              
|authorized, none issued                                    |               | --              
|Common Stock, no par value, 150,000,000 shares authorized, |              
|42,349,314 and 42,156,344 shares issued; 40,126,614 and    |              
|39,933,644 shares outstanding                              |               | 94,315          
|Retained earnings                                          |               | 81,199          
|Deferred compensation                                      |               | (47             
|Accumulated other comprehensive loss                       |               | (2,331          
|Less treasury stock, at cost                               |               | (20,876         
|                                                           |               |                 
|Total stockholders' equity                                 |               | 152,260         
|                                                           |               |                 
|                                                           |               | $ 187,585       
|                                                           |               |                 

|The
accompanying notes are an integral part of these statements.


4
|--------------------------------------------------------------------

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|DENDRITE
INTERNATIONAL, INC. 
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)(UNAUDITED)
|---------------------------------------------------------------------------------------------

|                                                          | Three Months Ended March 31,
|--------------------------------------------------------- | ----------------------------
|                                                          |                             
|
|                                                          |                             
|Operating activities:                                     |                             
|Net income                                                |                             
|Adjustments to reconcile net income to net cash           |                             
|provided by operating activities:                         |                             
|Depreciation and amortization                             |                             
|Amortization of deferred compensation, net of forfeitures |                             
|Changes in assets and liabilities:                        |                             
|Decrease in accounts receivable                           |                             
|Decrease (increase) in prepaid expenses and other         |                             
|Increase in other assets                                  |                             
|Decrease in prepaid income taxes                          |                             
|Decrease in accounts payable and accrued expenses         |                             
|Decrease in income taxes payable                          |                             
|Decrease in accrued restructuring charge                  |                             
|Increase (decrease) in deferred revenues                  |                             
|Increase in other non-current liabilities                 |                             
|                                                          |                             
|Net cash provided by operating activities                 |                             
|                                                          |                             
|Investing activities:                                     |                             
|Purchases of short-term investments                       |                             
|Sales of short-term investments                           |                             
|Purchases of property and equipment                       |                             
|Additions to capitalized software development costs       |                             
|                                                          |                             
|Net cash used in investing activities                     |                             
|                                                          |                             
|Financing activities:                                     |                             
|Payments on capital lease obligations                     |                             
|Issuance of common stock                                  |                             
|                                                          |                             
|Net cash provided by financing activities                 |                             
|                                                          |                             
|Effect of exchange rate changes on cash                   |                             
|                                                          |                             
|Net increase (decrease) in cash and cash equivalents      |                             
|Cash and cash equivalents, beginning of period            |                             
|                                                          |                             
|Cash and cash equivalents, end of period                  |                             
|                                                          |                             

|The
accompanying notes are an integral part of these statements.


5
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|DENDRITE
INTERNATIONAL, INC. NOTES TO UNAUDITED
CONSOLIDATED FINANCIAL STATEMENTS


1.  Basis of Presentation


The
consolidated financial statements of Dendrite International, Inc. and its subsidiaries
(the Company) included in this Form 10-Q are unaudited and reflect all
adjustments (consisting only of normal recurring adjustments) which are, in the opinion of
management, necessary for a fair presentation of the financial position and operating
results for the three month periods ended March 31, 2003 and 2002. For further
information, refer to the consolidated financial statements and notes thereto included in
the Companys Annual Report on Forms 10-K and 10-K/A for the year ended December 31,
2002.


Our
interim operating results may not be indicative of operating results for the full year.


2.   Net Income Per Share


Basic
net income per share was computed by dividing the net income for each period by the
weighted average number of shares of common stock outstanding for each period. Diluted net
income per share was computed by dividing net income for each period by the weighted
average number of shares of common stock and common stock equivalents (stock options)
outstanding during each period. For the three months ended March 31, 2003 and 2002, common
stock equivalents used in computing diluted net income per share were 172,000 and 503,000
shares, respectively.


3.   Comprehensive Income


Assets
and liabilities of the Companys wholly-owned international subsidiaries are
translated at their respective period-end exchange rates and revenues and expenses are
translated at average currency exchange rates for the period. The resulting translation
adjustments are included as Accumulated other comprehensive loss and are
reflected as a separate component of stockholders equity. Total after-tax
comprehensive income for the three months ended March 31, 2003 and 2002 was $4,194,000 and
$3,331,000, respectively.


4.   Reclassifications


Certain
prior period balances have been reclassified to conform with current year presentation.


5.   Stock Based
Compensation


The
Company has adopted the disclosure requirements of Statement of Financial Accounting
Standards (SFAS) 123 Accounting for Stock-Based Compensation as
amended by SFAS 148 Accounting for Stock-Based Compensation  Transition and
Disclosure. The Company applies Accounting Principles Board (APB) 25
Accounting for Stock Issued to Employees and related interpretations in
accounting for stock options granted under the Companys stock option plans (the
Plans). Accordingly, compensation cost has been computed for the Plans based
on the intrinsic value of the stock option at the date of grant, which represents the
difference between the exercise price and the fair value of the Companys stock. As
the exercise price of all stock options granted equaled the fair value of the
Companys stock at the date of option issuance, no compensation cost related to stock
options has been recorded in the accompanying statements of operations. Had compensation
cost for the Plans and the employee stock purchase plan been determined consistent with
SFAS 123, the Companys net income and net income per share would have been adjusted
to the following pro forma amounts:
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                  | For the Three Months Ended March 31,
|------------------------------------------------- | ------------------------------------
|                                                  |                                     
|
|                                                  |                                     
|                                                 
|Net income as reported                            |                                     
|                                                 
|Add/(Deduct): Deferred compensation, amortization |                                     
|net of forfeitures recognized in                  |                                     
|accordance with APB 25, net of                    |                                     
|related tax effects                               |                                     
|                                                 
|Deduct: Total stock-based employee                |                                     
|compensation expense determined                   |                                     
|under the fair value based method                 |                                     
|for all awards, net of related tax                |                                     
|effects                                           |                                     
|                                                  |                                     
|                                                 
|Pro forma net income (loss)                       |                                     
|                                                 
|Earnings (loss)  per share:                       |                                     
|Basic - as reported                               |                                     
|Basic - pro forma                                 |                                     
|                                                 
|Diluted - as reported                             |                                     
|Diluted - pro forma                               |                                     
|                                                 
|                                                  |                                     

|6
|-

---

|6.   Restructuring Charge


On
June 14, 2001, the Company announced a restructuring of its business operations to reflect
a lower expected revenue growth model in the near term. As a result the Company
re-examined its cost structure and determined that there were duplicate employee costs and
excess overhead costs. The restructuring plan consisted of a reduction of 155 delivery and
staff positions and the termination of 35 independent contractors across various
departments in the United States and Europe. In addition, 192 additional positions were
eliminated as part of the closing of the Companys facility in Stroudsburg, PA. The
Stroudsburg, PA operations were relocated to the Companys facilities in New Jersey,
Virginia and a new facility in Bethlehem, PA. The exit costs, consisting of costs to
retrofit the Stroudsburg facility, lease termination costs and the write-off of leasehold
improvements, were included in the restructuring charge while moving and other start-up
costs were not included in this restructuring charge and were expensed as incurred.


During
the second quarter of 2001, the Company recorded a charge of $6,134,000 associated with
this restructuring. This charge was reduced by $24,000 to $6,110,000 in the fourth quarter
of 2001 due to the variance between the amounts originally recorded and managements
revised estimate of the total costs of the restructuring. During the fourth quarter of
2002, the Company again reduced the restructuring accrual by an additional $47,000 due to
a revised estimate of the total costs of the restructuring. Of the remaining restructuring
charge, $70,000 related primarily to European severance had not been paid as of March 31,
2003 and, accordingly, is classified as accrued restructuring charge in the accompanying
consolidated balance sheet. The restructuring charges were based upon formal plans
approved by the Companys management using the information available at the time. The
Company anticipates that the accrued restructuring balance of $70,000 as of March 31, 2003
will be paid during 2003. The activity in accrued restructuring as of March 31, 2003 is
summarized in the table below:
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                  | Accruedrestructuring asof January 1, 2003 | Cash Paymentsin 2003 | AccruedRestructuringas of March 31,2003
|--------------------------------- | ----------------------------------------- | -------------------- | ---------------------------------------
|                                  |                                           |                      |                                        
|                                  |                                           |                     
|Termination payments to employees |                                           |                      | $                                      
|                                  |                                           |                      |                                        
|                                  |                                           |                      | $                                      
|                                  |                                           |                      |                                        
|                                  |                                           |                     

|7.   Pro Forma Results
 SAI


On
September 19, 2002, the Company acquired Software Associates International
(SAI), a privately-held company based in New Jersey. SAI provided software
products and solutions that enabled corporate level sales and marketing analysis for
pharmaceutical companies. These solutions are complementary to the Companys core
suite of business products. The results of SAIs operations have been included in the
Consolidated Financial Statements since the acquisition date.


The
aggregate purchase price was approximately $16,739,000 which included: cash of
approximately $15,092,000 (approximately $1,600,000 in escrow as of March 31, 2003);
accrued professional service fees of approximately $410,000; and options to purchase
Dendrite common stock valued at approximately $1,237,000. The fair value of the stock
options was estimated using the Black-Scholes valuation model. The Company is in the
process of finalizing a third-party valuation of certain intangible assets and its own
evaluation of acquired facilities and personnel for redundancy, and therefore, the
purchase price allocation is preliminary and subject to adjustment.


The Companys unaudited pro
forma results of operations for the three month period ended March 31, 2002 assuming that
the acquisition of SAI described above occurred on January 1, 2002 is as follows (in
thousands, except per share data):
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | March 31, 2002          
| | ------------------------
| | Revenue                 
| | Net Income              
| | Basic Income per share  
| | Diluted Income per share

|8.   Purchase Accounting
Restructuring Accrual


In
     connection  with the  acquisition of SAI,  discussed in Note 7, the Company
developed an exit plan to close SAIs facility in Mt. Arlington, New Jersey
and to relocate the  operations to other Company  facilities in New Jersey.  The
Company accrued as part of the acquisition  costs the costs to terminate certain
leases amounting to $3,252,000. The Company exited the facility during the first
quarter of 2003. The activity in purchase accounting restructuring accrual as of
March 31, 2003 is summarized in the table below:


7
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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|                        | Accruedrestructuring asof January 1, 2003 | Cash Paymentsin 2003 | AccruedRestructuring asof March 31, 2003
|----------------------- | ----------------------------------------- | -------------------- | ----------------------------------------
|                        |                                           |                      |                                         
|Lease termination costs |                                           | $3,252,000           |                                         
|                        |                                           |                      |                                         
|                        |                                           | $3,252,000           |                                         
|                        |                                           |                      |                                         

|9.   Goodwill and
Intangible Assets


Effective January 1, 2002 the Company adopted SFAS 142, Goodwill and other
Intangible Assets. SFAS 142 requires that goodwill and certain intangibles no longer
be amortized, but instead be tested for impairment at least annually. SFAS 142 also
requires that intangible assets with finite useful lives be amortized over their
respective estimated useful lives and reviewed for impairment in accordance with SFAS 121,
which was superceded by SFAS 144. Based on the Companys analysis, there was no
impairment of goodwill upon adoption of SFAS 142 on January 1, 2002. The Company conducts
its annual impairment testing of goodwill on October 1 of each year. For the year ended
December 31, 2002 there was no impairment recorded.


The
total gross carrying amount and accumulated amortization for goodwill and intangible
assets are as follows:
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                               | As of March 31, 2003 | As of December 31, 2002
|------------------------------ | -------------------- | -----------------------
|                               |                      |                        
|
|                               |                      |                        
|INTANGIBLE ASSETS              |                      |                        
|SUBJECT TO AMORTIZATION        |                     
|Purchased capitalized software |                      | $  2,441,000           
|Capitalized software           |                     
|development costs              |                      | 18,210,000             
|Customer relationship assets   |                      | 1,193,000              
|Non-compete covenants          |                      | 1,244,000              
|                               |                      |                        
|Total                          |                      | 23,088,000             
|                               |                     
|INTANGIBLE ASSETS NOT          |                     
|SUBJECT TO AMORTIZATION        |                     
|Goodwill                       |                      | 12,353,000             
|Trademarks                     |                      | 732,000                
|                               |                      |                        
|Total                          |                      | 13,085,000             
|                               |                      |                        
|                               |                     
|Total goodwill and intangible  |                     
|assets                         |                      | $36,173,000            
|                               |                      |                        

|There
were no changes in the carrying amount of goodwill for the three month period ended March
31, 2003.


Aggregate
annual amortization expense for intangible assets is estimated to be:
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                         |           
|------------------------ | ----------
|Year ending December 31, |           
|2003                     | $4,253,000
|2004                     | 3,468,000 
|2005                     | 1,726,000 
|2006                     | 674,000   
|2007                     | --        
|Thereafter               | --        

|10.   Customer and
Geographic Segment Data


In
the three months ended March 31, 2003, the Company derived approximately 45% of its
revenues from its largest customer, which includes approximately 6% of low
gross margin or reimbursable revenue. In the three months ended March
31, 2002, the Company derived approximately 49% of its revenues from its two largest
customers, which includes approximately 1% of low gross margin or reimbursable revenue.


The
Company is organized by geographic locations and has one reportable segment. All transfers
between geographic areas have been eliminated from consolidated revenues. Operating income
consists of total revenues recorded in the location less operating expenses and does not
include interest income, other expense or income taxes. This data is presented in
accordance with SFAS 131, Disclosure About Segments of an Enterprise and Related
Information.


8
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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|                     | For the Three Months Ended March 31,
|-------------------- | ------------------------------------
|                     |                                     
|                     |                                     
|Revenues:            |                                     
|United States        |                                     
|All Other            |                                     
|                     |                                     
|                     |                                     
|                     |                                     
|Operating income:    |                                     
|United States        |                                     
|All Other            |                                     
|                     |                                     
|                     |                                     
|                     |                                     
|                    
|
|                     |                                     
|Identifiable assets: |                                     
|United States        |                                     
|All Other            |                                     
|                     |                                     
|                     |                                     
|                     |                                     

|For
segment reporting purposes, license revenues have been allocated to the sales office of
the respective country in which the sale is made, although the actual contract is with the
U.S. entity for legal and tax purposes.


11.   Recent Accounting
Pronouncements


In
November 2002, the FASB issued EITF Issues 00-21, Accounting for Revenue
Arrangements with Multiple Deliverables (EITF 00-21). EITF 00-21
addresses the accounting for arrangements that involve the delivery or performance of
multiple products, services or rights to use assets. This consensus is applicable to
arrangements entered into on or after June 15, 2003 and requires companies to account for
existing arrangements as the cumulative effect of a change in accounting principles in
accordance with APB Opinion 20, Accounting Changes. The Company has assessed
the impact of EITF 00-21, and does not believe that it will have a material impact on its
consolidated financial statements.


12.   Subsequent Event


On
April 21, 2003, the Company announced that it had made a proposal to acquire all of the
outstanding shares of Synavant Inc. (NASDAQ:SNVT) at a cash price of $2.50 per share. The
Company also announced on April 21, 2003 the filing of a complaint in the Delaware
Chancery Court seeking to invalidate the Synavant-Cegedim merger agreement. The lawsuit
also sought to compel Synavant to waive its poison pill and compliance with Delaware
General Corporation Law Section 203 as it had done for Cegedim.


On May 9, 2003, the Company
announced that it had reached an agreement with Synavant  whereby Dendrite would commence a cash tender
offer of $2.83 per share for all issued and outstanding Synavant common stock which would be followed by
a second step merger. At March 31, 2003, Synavant had approximately 15.24 million shares of
common stock issued and outstanding and approximately 1.75 million shares of common stock issuable pursuant
to stock options or represented by restricted stock units. Under the terms of the merger agreement, all Synavant shares
not tendered would be converted in the merger into the right to receive $2.83 per share.
The tender offer would be subject to shareholders representing a majority of Synavants
outstanding common stock ownership tendering their shares, as well as other customary
conditions.  The Company also announced on May 9, 2003 that it
had entered into a settlement agreement with Synavant wherein the Company agreed to
suspend its pending lawsuit against Synavant and its directors in the Delaware Chancery
Court. The lawsuit would be dismissed upon a successful completion of the tender offer.


On May 14, 2003, Synavant announced that
 on May 13, 2003 it received a proposal from Cegedim to acquire all of Synavants outstanding common stock for
$3.15 per share in cash.  According to the announcement, the Synavant
board of directors authorized its management and advisors to enter into discussions and negotiations with Cegedim
regarding its proposal.  Synavants announcement also stated that this authorization does not constitute approval or
recommendation of Cegedims bid by Synavants board of directors nor has the Synavant board withheld, withdrawn, modified 
or changed its approval or its recommendation in favor of the transaction with Dendrite.


There can be
no assurance of the outcome of this matter or that a transaction with the Company will occur and there can be no
assurance as to the actions Dendrite, Cegedim or Synavant may take in the future as to this matter.


ITEM 2.   Managements Discussion and
Analysis of Financial Condition and Results of Operations.


FORWARD-LOOKING
STATEMENTS


This
Form 10-Q may contain certain forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933 and Section 21-E of the Securities Exchange Act of 1934,
which are intended to be covered by the safe harbors created by such acts. For this
purpose, any statements that are not statements of historical fact may be deemed to be
forward-looking statements, including the statements under Managements
Discussion and Analysis of Financial Condition and Results of Operations regarding
our strategy, future operations, future expectations or future estimates, future financial
position and objectives of management. Those statements in this Form 10-Q containing the
words believes, anticipates, plans,
expects and similar expressions constitute forward-looking statements,
although not all forward-looking statements contain such identifying words. These
forward-looking statements are based on our current expectations, assumptions, estimates
and projections about our Company and the pharmaceutical and consumer packaged goods
industries. All such forward-looking statements involve risks and uncertainties, including
those risks identified under Factors That May Affect Future Operating Results,
many of which are beyond our control. Although we believe that the assumptions underlying
our forward-looking statements are reasonable, any of the assumptions could be inaccurate
and actual results may differ from those indicated by the forward-looking statements
included in this Form 10-Q, as more fully described under Factors That May Affect
Future Operating Results. In light of the significant uncertainties inherent in the
forward-looking statements included in this Form 10-Q, you should not consider the
inclusion of such information as a representation by us or anyone else that we will
achieve such results. Moreover, we assume no obligation to update these forward-looking
statements to reflect actual results, changes in assumptions or changes in other factors
affecting such forward-looking statements.




9
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|OVERVIEW


Co-founded
in 1986 by John E. Bailye, the Companys Chairman and Chief Executive Officer, and
incorporated in 1987, Dendrite was established to provide sales force automation solutions
for the pharmaceutical industry. Since then, it has broadened its offerings to include
multiple sales and marketing solutions and related services to life sciences clients.
Dendrites solutions now comprise a broad array of knowledge-based, technology-driven
solutions that increase the effectiveness of sales, marketing, and clinical processes for
pharmaceutical and other life sciences clients, including: Customer Relationship
Management (CRM) Solutions, Information Management, Business Intelligence and Analytics,
and Commercial Operations Management.


Dendrites
primary markets are the United States, the United Kingdom, France, and Japan. We bill
services provided by our foreign branches and subsidiaries in local currencies. Operating
results generated in local currencies are translated into U.S. dollars at the average
exchange rate in effect for the reporting period. We generated approximately 20% and 19%
of our total revenues outside the United States during the three months ended March 31,
2003 and 2002, respectively. Our operating profits by geographic segment are shown in Note
10 of the Notes to Unaudited Consolidated Financial Statements.


CRITICAL ACCOUNTING
POLICIES, JUDGMENTS AND ESTIMATES


Securities
and Exchange Commission Financial Reporting Release 60 requires companies to include a
discussion of critical accounting policies or methods used in the preparation of financial
statements. A critical accounting policy is one that is both very important to the
portrayal of a companys financial position and results of operations, and requires
managements most difficult, subjective or complex judgments. The Company believes
its critical accounting policies to be revenue recognition, accounting for restructuring,
impairments and income taxes.


10
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

|Revenue Recognition


The
area of revenue recognition requires the Companys management to make significant
judgments and estimates. AICPA Statement of Position (SOP) 97-2, Software Revenue
Recognition,governs revenue recognition for arrangements that include
software which is more than incidental to the arrangement. Under SOP 97-2, if a sale of
software includes services that are essential to the functionality of the software, then
the entire arrangement is to be accounted for using contract accounting as described in
Accounting Research Bulletin 45, Long-Term Construction-Type ContractsandSOP 81-1, Accounting for Performance of Construction-Type and Certain
Production-Type Contracts. The determination of whether or not services are
essential to the functionality of the software can differ from arrangement to arrangement,
and requires the use of significant judgment by management. Factors used in determining
whether or not services are essential to the functionality may include: whether or not
physical changes are being made to the softwares underlying source code; the
complexity of software configuration services; the level of effort required to build
interfaces; the overall relationship of the service fees to the license fees; the length
of time expected to complete the services and whether or not the services can be obtained
by a customer from their internal resources or another third-party vendor. If services are
not considered to be essential to the software, SOP 97-2 generally allows companies to
recognize revenue for software licenses upon delivery of the licenses, prior to
configuration or implementation services, provided that the other requirements of the SOP
are met. In managements judgment, the Companys configuration and
implementation services generally are essential to the functionality of its software.
Therefore, the Company typically recognizes revenues using the percentage-of-completion
method as detailed in SOP 81-1.


The
Companys arrangements are segmented, in accordance with SOP 81-1, into two primary
elements or profit centers, one being the license fee and implementation service element
and the other being an ongoing sales force support services element. The Company believes
that its arrangements meet all of the criteria under SOP 81-1 to allow for the
segmentation of the two elements. If the segmentation criteria could not be met, it would
result in recognition of the Companys license and implementation service revenues
over the term of its multi-year support service agreements.


The
percentage-of-completion method of revenue recognition requires management to use
significant estimates in measuring the progress-to-completion for each project. For its
license fee and implementation service projects, the Company uses the input measure of
labor incurred as compared with total expected labor for the entire project. The
determination of total project labor requires the use of significant judgment and
estimates. We review these estimates on a monthly basis. Actual results could differ from
these estimates, which would have impacted the amount of revenue previously recognized,
had better estimates been available at the time.


Accounting for
Restructuring


During
2001, the Company recognized costs in connection with a restructuring plan which involved
a reduction in size of the Companys work force, downsizing of certain facilities and
relocation of certain activities. During 2002, in connection with the purchase accounting
related to the acquisition of SAI, the Company established an accrual related to costs in
connection with exiting SAIs facility. These restructuring-related costs were based
upon formal plans approved by the Companys management using the information
available at the time.


Accounting for
Impairments


We
review long-lived assets other than goodwill for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset might not be recoverable. If
indicators of impairment are present, we evaluate the recoverability of the long-lived
assets by estimating future undiscounted cash flows that are directly associated with and
that are expected to arise as a direct result of the use and eventual disposition of the
long-lived asset. If this estimate of future undiscounted cash flows demonstrates that
recoverability is not probable, an impairment loss would be calculated and recognized. An
impairment loss would be calculated based on the excess carrying amount of the long-lived
asset over the long-lived assets fair value. The estimate of the fair value and the
future undiscounted cash flows of the underlying long-lived assets are based on
significant judgment and assumptions.


We
review capitalized software development costs and purchased capitalized development
software costs for impairment at each balance sheet date to determine if the unamortized
capitalized costs of a computer software product is greater than the net realizable value
of that product. In those instances where the unamortized capitalized costs are greater
than the net realizable value, we will record an impairment.


We
assess the impairment of goodwill and indefinite lived intangibles on an annual basis
(October 1 of each year), and whenever events or changes in circumstances indicate that
the carrying value may not be recoverable. Some factors we consider important which could
trigger an impairment review include the following:
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Significant underperformance relative to expected historical or projected
                    future operating results;
|- | -----------------------------------------------------------------------------------------------------------------------

| | Significant changes in the manner of our use of the
                    acquired assets or the strategy for our overall business; and
|- | -------------------------------------------------------------------------------------------------------------------------------------

| | Significant negative industry or economic trends.
|- | -------------------------------------------------

|11
|--

---

|On
an annual basis, or when we determine that the carrying value of goodwill and indefinite
lived intangibles may not be recoverable based upon the existence of one or more of the
above indicators of impairment, we compare the fair value of the reporting unit to its
carrying value, including goodwill (step one of the required test). If the carrying value
exceeds fair value, we would perform step two of the required test. Under step two, we
would calculate the implied fair value of the goodwill for the reporting unit and compare
it to the carrying value of the goodwill for the reporting unit. If the implied fair value
of the goodwill is less than the carrying value of the goodwill, we would recognize
in our Statement of Operations an impairment loss equal to such difference, not to exceed the
carrying value.


Accounting for Income
Taxes


We
recognize deferred tax assets and liabilities based on the differences between the
financial statement carrying amounts and the tax bases of assets and liabilities. The
Company regularly reviews its deferred tax assets for recoverability and establishes a
valuation allowance based on historical taxable income, projected future taxable income,
and the expected timing of the reversals of existing temporary differences, all of which
require significant management judgments. Realization is dependent on generating
sufficient taxable income of a correct character prior to the expiration of the loss
carryforwards, capital loss and foreign tax credit carryforwards. Although realization is
not assured, management currently believes it is more likely than not that the recorded
net deferred tax asset will be realized; however, the asset could be reduced in the near
term if estimates of future taxable income during the carryforward period are reduced.


RESULTS OF OPERATIONS


THREE MONTHS ENDED MARCH
31, 2003 AND 2002


     REVENUES. Total revenues increased to $59,710,000 in the three
          months ended March 31, 2003, up $2,267,000 or 4% from $57,443,000 in the three
          months ended March 31, 2002.


License
fee revenues decreased to $2,562,000 in the three months ended March 31, 2003, down
$617,000 or 19% from $3,179,000 in the three months ended March 31, 2002. License fee
revenues as a percentage of total revenues were 4% in the three months ended March 31,
2003, as compared to 6% in the three months ended March 31, 2002. This decrease was caused
by both a decrease in the number of additional licenses purchased by existing customers as
well as a decrease in licenses to new customers.


Service
revenues increased to $57,148,000 in the three months ended March 31, 2003, up $2,884,000
or 5% from $54,264,000 in the three months ended March 31, 2002. Service revenues as a
percentage of total revenues were 96% in the three months ended March 31, 2003,
compared to 94% in the three months ended March 31, 2002. The Companys results
reflected growth in our implementation services of approximately 44%, and international
services of approximately 14%, which includes favorable foreign currency movements that
accounted for approximately 2% of our overall growth. The increase in implementation
revenue was primarily attributable to integration work for our largest customer and
services generated from the acquisition of SAI. This increase was offset by a decrease in
technical and support services of approximately 7% and in our low gross
margin or reimbursable revenue of approximately 23%.


COST OF REVENUES. Total cost of revenues decreased to $29,820,000 in the three
months ended March 31, 2003, down $331,000 or 1% from $30,151,000 in the three months
ended March 31, 2002.


Cost
of license fees increased to $1,079,000 in the three months ended March 31, 2003, up
$155,000 or 17% from $924,000 in the three months ended March 31, 2002. Cost of license
fees for the three months ended March 31, 2003 is comprised of the amortization of
capitalized software development costs of $839,000 and third party-vendor license costs of
$240,000. Cost of license fees for the same period in 2002 is comprised of the
amortization of purchased software and capitalized software development costs of $648,000
and third party vendor license fees of $276,000. The increase in amortization of
capitalized software development costs relates primarily to amortization of the assets
obtained from the acquisition of SAI while third party vendor license costs remained
relatively consistent year on year.


Cost
of services decreased to $28,741,000 in the three months ended March 31, 2003, down
$486,000 or 2% from $29,227,000 in the three months ended March 31, 2002. This decrease
was due primarily to a reduction in the amount of low gross margin or reimbursable
revenue compared to the prior period. In addition, the
Company incurred additional costs from the increase in headcount due to the acquisition of
SAI in September 2002 which was partially offset by a reduction in the workforce in the
third quarter 2002.


GROSS MARGIN.Total gross margin for the three months ended March 31, 2003
was 50%, up from 48% for the three months ended March 31, 2002.


12
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

|Gross
margin for license fees was 58% in the three months ended March 31, 2003, down from 71%
for the three months ended March 31, 2002. The decrease in gross margin was primarily
impacted by the decrease in license revenue on a relatively stable cost base.


Gross
margin for services was 50% in the three months ended March 31, 2003, up from 46% for the
three months ended March 31, 2002. The increase in gross margin for services relates to a
decrease in low gross margin or reimbursable revenue of $1,275,000 or 23% to
approximately $4,200,000 for the three months ended March 31,
2003, compared to approximately $5,575,000 for the three months ended March 31, 2002.
Excluding these low gross margin or reimbursable items, the gross margin for service would
have been 53% and 51% for the three months ended March 31, 2003 and 2002, respectively.
Also contributing to the improvement were the efficiencies gained from the Companys
cost reduction actions in the third quarter of 2002. The Company believes that segregating
low gross margin or reimbursable revenue provides investors with useful information, on a
comparative basis, on the impact of these particular service items on overall gross margin
for services for the quarterly period.


SELLING, GENERAL AND ADMINISTRATIVE (SG&A) EXPENSES. SG&A expenses
increased to $20,239,000 in the three months ended March 31, 2003, up $739,000 or 4% from
$19,500,000 in the three months ended March 31, 2002. As a percentage of revenues,
SG&A expenses remained the same for both periods at 34%. The increase reflects the
additional operating costs from the acquisition of SAI, higher employment costs and higher
professional fees, partially offset by the impact of the Companys cost reduction
actions in the third quarter of 2002.


RESEARCH
AND DEVELOPMENT (R&D) EXPENSES. R&D expenses increased to
$2,698,000 in the three months ended March 31, 2003, up $69,000 or 3% from $2,629,000 in
the three months ended March 31, 2002. As a percentage of revenues, R&D expenses were
consistent at 5% in the three month period ended March 31, 2003 and March 31, 2002.


INTEREST INCOME.Interest income decreased to $243,000 in the three months
ended March 31, 2003, down $61,000 or 20% from $304,000 in the three months ended March
31, 2002. Lower short-term interest rates versus last year adversely impacted interest
income during the three months ended March 31, 2003.


PROVISION
FOR INCOME TAXES. The effective tax expense rate was 40% in the three
months ended March 31, 2003 as compared to 36% for the three months ended March 31, 2002.
In July 2002, the State of New Jersey enacted new tax legislation that adversely impacts
the effective state tax rate of most companies operating in New Jersey. The effect of this
legislation increased the Companys effective tax rate from 36% to 40% for the 2002
tax year. This legislation was retroactive to January 1, 2002. At March 31, 2002, the
legislation had not yet been enacted, therefore the effective tax rate for the three
months ended March 31, 2002 was 36%.


LIQUIDITY AND CAPITAL
RESOURCES


We
finance our operations primarily through cash generated by operations. Net cash provided
by operating activities was $8,492,000 for the three months ended March 31, 2003, compared
to $3,333,000 for the three months ended March 31, 2002. This increase in cash provided by
operating activities was due primarily to decreases in accounts receivable and prepaid
expenses, as well as increases in deferred revenue and net income during the three months
ended March 31, 2003. The increase was partially offset by the payment of income taxes and
accrued expenses during the three months ended March 31, 2003.


Cash
used in investing activities was $2,413,000 in the three months ended March 31, 2003,
compared to $5,479,000 in the three months ended March 31, 2002. The decrease of
$3,066,000 is primarily attributable to a significant number of purchases of property and
equipment during the three months ended March 31, 2002 for two new facilities.


Cash
provided by financing activities was $1,141,000 in the three months ended March 31, 2003,
compared to $514,000 in the three months ended March 31, 2002. The increase of $627,000 is
attributable to an increase in stock option exercises during the three months ended March
31, 2003.


At
March 31, 2003, our working capital was approximately $94,298,000. Total cash and
investments were 41% of total assets as of March 31, 2003, compared with 37% as of December
31, 2002. The Companys days sales outstanding in accounts receivable was 62 days as
of March 31, 2003, compared with 73 days as of December 31, 2002. We believe that available
funds, anticipated cash flows from operations and our line of credit will satisfy our
currently projected working capital and capital expenditure requirements, exclusive of
cash required for possible acquisitions of businesses, products and technologies, for the
next twelve to eighteen months.


We
regularly evaluate opportunities to acquire products or businesses complementary to our
operations. Such acquisition opportunities, if they arise, and are successfully completed,
may involve the use of cash or equity instruments. At this time we currently
anticipate that we would be able to fund the potential acquisition of Synavant, as
previously announced by the Company, through available funds and our line of credit.
Actual cash requirements concerning this potential acquisition, however, are uncertain at
this time.


13
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

|Contractual Obligations
and Commitments


We
maintain a $15.0 million revolving line of credit agreement with The Chase Manhattan Bank,
N.A. The agreement is available to finance working capital needs and possible future
acquisitions. The terms of this agreement require us to maintain a minimum consolidated
net worth, among other covenants, measured quarterly, which is equal to $105,000,000, plus
50% of our net income earned after January 1, 2002 and 75% of the net proceeds to us of
any stock offerings after September 30, 2001 (as defined in the agreement). This covenant
effectively limits the amount of cash dividends we may pay. The credit facility expires on
November 30, 2003. At March 31, 2003, there were no borrowings outstanding under the
agreement and we were in compliance with all of our covenant obligations.


As
of March 31, 2003, we did not have any material commitments for capital expenditures. Our
principal commitments at March 31, 2003 consisted primarily of obligations under operating
and capital leases as well as future minimum guarantees to certain vendors. Future minimum
payments on these obligations are as follows:
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                          | Payments due by period
|------------------------- | ----------------------
|
|Capital Lease Obligations | 784,000               
|Minimum Guarantees        | 1,378,000             
|Operating Leases          | 35,765,000            
|Total                     | 37,927,000            

|As of March 31, 2003, letters of
credit for approximately $475,000 were outstanding.


The
Company has an agreement with a venture capital fund with a commitment to contribute
$1,000,000 to the fund, callable at the discretion of the general partner in $100,000
increments. As of March 31, 2003, $300,000 has been paid, with $700,000 of commitment
remaining. The agreement has a termination date of December 11, 2010, subject to extension
with the consent of a majority in interest of the limited partners.


FACTORS THAT MAY AFFECT
FUTURE OPERATING RESULTS


OUR BUSINESS IS
HEAVILY DEPENDENT ON THE PHARMACEUTICAL INDUSTRY


Most
of our customer relationship management (CRM) and sales force effectiveness (SFE) products
and services are currently used in connection with the marketing and sale of
prescription-only drugs. This market is undergoing a number of significant changes. These
include:
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  |  |  | the
 significant  consolidation  of the  pharmaceutical  industry  as well as the  timing
 and  sequencing  of sales to our               customers may reduce the number of our
existing and potential customers;
| |  |  |  | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  |  |  | regulatory
changes that permit the over-the-counter sale of formerly prescription-only drugs;
| |  |  |  | - |  | ---------------------------------------------------------------------------------------------

| |  |  |  |  |  | increasing
Food and Drug Administration activism; and
| |  |  |  | - |  | -----------------------------------------------------

| |  |  |  |  |  | competitive pressure on the pharmaceutical industry resulting from the continuing shift to
delivery of healthcare through managed care organizations.
| |  |  |  | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------

|We
cannot assure you that we can respond effectively to any or all of these and other changes
in the marketplace. Our failure to do so could have a material adverse effect on our
business, operating results or financial condition.


WE DEPEND ON A FEW
MAJOR CUSTOMERS FOR A SIGNIFICANT PORTION OF OUR REVENUES


Historically,
a limited number of our customers have contributed a significant percentage of the
Companys revenues. The Company anticipates that its operating results in any given
period will continue to depend significantly upon revenues from a small number of
customers. The loss of any of these customers (which could include loss through mergers
and acquisitions) could have a materially adverse effect on the Companys business.
We cannot make any assurances that we will retain our existing customers or attract new
customers that would replace the revenue that could be lost if one or more of these
customers failed to renew its agreement(s) with the Company.


14
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

|BUSINESS AND ECONOMIC
PRESSURES ON OUR MAJOR CUSTOMERS MAY CAUSE A DECREASE IN DEMAND FOR OUR NEW PRODUCTS AND
SERVICES


Business
and economic pressures on our major customers may result in budget constraints that
directly impact their ability to purchase the Companys new products and services
offerings. We cannot assure you that any decrease in demand caused by these pressures will
not have a material adverse effect on our business, operating results or financial
condition.


OUR LENGTHY SALES AND
IMPLEMENTATION CYCLES MAKE IT DIFFICULT TO PREDICT OUR QUARTERLY REVENUES


The
selection of a CRM solution generally entails an extended decision-making process by our
customers because of the strategic implications and substantial costs associated with a
customers license or implementation of the solution. Given the importance of the
decision, senior levels of management of our customers are often involved in the process
and, in some instances, its board of directors may also be involved. As a result, the
decision-making process typically takes nine to eighteen months, and in certain cases
longer. Accordingly, we cannot fully control or predict the timing of our execution of
contracts with customers.


In
addition, an implementation process of three to six or more months before the software is
rolled out to a customers sales force is customary. However, if a customer were to
delay or extend its implementation process, our quarterly revenues may decline below
expected levels and could adversely affect our results of operations.


OUR FIXED COSTS MAY
LEAD TO FLUCTUATIONS IN OUR QUARTERLY OPERATING RESULTS IF REVENUES FALL BELOW
EXPECTATIONS


We
establish our expenditure levels for product development, sales and marketing and some of
our other operating expenses based in large part on our expected future revenues and
anticipated competitive conditions. In particular, we frequently add staff in advance of
new business to permit adequate time for training. If the new business is subsequently
delayed, canceled or not awarded, we will have incurred expenses without the associated
revenues. In addition, we may increase sales and marketing expenses if competitive
pressures become greater than originally anticipated. Since only a small portion of our
expenses varies directly with our actual revenues, our operating results and profitability
are likely to be adversely and disproportionately affected if our revenues fall below our
targeted goals or expectations.


WE MAY BE UNABLE TO
SUCCESSFULLY INTRODUCE NEW PRODUCTS OR RESPOND TO TECHNOLOGICAL CHANGE


The
market for CRM and SFE products changes rapidly because of frequent improvements in
computer hardware and software technology. Our future success will depend, in part, on our
ability to:
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  |  |  | use
available  technologies  and data sources to develop new products and services and to
enhance our current  products and               services;
| |  |  |  | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  |  |  | introduce
new solutions that keep pace with developments in our target markets; and
| |  |  |  | - |  | -----------------------------------------------------------------------------------

| |  |  |  |  |  | address
the changing and increasingly sophisticated needs of our customers.
| |  |  |  | - |  | ---------------------------------------------------------------------------

|We
cannot assure you that we will successfully develop and market new products or product
enhancements that respond to technological advances in the marketplace, or that we will do
so in a timely fashion. We also cannot assure you that our products will adequately and
competitively address the needs of the changing marketplace.


Competition
for software products has been characterized by shortening product cycles. We may be
materially and adversely affected by this trend if the product cycles for our products
prove to be shorter than we anticipate. If that happens, our business, operating results
or financial condition could be adversely affected.


To
remain competitive, we also may have to spend more of our revenues on product research and
development than we have in the past. As a result, our results of operations could be
materially and adversely affected.


Further,
our software products are technologically complex and may contain previously undetected
errors or failures. We cannot assure you that, despite our testing, our new products will
be free from errors. Software errors could cause delays in the commercial release of
products until the errors have been corrected. Software errors may cause damage to our
reputation and cause us to commit significant resources to their correction. Errors that
result in losses or delays could have a material adverse effect on our business, operating
results or financial condition.


INCREASED COMPETITION
MAY RESULT IN PRICE REDUCTIONS AND DECREASED DEMAND FOR OUR PRODUCTS AND SERVICES


There
are a number of other companies that sell CRM and SFE products and related services that
specifically target the pharmaceutical industry, including competitors that are actively
selling CRM and SFE software products in more than one country and competitors that also
offer CRM and SFE support services. Some of our competitors and potential competitors are
part of large corporate groups and have significantly greater financial, sales, marketing,
technology and other resources than we have.


While
we believe that the CRM and SFE software products and/or services offered by most of our
competitors do not address the variety of pharmaceutical customer needs that our solutions
address, increased competition may require us to reduce the prices for our products and
services. Increased competition may also result in decreased demand for our products and
services.


We
believe our ability to compete depends on many factors, some of which are beyond our
control, including:
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  |  |  | the
number and success of new market entrants supplying competing CRM products or support
services;
| |  |  |  | - |  | ---------------------------------------------------------------------------------------------------

| |  |  |  |  |  | expansion
of product lines by, or consolidation among, our existing competitors; and
| |  |  |  | - |  | ------------------------------------------------------------------------------------

| |  |  |  |  |  | development
and/or operation of in-house CRM software products or services by our customers and
potential customers.
| |  |  |  | - |  | --------------------------------------------------------------------------------------------------------------------

|Any one of these factors can lead to
price reductions and/or decreased demand and we cannot assure you that we will be able to
continue to compete successfully or that competition will not have a material adverse
effect on our business, operating results or financial condition.


WE MAY NOT BE ABLE TO COMPETE  EFFECTIVELY IN THE  INTERNET-RELATED  PRODUCTS AND SERVICES MARKET NOR CAN WE PROVIDE ASSURANCES
THAT THE DEMAND FOR INTERNET-RELATED PRODUCTS AND SERVICES WILL INCREASE


The
success of parts of our business will depend, in part, on our ability to continue
developing Internet-related products and responding to technological advances and changing
commercial uses of the Internet. We cannot assure you that our Internet-related products
and services will adequately respond to such technological advances and changing uses. Nor
can we assure you that the demand for Internet-related products and services will
increase.


OUR INTERNATIONAL
OPERATIONS HAVE RISKS THAT OUR DOMESTIC OPERATIONS DO NOT


The
sale of our products and services in foreign countries accounts for, and is expected in
the future to account for, a material part of our revenues. These sales are subject to
risks inherent in international business activities, including:
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  |  |  | any
adverse change in the political or economic environments in these countries or regions;
| |  |  |  | - |  | -------------------------------------------------------------------------------------------

| |  |  |  |  |  | any
adverse change in tax, tariff and trade or other regulations;
| |  |  |  | - |  | -----------------------------------------------------------------

| |  |  |  |  |  | the
absence or significant lack of legal protection for intellectual property rights;
| |  |  |  | - |  | -------------------------------------------------------------------------------------

| |  |  |  |  |  | exposure
to exchange rate risk for service revenues which are denominated in currencies other than
U.S. dollars; and
| |  |  |  | - |  | --------------------------------------------------------------------------------------------------------------------

| |  |  |  |  |  | difficulties
in managing an organization spread over various jurisdictions.
| |  |  |  | - |  | ---------------------------------------------------------------------------

|WE MAY FACE RISKS
ASSOCIATED WITH ACQUISITIONS


Our
business could be materially and adversely affected as a result of the risks associated
with acquisitions (including any potential acquisition of Synavant). As part of our
business strategy, we have acquired, and in the future may acquire, businesses that offer
complementary products, services or technologies. These acquisitions are accompanied by
the risks commonly encountered in an acquisition of a business, including:
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  |  |  | the
effect of the acquisition on our financial and strategic position;
| |  |  |  | - |  | ----------------------------------------------------------------------

| |  |  |  |  |  | the
failure of an acquired business to further our strategies;
| |  |  |  | - |  | --------------------------------------------------------------

| |  |  |  |  |  | the
difficulty of integrating the acquired business;
| |  |  |  | - |  | ----------------------------------------------------

| |  |  |  |  |  | the
diversion of our management's attention from other business concerns;
| |  |  |  | - |  | -------------------------------------------------------------------------

| |  |  |  |  |  | the
impairment of relationships with customers of the acquired business;
| |  |  |  | - |  | ------------------------------------------------------------------------

| |  |  |  |  |  | the
potential loss of key employees of the acquired company; and
| |  |  |  | - |  | ----------------------------------------------------------------

| |  |  |  |  |  | the
maintenance of uniform, company-wide standards, procedures and policies.
| |  |  |  | - |  | ----------------------------------------------------------------------------

|16
|--

---

|These
factors could have a material adverse effect on our revenues and earnings. We expect that
the consideration paid for future acquisitions, if any, could be in the form of cash,
stock, rights to purchase stock, or a combination of these. To the extent that we issue
shares of stock or other rights to purchase stock in connection with any future
acquisition, existing shareholders will experience dilution and potentially decreased
earnings per share.


On May 9, 2003, the Company
announced that it had reached an agreement with Synavant  whereby Dendrite would commence a cash tender
offer of $2.83 per share for all issued and outstanding Synavant common stock which would be followed by
a second step merger. At March 31, 2003, Synavant had approximately 15.24 million shares of
common stock issued and outstanding and approximately 1.75 million shares of common stock issuable pursuant
to stock options or represented by restricted stock units. Under the terms of the merger agreement, all Synavant shares
not tendered would be converted in the merger into the right to receive $2.83 per share.
The tender offer would be subject to shareholders representing a majority of Synavants
outstanding common stock ownership tendering their shares, as well as other customary
conditions.  The Company also announced on May 9, 2003 that it
had entered into a settlement agreement with Synavant wherein the Company agreed to
suspend its pending lawsuit against Synavant and its directors in the Delaware Chancery
Court. The lawsuit would be dismissed upon a successful completion of the tender offer.


On May 14, 2003, Synavant announced that
 on May 13, 2003 it received a proposal from Cegedim to acquire all of Synavants outstanding common stock for
$3.15 per share in cash.  According to the announcement, the Synavant
board of directors authorized its management and advisors to enter into discussions and negotiations with Cegedim
regarding its proposal.  Synavants announcement also stated that this authorization does not constitute approval or
recommendation of Cegedims bid by Synavants board of directors nor has the Synavant board withheld, withdrawn, modified 
or changed its approval or its recommendation in favor of the transaction with Dendrite.


There can be
no assurance of the outcome of this matter or that a transaction with the Company will occur and there can be no
assurance as to the actions Dendrite, Cegedim or Synavant may take in the future as to this matter.



AN INABILITY TO MANAGE
GROWTH COULD ADVERSELY AFFECT OUR BUSINESS


To
manage our growth effectively we must continue to strengthen our operational, financial
and management information systems and expand, train and manage our work force. However,
we may not be able to do so effectively or on a timely basis. Failure to do so could have
a material adverse effect upon our business, operating results or financial condition.


WE MAY FACE RISKS
ASSOCIATED WITH EVENTS WHICH MAY AFFECT THE WORLD ECONOMY


The
terrorist attacks of September 11, 2001 and subsequent world events weakened the world
economy. While we did not experience any material impact to our business during the time
period immediately following September 11, 2001, we cannot assure you that the resulting
impact which the terrorist attacks, threat of future terrorist activity or current U.S.
military action in the Middle East, or threat of hostilities in the Middle East, Asia and
other geographical areas had or may have on the U.S. and world economies will not
adversely affect our business or the businesses of our customers.


CATASTROPHIC EVENTS
COULD NEGATIVELY AFFECT OUR INFORMATION TECHNOLOGY INFRASTRUCTURE


The
efficient operation of our business, and ultimately our operating performance, depends on
the uninterrupted use of our critical business and information technology systems. Many of
these systems require the use of specialized hardware and other equipment that is not
readily available. Although we maintain these systems at more than one location, a natural
disaster, a fire or other catastrophic event at any of these locations could result in the
destruction of these systems. In such an event, the replacement of these systems and
restoration of archived data and normal operation of our business could take several days
to several weeks. During the intervening period when our critical business and information
technology systems are fully or partially inoperable, our ability to conduct normal
business operations could be significantly and adversely impacted and as a result our
business, operating results and financial conditions could be adversely affected.


OUR SUCCESS DEPENDS ON
RETAINING OUR KEY SENIOR MANAGEMENT TEAM AND ON ATTRACTING AND RETAINING QUALIFIED
PERSONNEL


Our
future success depends, to a significant extent, upon the contributions of our executive
officers and key sales, technical and customer service personnel. Our future success also
depends on our continuing ability to attract and retain highly qualified technical and
managerial personnel. Due to competition for such personnel, we have at times experienced
difficulties in recruiting qualified personnel and we may experience such difficulties in
the future. Any such difficulties could adversely affect our business, operating results
or financial condition.


OUR BUSINESS DEPENDS
ON PROPRIETARY TECHNOLOGY THAT WE MAY NOT BE ABLE TO PROTECT COMPLETELY


We
rely on a combination of trade secret, copyright and trademark laws, non-disclosure and
other contractual agreements and technical measures to protect our proprietary technology.
We cannot assure you that the steps we take will prevent misappropriation of this
technology. Further, protective actions we have taken or will take in the future may not
prevent competitors from developing products with features similar to our products. In
addition, effective copyright and trade secret protection may be unavailable or limited in
certain foreign countries. In response to a request by our customers, we have also on
occasion entered into agreements which require us to place our source code in escrow to
secure our service and maintenance obligations.



17
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|Further,
while we believe that our products and trademarks do not infringe upon the proprietary
rights of third parties, third parties may assert infringement claims against us in the
future that may result in the imposition of damages or injunctive relief against us. In
addition, any such claims may require us to enter into royalty arrangements. Any of these
results could materially and adversely affect our business, operating results or financial
condition.


IF
OUR THIRD-PARTY VENDORS ARE UNABLE TO SUCCESSFULLY RESPOND TO TECHNOLOGICAL CHANGE OR IF
WE DO NOT MAINTAIN OUR RELATIONSHIPS WITH THIRD-PARTY VENDORS, INTERRUPTIONS IN THE SUPPLY
OF OUR PRODUCTS MAY RESULT


Some
of our software is provided by third-party vendors. If our third-party vendors are unable
to successfully respond to technological change or if our relationships with certain
third-party vendors are terminated, we may experience difficulty in replacing the
functionality provided by the third-party software currently offered with our products.
Although we believe there are other sources for all of our third-party software, any
significant interruption in the supply of these products could adversely impact our sales
unless and until we can secure another source. The absence of or any significant delay in
the replacement of functionality provided by third-party software in our products could
materially and adversely affect our sales.


THE RESULTS DERIVED
FROM CURRENT AND FUTURE STRATEGIC RELATIONSHIPS MAY PROVE TO BE LESS FAVORABLE THAN
ANTICIPATED


We
are involved in a number of strategic relationships with third parties and are frequently
pursuing others. Should these relationships, or any of them, prove to be more costly than
anticipated or fail to meet revenue expectations or other anticipated synergies, we cannot
guarantee that such events will have no material impact upon our business, operating
results or financial condition.


OUR DATA SOLUTIONS ARE
DEPENDENT UPON STRATEGIC RELATIONSHIPS WHICH, IF NOT MAINTAINED, COULD UNDERMINE THE
CONTINUED VIABILITY OF THESE SOLUTIONS


Our
data and analytics solutions are sourced, in part, from data provided through strategic
relationships. The termination of any of these relationships could diminish the breadth or
depth of our data solutions and we cannot guarantee that this would not negatively impact
our business, operating results or financial condition.


FEDERAL AND STATE LAWS
AND REGULATIONS COULD DEPRESS THE DEMAND FOR SOME OF OUR SOLUTIONS


While
we believe our data and analytics solutions are not violative of current federal or state
laws and regulations pertaining to patient privacy or health information, including the
Health Insurance Portability and Accountability Act of 1996 (HIPAA), we cannot guarantee
that future laws or regulations or interpretations of existing laws and statutes will not
impact negatively upon our ability to market these solutions or cause a decrease in demand
for such solutions from customers that see an increased risk in any such new laws or
regulations.


DIFFICULTIES IN
SUBLEASING, SELLING OR OTHERWISE DISPOSING OF CERTAIN OF OUR FACILITIES MAY NEGATIVELY
IMPACT UPON OUR EARNINGS


We
are currently marketing our Piscataway, New Jersey facility. We also expect to sublease
all or a portion of certain other facilities. If the recent real estate downturn
continues, it could negatively impact upon our ability to effectively market these
facilities. An inability to successfully dispose of any of these facilities or to obtain
favorable pricing terms could negatively impact our earnings.


UNANTICIPATED CHANGES IN
OUR ACCOUNTING POLICIES MAY BE REQUIRED BECAUSE OF MANDATES BY ACCOUNTING STANDARDS
SETTING ORGANIZATIONS AND COULD HAVE A MATERIAL IMPACT ON OUR FINANCIAL STATEMENTS


In
reporting our financial results we rely upon the accounting policies and standards then in
effect at the time of our report. Future regulations, standards or interpretations may
require us to adjust or restate financial results previously reported. A required
restatement could have an unfavorable impact upon past financial results or current
comparison to previous results.


18
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|PROVISIONS OF OUR
CHARTER DOCUMENTS AND NEW JERSEY LAW MAY DISCOURAGE AN ACQUISITION OF DENDRITE


Provisions
of our Restated Certificate of Incorporation, as amended, our By-laws, as amended, and New
Jersey law may make it more difficult for a third party to acquire us. For example, the
Board of Directors may, without the consent of the stockholders, issue preferred stock
with rights senior to those of the common stock. In addition, the Company has a
Shareholder Rights Plan which may limit the ability of a third party to attempt a hostile
acquisition of the Company.


OUR COMMON STOCK MAY
BE SUBJECT TO PRICE FLUCTUATIONS


The market price of our common stock
may be significantly affected by the following factors:
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  |  | the
announcement or the introduction of new products by us or our competitors; | 
| |  |  |  | - | ------------------------------------------------------------------------------ | 

| |  |  |  |  | quarter-to-quarter
 variations in our operating  results or changes in revenue or earnings  estimates or
failure to meet or               exceed revenue or earnings estimates; | 
| |  |  |  | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 

| |  |  |  |  | market
conditions in the technology, healthcare and other growth sectors; and | 
| |  |  |  | - | ----------------------------------------------------------------------------- | 

| |  |  |  |  | general
consolidation in the healthcare information industry which may result in the market
perceiving us or other comparable companies as potential acquisition targets. | 
| |  |  |  | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 

|Further,
the stock market has experienced on occasion extreme price and volume fluctuations. The
market prices of the equity securities of many technology companies have been especially
volatile and often have been unrelated to the operating performance of such companies.
These broad market fluctuations may have a material adverse effect on the market price of
our common stock.


ITEM 4.   Controls and
Procedures


The
Companys principal executive officer and principal financial officer have evaluated
the Companys disclosure controls and procedures as of a date within 90 days of the
filing of this Form 10-Q and have found the disclosure controls and procedures to be
effective. There have been no significant changes in the Companys internal controls
or in other factors that could significantly affect these internal controls subsequent to
the date of their evaluation, nor were any significant deficiencies or material weaknesses
in the Companys internal controls found.


PART II.    OTHER INFORMATION


ITEM 1.   Legal Proceedings


See
Note 12 to the Companys Consolidated Financial Statements concerning the
Companys proposed acquisition of Synavant and the related litigation commenced by the Company.


ITEM 5.   Other Information


See
Note 12 to the Companys Consolidated Financial Statements concerning the
Companys proposed acquisition of Synavant.


ITEM 6.  Exhibits and Reports on Form 8-K


(i)       Exhibits


99.1
Certifications Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002, signed by John E. Bailye, Chairman of the Board and Chief
Executive Officer of the Company, and Kathleen E. Donovan, Senior Vice President and Chief
Financial Officer of the Company.


     (ii)       
          Reports on Form 8-K
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(a) |  | The Company filed a Current Report on Form 8-K on March 26, 2003, pursuant to
               Item 5. Other Events and Regulation FD Disclosure relating to
               certain employment related agreements and a credit agreement amendment.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) |  | The Company filed a Current Report on Form 8-K on February 28, 2003, pursuant to
               Item 5. Other Events and Regulation FD Disclosure relating to the
               Companys stock ownership incentive program.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|19
|--

---

|Signatures



Pursuant
to the requirements 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.


Date: May 15, 2003
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | By:  JOHN E. BAILYE
John E. Bailye, Chairman of the Board and
Chief Executive Officer
(Principal Executive Officer)
| |  | ---------------------------------------------------------------------------------------------------------------------------------

| |  | By:  KATHLEEN E. DONOVAN
Kathleen E. Donovan, Senior Vice President
and Chief Financial Officer
(Principal Financial Officer)
| |  | -------------------------------------------------------------------------------------------------------------------------------------------

|20
|--

---

|CERTIFICATIONS


I, John E. Bailye, certify that:


1.     
   I have reviewed this  quarterly report
on Form 10-Q of Dendrite International, Inc.;


2.     
   Based  on  my  knowledge,  this
quarterly  report does not contain any untrue  statement  of a material  fact or omit to
state a material fact necessary to make the statements made, in light of the
 circumstances  under which such  statements  were made, not misleading with respect to
the period covered by this quarterly report;



3.     
   Based on my knowledge, the
financial statements, and other financial           information included in this
quarterly report, fairly present in all material           respects the financial
condition, results of operations and cash flows of the           registrant as of, and
for, the periods presented in this quarterly report;


4.     
   The  registrants   other
certifying  officers and I are  responsible  for  establishing  and  maintaining
disclosure  controls and procedures (as defined in Exchange Act Rules 13a-14 and
15d-14) for the registrant and we have:
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (a)
             Designed
     such disclosure controls and procedures to ensure that material information relating
to the registrant,  including its  consolidated  subsidiaries,  is made known to us by
others within those entities,  particularly  during the period in which this quarterly
report is being prepared;
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)
              Evaluated the  effectiveness of
the registrants  disclosure controls and procedures as of a date within 90
days prior to the filing date of this  quarterly  report  (the  Evaluation
Date); and
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c)          Presented in this quarterly
report our conclusions  about the  effectiveness of the disclosure  controls and
procedures based on our evaluation as of the Evaluation Date;
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|5.     
   The registrants other
certifying officers and I have disclosed, based on           our most recent evaluation,
to the registrants auditors and the audit           committee of registrants
board of directors (or persons performing the           equivalent function):
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (a)
                           All significant
deficiencies in the design or operation of internal controls           which could
adversely affect the registrants ability to record, process,           summarize
and report financial data and have identified for the           registrants
auditors any material weaknesses in internal controls; and
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)
                           Any fraud, whether or not
material, that involves management or other employees           who have a significant
role in the registrants internal controls; and
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|6.     
   The
registrants other certifying officers and I have indicated in this
          quarterly report whether or not there were significant changes in internal
          controls or in other factors that could significantly affect internal controls
          subsequent to the date of our most recent evaluation, including any corrective
          actions with regard to significant deficiencies and material weaknesses.



Date: May 15, 2003
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|JOHN E. BAILYE
John E. Bailye
Chairman and Chief Executive Officer |  | 
|-------------------------------------------------------------------------------- |  | 

|21
|--

---

|I, Kathleen E. Donovan, certify that:


1.     
   I have reviewed this  quarterly report
on Form 10-Q of Dendrite International, Inc.;


2.     
   Based  on  my  knowledge,  this
quarterly  report does not contain any untrue  statement  of a material  fact or omit to
state a material fact necessary to make the statements made, in light of the
 circumstances  under which such  statements  were made, not misleading with respect to
the period covered by this quarterly report;



3.     
   Based on my knowledge, the
financial statements, and other financial           information included in this
quarterly report, fairly present in all material           respects the financial
condition, results of operations and cash flows of the           registrant as of, and
for, the periods presented in this quarterly report;


4.     
   The  registrants   other
certifying  officers and I are  responsible  for  establishing  and  maintaining
disclosure  controls and procedures (as defined in Exchange Act Rules 13a-14 and
15d-14) for the registrant and we have:
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (a)
              Designed
     such disclosure controls and procedures to ensure that material information relating
to the registrant,  including its  consolidated  subsidiaries,  is made known to us by
others within those entities,  particularly  during the period in which this quarterly
report is being prepared;
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)
              Evaluated the  effectiveness of
the registrants  disclosure controls and procedures as of a date within 90
days prior to the filing date of this  quarterly  report  (the  Evaluation
Date); and
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c)          Presented in this quarterly
report our conclusions  about the  effectiveness of the disclosure  controls and
procedures based on our evaluation as of the Evaluation Date;
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|5.     
   The registrants other
certifying officers and I have disclosed, based on           our most recent evaluation,
to the registrants auditors and the audit           committee of registrants
board of directors (or persons performing the           equivalent function):
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (a)
                           All significant
deficiencies in the design or operation of internal controls           which could
adversely affect the registrants ability to record, process,           summarize
and report financial data and have identified for the           registrants
auditors any material weaknesses in internal controls; and
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)
                           Any fraud, whether or not
material, that involves management or other employees           who have a significant
role in the registrants internal controls; and
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|6.     
   The
registrants other certifying officers and I have indicated in this
          quarterly report whether or not there were significant changes in internal
          controls or in other factors that could significantly affect internal controls
          subsequent to the date of our most recent evaluation, including any corrective
          actions with regard to significant deficiencies and material weaknesses.


Date: May 15, 2003
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|KATHLEEN E. DONOVAN
Kathleen E. Donovan
Senior Vice President and Chief Financial Officer |  | 
|------------------------------------------------------------------------------------------------------- |  | 

|22
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