Dendrite Hits Q3 Earnings
Dendrite International Inc., which focuses on CRM for pharmaceutical companies, Thursday reported third-quarter net income of $3.9 million, or 10 cents per diluted share, in line with consensus estimates.
Including nonrecurring charges, Dendrite reported third quarter net income of $2.5 million, or 6 cents per diluted share. Revenue for the third quarter was $53.7 million, down 7 percent compared to the same period a year ago.
Despite the economic downturn company officials say they were pleased with the performance for the third quarter, which ended September 30.
"It was a highly productive quarter," Dendrite Senior Vice President and CFO Luke Beshar said on a conference call with press and analysts following the release of the earnings.
Gross margin, excluding nonrecurring charges, was 51 percent for the current quarter, flat compared with third-quarter '01, also excluding nonrecurring costs.
Excluding nonrecurring charges from both periods the company generated an operating profit of $7.2 million, or 13.4 percent of revenue, in the third quarter this year versus $6.2 million, or 10.6 percent of revenue, last year. Including all charges the company generated operating profit of $5.0 million for the most recently ended quarter.
Dendrite Chairman and CEO John Bailye said the most significant happening of the quarter was the company's late-September acquisition of Software Associates International (SAI), a privately held company providing home office sales and marketing tools that complemented Dendrite's core suite of products, for approximately $16 million.
Other highlights of the third quarter included signing 21 contracts, adding more than 1,300 new-user licenses, and securing 1,510 license upgrades.
The Morristown, NJ, company says it won nearly two out of every three contracts for which it competed, established new business, expanded contracts with eight leading pharmaceutical companies in the Asia/Pacific market, and expanded its total market share in Japan to more than 30 percent.
Dendrite also expanded its European operations by securing contracts with two leading pharmaceutical companies in nine countries, and acquired Pharma Vision, a privately held company based in Belgium that develops pharmaceutical sales-force analysis and prescriber data-collection software.
Bailye says the company is also building momentum with its analytics and clinical divisions. One big win was a contract to perform data analysis for the Food and Drug Administration. He adds that he expects analytics projects to play a bigger role next year.
Bailye says that he doesn't see a boost in the fourth quarter or in 2003 due to the economy, so instead Dendrite plans to focus on its existing customer base. That means exposing its users to SAI products, and improving customer satisfaction. "If you improve customer satisfaction, customers will buy more products and services," Bailye says.