-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LjB+PxYWy0SYMCXQQ3zo32HsxPjqXt2gacvs8YMzA+C3/OrgKSvO6OZi4uojsMnZ M+eqPwrz70YKBYvYZ6yrAQ== 0000927016-01-500961.txt : 20010515 0000927016-01-500961.hdr.sgml : 20010515 ACCESSION NUMBER: 0000927016-01-500961 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010331 FILED AS OF DATE: 20010514 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KEANE INC CENTRAL INDEX KEY: 0000054883 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING SERVICES [7371] IRS NUMBER: 042437166 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-07516 FILM NUMBER: 1632271 BUSINESS ADDRESS: STREET 1: TEN CITY SQ CITY: BOSTON STATE: MA ZIP: 02129 BUSINESS PHONE: 6172419200 MAIL ADDRESS: STREET 1: TEN CITY SQ CITY: BOSTON STATE: MA ZIP: 02109 FORMER COMPANY: FORMER CONFORMED NAME: KEANE ASSOCIATES INC DATE OF NAME CHANGE: 19800826 10-Q 1 d10q.txt FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (Mark One) (x) QUARTERLY RE[PORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended March 31, 2001 OR (_) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________ Commission File Number 1-7516 KEANE, INC. (Exact name of registrant as specified in its charter) MASSACHUSETTS 04-2437166 (State or other jurisdictions of (I.R.S. Employer Identification incorporation or organization) Number) Ten City Square, Boston, Massachusetts 02129 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (617) 241-9200 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No _____ ____ As of March 31, 2001, the number of issued and outstanding shares of Common Stock (excluding 4,946,701 shares held in treasury) and Class B Common Stock are 67,499,400 and 284,891 shares, respectively. Keane, Inc. And Subsidiaries Table Of Contents Part I - Financial Information
Unaudited Consolidated Statements of Income for the three months ended March 31, 2001 and 2000................................................................................... 3 Unaudited Consolidated Balance Sheets as of March 31, 2001 and December 31, 2000........... 4 Unaudited Consolidated Statements of Cash Flows for the three months ended March 31, 2001 and 2000................................................................................... 5 Notes to Unaudited Financial Statements.................................................... 6 Management's Discussion and Analysis of Financial Condition and Results of Operations...... 9 Part II - Other Information................................................................ 13 Signature Page............................................................................. 14
2 Keane, Inc. and Subsidiaries Consolidated Statements of Income
(In thousands except per share amounts) Three months ended March 31, 2001 2000 Total revenues $208,346 $216,208 Salaries, wages and other direct costs 145,149 154,574 Selling, general and administrative expenses 49,327 51,254 Amortization of goodwill and other intangible assets 3,462 2,889 -------- -------- Operating income 10,408 7,491 Interest and dividend income 1,625 2,143 Interest expense 113 186 Other (income) expenses, net (2,291) 183 -------- -------- Income before income taxes 14,211 9,265 Provision for income taxes 5,757 3,754 -------- -------- Net income $ 8,454 $ 5,511 ======== ======== Net income per share (basic) $ 0.12 $ 0.08 ======== ======== Net income per share (diluted) $ 0.12 $ 0.08 ======== ======== Weighted average common shares outstanding (basic) 68,140 71,011 ======== ======== Weighted average common and common share equivalents outstanding 68,877 71,686 (diluted) ======== ========
The accompanying notes are an integral part of the consolidated financial statements. 3
Keane, Inc. and Subsidiaries Consolidated Balance Sheets (In thousands) March 31, 2001 December 31, 2000 Assets ( Unaudited ) ( See Note 1 ) Current: Cash and cash equivalents $ 92,885 $ 53,783 Marketable securities 52,512 59,179 Accounts receivable, net: Trade 166,688 164,706 Other 1,401 1,428 Prepaid expenses and deferred taxes 17,425 15,533 -------- -------- Total current assets 330,911 294,629 Long-term investments 250 2,250 Property and equipment, net 21,968 24,132 Goodwill, net 73,916 75,497 Intangible assets, net 40,824 43,164 Deferred taxes and other assets, net 22,508 23,922 -------- -------- $490,377 $463,594 ======== ======== Liabilities Current: Accounts payable 13,709 16,820 Accrued expenses and other liabilities 38,154 26,953 Accrued compensation 25,682 17,709 Notes payable 4,033 5,006 Accrued income taxes 15,973 9,003 Unearned income 3,673 4,611 Current capital lease obligations 1,179 1,230 -------- -------- Total current liabilities 102,403 81,332 Deferred income taxes 6,287 9,205 Long-term portion of capital lease obligations 2,114 2,380 Stockholders' Equity Common stock 7,245 7,245 Class B common stock 28 28 Additional paid-in capital 115,687 121,444 Accumulated other comprehensive income (3,369) (4,637) Retained earnings 352,428 343,974 Less treasury stock (92,446) (97,377) -------- -------- Total stockholders' equity 379,573 370,677 -------- -------- $490,377 $463,594 ======== ========
The accompanying notes are an integral part of the consolidated financial statements. 4 Keane, Inc. and Subsidiaries Consolidated Statements of Cash Flows (unaudited)
(In thousands) Three months ended March 31, Cash flows from Operating Activities: 2001 2000 Net Income $ 8,454 $ 5,511 Adjustments to reconcile net income to net cash used for operating activities: Depreciation and amortization 6,687 4,503 Deferred income taxes (983) 381 Provision for doubtful accounts 394 1,231 Loss on sale of property and equipment 24 489 Loss on write down of equity investments 2,000 --- Gain on sale of business unit (4,302) --- Changes in operating assets and liabilities: (Increase) decrease in accounts receivable (2,349) 25,498 (Increase) decrease in prepaid expenses and other assets (2,381) 2,879 (Increase) decrease in accounts payable, accrued expenses and 7,407 (2,865) other liabilities, and unearned revenue Increase in income taxes payable 7,254 3,194 ------- -------- Net cash provided by operating activities 22,205 40,821 ------- -------- Cash flows from Investing Activities: Purchase of investments (4,408) (8,827) Sale of investments 11,075 7,178 Purchase of property and equipment (3,307) (3,844) Proceeds from sale of business unit 16,087 --- Proceeds from the sale of property and equipment 65 35 Payments for prior year acquisitions (1,032) --- ------- -------- Net cash provided by (used for) investing activities 18,480 (5,458) ------- -------- Cash flows from Financing Activities: Payments under long-term debt (973) (254) Principal payments under capital lease obligations (679) (271) Proceeds from issuance of common stock 3,217 5,598 Repurchase of common stock (4,045) (30,827) ------- -------- Net cash (used for) financing activities (2,480) (25,754) ------- -------- Effect of exchange rate changes on cash 897 --- Net increase in cash and cash equivalents 38,205 9,609 Cash and cash equivalents at beginning of period 53,783 53,018 ------- -------- Cash and cash equivalents at end of period $92,885 $ 62,627 ======= ========
The accompanying notes are an integral part of the consolidated financial statements. 5 Keane, Inc. and Subsidiaries Notes to Unaudited Consolidated Financial Statements (in thousands except per share amounts) Note 1. The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principals for interim financial information and accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments consisting only of normal and recurring adjustments considered necessary for a fair presentation have been included. Operating results for the three-month period ended March 31, 2001 are not necessarily indicative of the results that may be expected for the year ended December 31, 2001. The financial information at December 31, 2000 and for the then ended has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2000. Note 2. Computation of Earnings Per Share for quarters ended March 31, 2001 and 2000.
Three months ended March 31, 2001 2000 Net income $ 8,454 $ 5,511 Weighted average number of common shares 68,140 71,011 outstanding used in calculation of basic earnings per share Incremental shares from the assumed 737 675 Exercise of dilutive stock options Weighted average number of common shares 68,877 71,686 outstanding used in calculation of diluted earnings per share Earnings per share Basic $ 0.12 $ 0.08 ========== ========== Diluted $ 0.12 $ 0.08 ========== ==========
6 Keane, Inc. and Subsidiaries Notes to Unaudited Consolidated Financial Statements (in thousands except per share amounts) Note 3. The Company offers an integrated mix of end-to-end business solutions, such as Business and IT consulting (Plan), software development and integration services including e-Solutions (Build), and Application Development and Management Outsourcing (Manage). During the first quarter of 2001 approximately 94% of the Company's revenues was derived from these offerings, with the balance from the healthcare industry. Therefore, the Company operates in one reportable segment. Note 4. Total comprehensive income (i.e. net income plus available- for-sale securities valuation adjustments and currency translation adjustments to stockholders equity) for the first quarter of fiscal 2001 and fiscal 2000 was $9.7 million and $5.4 million, respectively. Note 5. In the fourth quarter of 2000, the Company recorded a restructuring charge of $8.6 million. Of this charge $1.7 million related to a workforce reduction of approximately 200 employees, primarily consultants. In addition, the Company performed a review of its business strategy and concluded that consolidating some of its branch offices was key to its success. As a result of this review, the Company wrote off $3.4 million of impaired assets, which became impaired as a result of this restructuring action. The charge included $3.5 million for branch office closings and certain other expenditures. A summary of first quarter activity with respect to the restructuring charge is as follows: Branch Office Closures and Workforce Certain Other Reduction Expenditures Total --------- ------------- ------- Balance 12/31/00 $ 1,405 $ 4,927 $ 6,332 Cash expenditures 1,405 890 2,295 ------- ------- ------- Balance 03/31/01 $ - $ 4,037 $ 4,037 ======= ======= ======= Note 6. In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 133, (FAS 133), "Accounting for Derivative Instruments and Hedging Activities", which required adoption in periods beginning after June 15, 1999. FAS 133 was subsequently amended by Statement of Financial Accounting Standards No. 137, "Accounting for Derivative Instruments and Hedging Activities- Deferral of the Effective Date of FASB Statement No. 133" which made FAS 133 effective for fiscal years beginning after June 15, 2000. Accordingly, the Company adopted FAS 133 in the first quarter of 2001 and the adoption did not have a significant impact on the Company's financial position or results of operations. 7 Keane, Inc. and Subsidiaries Notes to Unaudited Consolidated Financial Statements (in thousands except per share amounts) Note 7. On February 5, 2001, the Company completed the divestiture of its Help Desk operations in return for $15.7 million in cash. As a result of this transaction, the Company incurred an one time gain of approximately $4.0 million and is reflected in the statement of operation under the caption "Other expense (income), net". 8 Keane, Inc. and Subsidiaries Management's Discussion and Analysis of Financial Condition and Results of Operations This Quarterly Report on Form 10-Q contains forward-looking statements. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words "believes," "anticipates," "plans," "expects," and similar expressions are intended to identify forward-looking statements. There are a number of important factors that could cause the Company's actual results to differ materially from those indicated by such forward-looking statements. These factors include, without limitation, those set forth below under the caption "Certain Factors That May Affect Future Results." Results of Operations The Company's revenue for the first quarter of 2001 was $208.3 million, a 3.6% decrease from revenue of $216.2 million in the first quarter of 2000. However, excluding the Company's divested Help Desk operations, Keane's revenue was $203.2 million, an increase of 2% from comparable non-Y2K related revenue in the first quarter of 2000. On February 5, Keane completed the divestiture of its Help Desk operations for $15.7 million in cash. Keane's revenue in the first quarter was generated by the Company's diversified portfolio of Business Innovation Consulting (Plan), Application Development and Integration (Build - e-Solutions), and Application Development and Management Outsourcing (Manage) services. Keane's Application Development and Management (ADM) Outsourcing service represented $100 million or 48% of revenue during the quarter, an increase of 17% from $85.2 million during the first quarter of 2000. For the first quarter of 2001, revenue from the Company's Plan Services was $20.7 million, down 34.1% from Plan revenue of $31.4 million for the first quarter of last year. Plan revenue for the quarter was negatively effected by project deferrals and cancellations associated with the Company's business consulting arm, Keane Consulting Group (KCG). Plan revenue is primarily comprised of business innovation consulting delivered via KCG and IT consulting services, which are sold and implemented out of Keane's network of branch offices. First quarter 2001 revenue from the Company's Build Services was $76.2 million, a 4.3% decrease from $79.6 million in the first quarter of 2000. Build revenue was negatively impacted by Keane's Healthcare Solutions business, which also experienced project deferrals and elongated sales cycles during the quarter. Build revenue primarily consists of application development and integration business, including much of the Company's e-business work. The Company's e- Solutions revenue during the quarter was $45 million, up 30% from the first quarter of last year. This increase resulted from additional spending from the Company's Global 2000 customer base, and public sector work from both Federal and State governments. The decline in the Company's more economically sensitive Plan and Build Services was offset by strong first quarter growth from the Company's Manage Services, which generated $111.4 million, up 11.7% from $99.8 million, excluding Y2K revenue, during the first quarter of 2000. Manage revenue during the first quarter of 2000, consisted of $100 million of Application Development and Management (ADM) Outsourcing services, $5.2 million of Help Desk revenue, and $6.2 million in other manage-related business. This increase was driven by strong ADM Outsourcing bookings during 2000, particularly in the fourth quarter of last year. Salaries, wages and other direct costs for the first quarter of 2001 were $145.1 million, or 69.7% of revenue, compared to $154.6 million, or 71.5% of revenue, for the first quarter of 2000. As a result, Keane's gross margins for the first quarter of 2001 increased to 30.3%, an increase of 180 basis points. This decrease in direct costs and increase in gross margin was primarily the result of higher utilization of billable employees, the divestiture of lower-margin Help Desk business, and the restructuring of under-performing business units announced last year. Selling, General & Administrative ("SG&A") expense for the first quarter of 2001 was $49.3 million, or 23.7% of revenue, compared to $51.3 million, or 23.7% of revenue, for the first quarter of last year. This decrease in absolute dollars reflects the Company's efforts to keep SG&A expense in alignment with current revenue. Excluding Keane's Help Desk operations, SG&A expense for the first quarter would have been $48.6 million. 9 Amortization of goodwill and other intangible assets for the first quarter of 2001 was $3.5 million, or 1.7% of revenue, compared to $2.9 million, or 1.3% of revenue in the first quarter of 2000. The increase in amortization in absolute dollars was attributable to additional intangible assets as a result of the Company's acquisitions of Denver Management Group in July 2000 and Care Computer Systems in September 2000. Interest and dividend income totaled $1.6 million for the first quarter of 2001, compared to $2.1 million for the same period last year. The decrease in interest and dividend income was primarily attributable to lower investment balances. Interest and other expense for the first quarter of 2001 was a positive $2.3 million, as compared to $0.2 million for the first quarter of 2000. This increase was primarily the result of a gain of $4.0 million from the sale of Keane's Help Desk operations, net of write-offs related to certain equity investments totaling $2.1 million. The Company's effective tax rate was 40.5% for the first quarter of each of 2001 and 2000. Net income for the first quarter of 2001 was $8.5 million, up 53% from $5.5 million in net income for the first quarter of 2000. Diluted earnings per share for the first quarter of 2001 was $0.12, up from $0.08 during the same period a year ago. Prior to the gain on the sale of the Company's Help Desk operations and the write-off of certain equity investments, Keane first quarter 2001 net income would have been $7.3 million with diluted earnings per share of $.11. Net cash provided from operations was $22.2 million during the first quarter of 2001, before the investment of $4.0 million for the repurchase of Keane shares. The Company plans to continue to focus on optimizing cash flow in order to fund stock repurchases and potential mergers and acquisitions as well as to build long-term shareholder value. Liquidity and Capital Resources The Company's cash and investments at the end of the first quarter increased to $145.6 million from the year end balance of $115.2 million. This increase was primarily attributable to the proceeds from the sale of the Company's help desk business for $15.7 million and decreases in accounts receivable, offset in part by decreases in accounts payable and accrued expenses. On February 21, 2001, the Company announced that it had increased the share repurchase authorization under the Company's July 26, 2000 share repurchase program by an additional one million shares. The remaining 869,000 shares available for repurchase under existing authorization brings the total number of shares authorized for repurchase to 1,869,000 shares as of February 21, 2001. During the first quarter, the Company purchased 326,200 shares of Common Stock at a cost of approximately $4.0 million. The Company paid $2.3 million associated with the fourth quarter restructuring charge. The payments were primarily related to severance. The Company maintains and has available a $10 million unsecured demand line of credit with a major Boston bank for operations and acquisition opportunities. There was no borrowing under this line during the first quarter of 2001. The Company believes that the cash provided form operations, borrowings available under its revolving line of credit, existing cash, cash equivalents and marketable securities will be sufficient to meet its working capital and capital expenditure requirements for at least the next 12 months. Impact of Inflation and Changing Prices Inflationary increases in costs have not been material in recent years and, to the extent permitted by competitive pressures, are passed on to the clients through increased billing rates. Rates charged by the Company are based on the cost of labor and market conditions within the industry. The Company was able to increase its billing rates over its increases in direct labor costs in the first quarter. This is due primarily to increases in the Company's high value core services, business innovation consulting, software development, integration, and E-Solutions, and application development and management outsourcing, which command higher rates. Certain Factors that May Affect Future Results The following important factors, among others, could cause actual results to differ materially from those indicated by forward-looking statements made in this Quarterly Report on Form 10-Q and presented elsewhere by management from time to time. 10 Fluctuations in Operating Results. Keane has experienced and expects to continue to experience fluctuations in its quarterly results. Keane's gross margins vary based on a variety of factors including employee utilization rates and the number and type of services performed by Keane during a particular period. A variety of factors influence Keane's revenue in a particular quarter, including: . general economic conditions which may influence investment decisions or cause downsizing; . the number and requirements of client engagements; . employee utilization rates; . changes in the rates Keane can charge clients for services; . acquisitions; and . other factors, many of which are beyond Keane's control. A significant portion of Keane's expenses does not vary relative to revenue. As a result, if revenue in a particular quarter does not meet expectations, Keane's operating results could be materially adversely affected, which in turn may have a material adverse impact on the market price of Keane common stock. In addition, many of Keane's engagements are terminable without client penalty. An unanticipated termination of a major project could result in an increase in underutilized employees and a decrease in revenue and profits. Risks Relating to Acquisitions. In the past five years, Keane has grown significantly through acquisitions. Since January 1, 1999, Keane has completed the acquisitions of Emergent Corporation in San Mateo, California, Amherst Consulting Group, Inc, in Boston, Massachusetts, Advanced Solutions Inc. in New York, New York, Anstec, Inc. of McLean, Virginia, First Coast Systems, Inc. of Jacksonville, Florida, Parallax Solutions Limited, of Birmingham, England, Denver Management Group, of Denver, Colorado and Care Computer Systems, Inc. of Bellevue, Washington. Keane's future growth may be based in part on selected acquisitions. At any given time, Keane may be in various stages of considering such opportunities. Keane can provide no assurances that it will be able to find and identify desirable acquisition targets or that it will be successful in entering into a definitive agreement with any one target. Also, even if a definitive agreement is reached, there is no assurance that any future acquisition will be completed. Keane typically anticipates that each acquisition will bring certain benefits, such as an increase in revenue. Prior to completing an acquisition, however, it is difficult to determine if such benefits can actually be realized. Accordingly, there is a risk that an acquired company may not achieve an increase in revenue or other benefits for Keane. In addition, an acquisition may result in unexpected costs, expenses and liabilities. Any of these events could have a material adverse effect on Keane's business, financial condition and results of operations. The process of integrating acquired companies into Keane's existing business may also result in unforeseen difficulties. Unforeseen operating difficulties may absorb significant management attention, which Keane might otherwise devote to its existing business. Also, the process may require significant financial resources that Keane might otherwise allocate to other activities, including the ongoing development or expansion of Keane's existing operations. Finally, future acquisition could result in Keane having to incur additional debt and/or contingent liabilities. All of these possibilities might have a material adverse effect on Keane's business, financial condition and result of operations. Dependence on Personnel. Keane believes that its future success will depend in large part on its ability to continue to attract and retain highly skilled technical and management personnel. The competition for such personnel is intense. Keane may not succeed in attracting and retaining the personnel necessary to develop its business. If Keane does not, its business, financial condition and result of operations could be materially adversely affected. Highly Competitive Market. The market for Keane's services is highly competitive. The technology for custom software services can change rapidly. The market is fragmented, and no company holds a dominant position. Consequently, Keane's competition for client assignments and experienced personnel varies significantly from city to 11 city and by the type of service provided. Some of Keane's competitors are larger and have greater technical, financial and marketing resources and greater name recognition in the markets they serve than does Keane. In addition, clients may elect to increase their internal information systems resources to satisfy their custom software development needs. Keane believes that in order to compete successfully in the software services industry it must be able to: . compete cost-effectively; . develop strong client relationships; . generate recurring revenues; . utilize comprehensive delivery methodologies; and . achieve organizational learning by implementing standard operational processes. In the healthcare software systems market, Keane competes with some companies that are larger in the healthcare market and have greater financial resources than Keane. Keane believes that significant competitive factors in the healthcare software systems market include size and demonstrated ability to provide service to targeted healthcare markets. Keane may not be able to compete successfully against current or future competitors. In addition, competitive pressures faced by Keane may materially adversely affect its business, financial condition and results of operations. International Operations. Keane's international operations are subject to political and economic uncertainties, currency exchange rate fluctuations, foreign exchange restrictions, changes in taxation and other difficulties in managing operations overseas. Keane may not be successful in its international operations. As a result of these and other factors, the Company's past financial performance should not be relied on as an indication of future performance. Keane believes that period to period comparisons of its financial results are not necessarily meaningful and it expects that results of operations may fluctuate from period to period in the future. Quantitative and Qualitative Disclosures about Market Risk. The Company does not engage in trading market risk sensitive instruments or purchasing hedging instruments or other trading instruments that are likely to expose the Company to market risk, whether interest rate, foreign currency exchange, and commodity price or equity price risk. The Company has not purchased options or entered into swaps or forward or futures contracts. The Company's primary market risk exposure is that of interest rate risk on its investments, which would affect the carrying value of those investments. Additionally, the Company transacts business in the United Kingdom and as such has exposure associated with movement in foreign currency exchange rates. 12 Keane, Inc. and Subsidiaries Part II - Other Information Item 5. Other Information. The Company announced on February 21, 2001, that it had authorized and increase in the number of shares authorized for repurchase under the Company's July 26, 2000 share repurchase program by an additional one million shares. The remaining 869,000 shares available for repurchase under the prior authorization brings the total number of shares authorized for repurchase to 1,869,000 shares as of February 21, 2001. The timing and amount of shares repurchased will be determined by the Company's management based on its evaluation of market and economic conditions. The Company expects to use any shares repurchased for its stock plans, employee stock purchase and stock benefit plans, and other general corporate purposes. The Company announced on February 5, 2001 that it had sold its help desk business. The divestiture encompasses assets associated with the technical support centers located in Tucson, Arizona and Kirkland, Washington, which together employed approximately 1,000 people. The divestiture was completed as a cash transaction valued at $15.7 million. Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits - None (b) Reports on Form 8-K - The registrant filed no reports on Form 8-K during the quarter ended March 31, 2001. 13 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. KEANE, INC. (Registrant) Date: May 14, 2001 \s\ Brian T. Keane ------------------------------------- Brian T. Keane President and Chief Executive Officer Date: May 14, 2001 \s\ John J. Leahy ------------------------------------- John J. Leahy Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) 14 -----END PRIVACY-ENHANCED MESSAGE-----