-----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, IyLxaf/bfSvjfFf0li7pUk0MUeEPgUQjdjt7ON2Hs3y6VFuEDORhERh7K405euBY v1lI1maWvUK8Hw/f6VZzQg== 0000927016-99-001994.txt : 19990517 0000927016-99-001994.hdr.sgml : 19990517 ACCESSION NUMBER: 0000927016-99-001994 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990514 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: 99621815 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 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 For Quarter Ended March 31, 1999 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, 1999, the number of issued and outstanding shares of Common Stock (excluding 315,893 shares held in treasury) and Class B Common stock are 71,387,924 and 285,213 shares, respectively. Page 1 of 16 Keane, Inc. and Subsidiaries TABLE OF CONTENTS Part I - Financial Information Consolidated Statements of Income for the three months ended March 31, 1999 and 1998 .............................................. 3 Consolidated Balance Sheets as of March 31, 1999 and December 31, 1998 .................................................... 4 Consolidated Statements of Cash Flows for the three months ended March 31, 1999 and 1998 .............................................. 5 Notes to Unaudited Financial Statements .............................. 6 Management's Discussion and Analysis of Financial Condition and Results of Operations ................................................ 8 Part II - Other Information .......................................... 15 Signature Page ....................................................... 16 Page 2 of 16 Keane, Inc. and Subsidiaries Consolidated Statements of Income (Unaudited)
(In thousands except per share amounts) Three months ended March 31, 1999 1998 -------- -------- Total revenues $285,004 $230,056 Salaries, wages and other direct costs 183,894 149,570 Selling, general and administrative expenses 49,583 41,518 Amortization of goodwill and other intangible assets 1,976 1,644 -------- -------- Operating income 49,551 37,324 Interest and dividend income 1,835 1,212 Interest expense -- 49 Other expenses, net 239 187 -------- -------- Income before income taxes 51,147 38,300 Provision for income taxes 20,969 15,516 -------- -------- Net income $ 30,178 $ 22,784 ======== ======== Net income per share (basic) $ .42 $ .32 ======== ======== Net income per share (diluted) $ .42 $ .32 ======== ======== Weighted average common shares outstanding (basic) 71,553 70,611 ======== ======== Weighted average common and common share equivalents outstanding (diluted) 72,392 72,062 ======== ========
The accompanying notes are an integral part of the consolidated financial statements. Page 3 of 16 Keane, Inc. and Subsidiaries Consolidated Balance Sheets (unaudited)
(In thousands) March 31, 1999 December 31, 1998 -------------- ----------------- Assets Current: Cash and cash equivalents $ 49,875 $ 51,696 Short term investments 2,857 6,165 Accounts receivable, net: Trade 255,487 229,457 Other 5,431 1,573 Prepaid expenses and other current assets 18,154 23,376 --------- --------- Total current assets 331,804 312,267 Long-term investments 76,131 71,368 Property and equipment, net 29,372 29,973 Intangible assets, net 37,103 35,714 Other assets, net 8,584 8,238 --------- --------- $ 482,994 $ 457,560 ========= ========= Liabilities Current: Accounts payable $ 18,104 $ 20,222 Accrued expenses and other liabilities 15,822 30,647 Accrued compensation 24,656 25,429 Notes payable 1,500 1,000 Accrued income taxes 20,213 13,548 Current capital lease obligations 930 954 --------- --------- Total current liabilities 81,225 91,800 Long-term portion of capital lease obligations 1,959 1,976 Stockholders' Equity Common stock 7,171 7,136 Class B common stock 29 29 Additional paid-in capital 115,372 109,606 Foreign currency translation (622) (764) Retained earnings 280,724 250,546 Less treasury stock (2,864) (2,769) --------- --------- Total stockholders' equity 399,810 363,784 --------- --------- $ 482,994 $ 457,560 ========= =========
The accompanying notes are an integral part of the consolidated financial statements. Page 4 of 16 Keane, Inc. and Subsidiaries Consolidated Statements of Cash Flows
(In thousands) Three Months ended March 31, Cash flows from Operating Activities: 1999 1998 -------- -------- Net Income $ 30,178 $ 22,784 Adjustments to reconcile net income to net cash used for operating activities: Depreciation and amortization 5,845 4,288 Deferred income taxes (1,473) (1,706) Provision for doubtful accounts (1,968) 1,632 Changes in assets and liabilities, net of acquisitions: Increase in accounts receivable (27,393) (46,110) Decrease in prepaid expenses and other assets 6,510 564 Decrease in accounts payable and accrued expenses and other liabilities (18,116) (1,830) Increase in income taxes payable 6,665 13,691 -------- -------- Net cash provided by (used for) operating activities 248 (6,687) -------- -------- Cash flows from Investing Activities: Purchase of investments (17,828) (17,653) Sale of investments 16,373 12,874 Purchase of property and equipment (3,100) (4,724) Proceeds from the sale of property and equipment 2 5 Payments for current acquisitions (3,181) (295) -------- -------- Net cash used for investing activities (7,734) (9,793) -------- -------- Cash flows from Financing Activities: Payments under long-term debt -- (2,850) Principal payments under capital lease obligations (41) (87) Proceeds from issuance of common stock 5,706 2,472 Dividends paid -- (210) -------- -------- Net cash provided by (used for) financing activities 5,665 (675) -------- -------- Net (decrease) in cash and cash equivalents (1,821) (17,155) Cash and cash equivalents at beginning of period 51,696 40,276 -------- -------- Cash and cash equivalents at end of period $ 49,875 $ 23,121 ======== ========
The accompanying notes are an integral part of the consolidated financial statements. Page 5 of 16 Keane, Inc. and Subsidiaries Notes to Unaudited Financial Statements Note 1. The accompanying unaudited consolidated financial statements have been prepared in accordance with the accounting policies described in the Company's Annual Report on Form 10-K for the year ended December 31, 1998 (the "Annual Report") and should be read in conjunction with the disclosures therein. All financial figures are in thousands of dollars, except per share amounts. Prior period amounts have been restated to conform to current year presentation. In the opinion of management, these interim financial statements reflect all adjustments, consisting of normal recurring accruals, necessary to present fairly the financial position, results of operations and cash flows for the periods presented. Interim results are not necessarily indicative of results for the full year. During 1998, the Company completed five acquisitions. Four of the acquisitions were accounted for as poolings-of-interests and one was accounted for as a purchase. The accompanying financial statements and notes have been restated for all periods presented for the three material pooling-of-interests acquisitions. Note 2. Computation of Earnings Per Share for quarters ending March 31, 1999 and 1998.
Three Months Ended March 31, 1999 1998 ------- ------- Net income $30,178 $22,784 Weighted average number of common shares outstanding used in calculation of basic earnings per share 71,553 70,611 Incremental shares from the assumed exercise of dilutive stock options 839 1,451 Weighted average number of common shares outstanding used in calculation of diluted earnings per share 72,392 72,062 Earnings per share Basic $ .42 $ .32 ======= ======= Diluted $ .42 $ .32 ======= =======
Page 6 of 16 Keane, Inc. and Subsidiaries Notes to Unaudited Financial Statements Note 3. Intangible assets consist of the following: 3/31/99 12/31/98 Goodwill $27,060 $23,695 Noncompetition agreements 1,000 2,268 Customer-based intangibles 44,436 44,501 Software 2,534 5,618 Other -- 273 ------- ------- 75,030 76,355 Less accumulated amortization 37,927 40,641 ------- ------- $37,103 $35,714 ======= ======= Page 7 of 16 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 1999 was $285.0 million, a 23.9% increase from $230.1 million in the first quarter of 1998. Commencing with the first quarter of 1999, Keane intends to categorize its information technology revenue as either plan, build or manage. First quarter 1999 revenue from the Company's planning services was $26.1 million, up 36.6% from planning services revenue for the first quarter last year of $19.1 million. Plan revenue is primarily comprised of management consulting revenue focused on operations improvements. First quarter 1999 revenue from the Company's build services was $81.0 million, a 35.7% increase from the first quarter 1998 revenue of $59.7 million. Build revenue primarily consists of implementing e-solutions, Customer Relationship Management systems, data-warehousing services, application development and licensing and implementing the Company's proprietary suite of hospital application products. First quarter 1999 revenue from the Company's manage services was $171.9 million, up 13.6% from the first quarter 1998 manage revenue of $151.3 million. Manage revenue primarily consists of application outsourcing, help desk and application maintenance and support. Of the Company's' first quarter 1999 manage revenue, Year 2000 compliance services totaled $80.0 million in the first quarter of 1999 compared to $74.4 million in the first quarter of 1998. The Company expects its Year 2000 compliance revenue to gradually decrease over the next two years, but anticipates that revenue from the Company's other strategic service offerings will increase as companies that have completed their Year 2000 compliance projects will be able to concentrate on other strategic IT development needs. All other revenue for the first quarter of 1999 totaled $6.0 compared to $0 for the first quarter last year. Salaries, wages and other direct costs for the first quarter of 1999 were $183.9 million, or 64.5% of revenue, compared to $149.6 million, or 65.0% of revenue, for the first quarter of 1998, for a 0.5% decrease as a percentage of revenue. This decrease as a percentage of revenue was primarily due to the Company's ability to increase its billing rates over its increases in direct labor costs in 1999. This is due primarily to the Company's increase in client strategic services in which competition is less and the quality of services commands higher billing rates. Selling, General & Administrative ("SG&A") expenses for the first quarter of 1999 were $49.6 million, or 17.4% of revenue, compared to $41.5 million, or 18.0% of revenue, for the first quarter last year, for a 0.6% decrease as a percentage of revenue. The Company's objective is to continue to reduce SG&A, as a percentage of revenue, by realizing economies of scale, investing in MIS to increase productivity, and continuing to implement cost saving programs such as national purchasing for volume purchase discounts in such areas as travel, office supplies, and computer equipment. Page 8 of 16 Amortization of goodwill and other intangible assets for the first quarter of 1999 was $2.0 million, or 0.7% of revenue, compared to $1.6 million, or 0.7% of revenue in the first quarter of 1998. The increase in amortization was attributable to the increase in intangible assets as a result of the acquisition of GSE Erudite in April 1998. Interest and dividend income totaled $1.8 million for the first quarter of 1999, compared to $1.2 million for the same period last year. The increase in interest and dividend income can be attributed to an increase in investments. Interest and other expenses for the first quarter of each of 1999 and 1998 totaled $0.2 million. Pre-tax income for the first quarter of 1999 was $51.1 million, or 17.9% of revenue, up 33.5% from pre-tax income of $38.3 million, or 16.6% of revenue, in the first quarter of 1998. The Company's effective tax rate for the first quarter of 1999 was 41.0% compared to 40.5% for the first quarter of 1998. Net income and earnings per share for the first quarter of 1999 were $30.2 million and $0.42 per share diluted, respectively, compared to $22.8 million and $0.32 per share diluted, respectively for the first quarter last year. Liquidity and Capital Resources The Company ended the first quarter of 1999 with cash and investments totaling approximately $129.0 million, the same as the 1998 year end balance and up $59.0 million from the first quarter of 1998. The Company maintains and has available a $20 million unsecured demand line of credit split equally between two major Boston banks. Based on the Company's current operating plan, it believes that its cash and cash equivalents on hand, cash flows from operations, and its current available line of credit will be sufficient to meet its current working capital requirements during at least the next twelve 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 1999. This is due primarily to the Company's increase in client strategic services in which competition is less and the quality of services commands higher rates. Year 2000 Issues Overview The "Year 2000" issue is the result of computer programs being written using two digits rather than four to define the applicable year. Keane's computer equipment and software and devices with embedded technology that are time sensitive may recognize "00" as the year 1900 rather than the Year 2000. This could result in a system failure or miscalculations causing disruptions of Keane's operations, including, Page 9 of 16 among other things, a temporary inability to perform mission critical functions like billing and time reporting. As a result, software and computer systems may need to be upgraded or replaced in order to ensure that they accept four digit date codes. State of Readiness Company Services and Products. Keane generally delivers services and not - ------------------------------ products to its customers. The Company believes that the services provided by its professionals to its customers are provided in a Year 2000 compliant manner. As part of its build services, Keane develops, markets and sells software products through its Healthcare Solutions Practice. Certain of these products are not fully Year 2000 operable. Keane has advised its customer base for these products that it does not intend to offer Year 2000 compliant versions of these products and has encouraged them to migrate to new products offered by Keane that are Year 2000 compliant. The Company anticipates that some customers will choose not to migrate to these products and will therefore terminate their relationship with Keane's Healthcare Solutions Practice. The exact amount of anticipated lost customers has not been determined. The Company believes that the revenue lost as a result of these events will be immaterial to its overall operations. In addition to its own products, Keane markets certain third party software products through its Healthcare Solutions Practice. The Company is seeking assurances from the vendors of these products that all licensed software is Year 2000 compliant. The Company received substantially all of these assurances in the first quarter of 1999. Company Systems. Keane has established a Year 2000 task force that has completed - ---------------- its assessment of the Company's Information Technology-related ("IT- related") systems for the Year 2000 issue. For IT-related systems, the Company believes that most of the critical systems, including its accounting software, AS400 applications and payroll systems, are now Year 2000 compliant. The Company is in the process of replacing its billing software because the current software product is not Year 2000 compliant. The cost to replace this software is currently estimated to be approximately $500,000. Keane believes that the new software will be operational by the end of the second quarter of 1999. Keane's Year 2000 task force has also completed its evaluation of the Company's non-IT systems, including alarm systems, sprinkler systems, elevators, fax machines and other miscellaneous systems that may contain embedded technology, for the Year 2000 Issue during the first quarter of 1999. Keane has established a remediation plan to address any outstanding Year 2000 Issues concerning the Company's non-IT systems. Costs to Address Year 2000 Issues Keane anticipates that it will incur direct costs to modify or replace existing systems used by Keane in the operation of its business to ensure that all systems will be operable in the Year 2000, including the costs to replace its billing software described above. The Company believes that the total amounts spent by it to date and that it expects to spend in 1999 addressing the Year 2000 issue are not material. Page 10 of 16 Risks to the Company In the event of a failure of some or all of the Company's IT-related and non-IT systems on January 1, 2000, the Company's operations may be substantially curtailed until the Company or its third-party suppliers develop a solution to address such system's failure. In such event, the Company may be unable to: (a) perform billing functions, (b) keep track of time performed on projects for its clients, (c) access client records, (d) communicate between field offices and headquarters, (e) operate its Internet site, (f) receive and send email or (g) prepare its financial statements for the fourth quarter of 1999 or periods thereafter. Among the services that Keane provides are assessment, planning, migration/remediation and testing services for Year 2000 compliance. Keane has devoted significant resources to services that address the Year 2000 problem and believes the market for these services will decline as the Year 2000 approaches. Although Keane believes that the demand for its services relating to the Year 2000 problem will continue to exist after the Year 2000, this demand will diminish significantly over time and will eventually disappear. Keane's services addressing the Year 2000 problem involve key aspects of its clients' computer systems. A failure in a client's system could result in a claim for substantial damages against Keane, regardless of Keane's responsibility for the failure. Keane could incur substantial costs in connection with any resulting litigation, regardless of the outcome. Contingency Plans As described above, the Company has identified potential vulnerabilities associated with the change of the century. The Company is devoting resources to working with providers of systems to the Company to ensure that its business is not substantially interrupted as a result of the date change. The Company currently does not have a contingency plan in the event of a particular system not being Year 2000 compliant. Such a plan will be developed if it becomes clear that the company is not going to achieve its scheduled compliance objectives. 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 Annual Report on Form 10-K and presented elsewhere by management from time to time. 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; Page 11 of 16 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 do 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, 1998, Keane has completed the acquisitions of Quantum Associates, Inc. d/b/a Omega Systems in Pittsburgh, Pennsylvania, GSE Erudite Systems in Salt Lake City, Utah, Bricker & Associates, Inc. in Chicago, Illinois, Icom Systems Ltd in Birmingham, England, Fourth Tier, Inc. in El Segundo, California, Emergent Corporation in San Mateo, California, Advanced Solutions Inc. in New York, New York, Amherst Consulting Group, Inc. in Boston, Massachusetts and Parallax Solutions Ltd in the United Kingdom. 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 and expenses. 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 Page 12 of 16 dominant position. Consequently, Keane's competition for client assignments and experienced personnel varies significantly from city to 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. 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. Year 2000 Compliance; Risks Associated with Provision of Year 2000 Services. - ---------------------------------------------------------------------------- Keane has reviewed its internal computer systems and has identified certain internal systems that are not Year 2000 compatible (i.e., such systems use only two digits to represent the year in date data fields and, consequently, may not accurately distinguish between the 20th and 21st centuries or may not function properly at the turn of the century). Keane is in the process of correcting these systems or replacing them with Year 2000 compliant systems. Keane expects to implement successfully the systems and programming changes necessary to address Year 2000 issues and does not believe that the cost of such actions will have a material effect on Keane's financial condition or results of operations. There may, however, be a delay in, or increased costs associated with, the implementation of these changes. Keane's inability to implement changes could have a material adverse effect on Keane's business, financial condition or results of operations. Among the services that Keane provides are assessment, planning, migration/remediation and testing services for Year 2000 compliance. Keane has devoted significant resources to services that address the Year 2000 problem and believes the market for these services will decline as the Year 2000 approaches. Although Keane believes that the demand for its services relating to the Year 2000 problem will continue to exist after the Year 2000, this demand will diminish significantly over time and will eventually disappear. Keane's services addressing the Year 2000 problem involve key aspects of its clients' computer systems. A failure in a client's system could result in a claim for substantial damages against Keane, regardless of Keane's responsibility for the failure. Keane could incur substantial costs in connection with any resulting litigation, regardless of the outcome. International Operations. Keane commenced operations in the United Kingdom with - ------------------------- its acquisition of Icom Systems Ltd, now known as Keane Limited, in August 1998 and acquired Parallax Solutions Ltd in the United Kingdom in May 1999. Keane's international operations will be subject to political and Page 13 of 16 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 Risks. Market risks were - ------------------------------------------------------------ reported in the Company's Annual Report on Form 10-K for the year ended December 31, 1998. There have been no material changes in these risks since the end of the year. Page 14 of 16 Keane, Inc. and Subsidiaries Part II - Other Information - -------------------------------------------------------------------------------- Item 5. Other Information. On May 3, 1999, the Company acquired Boston-based Amherst Consulting Group, Inc., a privately-held management consulting firm specializing in change management for cash. On May 8, 1999, the Company acquired Parallax Solutions Ltd, a software services consultancy based in Coventry England that helps leading automotive, retail finance and capital market companies develop business solutions using internet and advanced technologies for cash and notes. 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, 1999. Page 15 of 16 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 13, 1999 /s/ John F. Keane ------------ -------------------------------------------- John F. Keane President (Principal Executive Officer) Date May 13, 1999 /s/ Wallace A. Cataldo ------------ -------------------------------------------- Wallace A. Cataldo Vice President, Finance (Principal Financial and Accounting Officer) Page 16 of 16 EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM BALANCE SHEET AND INCOME STATEMENT AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS DEC-31-1999 JAN-01-1999 MAR-31-1999 49,875 2,857 260,918 0 0 331,804 70,085 40,713 482,994 81,225 0 0 0 7,171 392,639 482,994 0 285,004 0 235,453 239 0 0 51,147 20,969 0 0 0 0 30,178 .42 .42
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