-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, JhVZw9ZLVFzz4LNacjybjMZSftOo/naA/55XX3JzXT+4dnCVZx5np4luAdasMb8n tC2xNJgJJOkmDp1f9qkKJA== 0000950109-95-001775.txt : 19950530 0000950109-95-001775.hdr.sgml : 19950530 ACCESSION NUMBER: 0000950109-95-001775 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950511 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: KEANE INC CENTRAL INDEX KEY: 0000054883 STANDARD INDUSTRIAL CLASSIFICATION: 7371 IRS NUMBER: 042437166 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07516 FILM NUMBER: 95536639 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, 1995 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 (617) 241-9200 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 reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No _____ ----- As of March 31, 1995, the number of issued and outstanding shares of Common Stock (excluding 303,313 shares held in treasury) and Class B Common Stock are 15,725,472 and 288,553 shares, respectively. 1 Keane, Inc. and Subsidiaries TABLE OF CONTENTS Part I - Financial Information
Consolidated Statements of Income for the three months ended March 31, 1995 and 1994 (unaudited)........................ 3 Consolidated Balance Sheets as of March 31, 1995 and December 31, 1994 (unaudited).............................. 4 Consolidated Statements of Cash Flows for the three months ended March 31, 1995 and 1994 (unaudited)........................ 5 Notes to Unaudited Financial Statements....................................... 6 Management's Discussion and Analysis of Financial Condition and Results of Operations................................................................. 8 Part II. - Other Information................................................. 9 Signature Page............................................................... 10
2 Keane, Inc. and Subsidiaries Consolidated Statements of Income (unaudited)
(In thousand except per share amounts) Three Months Ended March 31, 1995 1994 Total revenues $90,452 $86,165 Salaries, wages and other direct costs 58,963 55,884 Selling, general and administrative expenses 19,668 19,709 Amortization of goodwill and other intangible 2,949 2,780 assets Operating income 8,872 7,792 Investment income 366 33 Interest expense 164 480 Other expenses, net 37 132 Income before income taxes 9,037 7,213 Provision for income taxes 3,886 3,246 Net income $ 5,151 $ 3,967 (1) Net income per share $.32 $.29 (1) Weighted average shares outstanding 16,283 13,787
(1) Net income per share and weighted average share outstanding reflect the 3 for 2 stock split in the form of a dividend which was distributed on September 7, 1994 to shareholders of record as of August 12, 1994. The 1995 share figure reflects the sales of 2.3 million of additional shares as part of a secondary stock offering completed in November, 1994. The accompanying notes are an integral part of the consolidated financial statements. 3 Keane, Inc. and Subsidiaries Consolidated Balance Sheets (unaudited)
(In thousands) March 31, 1995 December 31, 1994 Assets Current: Cash and cash equivalents $29,079 $26,288 Accounts receivable, net Trade 71,398 69,046 Other 876 994 Prepaid expenses and other current assets 4,679 3,975 Total current assets 106,032 100,303 Property and equipment, net 10,955 11,600 Intangible assets, net (Note 3) 63,062 65,600 Other assets, net 1,611 1,499 181,660 179,002 Liabilities Current: Accounts payable 2,127 3,490 Accrued compensation 2,433 6,852 Accrued expenses and other liabilities 8,877 9,250 Notes payable 4,459 4,400 Income taxes payable 3,585 0 Current capital lease obligations 423 435 Total current liabilities 21,904 24,427 Notes payable 7,055 6,941 Deferred federal and state income taxes 2,044 2,705 Long-term portion of capital lease obligations 452 542 Stockholders' Equity: Preferred Stock -- -- Common Stock 1,603 1,599 Class B Common Stock 29 29 Additional paid-in capital 90,682 90,019 Foreign currency translation (74) (74) Retained earnings 60,377 55,226 Less treasury stock (2,412) (2,412) Total stockholders' equity 150,205 144,387 $181,660 $179,002
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: 1995 1994 Net income $5,151 $3,967 Adjustments to reconcile net income to net cash used by operating activities Depreciation and amortization 4,234 3,815 Accrued interest on long term debt 164 50 Deferred income taxes (652) (128) Provision for doubtful accounts (200) (242) Loss on disposal of fixed assets 42 -- Changes in operating assets and liabilities, net of acquisitions: (Increase) in accounts receivable (2,034) (15,942) (Increase) in prepaid expenses and other current assets (916) (236) Increase (decrease) in accounts (2,571) (4,801) payable and accrued expenses and other current liabilities and deferred taxes Net cash provided by [used for] operating activities 3,218 (13,517) Cash flows from investing activities: Sale of short-term investments -- 4,868 Purchase of property and equipment, net (729) (647) Proceeds from sales of assets 48 4 Payment for acquisition, net of cash as acquired (320) (42,003) Purchase of other assets -- (933) Net cash used for investing activities (1,001) (38,711) Cash flow from financing activities: Borrowing under notes payable and long-term debt, net -- 62,002 Payments under long-term debt and capital lease obligations (92) (25,024) Proceeds from issuance of common stock 666 467 Net cash provided by financing activities 574 37,445 Net increase (decrease) in cash and cash equivalents 2,791 (14,783) Cash and cash equivalents, beginning of period 26,288 19,244 Cash and cash equivalents, end of period $29,079 $4,461
The accompanying notes are an integral part of the consolidated financial statement. 5 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 1994 Annual Report on Form 10-K and should be read in conjunction with the disclosures therein. All financial figures are in thousands of dollars, except per share amounts. 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. On July 28, 1994, the Company declared a 3 for 2 stock split in the form of a dividend that was distributed on September 7, 1994 to shareholders of record as of August 12, 1994. All Common shares and per share amounts included in these financial statements are given retroactive effect to the extent required for this stock split. The 1995 share figures reflects the sale of 2.3 million of additional shares as part of a secondary stock offering completed in November, 1994. Note 2. Computation of Earnings Per Share for quarters ending March 31, 1995 and 1994.
1995 1994 Primary Average shares outstanding Common 15,710 13,145 Class B Common 289 291 Net effect of diluative options-based on the treasury stock method using average market price. Common Stock 284 351 Total 16,283 13,787 Net income $5,151 $3,967 Per share amount $.32 $.29
6 Keane, Inc. and Subsidiaries Notes to Unaudited Financial Statements
1995 1994 Fully Diluted Average Share outstanding Common 15,710 13,145 Class B Common 289 291 Net effect of dilutive stock options-based on the treasury stock method using higher of average market price or period ending price. Common stock 299 367 Total 16,298 13,803 Net income $5,151 $3,967 Per share amount $.32 $.29 Note 3. Intangible assets consist of the following: 3/31/95 12/31/95 Goodwill $19,302 $19,302 Noncompetition agreements 22,135 21,985 Customer-based intangibles 37,634 37,464 Software 5,169 5,169 Other 294 294 --- --- 84,534 84,214 Less accumulated amortization 21,472 18,614 ------ ------ $63,062 $65,600
Note 4. During the first quarter of 1995, there has been no material changes in the contingencies described in Footnote L, Commitments and Contingencies, of the Company's 1994 Annual Report. 7 Keane, Inc. and Subsidiaries Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations Revenues were $90,452 for the First Quarter of 1995, an increase of 5.0% from the same period last year. Salaries, wages and other direct costs for the First Quarter were $58,963 an increase of 0.3%, as a percentage of revenue, over the same period last year. Keane, as well as many other companies, continues to experience client pressure to deliver high quality service and to reduce costs. Keane responds to these customer demands by among other things, providing volume discounts, reducing project cycle time, and partnering with our clients in providing cost effective solutions for their information system needs. Selling, general and administrative (SG&A) costs for the First Quarter were $19,668 a decrease of 1.2%, as a percentage of revenue, over the same period last year. This decrease is primarily due to costs incurred during the First Quarter last year in the assimilation of AGS Computers, Inc. into Keane that were not incurred during the First Quarter of 1995. Amortization of goodwill and other intangible assets for the First Quarter was $2,949 an increase of $169 over the same period last year. The Company's interest expense for the First Quarter was $164 a decrease of $316 over the same period last year. This decrease was primarily attributable to the repayment of all outstanding bank debt in November, 1994 as a result of a secondary stock offering. Interest income for the First Quarter was $366 an increase of $333 from the same period last year. This increase resulted from interest income generated from investing the excess proceeds from the secondary stock offering last year. Net Income Net income and earnings per share for the First Quarter were $5,151 and $.32 per share, respectively, as compared to $3,967 and $.29, respectively, for the same period last year, a 30% increase in net income. Liquidity and Capital Resources The Company is in the process of reducing its $40 million line of credit with two Boston banks to $20 million. The Company currently has no outstanding bank debt. The Company ended the quarter with cash, cash equivalents and short-term investments of approximately $29.1 million. The Company believes that it will generate sufficient cash flow from operations to meet any debt obligations and working capital requirements. 8 Keane, Inc. and Subsidiaries Part II - Other Information - - - - - - -------------------------------------------------------------------------------- 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, 1995. 9 Keane, Inc. and Subsidiaries Signature Page 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 __________________________ ___________________________________ John F. Keane President Date __________________________ ___________________________________ Wallace A. Cataldo Vice President, Finance 10 EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION PAGE 27 FINANCIAL DATA SCHEDULE --
EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 U.S DOLLARS 3-MOS DEC-31-1995 JAN-01-1995 MAR-31-1995 1 29,079 0 72,274 0 0 106,032 23,162 12,207 181,660 21,904 0 1,632 0 0 0 181,600 0 90,452 0 81,580 37 0 164 9,037 3,886 0 0 0 0 5,151 .32 .32
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