To Our Shareholders and Employees:
Once again in 1975, Keane Associates improved its revenues, which grew 17 per cent over the previous year, net income was flat however.
The tight money conditions that prevailed throughout the year caused many computer users-both traditional Keane clients as well as new accounts-to defer major commitments to new systems development projects. Despite this temporary shrinkage in total market size, the company increased its market share
However, the internal development of several new services required a financial commitment that contributed to keeping earnings at 43 cents per share equal to last year These investments, combined with an improving economic climate, suggest somewhat better income performance in 1976.
Our confidence in the company's future business opportunities and our strong financial posture, led the Board of Directors at its meeting in February 1976, to vote to establish a regular quarterly dividend to share- holders of common stock, in lieu of the annual dividend the company has declared for the past two years.
The dividend 16 cents annually. will be paid quarterly at the rate of four cents per quarter. The initial payment will be made on April 14 1976 to shareholders of record as of March 29, 1976
Based upon the recent trading ranges of our common stock, we are pleased that this dividend represents a yield to shareholders approximating six per cent.
Shifting User Preoccupation
increasingly, users of computer systems are searching for ways to Improve the internal performance, and hence the return on their investments, in their data processing activities. Several factors have precipitated a subtle but fundamental change in computer usage patterns The greatest stimulant, by far, has been the budgetary restrictions that most users incurred in 1975. The mid-point in the life cycle of current computer hardware and software products encourages better usage of existing tools, rather than expectations of immediately available new ones. And pressures from internal departments to perform more work on the same equipment, at the same staffing levels has forced many computer users to find better ways of getting more done in less time.
Although this trend is in its early stages, Keane Associates has already positioned itself to offer new services that help users improve their data processing efficiency.
Through the acquisition early in 1975 of innovations in Technology, a New York area supplier of hospital information services, Keane has expanded into providing total systems solutions-a technique through which a supplier performs the complete computer systems function for a user. In 1975, we broadened the technique to incorporate complete management of a computer facility-including the staffing, software development, hardware purchase and operation, and future systems development work.
This facilities management approach is particularly attractive to small computer users, like hospitals Our success in 1975 encourages us to seek broader market opportunities to apply it in the future.
Productivity Management Thrust
Perhaps more significant than facilities management, but at an earlier stage of business development, is our refinement of Productivity Management services.
Our experience in recent years suggests that relatively few large scale computer users have mastered the techniques for bringing significant efficiencies to their data processing activities Yet most feel an urgent requirement to do so in 1975, a dedicated team of top Keane analysts and managers formalized and developed a system of planning controlling, measuring and effecting productivity improvements in the implementation of large computer systems Significant progress was made during the year in structuring that system into a readily usable pro gram within a user's site and a series of seminars were held throughout out market areas.
We are highly encouraged by the initial response to our Productivity Management services, and consider it a leading edge to providing even more complete systems and advisory services in coming years.
Data Base Education Programs
Because Keane regularly works with the most advanced systems concepts being applied by large users, we possess a unique knowledge of the potentials and - problems associated with such concepts. In previous years, our staff transferred this knowledge to other users mostly through our consulting services group. Last year, however we formally packaged a series of user seminars which were conducted throughout our market areas. The most successful of these, on Data Base Technology, attracted well over 100 user companies in 1975.
A Broader Presence
The company's direction in the coming year will be an extension of the strategies that served us well last year. Keane will strive to maintain its ongoing relationships with current clients, and to broaden our services
to them. We will continue to market aggressively to build our base of new
accounts. And most importantly, we will continue to work to keep our reputation for doing what we say we will do The combined skills and dedication of the professional staff, I am confident, will enable us to meet successfully the many challenges that will present themselves during the nation's Bicentennial year.
John F. Keane,
President
March 16, 1976
Annual Report
Key Information
Keane Associates Inc, is traded on the Boston Stock Exchange under the symbol KEA