To Our Shareholders and Employees:
Bicentennial 1976 was a good year, and a very busy one at Keane Associates. It was a year of major transition, but one in which we continued our established pattern of steady growth.
Revenues increased ten percent to $5.673.000 Net income of $355.000 or 42c per share, however, was down slightly from $357.000 or 430 per share in the preceding year.
Economic activity, slow in the first quarter, improved during the year as client companies put higher priorities on computer development efforts that had been side-tracked during the period of tight money conditions. We see business activity continuing to improve and expect an increased demand for our services in 1977
Management Change
A major accomplishment during the year was the restructuring of our Information Services Organization, a group that currently accounts for a major portion of Keane's revenues
This restructuring resulted in reducing the number of management positions at our corporate facility, while increasing the number and caliber of management personnel in our field locations. Two new management positions were created. The first position is that of Area Manager, responsible for coordinating the resources of several Keane branches serving a geographical market area Three such areas were created in 1976 The second position is that of Account Manager, responsible for coordinating Keane's resources for a major client, which may in some cases span several of Keane's branch offices
We believe these changes will enable us to be more responsive to the needs of our client companies and at the same time provide further opportunity for career growth at Keane.
Geographical Expansion
In the fourth quarter, the company opened a branch office in Washing ton, DC, to serve the growing Federal government services market Until now, we have intentionally avoided the Federal marketplace. However, with the government's new emphasis on personnel reduction and increased use of outside con tractors, we believe a unique opportunity exists for a company with Keane's capabilities.
Washington is the first new office opening for Keane in three years, and reflects our increased confidence in the marketplace. We are reviewing plans for other branch offices as a part of our new "Area Management" concept.
Health Care Services
The company's KeaMed facilities management activity, through which Keane staffs, manages, and develops the computer facilities of individual hospitals, made significant progress in 1976. Two additional hospitals in the New York area joined the KeaMed group, and major efforts to penetrate the New England hospital market are expected to lead to the inauguration of KeaMed facilities here soon
In September, we entered into an agreement with Massachusetts Blue Shield and its Blue Streak subsidiary through which Keane Associates has been hired to manage Blue Streak, a computerized physicians claims processing operation. We have already made major improvements in the operations of Streak
Other Expansion
Also in September, we formed a new corporation, Chervenak, Keane & Company, Inc, in which Keane has a 50 percent interest to provide computer systems and technical services to hotels and hospitals. CKC recently completed two major surveys on trends in the use of data processing services. One survey was on hospitals for the Hospital Financial Management Association, and the other was on hotels for the Hotel/Motel Management Association. The Company is highly regarded for its consulting expertise and has current projects in Puerto Rico the Philip pines, Greece, Iran, Russia, and various areas throughout the United States
Look at the Future
Many efforts in 1976 were directed to establishing a solid foundation for future growth Our management team is stronger than it has ever been We are postured for geographical expansion and for increased emphasis in the health care services marketplace. We are continually reviewing opportunities for growth through acquisition and will pursue prospects as they come available
I am optimistic that our efforts in 1976 will be rewarded with continued good performances in the year ahead. The many signals-from the economy, the marketplace and our own dedicated staff-indicate an excellent year for Keane Associates in 1977.
John F. Keane
President
March 22, 1977
Annual Report
Key Information
Keane Associates Inc, is traded on the Boston Stock Exchange under the symbol KEA