My Turn at the Helm: 1979

President's Letter

1979 was a very productive year for Keane Associates, inc. It was a year of record earnings and revenues and a year which we realized many of the benefits of past planning and develop more. Revenues for the year were $15.731.000 up 42% from $11,113.000 the prior year. Net income was $685.000 or 60 per share up 68% from $408.000 and 50% a share a year ago. Earnings increased at an even faster rate than our revenues. 1979 was an important year in a number of ways . Our workforce increased approximately 23% and over 70% of our employees moved into positions of increased responsibility. We initiated several new development efforts which will contribute to our Company's future growth and we enter 1980 with the highest backing in our history. We believe that Keane's performance in 1979 marks the beginning of an exciting decade.

Highlights of the year

In 1979, despite economic uncertainty, a strong demand for Keane's services continued. Rather than hire train and retain a large technical staff of their own, clients called on Keane to help improve their operating efficiencies. As a result of increased business we added considerable depth to our organizational structure which increased managements span of control and enhanced the localized service we provide client companies. Our new structure also provided our employees additional opportunities for personal development and career growth.

For some time, Keane has been exploring software products which would complement our field operations and assist in meeting our commitment to improved client productivity. One of the highlights of the year was the introduction of Program Structure Technology (PST) and PST/AIDS. Keane is currently negotiating a licensing agreement for the exclusive right to market PST and PST/AIDS PST is a process which concentrates on braking down the program design effort to a precise methodology PST/AIDS is a software product which automates the PST methodology. We are now training our em yes to use the PST methodology and a campaign has been initiated to market the methodology to our current client base. Structured tools and technologies are the way of the future, and PST gives Keane the opportunity to make a significant impact on how programming done in the industry.

For our KeaMed Hospital Systems Division 1979 was a year in which six new hospitals were successfully converted and where we pastured our organization for future growth by focusing on the development of new products. KeaMed which is now a major factor in the hospital Facilities Management (FM) market, has firmly established a strong hold in the New York and New England areas and plans to expand further in the future in preparation for expansion, we are developing a variety of programs which will provide the foundation of our future growth

In the product development area KeaMed completed its hospital information systems plan to fully integrate the fiscal administrative and patient care applications By year end software development was completed on several of the major hospital applications and first installations are now being made at client sites Formal product announcements, which will foster KeaMed's growth into the hospital market are scheduled to be made in 1960 The

Productivity People

The most significant contribution to our success in 1979 was the performance of our employees if anything Keane apart from other professional service organizations it is the diverse capabilities of our people During the year we continued to offer programs designed to strengthen the development of our professional staff Management training classes and skills work shops were conducted regularly Our College Program which was indicated two years ago is now well established College Program participants have been able to make significant contributions to the Company's revenues Our strong position as we enter 1980 is clearly the result of an aggressive marketing force, a talented management team and a highly skilled technical staff.

We look towards the 1980s as a period of further development and increased profitability. Our strategy for the decade is to continue to deliver the highest quality services, and to provide our employees additional opportunities for personal and professional growth I would like to thank everyone at Keane for making 1979 one of the most significant and exciting years ever. Their efforts are reflected in this year's results.

John F, Keane