President's Letter
President's LetterThe year 1980 was a challenging one for Keane. Revenues for the year were $17,322,107, a 10% in crease over 1979 revenues of $15,730,588. Net income was $246.099 of 29 per share, down from $684,564 or 82 per share the year before. To fully understand Keane's financial performance in 1980, it is important to look at the highlights of the Company's operations over the past few years.1977 through 1979 were years of rapid revenue growth and aggressive geographical expansion for the Information Services Division (ISD). We entered 1980 with the highest backlog in our history. To accommodate this business volume, we in creased our staff size, added considerable management depth to our organizational structure and opened several branch offices,As we moved into the year, demand for our services started to level off due to inflation and uncertain economic conditions. While revenues did increase, they were not high enough to effectively utilize all of our staff resources. Imbalances between revenues and direct costs and between revenues and administrative expenses resulted.To correct this situation, we revised our revenue forecasts and took steps to restructure ISD. We consolidated our Washington and Baltimore offices and closed branches in Cleveland, Toledo and Detroit. These actions enabled us to bring the size of our marketing, management and technical staffs in line with current business levels. In addition, we phased out the external marketing of two products in which we had invested heavily during the year.These actions were effective, and Keane completed the year with ISD financially in balance in addition, series of new programs which will contribute to our operating effectiveness were developed. The experiences of 1980 have sharpened our skills, and we now are able to respond more quickly to changing market conditions. As economic conditions improve, we plan to grow through increased market penetration and geographical expansion.In 1980, KeaMed Hospital Systems (KeaMed) expanded its business and invested significantly in product development and the installation of new computer systems on hospital sites. Two new hospitals were added to the Division's client base, one of which is the Company's first New Jersey hospital. This hospital provides the foundation for future growth in this state. In addition, a highly successful renewal rate for multiyear contracts was achieved. KeaMed's long-term contracts provide an excellent complement to the shorter-term ISD business.During the year, KeaMed continued to improve its computer operations. We replaced eight computers in client hospitals. These new systems have improved productivity and will result in significant cost reductions In December, two new IBM System 38 computers were installed. These systems signaled the beginning of on-line processing of Admissions, discharges and transfers, Central index of patients' medical records, Out-patient registration and Charge collection. We plan to expand upon these new capabilities by installing computer terminals at nursing stations. With this capability our clients will be able to collect and transmit doctors' orders to all ancillary departments in the hospital.The market for the Division's services is growing KeaMed provides client hospitals the latest computer system capabilities at a cost far less than they could provide for themselves. The Division is concentrating management attention on development of people and systems needed for an aggressive pro gram of growthWe are in an expanding industry. one that is essential to our clients and our economy. The computer industry is one in which technologies are constantly changing, resulting in continuing pressure to adapt and respond to these changes. Keane's business is to alleviate these pressures by managing the implementation of technology. With a foundation of 15 years experience, Keane is well positioned to provide the needed expertiseI am pleased to announce that on January 27, 1981, Keane's Board of Directors appointed Mr. Herbert J. Hurwitz, former Senior Vice President and current Director of General Cinema Corporation, to fill a vacancy on the Board, I am confident that Mr. Hurwitz will be a valuable addition to the Keane organization, and I look forward to working with him.On the occasion of our 15th anniversary, I wish to thank the many capable and dedicated people in Keane who have contributed so much to our success.John F. Keane
Annual Report
Key Information
Notes