Keane had an outstanding year in 1989, reporting record revenues and earnings. Revenues for the year increased 29% to $77.2 million; pretax income grew over 24% to $6 million, and net income rose 24% to $3.6 million, or $.91 per share.
Keane's growth is due to the expanding market for custom software development, coupled with a growth strategy which included the acquisition of three smaller custom software development firms during the year. Keane's increased profitability is due to the Company's success in differentiating itself through targeted marketing and sales, its strong project management capability, high quality technical expertise, and the consistent delivery of expected results.
Keane's strong operating performance was reflected in the price of the Company's stock, which increased in value over 218% during the year. This resulted in Keane being ranked as the third best performing stock on the American Stock Exchange. During the year, Keane moved the trading of its stock from the NASDAQ National Market System to the American Stock Exchange, and on May 8, Keane implemented a 2 for 1 stock split. In November, Forbes magazine name Keane one of the 200 best managed small companies in America, and in January of 1990, Keane completed an additional 3 for 2 sock split.
Keane's Information Services Division 150, which represented 90% of the Company's 1999 revenues, grew 33%. A significant amount of this growth came from three acquisitions: Computer Consultants, Inc. (Cleveland), the consulting operations of DBMS (Chicago and Washington, DC), and Compro (Tampa and Orlando, FL Atlanta, GA and Rochester and Buffalo, NY). These acquisitions are part of Kane's continuing strategy to grow present branches to critical mass, and to expand its geographic coverage
The KeaMed Hospital Systems Divison (KeaMed), which accounted for 10% of the Company's 1999 revenues, also reported a strong financial performance, despite a difficult healthcare market. Of great significance KeaMed's growing capabilities in systems integration. It offers totally integrated software solutions to client hospitals, regardless of whether the client operates solely on KeaMed's software products with a combination of products from KeaMed and other vendors. By the end of 1990 KeaMed plans offer UNIX version of its family of applications, enabling them to operate on a variety of computer system.
Finally, I am pleased to report that in March of 1990, the Company successfully completed a public offering of 826,950 shares at a price of $14.625 per share Certain shareholders of the Company sold an additional 250,000 shares in this offering. I would like to take this opportunity to welcome all of Keane's new shareholders, and to thank each of Keane's clients and employees for their many contributions during the year. I look forward to working with each of you, and to our continued success throughout the 1990s.
Looking ahead, I am confident that Keane's capabilities, strategy, and resources will enable the Company to continue to produce strong operating results. In the following report, we will outline Keane's view of the custom software development market, our growth and differentiation strategy, and details of our 1999 performance.
Yours truly.
John F. Keane
President