SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 

FORM 10-Q

 

QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

 

(Mark One)

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarter ended June 30, 2003

 

OR

 

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from                   to                  

 

Commission File Number 1-7516

 

KEANE, INC.

(Exact name of registrant as specified in its charter)

 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ý No o

 

Indicate by check mark whether the registrant is an accelerated filer as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended.  Yes ý No o

 

As of June 30, 2003, the number of issued and outstanding shares of Common Stock (excluding 12,067,219 shares held in treasury) and Class B Common Stock are 63,478,172 and 284,599 shares, respectively.

 

 

Keane, Inc. and Subsidiaries
Table Of Contents

 

Part 1	Financial Information
Item 1.	Unaudited Condensed Consolidated Statements of Income for the three months and six months ended June 30, 2003 and 2002
	Condensed Consolidated Balance Sheets as of June 30, 2003 (unaudited) and December 31, 2002
	Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2003 and 2002
	Notes to Unaudited Condensed Consolidated Financial Statements
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 3.	Quantitative and Qualitative Disclosures about Market Risk
Item 4.	Controls and Procedures
Part II	Other Information
Item 2.	Changes in Securities and Use of Proceeds
Item 4.	Submission of Matters to a Vote of Security Holders
Item 6.	Exhibits and Reports on Form 8-K
Signature Page

 

2

 

Keane, Inc. and Subsidiaries
Part I                 Financial Information

 

Item 1.         Financial Statements

 

Keane, Inc. and Subsidiaries
Condensed Consolidated Statements of Income (Unaudited)

 

		Three Months Ended June 30,						Six Months Ended June 30,
		2003			2002			2003			2002
		(In Thousands Except Per Share Amounts)
Total revenues		$	203,511		$	226,062		$	408,173		$	447,321
Salaries, wages and other direct costs		137,877			161,905			280,308			319,738
Selling, general and administrative expenses		50,146			51,022			98,221			103,313
Amortization of intangible assets		4,030			4,248			8,077			7,556
Operating income		11,458			8,887			21,567			16,714
Interest and dividend income		898			510			1,246			1,534
Interest expense		1,066			72			1,099			139
Other expense (income), net		259			125			(6,918		)	(345		)
Income before income taxes		11,031			9,200			28,632			18,454
Provision for income taxes		4,411			3,679			11,451			7,380
Net income		$	6,620		$	5,521		$	17,181		$	11,074
Earnings per share (basic)		$	0.10		$	0.07		$	0.25		$	0.15
Earnings per share (diluted)		$	0.10		$	0.07		$	0.25		$	0.15
Weighted average common shares outstanding (basic)		66,351			75,733			67,681			75,724
Weighted average common shares and common share equivalents outstanding (diluted)		66,799			76,308			67,809			76,399

 

The accompanying notes are an integral part of the consolidated financial statements.

 

3

 

Keane, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets

 

		June 30, 2003			December 31, 2002
		(Unaudited)			(See Note A)
		(In Thousands)
Assets
Current:
Cash and cash equivalents		$	155,524		$	46,383
Marketable securities		28,907			21,872
Accounts receivable, net:
Trade		121,256			129,432
Other		851			1,004
Prepaid expenses and deferred taxes		34,679			37,430
Total current assets		341,217			236,121
Property and equipment, net		28,656			24,729
Building, net		40,451			40,888
Goodwill		277,650			277,435
Customer lists, net		63,551			69,193
Other intangible assets, net		15,222			17,613
Deferred taxes and other assets, net		25,020			19,695
		$	791,767		$	685,674
Liabilities
Current: