Have you seen this?
Its from yesterday's Boston Herald.
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The Superstar 10
Thursday, April 22, 1999
1. CMGI 2. Keane Inc. 3. (tied) Waters Corp. 4. (tied) EMC Corp. 5. GeoTel Communications Corp. 6. Biogen Inc. 7. Staples Inc. 8. Sapient Corp. 9. Carematrix Corp. 10. Progress Software Corp.
1
Net result: CMGI's strategy pays off
by Todd Wallack
CMGI Inc. isn't just another Internet play. It's the mother of several Net stocks.
2
For Keane Inc., Y2K wasn't a bug, it was a blessing.
The Charlestown-based information technology firm introduced itself to new customers in 1997 and 1998, when its employees traveled from business to business, making sure computer systems were ready for the millennium.
Once clients' Year 2000 issues were resolved, Keane found itself with a larger-than-ever customer base. Buoyed by its successes, the company is expanding operations, both at home and abroad.
''It was like wind at the back,'' Chairman and Chief Executive John F. Keane Sr. said of Y2K. ''As a services company, we want to help our businesses with the biggest problems they faced. For the past couple of years, Y2K was the biggest problem.''
Keane's revenue jumped from $706.8 million in 1997 to $1.1 billion in 1998. Net income increased 88 percent, to $96.3 million, during the same period.
Keane said his company is successful because it has a clear vision of its role, which is to provide businesses with technology solutions. The service is provided through 48 branch offices across the United States and Canada.
And, he said, the company manages systems well, keeping on top of the latest technology but not forgetting the older systems still used by many smaller businesses.
''We're not really high-tech people, though we play with technology,'' Keane said.
Customers include the heavyweights of corporate America, such as computer maker International Business Machines Corp.
Keane recently helped AT&T Corp. with software for its human resources department. Other customers include BankBoston Corp., EMC Corp., Fidelity Investments, Princess Cruise Lines and McDonald's Corp.
Meanwhile, Keane works with hundreds of companies that don't have their own information technology departments, or that have small IT staffs needing help in specialty areas.
At the start of 1997, Keane employed about 8,000 people; it now has 10,500. And its chairman predicts the work force will only get larger.
Last year, the 34-year-old company bought Icom Solutions of Birmingham, England, a services company that had $50 million in annual sales. It's now called Keane Ltd.
''Our intent is to build critical mass in the U.K. and use that as a way to move into the continent,'' Keane said.
The company made other acquisitions last year to complement its services in North America.
In April 1998, it bought Bricker & Associates, a Chicago management company that helps customers tweak operations through technology. Keane paid $110 million in stock for Bricker, which had revenue of $15 million in 1997.
In October, Keane bought Fourth Tier in Los Angeles, a computer services provider, for $29 million in stock. Fourth Tier notched revenue of $6.3 million in 1997.
The buying continued into this year.
In March, Keane acquired Advanced Solutions Inc., a New York information technology firm. Terms were not disclosed.
This year, the Wall Street Journal named Keane one of the top market performers over the last three years, providing investors with a 93.3 percent return. Keane was also named one of the top performers over the last decade.
Despite the accolades, Keane's stock has been on a steady slide after peaking last July 8 at $60.94. It closed the year at $39.94 and recently traded as low as $18 and as high as $25.
Damian Rinaldi, a First Albany Corp. analyst who follows Keane, said the stock has been hurt by outside influences, rather than by what the company has done.
Though it is still more than half a year away, some investors fear the aftermath of Y2K.
Rinaldi said they worry that service companies like Keane will have little to do once the millennium bug is a dead issue. But Keane's management team and its geographic reach will help the company's stock rebound down the road, he said.
''It's an organization that investors should be looking at very, very closely,'' Rinaldi said. ''I can't imagine there's going to be a glut of IT staff hanging out on the street corner, as some people fear.
''When the sector comes back, Keane should be on the short list of the most savvy investors,'' he said.
3(tie)
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