<PAGE>
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
FOR QUARTER ENDED MARCH 31, 2000 COMMISSION FILE NUMBER 1-7516
KEANE, INC.
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 04-2437166
(State or other jurisdictions of (I.R.S. Employer Identification
incorporation or organization) Number)
Ten City Square, Boston, Massachusetts 02129
(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code (617) 241-9200
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 X No
----- -----
As of March 31, 2000, the number of issued and outstanding shares of Common
Stock (excluding 2,539,561 shares held in treasury) and Class B Common stock are
69,906,444 and 284,987 shares, respectively.
Page 1 of 13
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KEANE, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
<TABLE>
<S> <C>
Part I - Financial Information
Consolidated Statements of Income for the three months ended March 31, 2000
and 1999.......................................................................................................3
Consolidated Balance Sheets as of March 31, 2000 and December 31, 1999.........................................4
Consolidated Statements of Cash Flows for the three months ended March 31, 2000
and 1999.......................................................................................................5
Notes to Unaudited Financial Statements........................................................................6
Management's Discussion and Analysis of Financial Condition and Results of Operations..........................8
Part II - Other Information...................................................................................12
Signature Page................................................................................................13
</TABLE>
Page 2 of 13
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KEANE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
<TABLE>
<CAPTION>
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED MARCH 31,
2000 1999
<S> <C> <C>
Total revenues $216,208 $285,004
Salaries, wages and other direct costs 154,574 183,894
Selling, general and administrative expenses 51,254 49,583
Amortization of goodwill and other intangible assets 2,889 1,976
-------- --------
Operating income 7,491 49,551
Interest and dividend income 2,143 1,835
Interest expense 186 ---
Other expenses, net 183 239
-------- --------
Income before income taxes 9,265 51,147
Provision for income taxes 3,754 20,969
-------- --------
Net income $ 5,511 $ 30,178
======== ========
Net income per share (basic) $ 0.08 $ 0.42
======== ========
Net income per share (diluted) $ 0.08 $ 0.42
======== ========
Weighted average common shares outstanding (basic) 71,011 71,553
======== ========
Weighted average common and common share equivalents 71,686 72,392
outstanding (diluted) ======== ========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
Page 3 of 13
<PAGE>
KEANE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
<TABLE>
<CAPTION>
(IN THOUSANDS)
MARCH 31, 2000 DECEMBER 31, 1999
<S> <C> <C>
Assets
Current:
Cash and cash equivalents $ 62,627 $ 53,018
Short term investments 8,674 8,582
Accounts receivable, net:
Trade 186,954 213,767
Other 2,332 2,248
Prepaid expenses and other current assets 19,710 19,845
--------- ---------
Total current assets 280,297 297,460
Long-term investments 82,720 81,163
Property and equipment, net 26,600 27,330
Intangible assets, net 93,436 93,885
Other assets, net 11,733 14,987
--------- ---------
$ 494,786 $ 514,825
========= =========
Liabilities
Current:
Accounts payable 9,249 18,500
Accrued expenses and other liabilities 31,591 35,466
Accrued compensation 31,414 18,288
Notes payable 7,368 7,564
Accrued income taxes 3,194 ---
Unearned income 5,504 8,369
Current capital lease obligations 1,200 1,080
--------- ---------
Total current liabilities 89,520 89,267
Long-term portion of capital lease obligations 2,219 2,610
Notes payable 91 149
Stockholders' Equity
Common stock 7,245 7,208
Class B common stock 29 29
Additional paid-in capital 123,841 120,810
Accumulated other comprehensive income (2,152) (2,027)
Retained earnings 329,131 323,620
Less treasury stock (55,138) (26,841)
--------- ---------
Total stockholders' equity 402,956 422,799
--------- ---------
$ 494,786 $ 514,825
========= =========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
Page 4 of 13
<PAGE>
KEANE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
(IN THOUSANDS)
THREE MONTHS ENDED MARCH 31,
<S> <C> <C>
Cash flows from Operating Activities: 2000 1999
Net Income $ 5,511 $ 30,178
Adjustments to reconcile net income to net cash used for operating
activities:
Depreciation and amortization 4,503 5,845
Deferred income taxes 381 (1,473)
Provision for doubtful accounts 1,231 (1,968)
Loss on sale of property and equipment 489 ---
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable 25,498 (27,393)
Decrease in prepaid expenses and other assets 2,879 6,510
Decrease in accounts payable, accrued expenses and other (2,865) (18,116)
liabilities, and unearned revenue
Increase in income taxes payable 3,194 6,665
-------- --------
Net cash provided by operating activities 40,821 248
-------- --------
Cash flows from Investing Activities:
Purchase of investments (8,827) (17,828)
Sale of investments 7,178 16,373
Purchase of property and equipment (3,844) (3,100)
Proceeds from the sale of property and equipment 35 2
Payments for current acquisitions --- (3,181)
-------- --------
Net cash used for investing activities (5,458) (7,734)
-------- --------
Cash flows from Financing Activities:
Payments under long-term debt (254) ---
Principal payments under capital lease obligations (271) (41)
Proceeds from issuance of common stock 5,598 5,706
Repurchase of common stock (30,827) ---
-------- --------
Net cash provided by (used for) financing activities (25,754) 5,665
-------- --------
Net increase (decrease) in cash and cash equivalents 9,609 (1,821)
Cash and cash equivalents at beginning of period 53,018 51,696
-------- --------
Cash and cash equivalents at end of period $ 62,627 $ 49,875
======== ========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
Page 5 of 13
<PAGE>
KEANE, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED FINANCIAL STATEMENTS
Note 1. The accompanying unaudited consolidated financial
statements have been prepared in accordance with generally
accepted accounting policies for interim financial information
and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted
accounting principles for complete financial statements. In
the opinion of management, all adjustments considered
necessary for a fair presentation have been included.
Operating results for the three-month period ended March 31,
2000 are not necessarily indicative of the results that may be
expected for the year ended December 31, 2000.
The balance sheet at December 31, 1999 has been derived from
the audited financial statements at that date, but does not
include all of the information and footnotes required by
generally accepted accounting principles for complete
financial statements.
For further information, refer to the consolidated financial
statements and footnotes thereto included in the Annual Report
on Form 10-K for the year ended December 31, 1999.
Note 2. Computation of Earnings Per Share for quarters ended March 31,
2000 and 1999.
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
2000 1999
<S> <C> <C>
Net income $ 5,511 $30,178
Weighted average number of 71,011 71,553
common shares outstanding used in
calculation of basic earnings per share
Incremental shares from the assumed 675 839
exercise of dilutive stock options
Weighted average number of 71,686 72,392
common shares outstanding used in
calculation of diluted earnings per share
Earnings per share
Basic $ 0.08 $ 0.42
======= =======
Diluted $ 0.08 $ 0.42
======= =======
</TABLE>
Page 6 of 13
<PAGE>
KEANE, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED FINANCIAL STATEMENTS
Note 3. The Company offers an integrated mix of end-to-end business
solutions, such as Business and IT consulting (plan), e-Solutions
including e-architecture, online branding, development and integration
(Build), and Application Development and Management Outsourcing
(Manage). Approximately 96% of the Company's revenues were derived from
these offerings, with the balance from the healthcare industry.
Effectively, the Company operates in one reportable segment.
Note 4. Total comprehensive income, (i.e. net income plus available-for-sale
securities valuation adjustments and currency translation adjustments
to stockholders equity) for the first quarter of fiscal 2000 and fiscal
1999 was $ 5.4 million and $ 30.3 million, respectively.
Note 5. In the fourth quarter of 1999, the Company recorded a restructuring
charge of $13.7 million. Of this charge $3.8 million related to a
workforce reduction of approximately 600 employees, primarily
consultants. In addition, the Company performed a review of its
business strategy and concluded that consolidating some of its branch
offices was key to its success. As a result of this review, the Company
wrote off $4.8 million of impaired assets, which included the carrying
value of specific assets associated with these branch offices, and
incurred charges of $3.8 million for branch closings and $1.3 million
for payments to certain employees.
A summary of first quarter activity with respect to the restructuring
charge is as follows:
<TABLE>
<CAPTION>
Branch
Workforce Office Payments to
Reduction Closures Certain Employees Total
--------- -------- ----------------- -----
<S> <C> <C> <C> <C>
Balance 12/31/99 $2,800 $2,981 $1,300 $7,081
Cash expenditures $2,033 $ 197 $1,300 $3,530
------ ------ ------ ------
Balance 03/31/00 $ 767 $2,784 $ 0 $3,551
====== ====== ====== ======
</TABLE>
Page 7 of 13
<PAGE>
KEANE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
This Quarterly Report on Form 10-Q contains forward-looking statements. For this
purpose, any statements contained herein that are not statements of historical
fact may be deemed to be forward-looking statements. Without limiting the
foregoing, the words "believes," "anticipates," "plans," "expects," and similar
expressions are intended to identify forward-looking statements. There are a
number of important factors that could cause the Company's actual results to
differ materially from those indicated by such forward-looking statements. These
factors include, without limitation, those set forth below under the caption
"Certain Factors That May Affect Future Results."
RESULTS OF OPERATIONS
The Company's revenues for the first quarter of 2000 were $216.2 million, a
24.1% decrease from revenues of $285.0 million in the first quarter of 1999.
First quarter 2000 revenues includes all prior year acquisitions. The decrease
in revenue was primarily due to the anticipated and rapid decline of Y2K
compliance revenue. Y2K-related revenue declined 93.2% to $5.4 million for the
first quarter of 2000 versus $80.0 million for the first quarter of 1999, and
decreased 77.5% from $24 million during the fourth quarter of 1999. The Company
believes that, as of March 31, 2000, it recognized its final Y2K related
revenues. Keane's core Plan, Build, Manage revenues for the first quarter of
2000, excluding Y2K compliance, was $211.0 million, up 3.0% from the first
quarter of 1999 and up 8.0% from the fourth quarter of 1999. Although Keane's
core business experienced positive growth, it was negatively impacted for much
of the quarter by an industry-wide Y2K-related deferral of many new development
projects during the first quarter of 2000. Despite this deferral of spending,
Keane's Internet-related business increased to an annualized run rate of $138.0
million, an increase of 82.0% from the first quarter of 1999 and up 17.0% from
the fourth quarter of 1999.
First quarter 2000 revenues from the Company's Plan Services were $31.4 million,
up 20.3% from Plan revenues of $26.1 million for the first quarter last year,
and an increase of 20.7% from the fourth quarter of 1999. Plan revenue is
primarily comprised of business innovation consulting and IT consulting
services, which assist companies to develop new strategies, business processes,
organizational structures and IT infrastructures, to leverage the Internet and
position themselves within the new digital economy. First quarter 2000 revenues
from the Company's Build Services were $79.6 million, a 1.7% decrease from the
first quarter of 1999 revenues of $81.0 million, and a 1.1% increase from the
fourth quarter of last year. Build revenues primarily consists of implementing
e-solutions, e-Customer Relationship Management systems, e-Architecture and
data-warehousing services, custom application development projects and licensing
and implementing the Company's proprietary suite of hospital and long-term care
application software products. First quarter 2000 revenues from the Company's
Manage Services were $99.8 million, up 8.6% from $91.9 million during the first
quarter of 1999, and up 12.0% from the fourth quarter of last year. Manage
revenue primarily consist of Application Development and Management (ADM)
Outsourcing services, Call Center Outsourcing, and dot.com Outsourcing services.
Salaries, wages and other direct costs for the first quarter of 2000 were $154.6
million, or 71.5% of revenues, compared to $183.9 million, or 64.5% of revenues,
for the first quarter of 1999, an increase of 700 basis points. This increase as
a percentage of revenues were primarily a result of lower utilization of
billable employees caused by a decline in revenues associated with the Y2K
transition.
Selling, General & Administrative ("SG&A") expenses for the first quarter of
2000 were $51.3 million, or 23.7% of revenues, compared to $49.6 million, or
17.4% of revenues, for the first quarter last year, an increase of 630 basis
points. This increase as a percentage of revenue is primarily attributable to
the decrease in revenues, and continued investments the Company is making in the
development and marketing of its core service offerings.
Amortization of goodwill and other intangible assets for the first quarter of
2000 was $2.9 million, or 1.3% of revenues, compared to $2.0 million, or 0.7% of
revenues in the first quarter of 1999. The increase in amortization was
attributable to additional intangible assets as a result of the Company's
acquisitions of First Coast Systems and Anstec in late December of 1999.
Page 8 of 13
<PAGE>
Interest and dividend income totaled $2.1 million for the first quarter of 2000,
compared to $1.8 million for the same period last year. The increase in interest
and dividend income was attributable to an increase in investments. Interest and
other expenses for the first quarter of 2000 was $0.4 million and for the first
quarter of 1999 totaled $0.2 million.
Pre-tax income for the first quarter of 2000 was $9.3 million, or 4.3% of
revenue, down 81.8% from pre-tax income of $51.1 million, or 17.9% of revenues,
in the first quarter of 1999.
The Company's effective tax rate for the first quarter of 2000 was 40.5%
compared to 41.0% for the first quarter of 1999.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash and investments at the end of the first quarter increased to
$154.0 million from the year end balance of $142.8 million. This increase was
primarily attributable to net income and decreases in accounts receivable,
offset in part by decreases in accounts payable and accrued expenses. On
February 10, 2000, the Company's Board of Directors authorized a share
repurchase program for the repurchase of up to 2,000,000 shares of Common Stock
through February 9, 2001. During the first quarter, the Company purchased
1,302,000 common shares at a cost of approximately $30.8 million. The Company
continues to believe that its shares are significantly undervalued at prevailing
market prices. The Company paid down $ 3.5 million associated with the fourth
quarter restructuring charge. The payments were primarily related to severance.
The Company maintains and has available a $20 million unsecured demand line of
credit with a major Boston bank for operations and acquisitions opportunities.
There was no borrowing under this line during the first quarter of 2000.
IMPACT OF INFLATION AND CHANGING PRICES
Inflationary increases in costs have not been material in recent years and, to
the extent permitted by competitive pressures, are passed on to the clients
through increased billing rates. Rates charged by the Company are based on the
cost of labor and market conditions within the industry. The Company was able to
increase its billing rates over its increases in direct labor costs in the first
quarter. This is due primarily to the Company's increase in strategic services
such as business innovation consulting and e-solutions, in which the high value
of services commands higher rates.
YEAR 2000 ISSUES
Although the transition from 1999 to 2000 has passed and Keane is not aware of
any unresolved Year 2000 problems relating to the services provided by Keane,
its internal systems, the products developed by Keane's Healthcare Solutions
Practice or third party products used by Keane in its Healthcare Solutions
Practice, it is possible that Year 2000 problems could be discerned in the
future and that such problems could have a material adverse effect on Keane's
business, financial condition and prospects.
Keane has in the past devoted significant resources to, and earned significant
revenue from, providing services to its clients to address the Year 2000
problem. Keane believes that, as of March 31, 2000, it recognized its final Y2K
related revenues and expects that it will have no material Y2K related revenues
after the first quarter of 2000. Further, Keane's services addressing the Year
2000 problem involve key aspects of its client's computer systems. A failure in
a client's system could result in a claim for substantial damages against Keane,
regardless of Keane's responsibility for the failure. Keane could incur
substantial costs in connection with any resulting litigation, regardless of the
outcome.
CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS
The following important factors, among others, could cause actual results to
differ materially from those indicated by forward-looking statements made in
this Quarterly Report on Form 10-Q and presented elsewhere by management from
time to time.
Page 9 of 13
<PAGE>
Fluctuations in Operating Results. Keane has experienced and expects to continue
to experience fluctuations in its quarterly results. Keane's gross margins vary
based on a variety of factors including employee utilization rates and the
number and type of services performed by Keane during a particular period. A
variety of factors influence Keane's revenue in a particular quarter, including:
. general economic conditions which may influence investment decisions
or cause downsizing;
. the number and requirements of client engagements;
. employee utilization rates;
. changes in the rates Keane can charge clients for services;
. acquisitions; and
. other factors, many of which are beyond Keane's control.
A significant portion of Keane's expenses does not vary relative to revenue. As
a result, if revenue in a particular quarter does not meet expectations, Keane's
operating results could be materially adversely affected, which in turn may have
a material adverse impact on the market price of Keane common stock. In
addition, many of Keane's engagements are terminable without client penalty. An
unanticipated termination of a major project could result in an increase in
underutilized employees and a decrease in revenue and profits.
Risks Relating to Acquisitions. In the past five years, Keane has grown
significantly through acquisitions. Since January 1, 1999, Keane has completed
the acquisitions of Emergent Corporation in San Mateo, California; Amherst
Consulting Group, Inc, in Boston, Massachusetts; Advanced Solutions Inc. in New
York, New York; Anstec, Inc. of Maclean, Virginia; First Coast Systems, Inc. of
Jacksonville, Florida; Jamison/Gold, LLC, of Marina Del Ray, California and
Parallax Solutions Limited, of Birmingham, England. Keane's future growth may be
based in part on selected acquisitions. At any given time, Keane may be in
various stages of considering such opportunities. Keane can provide no
assurances that it will be able to find and identify desirable acquisition
targets or that it will be successful in entering into a definitive agreement
with any one target. Also, even if a definitive agreement is reached, there is
no assurance that any future acquisition will be completed.
Keane typically anticipates that each acquisition will bring certain benefits,
such as an increase in revenue. Prior to completing an acquisition, however, it
is difficult to determine if such benefits can actually be realized.
Accordingly, there is a risk that an acquired company may not achieve an
increase in revenue or other benefits for Keane. In addition, an acquisition may
result in unexpected costs and expenses. Any of these events could have a
material adverse effect on Keane's business, financial condition and results of
operations.
The process of integrating acquired companies into Keane's existing business may
also result in unforeseen difficulties. Unforeseen operating difficulties may
absorb significant management attention, which Keane might otherwise devote to
its existing business. Also, the process may require significant financial
resources that Keane might otherwise allocate to other activities, including the
ongoing development or expansion of Keane's existing operations. Finally, future
acquisition could result in Keane having to incur additional debt and/or
contingent liabilities. All of these possibilities might have a material adverse
effect on Keane's business, financial condition and result of operations.
Dependence on Personnel. Keane believes that its future success will depend in
large part on its ability to continue to attract and retain highly skilled
technical and management personnel. The competition for such personnel is
intense. Keane may not succeed in attracting and retaining the personnel
necessary to develop its business. If Keane does not, its business, financial
condition and result of operations could be materially adversely affected.
Highly Competitive Market. The market for Keane's services is highly
competitive. The technology for custom software services can change rapidly. The
market is fragmented, and no company holds a dominant position. Consequently,
Keane's competition for client assignments and experienced personnel varies
significantly from city to
Page 10 of 13
<PAGE>
city and by the type of service provided. Some of Keane's competitors are larger
and have greater technical, financial and marketing resources and greater name
recognition in the markets they serve than does Keane. In addition, clients may
elect to increase their internal information systems resources to satisfy their
custom software development needs.
Keane believes that in order to compete successfully in the software services
industry it must be able to:
. compete cost-effectively;
. develop strong client relationships;
. generate recurring revenues;
. utilize comprehensive delivery methodologies; and
. achieve organizational learning by implementing standard operational
processes.
In the healthcare software systems market, Keane competes with some companies
that are larger in the healthcare market and have greater financial resources
than Keane. Keane believes that significant competitive factors in the
healthcare software systems market include size and demonstrated ability to
provide service to targeted healthcare markets.
Keane may not be able to compete successfully against current or future
competitors. In addition, competitive pressures faced by Keane may materially
adversely affect its business, financial condition and results of operations.
Risks Associated with Provision of Year 2000 Services. The Company's business
may suffer as a result of defects to Year 2000 compliance issues that have not
yet been detected. We have not had any independent verification of our year 2000
compliance efforts. We have not procured any Year 2000 specific insurance or
made any contingency plans to address any undetected year 2000 risks.
Keane has devoted significant resources to, and earned significant revenue from,
providing services to address the Year 2000 problem. Keane believes that, as of
March 31, 2000, it recognized its final Y2K related revenues and expects that it
will have no material Y2K related revenues after the first quarter of 2000.
Further, Keane's services addressing the Year 2000 problem involve key aspects
of its client's computer systems. A failure in a client's system could result in
a claim for substantial damages against Keane, regardless of Keane's
responsibility for the failure. Keane could incur substantial costs in
connection with any resulting litigation, regardless of the outcome.
International Operations. In August 1998, Keane commenced operations in the
United Kingdom with its acquisition of Icom Systems Ltd, now known as Keane
Limited. These operations were expanded with Keane's acquisition of Parallax
Solutions Ltd. in May 1999. Keane's international operations will be subject to
political and economic uncertainties, currency exchange rate fluctuations,
foreign exchange restrictions, and changes in taxation and other difficulties in
managing operations overseas. Keane may not be successful in its international
operations.
As a result of these and other factors, the Company's past financial performance
should not be relied on as an indication of future performance. Keane believes
that period to period comparisons of its financial results are not necessarily
meaningful and it expects that results of operations may fluctuate from period
to period in the future.
Quantitative and Qualitative Disclosures about Market Risks. Market risks were
reported in the Company's Annual Report on Form 10-K for the year ended December
31, 1999. There have been no material changes in these risks since the end of
the year.
Page 11 of 13
<PAGE>
KEANE, INC. AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 5. Other Information.
The Company announced on February 10, 2000 that its Board of Directors
has authorized the Company to repurchase up to two million shares of
its Common Stock during the 12-month period ending February 9, 2001.
The timing and amount of shares repurchased will be determined by the
Company's management based on its evaluation of market and economic
conditions. The Company expects to use any shares repurchased for its
stock plans, employee stock purchase and stock benefit plans, and other
general corporate purposes.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits - None
(b) Reports on Form 8-K - The registrant filed no reports on Form
8-K during the quarter ended March 31, 2000.
Page 12 of 13
<PAGE>
SIGNATURES
- -------------------------------------------------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
KEANE, INC.
(Registrant)
Date: May 11, 2000 \s\ John F. Keane
-------- -----------------
John F. Keane
Chairman
(Principal Executive Officer)
Date: May 11, 2000 \s\ John J. Leahy
-------- -----------------
John J. Leahy
Vice President, Finance
(Principal Financial and Accounting
Officer)
Page 13 of 13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 62,627
<SECURITIES> 8,674
<RECEIVABLES> 189,286
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 280,297
<PP&E> 89,179
<DEPRECIATION> 62,579
<TOTAL-ASSETS> 494,786
<CURRENT-LIABILITIES> 89,520
<BONDS> 0
0
0
<COMMON> 7,245
<OTHER-SE> 395,711
<TOTAL-LIABILITY-AND-EQUITY> 494,786
<SALES> 0
<TOTAL-REVENUES> 216,208
<CGS> 0
<TOTAL-COSTS> 208,717
<OTHER-EXPENSES> 183
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 186
<INCOME-PRETAX> 9,265
<INCOME-TAX> 3,754
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,511
<EPS-BASIC> .08
<EPS-DILUTED> .08
</TABLE>
