SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 2, 1999
OR
( ) 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 0-20109
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Kronos Incorporated
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Massachusetts 04-2640942
- ----------------------------- ------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
400 Fifth Avenue, Waltham, MA 02451
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(781) 890-3232
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
- --------------------------------------------------------------------------------
(Former name,former address and former fiscal year,if changed since last report)
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 January 30, 1999, 8,418,969 shares of the registrant's Common Stock,
$.01 par value, were outstanding.
<PAGE>
KRONOS INCORPORATED
INDEX
PART I. FINANCIAL INFORMATION Page
Item 1. Condensed Consolidated Financial Statements (Unaudited)
Condensed Consolidated Statements of Income for the Three
Months Ended January 2, 1999 and January 3, 1998 1
Condensed Consolidated Balance Sheets at January 2, 1999
and September 30, 1998 2
Condensed Consolidated Statements of Cash Flows for the Three
Months Ended January 2, 1999 and January 3, 1998 3
Notes to Condensed Consolidated Financial Statements 4
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 6
PART II. OTHER INFORMATION
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
Signatures
Exhibit Index
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements (Unaudited)
<TABLE>
<CAPTION>
KRONOS INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except share and per share amounts)
UNAUDITED
Three Months Ended
-----------------------
January 2, January 3,
1999 1998
------------ ------------
<S> <C> <C>
Net revenues:
Product .......................................... $ 33,180 $ 29,761
Service .......................................... 19,935 14,812
----------- -----------
53,115 44,573
----------- -----------
Cost of sales:
Product .......................................... 7,840 7,040
Service .......................................... 12,112 10,129
----------- -----------
19,952 17,169
----------- -----------
Gross profit ................................ 33,163 27,404
Expenses:
Sales and marketing .............................. 18,688 16,051
Engineering, research and development ............ 6,003 4,324
General and administrative ....................... 3,374 3,095
Other (income) expense, net ...................... (95) (2)
----------- -----------
27,970 23,468
----------- -----------
Income before income taxes .................. 5,193 3,936
Provision for income taxes ............................. 1,984 1,504
----------- -----------
Net income .................................. $ 3,209 $ 2,432
=========== ===========
Net income per common share:
Basic ....................................... $ 0.39 $ 0.30
=========== ===========
Diluted ..................................... $ 0.37 $ 0.29
=========== ===========
Average common and common equivalent shares outstanding:
Basic ....................................... 8,325,006 8,190,075
=========== ===========
Diluted ..................................... 8,646,444 8,441,075
=========== ===========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
UNAUDITED
<TABLE>
<CAPTION>
January 2, September 30,
1999 1998
---------- ------------
ASSETS
<S> <C> <C>
Current assets:
Cash and equivalents .................................................... $ 36,133 $ 29,888
Marketable securities ................................................... 10,540 17,501
Accounts receivable, less allowances for doubtful accounts of $1,380
at January 2, 1999 and $1,268 at September 30, 1998 .................. 49,477 50,904
Deferred income taxes ................................................... 5,188 5,188
Other current assets .................................................... 8,992 8,171
--------- ---------
Total current assets ............................................. 110,330 111,652
Equipment, net ............................................................. 15,580 15,816
Investments ................................................................ 7,901 4,445
Excess of cost over net assets of businesses acquired ...................... 12,718 13,731
Deferred software development costs, net ................................... 10,225 9,541
Other assets ............................................................... 8,426 8,676
--------- ---------
Total assets ..................................................... $ 165,180 $ 163,861
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable ........................................................ $ 5,864 $ 6,427
Accrued compensation .................................................... 10,720 14,503
Accrued expenses and other current liabilities .......................... 15,854 18,570
Deferred maintenance revenues ........................................... 29,758 27,065
--------- ---------
Total current liabilities ........................................ 62,196 66,565
Deferred income taxes ...................................................... 911 911
Deferred maintenance revenues .............................................. 9,579 8,830
Other liabilities .......................................................... 311 352
Shareholders' equity:
Preferred Stock, par value $1.00 per share: authorized 1,000,000 shares,
no shares issued and outstanding
Common Stock, par value $.01 per share: authorized 20,000,000 shares,
8,401,193 shares and 8,310,479 shares issued at January 2, 1999 and
September 30, 1998, respectively ..................................... 84 83
Additional paid-in capital .............................................. 30,240 29,617
Retained earnings ....................................................... 62,975 59,765
Equity adjustment from translation ...................................... (1,063) (1,162)
Cost of Treasury Stock (1,210 shares and 30,574
shares at January 2, 1999 and September 30, 1998, respectively) ...... (53) (1,100)
--------- ---------
Total shareholders' equity ....................................... 92,183 87,203
--------- ---------
Total liabilities and shareholders' equity ....................... $ 165,180 $ 163,861
========= =========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
KRONOS INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
UNAUDITED
<TABLE>
<CAPTION>
Three Months Ended
------------------------
January 2, January 3,
1999 1998
------------ -----------
<S> <C> <C>
Operating activities:
Net income ................................................................. $ 3,209 $ 2,432
Adjustments to reconcile net income to net cash and equivalents
provided by operating activities:
Depreciation ........................................................ 1,916 1,788
Amortization of deferred software development costs and
excess of cost over net assets of businesses acquired ............ 2,328 1,443
Changes in certain operating assets and liabilities:
Accounts receivable, net ......................................... 1,453 427
Deferred maintenance revenue ..................................... 3,434 1,707
Accounts payable, accrued compensation
and other liabilities ......................................... (6,466) (3,850)
Other ............................................................... (538) (923)
-------- --------
Net cash and equivalents provided by operating activities 5,336 3,024
Investing activities:
Purchase of equipment ...................................................... (1,672) (920)
Capitalization of software development costs ............................... (2,002) (1,444)
(Increase) decrease in marketable securities ............................... 3,505 (5,015)
Acquisitions of businesses ................................................. (582) (726)
-------- --------
Net cash and equivalents used in investing activities ......... (751) (8,105)
Financing activities:
Net proceeds from exercise of stock option and employee stock
purchase plans .......................................................... 1,845 1,062
Purchase of treasury stock ................................................. (175) (27)
-------- --------
Net cash and equivalents provided by financing activities 1,670 1,035
Effect of exchange rate changes on cash and equivalents ......................... (10) (51)
-------- --------
Increase (decrease) in cash and equivalents ..................................... 6,245 (4,097)
Cash and equivalents at the beginning of the period ............................. 29,888 20,698
-------- --------
Cash and equivalents at the end of the period ................................... $ 36,133 $ 16,601
======== ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
KRONOS INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE A - General
The accompanying unaudited condensed consolidated financial statements include
all adjustments, consisting of normal recurring accruals, that management
considers necessary for a fair presentation of the Company's financial position
and results of operations as of and for the interim periods presented pursuant
to the rules and regulations of the Securities and Exchange Commission. Certain
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations, although the Company believes
the disclosures in these financial statements are adequate to make the
information presented not misleading. These condensed consolidated financial
statements should be read in conjunction with the Company's audited financial
statements for the fiscal year ended September 30, 1998. The results of
operations for the three month period ended January 2, 1999 is not necessarily
indicative of the results for a full fiscal year. Certain amounts have been
reclassified in fiscal 1998 to permit comparison with fiscal 1999.
NOTE B - Fiscal Quarters
The Company utilizes a system of fiscal quarters. Under this system, the first
three quarters of each fiscal year end on a Saturday. However, the fourth
quarter of each fiscal year will always end on September 30. Because of this,
the number of days in the first quarter (94 days in fiscal 1999 and 95 days in
fiscal 1998) and fourth quarter (89 days in fiscal 1999 and 88 days in fiscal
1998) of each fiscal year varies from year to year. The second and third
quarters of each fiscal year will be exactly thirteen weeks long. This policy
does not have a material effect on the comparability of results of operations
between quarters.
NOTE C - Software Revenue Recognition
In November 1997, the Accounting Standards Executive Committee (AcSEC) issued
Statement of Position (SOP) 97-2, "Software Revenue Recognition", which the
Company adopted in the first quarter of fiscal 1999. The adoption of SOP 97-2
did not have a material effect on the Company's financial statements.
<PAGE>
NOTE D - Comprehensive Income
In September 1997, the Financial Accounting Standard Board issued Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income" ("SFAS
No. 130), which the Company adopted in the first quarter of fiscal 1999. SFAS
No. 130 establishes standards for reporting and presentation of comprehensive
income and its components. Comprehensive income is defined as the change in
equity of a business enterprise during a period from transactions and other
events and circumstances from non-owner sources and includes all changes in
equity during a period except those resulting from investments by owners and
distributions to owners.
For the three months ended January 2, 1999 and January 3, 1998, the Company's
comprehensive income was as follows (in thousands):
Three Months Ended
January 2, 1999 January 3, 1998
------------- --------------
Comprehensive income:
Net income $ 3,209 $ 2,432
Cumulative translation adjustment 99 (362)
------------- --------------
Total comprehensive income $ 3,308 $ 2,070
============= ==============
NOTE E - Stock Split
On February 8, 1999, the Company announced a three-for-two stock split in the
form of a 50% stock dividend to be paid on March 9, 1999 to stockholders of
record on February 23, 1999.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Forward Looking Statements
This discussion includes certain forward-looking statements about the
Company's business and its expectations. Any such statements are subject to risk
that could cause the actual results to vary materially from expectations. For a
further discussion of the various risks that may affect the Company's business
and expectations, see "Certain Factors That May Affect Future Operating Results"
at the end of Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Results of Operations
Revenues. Revenues for the first quarter of fiscal 1999 amounted to $53.1
million as compared with $44.6 million for the first quarter of the prior year.
Revenue growth amounted to 19% and 20% in the first quarter of fiscal 1999 and
1998, respectively. Product revenues for the quarter increased 12% to $33.2
million from $29.8 million in the same period of fiscal 1998. In the first
quarter of fiscal 1998, product revenues increased 16% over the same period in
fiscal 1997. Product revenue growth in the first quarter of fiscal 1999 and 1998
was principally driven by customer demand. Service revenues for the first
quarter of fiscal 1999 increased 35% to $19.9 million from $14.8 million in the
same period of fiscal 1998. In the first quarter of fiscal 1998, service
revenues increased 30% over the same period in fiscal 1997. The growth in
service revenues in the first quarter of fiscal 1999 and 1998 reflects an
increase in maintenance revenue from the expansion of the installed base as well
as an increase in the level of maintenance contracts and professional services
accompanying sales to new customers and upgrade sales to existing customers.
Gross Profit. Gross profit as a percentage of revenues was 62% in the
first quarter of fiscal 1999 and 1998. Product gross profit as a percentage of
product revenues was 76% in the first quarter of fiscal 1999 and 1998. Service
gross profit as a percentage of service revenues increased to 39% in the first
quarter of fiscal 1999 from 32% in the first quarter of the prior year. The
increase in service gross profit is primarily attributable to the growth in
service revenues without a proportionate increase in service expenses. This has
been accomplished by more fully leveraging service resources and continuing to
improve efficiency in the delivery of services. The Company anticipates that
service gross profit as a percentage of service revenues should be approximately
36% to 39% over the remainder of fiscal 1999.
Expenses. Expenses as a percentage of revenues were 53% in the first
quarter of fiscal 1999 and 1998. Sales and marketing expenses as a percentage of
revenues were 35% in the first quarter of fiscal 1999 as compared to 36% in the
first quarter of the prior year. Sales and marketing expenses as a percentage of
revenues were higher in the first quarter of fiscal 1998 due to less than
anticipated revenues from the Company's international and OEM distribution
channels. Management anticipates that over the remainder of fiscal 1999 sales
and marketing expenses as a percentage of revenues will be comparable to fiscal
1998.
Engineering, research and development expenses as a percentage of
revenues were 11% in the first quarter of fiscal 1999 as compared with 10% in
the first quarter of the prior year. Expenses of $6.0 million and $4.3 million
in the first quarter of fiscal 1999 and 1998, respectively, are net of
capitalized software development costs of $2.0 million and $1.4 million,
respectively. The growth in engineering, research and development expenses
resulted principally from the development of new products in the client/server
and Windows environments.
General and administrative expenses as a percentage of revenues were 6%
in the first quarter of fiscal 1999 as compared with 7% in the first quarter of
the prior year. Other (income) expense, net amounted to less than 1% of revenues
for all periods presented. Other (income) expense, net is composed primarily of
interest income earned on the Company's investments partially offset by
amortization of intangible assets related to acquisitions made by the Company.
Income Taxes. The provision for income taxes as a percentage of pretax
income was 38% in the first quarter of fiscal 1999 and 1998. The Company's
effective income tax rate may fluctuate between periods as a result of various
factors, none of which is material, either individually or in the aggregate, to
the consolidated results of operations.
Liquidity and Capital Resources
Working capital as of January 2, 1999, amounted to $48.1 million as
compared with $45.0 million at September 30, 1998. As of those dates, cash and
equivalents, marketable securities and investments amounted to $54.6 million and
$51.8 million, respectively. Cash generated from operations increased to $5.3
million in the first quarter of fiscal 1999 from $3.0 million in the first
quarter of the prior year. This was principally attributable to an increase in
earnings and deferred maintenance revenues as well as better management of
accounts receivable from trade customers, partially offset by the reduction of
compensation accruals and income tax obligations. The Company's investment in
equipment in the first quarter of fiscal 1999 increased approximately $1.0
million as compared to the first quarter of the prior year due to the timing of
various capital projects. Cash generated from operations was more than
sufficient to fund investments in equipment and capitalized software development
costs. The Company expects to fund its investments in equipment as well as
software development costs over the remainder of its fiscal year with available
cash and operating cash flow generated in fiscal 1999.
Certain Factors That May Affect Future Operating Results
Except for historical matters, the matters discussed in this Quarterly
Report on Form 10-Q are "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995 (the "Act"). The Company
desires to take advantage of the safe harbor provisions of the Act and is
including this statement for the express purpose of availing itself of the
protection of the safe harbor with respect to all forward looking statements
that involve risks and uncertainties.
The Company's actual operating results may differ 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 because of a number of
factors including the potential fluctuations in quarterly results, timing and
acceptance of new product introductions by the Company and its competitors,
competitive pricing pressures, the dependence on alternate distribution
channels, potential effects associated with the century change, the ability to
attract and retain sufficient technical personnel, and the dependence on the
Company's time and attendance product line and on key vendors, as further
described below and in the Company's Annual Report on Form 10-K for the fiscal
year ended September 30, 1998, which factors are specifically incorporated by
reference herein.
Potential Fluctuations in Quarterly Results. The Company's quarterly
operating results may fluctuate as a result of a variety of factors, including
the timing of the introduction of new products and product enhancements by the
Company and its competitors, market acceptance of new products, mix of products
sold, the purchasing patterns of its customers, competitive pricing pressure and
general economic conditions. The Company historically has realized a relatively
larger percentage of its annual revenues and profits in the fourth quarter and a
relatively smaller percentage in the first quarter of each fiscal year, although
there can be no assurance that this pattern will continue. In addition, while
the Company has contracts to supply systems to certain customers over an
extended period of time, substantially all of the Company's product revenue and
profits in each quarter result from orders received in that quarter. If
near-term demand for the Company's products weakens or if significant
anticipated sales in any quarter do not close when expected, the Company's
revenues for that quarter will be adversely affected. The Company believes that
its operating results for any one period are not necessarily indicative of
results for any future period.
<PAGE>
Product Development and Technological Change. Continual change and
improvement in computer software and hardware technology characterize the
markets for frontline labor management systems. The Company's future success
will depend largely on its ability to enhance its existing product lines and to
develop new products and interfaces to third party products on a timely basis
for the increasingly sophisticated needs of its customers. Although the Company
is continually seeking to further enhance its product offerings and to develop
new products and interfaces, there can be no assurance that these efforts will
succeed, or that, if successful, such product enhancements or new products will
achieve widespread market acceptance, or that the Company's competitors will not
develop and market products which are superior to the Company's products or
achieve greater market acceptance.
Competition. The frontline labor management industry is highly
competitive. Competition is increasing as competitors in related industries,
such as human resources management, payroll processing and enterprise resource
planning (ERP) enter the market. Advances in software development tools have
accelerated the software development process and, therefore, can allow
competitors to penetrate certain of the Company's markets. Maintaining the
Company's technological and other advantages over competitors will require
continued investment by the Company in research and development and marketing
and sales programs. There can be no assurance that the Company will have
sufficient resources to make such investments or be able to achieve the
technological advances necessary to maintain its competitive advantages.
Increased competition could adversely affect the Company's operating results
through price reductions and/or loss of market share.
Dependence on Alternate Distribution Channels. The Company markets and
sells its products through its direct sales organization, independent dealers
and OEMs. For the fiscal year ended September 30, 1998, approximately 20% of the
Company's revenue was generated through sales to dealers and OEMs. Reduction in
the sales efforts of the Company's major dealers and/or OEMs, or termination or
changes in their relationships with the Company, could have a material adverse
effect on the results of the Company's operations.
Year 2000. The Company has an executive level steering committee to
identify and resolve Year 2000 issues associated with the Company's internal
systems (both information technology ("IT") and non-IT), the Company's own
products and services, the status of third party products distributed by the
Company to its customers as well as the Year 2000 readiness of the Company's
suppliers. The Company has completed an assessment of all of its principal IT
systems, which include manufacturing, distribution, customer service and
financial systems. The Company has, with the assistance of an outside
consultant, tested its principal internal enterprise resource planning (ERP)
system and believes it to be year 2000 compliant. This ERP system includes order
entry, material resource planning, master production scheduling, purchasing,
shipping and financial systems. The Company has identified Year 2000 issues in
other less significant IT systems, and expects to resolve those issues, by
replacements and/or upgrades, by mid-1999. The Company is currently performing
an assessment of certain non-IT systems and expects that assessment to be
completed by mid-1999. Examples of these non-IT systems include telephone
systems and stand alone shop-floor test equipment. The Company does not plan to
assess specifically its facility management systems, or the external forces such
as utility or transportation Year 2000 compliance failures that might generally
affect industry and commerce. Although the Company is not currently aware of any
material operational issues or costs associated with preparing its internal IT
and non-IT systems for the Year 2000, the Company may experience material
unanticipated problems and costs caused by undetected errors or defects in these
internal systems.
The Company's Year 2000 compliance plan includes designing its current
products to meet the Company's definition of "Year 2000 Compliant" and testing
the most recent versions of its current products to determine whether they meet
that definition. Testing of products currently manufactured by the Company is
approximately 95% completed and is expected to be finished by the end of June,
1999. The Company has warranted, and may in the future warrant to certain
customers that its products will work in the Year 2000 and beyond. Generally,
for products that have been identified to date as needing upgrades/new versions
to address Year 2000 issues, the Company has those upgrades/new versions
available to customers for purchase or under maintenance agreements. Some of the
Company's customers are using products and/or product versions that the Company
has not tested, and does not support, for Year 2000 compliance. The Company is
encouraging these customers to migrate to current products/versions that meet
the Company's Year 2000 compliance definition. In addition, the Company
does not intend to test any of its custom software products for Year 2000
compliance.
For third party products that the Company distributes with its
products, the Company has sought information and assurances from the
manufacturers concerning those products' Year 2000 compliance status. As a
result, the Company has identified certain third party products that will
require an upgrade to be Year 2000 compliant and is currently notifying affected
customers and encouraging them to upgrade. The Company expects to complete its
assessment of those third party products by mid-1999.
Despite the testing of its own products and efforts to obtain
assurances on third party products, errors or defects in such products could
result in delay or loss of revenue, diversion of development resources, damage
to the Company's reputation, or increased service and warranty costs, any of
which could materially affect the Company's business, results of operations, or
financial condition. In addition, the unprecedented nature of potential
litigation regarding Year 2000 compliance issues makes it uncertain whether the
Company will be affected by such litigation.
The Company has completed its systematic inquiry of key suppliers to
assess their Year 2000 readiness. The Company is not aware of any problems that
would materially affect its business, results of operations or financial
condition, but the Company has no means of ensuring that assurances received
from such suppliers are accurate. The inability of such suppliers to meet Year
2000 requirements could materially impact the ability of the Company to procure
material from these suppliers and to meet its obligations to supply products to
its customers.
The Company does not currently have any information concerning the Year
2000 compliance status of its customers. As with other similarly situated
companies, if the Company's current or future customers fail to achieve Year
2000 compliance or if they divert expenditures to address Year 2000 compliance
problems, the Company's business, results of operations, or financial condition
could be materially affected.
The Company has not yet developed a contingency plan on Year 2000
readiness. The Company is currently assessing the need for such a plan and
anticipates completing that assessment by mid-1999.
The costs associated with the Company's Year 2000 plan have been funded
from operating cash flows and have been charged to operations. To date, the
Company has incurred approximately $.3 million of incremental costs and expects,
on a cumulative basis, total costs to be approximately $.5 million to address
its internal IT and non-IT systems. The Company does not separately track the
internal costs associated with its Year 2000 plan, which are primarily
payroll costs for its information systems employees, support and technical
personnel and the Year 2000 steering committee. The costs described herein, and
the costs to accomplish the other elements of the Company's Year 2000 plan, have
not been and are not expected to be material to the Company's financial
position, results of operations or cash flows. The cost of completing the Year
2000 plan and the date on which the Company believes the plan will be complete
are based upon management's best estimates derived by using numerous assumptions
of future events, including the continued availability of certain resources.
There can be no guarantee that these estimates will be achieved and the actual
results may differ materially from those anticipated. Specific factors that
might cause these differences include without limitation, the availability and
cost of personnel trained in this area, the ability to make timely and
appropriate adjustments to all relevant computer codes and similar
uncertainties.
<PAGE>
PART II. OTHER INFORMATION
Item 5. Other Information
On February 8, 1999, the Company announced a three-for-two
stock split in the form of a 50% stock dividend to be paid on
March 9, 1999 to stockholders of record on February 23, 1999.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27 Financial Data Schedule
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during
the fiscal quarter ended January 2, 1999.
<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.
KRONOS INCORPORATED
By /s/ Paul A. Lacy
Paul A. Lacy
Vice President of Finance
and Administration
(Duly Authorized Officer and
Principal Financial Officer)
February 11, 1999
<PAGE>
KRONOS INCORPORATED
EXHIBIT INDEX
Exhibit
Number Description
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Condensed Consolidated Financial Statements of the Corporation for the
Three months ended January 3, 1998 and is qualified in its entirety by
reference to such financial statements
</LEGEND>
<CIK> 0000886903
<NAME> Kronos Incorporated
<MULTIPLIER> 1,000
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> Sep-30-1999
<PERIOD-START> Oct-01-1998
<PERIOD-END> Jan-02-1999
<EXCHANGE-RATE> 1
<CASH> 36,133
<SECURITIES> 10,540
<RECEIVABLES> 50,857
<ALLOWANCES> 1,380
<INVENTORY> 0
<CURRENT-ASSETS> 110,330
<PP&E> 48,892
<DEPRECIATION> 33,312
<TOTAL-ASSETS> 165,180
<CURRENT-LIABILITIES> 62,196
<BONDS> 0
0
0
<COMMON> 84
<OTHER-SE> 92,099
<TOTAL-LIABILITY-AND-EQUITY> 165,180
<SALES> 33,180
<TOTAL-REVENUES> 53,115
<CGS> 7,840
<TOTAL-COSTS> 19,952
<OTHER-EXPENSES> 27,970
<LOSS-PROVISION> 144
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 5,193
<INCOME-TAX> 1,984
<INCOME-CONTINUING> 3,209
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,209
<EPS-PRIMARY> 0.39
<EPS-DILUTED> 0.37
</TABLE>
