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 1, 2000
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
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 29, 2000, 12,530,761 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 1, 2000 and January 2, 1999 1
Condensed Consolidated Balance Sheets at January 1, 2000
and September 30, 1999 2
Condensed Consolidated Statements of Cash Flows for the
Three Months Ended January 1, 2000 and January 2, 1999 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>
KRONOS INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except share and per share amounts)
UNAUDITED
<CAPTION>
Three Months Ended
-----------------------
January 1, January 2,
2000 1999
---------- ----------
<S> <C> <C>
Net revenues:
Product .......................................... $ 36,152 $ 33,180
Service .......................................... 28,456 19,935
---------- ----------
64,608 53,115
---------- ----------
Cost of sales:
Product .......................................... 8,291 7,840
Service .......................................... 16,255 12,112
---------- ----------
24,546 19,952
---------- ----------
Gross profit ................................ 40,062 33,163
Expenses:
Sales and marketing .............................. 21,931 18,688
Engineering, research and development ............ 7,016 6,003
General and administrative ....................... 4,154 3,374
Other (income) expense, net ...................... 216 (95)
---------- ----------
33,317 27,970
---------- ----------
Income before income taxes .................. 6,745 5,193
Provision for income taxes ............................. 2,496 1,984
---------- ----------
Net income .................................. $ 4,249 $ 3,209
========== ==========
Net income per common share:
Basic ....................................... $ 0.34 $ 0.26
========== ==========
Diluted ..................................... $ 0.32 $ 0.25
========== ==========
Average common and common equivalent shares outstanding:
Basic ....................................... 12,462,471 12,487,508
========== ==========
Diluted ..................................... 13,152,909 12,969,665
========== ==========
</TABLE>
See accompanying notes to condensed consolidated financial
statements.
<PAGE>
<TABLE>
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
UNAUDITED
<CAPTION>
January 1, September 30,
2000 1999
---------- ----------
ASSETS
<S> <C> <C>
Current assets:
Cash and equivalents .................................................... $ 16,602 $ 20,148
Marketable securities ................................................... 24,349 20,893
Accounts receivable, less allowances of $7,155
at January 1, 2000 and $6,791 at September 30, 1999 .................. 58,258 66,817
Deferred income taxes ................................................... 5,869 5,414
Other current assets .................................................... 13,028 11,872
--------- ---------
Total current assets ............................................. 118,106 125,144
Property, plant and equipment, net ......................................... 29,133 23,981
Marketable securities ...................................................... 18,900 21,400
Excess of cost over net assets of businesses acquired, net ................. 29,049 29,946
Deferred software development costs, net ................................... 12,901 12,218
Other assets ............................................................... 14,861 15,554
--------- ---------
Total assets ..................................................... $ 222,950 $ 228,243
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable ........................................................ $ 8,141 $ 8,503
Accrued compensation .................................................... 14,994 21,106
Accrued expenses and other current liabilities .......................... 33,867 32,753
Deferred maintenance revenues ........................................... 42,988 41,636
--------- ---------
Total current liabilities ........................................ 99,990 103,998
Deferred maintenance revenues .............................................. 18,127 18,818
Other liabilities .......................................................... 1,202 1,169
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,
12,634,728 shares and 12,634,728 shares issued at January 1, 2000 and
September 30, 1999, respectively ..................................... 126 126
Additional paid-in capital .............................................. 23,494 31,087
Retained earnings ....................................................... 86,393 82,143
Equity adjustment from translation ...................................... (337) (337)
Cost of Treasury Stock (125,491 shares and 192,165
shares at January 1, 2000 and September 30, 1999, respectively) ...... (6,045) (8,761)
--------- ---------
Total shareholders' equity ....................................... 103,631 104,258
--------- ---------
Total liabilities and shareholders' equity ....................... $ 222,950 $ 228,243
========= =========
</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 1, January 2
2000 1999
----------- ----------
<S> <C> <C>
Operating activities:
Net income ........................................................................ $ 4,249 $ 3,209
Adjustments to reconcile net income to net cash and equivalents
provided by operating activities:
Depreciation .............................................................. 1,873 1,916
Amoritzation of excess of cost over net assets of businesses acquired ..... 1,551 1,010
Amortization of deferred software development costs ....................... 1,643 1,318
Provision for deferred income taxes ....................................... (895) --
Changes in certain operating assets and liabilities:
Accounts receivable, net .............................................. 8,591 1,453
Deferred maintenance revenue .......................................... 467 3,434
Accounts payable, accrued compensation
and other liabilities ............................................. (5,878) (6,466)
Other ................................................................. (16) (538)
-------- --------
Net cash and equivalents provided by operating activities ......... 11,585 5,336
Investing activities:
Purchase of property, plant and equipment ......................................... (7,024) (1,672)
Capitalization of software development costs ...................................... (2,326) (2,002)
(Increase) decrease in marketable securities ...................................... (956) 3,505
Acquisitions of businesses ........................................................ (514) (582)
-------- --------
Net cash and equivalents used in investing activities ............. (10,820) (751)
Financing activities:
Net proceeds from exercise of stock option and employee stock
purchase plans ................................................................ 3,844 1,845
Purchase of treasury stock ........................................................ (8,160) (175)
-------- --------
Net cash and equivalents (used in) provided by financing activities (4,316) 1,670
Effect of exchange rate changes on cash and equivalents ................................ 5 (10)
-------- --------
Increase (decrease) in cash and equivalents ............................................ (3,546) 6,245
Cash and equivalents at the beginning of the period .................................... 20,148 29,888
-------- --------
Cash and equivalents at the end of the period .......................................... $ 16,602 $ 36,133
======== ========
</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, 1999. The results of
operations for the three months ended January 1, 2000 are not necessarily
indicative of the results for a full fiscal year.
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 (93 days in fiscal 2000 and 94 days in
fiscal 1999) and fourth quarter (91 days in fiscal 2000 and 89 days in fiscal
1999) 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 - Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consist of the following (in
thousands):
January 1, September 30,
2000 1999
---------- ----------
Deferred professional service revenue ....... $ 15,346 $ 17,262
Accrued acquisition payments ................ 6,208 6,461
Federal and state taxes payable ............. 4,685 2,522
Accrued other ............................... 7,628 6,508
---------- ----------
$ 33,867 $ 32,753
========== ==========
<PAGE>
NOTE D - Comprehensive Income
For the three months ended January 1, 2000 and January 2, 1999 comprehensive
income consisted of the following (in thousands):
Three Months Ended
-------------------------
January 1, January 2,
2000 1999
---------- ----------
Comprehensive income:
Net income .......................... $ 4,249 $ 3,209
Cumulative translation adjustment ... -- 99
---------- ----------
Total comprehensive income .............. $ 4,249 $ 3,308
========== ==========
NOTE E - Earnings Per Share
The following table sets forth the computation of basic and diluted earnings per
share:
Three Months Ended
--------------------------
January 1, January 2,
2000 1999
----------- -----------
Net income (in thousands) .............. $ 4,249 $ 3,209
=========== ===========
Weighted-average shares ................ 12,462,471 12,487,508
Effect of dilutive securities:
Employee stock options .............. 690,438 482,157
----------- -----------
Adjusted weighted-average shares
and assumed conversions ............. 13,152,909 12,969,665
=========== ===========
Basic earnings per share ............... $ 0.34 $ 0.26
=========== ===========
Diluted earnings per share ............. $ 0.32 $ 0.25
=========== ===========
<PAGE>
11
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
Kronos' 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 Kronos' 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 2000 amounted to $64.6
million as compared with $53.1 million for the first quarter of the prior year.
Revenue growth amounted to 22% and 19% in the first quarter of fiscal 2000 and
1999, respectively. Product revenues for the quarter increased 9% to $36.2
million from $33.2 million in the same period of fiscal 1998. In the first
quarter of fiscal 1999, product revenues increased 12% over the same period in
fiscal 1998. Product revenue growth in the first quarter of fiscal 2000 was
principally driven by sales of Kronos' products to new customers as well as
sales into Kronos' existing customer base. While product revenues increased over
the comparable period of the prior year, the growth rate was negatively impacted
as a result of the postponement of customer orders due to their Year 2000
compliance efforts. Although management anticipates that the product revenue
growth rate for the remainder of the year to be above the growth rate
experienced in the first quarter of fiscal 2000, the growth rate in the second
quarter may continue to be impacted as customers transition from Year 2000
compliance efforts. Service revenues for the first quarter of fiscal 2000
increased 43% to $28.5 million from $19.9 million in the same period of fiscal
1999. In the first quarter of fiscal 1999, service revenues increased 35% over
the same period in fiscal 1998. The growth in service revenues in the first
quarter of fiscal 2000 and 1999 principally reflects an increase in maintenance
revenue from expansion of the installed base and the level of services sold to
the installed base, as well as an increase in the level of maintenance contracts
and professional services accompanying new and upgrade sales. Also contributing
to the growth in the first quarter of fiscal 2000 were maintenance and
professional service revenues resulting from the Company's acquisition of the
New York-New Jersey territory from a dealer in June 1999.
Gross Profit. Gross profit as a percentage of revenues was 62% in the
first quarter of fiscal 2000 and 1999. Product gross profit as a percentage of
product revenues was 77% and 76% in the first quarter of fiscal 2000 and 1999,
respectively. The improvement in product gross profit is principally
attributable to an increased proportion of product revenues generated by
software, which typically generates higher gross profit than other products. The
software component of product sales was 47% in the first quarter of fiscal 2000
as compared to 45% for the comparable period of the prior year. Service gross
profit as a percentage of service revenues increased to 43% in the first quarter
of fiscal 2000 from 39% 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 principally been
accomplished by improving the efficiency in the delivery of support services by
centralizing the software support function, leveraging web-based self-service
offerings and, as customers have upgraded to current versions of Kronos'
product, reducing the number of versions requiring support. In addition, Kronos
has also focused on enhancing the billing for professional services which also
improves service gross profit.
Expenses. Expenses as a percentage of revenues were 52% and 53% in the
first quarter of fiscal 2000 and 1999, respectively. Sales and marketing
expenses as a percentage of revenues were 34% in the first quarter of fiscal
2000 as compared to 35% in the first quarter of the prior year. Sales and
marketing expenses as a percentage of revenues were lower in the first quarter
of fiscal 2000 principally due to lower incentive related expenses relative to
revenues. Engineering, research and development expenses as a percentage of
revenues were 11% in the first quarter of fiscal 2000 and 1999. Expenses of $7.0
million and $6.0 million in the first quarter of fiscal 2000 and 1999,
respectively, are net of capitalized software development costs of $2.3 million
and $2.0 million, respectively. The growth in engineering, research and
development expenses resulted principally from the continuing development and
integration of new products and acquired technologies. Management anticipates
that over the remainder of fiscal 2000 engineering, research and development
expenses as a percentage of revenues will be in the 10%-11% range.
General and administrative expenses as a percentage of revenues were 6%
in the first quarter of fiscal 2000 and 1999. 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 Kronos'
investments offset by amortization of intangible assets related to acquisitions
made by Kronos.
Income Taxes. The provision for income taxes as a percentage of pretax
income was 37% and 38% in the first quarter of fiscal 1999 and 1998,
respectively. Kronos' 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 1, 2000, amounted to $18.1 million as
compared with $21.1 million at September 30, 1999. As of those dates, cash and
equivalents, marketable securities and investments amounted to $59.9 million and
$62.4 million, respectively. Cash generated from operations increased to $11.6
million in the first quarter of fiscal 2000 from $5.3 million in the first
quarter of the prior year, principally due to an increase in earnings and
collection of accounts receivable from trade customers. Cash used for property,
plant and equipment increased to $7.0 million in the first quarter of fiscal
2000 from $1.7 million in the first quarter of fiscal 1999. The increase in the
investment in property, plant and equipment was due to costs related to the
construction of Kronos' new corporate headquarters facility as well as
investments in information systems and infrastructure to improve and support
expanding operations. Over the next six months Kronos anticipates it will use
approximately $13.0 million in cash for the construction of its headquarters
facility and for payments due under the terms of various acquisition agreements.
The Company is also assessing several acquisition opportunities that may be
completed over the remainder of the fiscal year, although there can be no
assurance that these acquisitions will be completed.
Under Kronos' stock repurchase program, Kronos repurchased 168,500
common shares in the first quarter of fiscal 2000 at a cost of $8.2 million. The
common shares repurchased under the program are used for Kronos' employee stock
option plans and employee stock purchase plan. Cash provided by operations in
the first quarter of fiscal 2000 was more than sufficient to fund investments in
capitalized software development costs, property, plant and equipment and stock
repurchases. Kronos expects to fund its investments in property, plant and
equipment, software development costs, cash payments related to acquisitions and
any additional stock repurchases over the remainder of fiscal 2000 with
available cash and investments and operating cash flow.
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"). Kronos 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.
Kronos' 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 Kronos and its competitors, the
ability to attract and retain sufficient technical personnel, competitive
pricing pressures, potential effects of the century change, the dependence on
Kronos' time and attendance product line, and the dependence on alternate
distribution channels and on key vendors, as further described below and in
Kronos' Annual Report on Form 10-K for the fiscal year ended September 30, 1999,
which factors are specifically incorporated by reference herein.
Potential Fluctuations in Quarterly Results. Kronos' 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
Kronos 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. Kronos 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
Kronos has contracts to supply systems to certain customers over an extended
period of time, substantially all of Kronos' product revenue and profits in each
quarter result from orders received in that quarter. If near-term demand for
Kronos' products weakens or if significant anticipated sales in any quarter do
not close when expected, Kronos' revenues for that quarter will be adversely
affected. Kronos believes that its operating results for any one period are not
necessarily indicative of results for any future period.
Product Development and Technological Change. Continual change and
improvement in computer software and hardware technology characterize the
markets for frontline labor management systems. Kronos' future success will
depend largely on its ability to enhance the capabilities and increase the
performance of its existing products and to develop new products and interfaces
to third party products on a timely basis to meet the increasingly sophisticated
needs of its customers. Although Kronos 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 Kronos' competitors will not develop and market products
which are superior to Kronos' products or achieve greater market acceptance.
Attracting and Retaining Sufficient Technical Personnel for Product
Development, Support and Sales. Kronos has encountered intense competition for
experienced technical personnel for product development, technical support and
sales and expects such competition to continue in the future. Any inability to
attract and retain a sufficient number of qualified technical personnel could
adversely affect Kronos' ability to produce, support and sell products in a
timely manner.
Competition. The frontline labor management industry is highly
competitive. The number of competitors is also increasing as applications and
systems providers in related industries, such as human resources management,
payroll processing and enterprise resource planning (ERP), enter the market.
Technological changes such as those allowing for increased use of the Internet
may also create the potential for new entrants. Although Kronos believes it has
core competencies that are not easily obtainable by competitors, maintaining
Kronos' technological and other advantages over competitors will require
continued investment by Kronos in research and development and marketing and
sales programs. There can be no assurance that Kronos 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 Kronos' operating results through price reductions and/or
loss of market share.
Year 2000. The Company continues to maintain its executive level
steering committee which had been previously formed 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. Prior to January 1,
2000, the Company completed testing of its principal internal enterprise
resource planning (ERP) system for year 2000 compliance. This ERP system
includes order entry, material resource planning, master production scheduling,
purchasing, shipping and financial systems. The Company identified Year 2000
issues in other less significant IT systems, and resolved those issues, by
replacements and/or upgrades. The Company also completed an assessment and
remediation, as necessary, of certain non-IT prior to the end of December 1999.
The Company has replaced certain stand alone shop floor test equipment that was
found to be non-compliant. The Company did not assess specifically its facility
management systems, or the external forces such as utility or transportation
Year 2000 compliance failures that might have generally affect industry and
commerce. 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, nor is the Company aware of any unanticipated problems caused by
undetected errors or defects in these internal systems as a result of the year
2000.
The Company tested the most recent versions of its current products to
determine whether they met the Company's definition of "Year 2000 Compliant".
Testing of these products was completed by the end of December 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. Where products were identified
as needing upgrades/new versions to address Year 2000 issues, the Company made
those upgrades/new versions available to customers for purchase or under
maintenance agreements. Some of the Company's customers were using products
and/or product versions that the Company had not tested, and does not support,
for Year 2000 compliance. The Company encouraged these customers to migrate to
current products/versions that meet the Company's Year 2000 compliance
definition. The Company did not test any of its custom software products for
Year 2000 compliance.
For third party products that the Company distributes with its
products, the Company sought information and assurances from the manufacturers
concerning those products' Year 2000 compliance status. The Company completed
its assessment of those third party products by the end of December 1999. As a
result, the Company identified certain third party products that required an
upgrade to be Year 2000 compliant notified the affected customers and encouraged
them to upgrade.
To date, no Year 2000 related software problems have been detected in
the Company's standard products, other than problems that had been detected and
addressed prior to the end of 1999. A critical date still to be experienced is
February 29, 2000. Some known problems surrounding that date were identified in
one product prior to the end of 1999, and all known customers using this product
were notified and offered a free upgrade. In addition, even if customers do not
upgrade, workarounds for the problem are available.
Notwithstanding the Company's testing of its own products and efforts
to obtain assurances concerning 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, although no such
litigation relating to the Company's products has been filed so far.
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 $1.2 million of incremental costs to address
its internal IT and non-IT systems and to address Year 2000 compliance problems
in its own products and in third party products distributed with its products.
The Company believes that substantially all of the costs to be incurred
associated with the Company's Year 2000 plan have been recognized. 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.
<PAGE>
PART II. OTHER INFORMATION
Item 5. Other Information
None
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 1, 2000.
<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 14, 2000
<PAGE>
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 1, 2000 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-30-2000
<PERIOD-START> Oct-01-1999
<PERIOD-END> Jan-01-2000
<EXCHANGE-RATE> 1
<CASH> 16,602
<SECURITIES> 24,349
<RECEIVABLES> 65,413
<ALLOWANCES> 7,155
<INVENTORY> 3,371
<CURRENT-ASSETS> 118,106
<PP&E> 67,913
<DEPRECIATION> 38,780
<TOTAL-ASSETS> 222,950
<CURRENT-LIABILITIES> 99,990
<BONDS> 0
0
0
<COMMON> 126
<OTHER-SE> 103,505
<TOTAL-LIABILITY-AND-EQUITY> 222,950
<SALES> 36,152
<TOTAL-REVENUES> 64,608
<CGS> 8,291
<TOTAL-COSTS> 24,546
<OTHER-EXPENSES> 33,317
<LOSS-PROVISION> 244
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 6,745
<INCOME-TAX> 2,496
<INCOME-CONTINUING> 4,249
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,249
<EPS-BASIC> 0.34
<EPS-DILUTED> 0.32
</TABLE>
