-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AVki5PBOX3Aht2oU865ceKHWF7UVgFF661OPjGt6i0NveKb9BE5/X03YCyWYtNeT W5cq5Bfj7u8zP8X8uOPsRw== 0000886903-96-000012.txt : 19960813 0000886903-96-000012.hdr.sgml : 19960813 ACCESSION NUMBER: 0000886903-96-000012 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19960629 FILED AS OF DATE: 19960812 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: KRONOS INC CENTRAL INDEX KEY: 0000886903 STANDARD INDUSTRIAL CLASSIFICATION: OFFICE MACHINES, NEC [3579] IRS NUMBER: 042640942 STATE OF INCORPORATION: MA FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-20109 FILM NUMBER: 96608876 BUSINESS ADDRESS: STREET 1: 400 FIFTH AVENUE CITY: WALTHAM STATE: MA ZIP: 02154 BUSINESS PHONE: 6178903232 MAIL ADDRESS: STREET 1: 400 FIFTH AVE STREET 2: 400 FIFTH AVE CITY: WALTHAM STATE: MA ZIP: 02154 10-Q 1 QUARTERLY REPORT ON FORM 10-Q DATED 6/29/96 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 June 29, 1996 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 02154 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (617) 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 June 29, 1996, 8,099,255 shares of the registrant's Common Stock, $.01 par value, were outstanding (after giving effect to the three-for-two stock split of the Company's Common Stock effected in the form of a stock dividend paid on January 29, 1996 to stockholders of record on January 15, 1996.) KRONOS INCORPORATED INDEX PART I. FINANCIAL INFORMATION Page Item 1. Condensed Consolidated Financial Statements (Unaudited) Condensed Consolidated Statements of Income for the Three Months and Nine Months Ended June 29, 1996 and July 1, 1995 1 Condensed Consolidated Balance Sheets at June 29, 1996 and September 30, 1995 2 Condensed Consolidated Statements of Cash Flows for the Nine Months Ended June 29, 1996 and July 1, 1995 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 6. Exhibits and Reports on Form 8-K Signatures Exhibit Index
PART I. FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements (Unaudited) KRONOS INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except share and per share amounts) UNAUDITED Three Months Ended Nine Months Ended -------------------------- ------------------------- June 29, July 1, June 29, July 1, 1996 1995 1996 1995 ----------- ----------- ----------- ----------- Net revenues: Product ........................................... $ 25,018 $ 22,772 $ 70,792 $ 63,248 Service ........................................... 11,232 8,296 30,027 23,179 ----------- ----------- ----------- ----------- 36,250 31,068 100,819 86,427 ----------- ----------- ----------- ----------- Cost of sales: Product ........................................... 6,595 6,159 18,897 18,352 Service ........................................... 7,229 6,233 20,566 18,118 ----------- ----------- ----------- ----------- 13,824 12,392 39,463 36,470 ----------- ----------- ----------- ----------- Gross profit ................................. 22,426 18,676 61,356 49,957 Expenses: Sales and marketing ............................... 11,896 10,447 33,133 29,300 Engineering, research and development ............. 3,197 2,131 8,699 5,913 General and administrative ........................ 2,572 2,252 7,330 6,310 Other expense (income), net ....................... (28) 169 85 468 ----------- ----------- ----------- ----------- 17,637 14,999 49,247 41,991 ----------- ----------- ----------- ----------- Income before income taxes ................... 4,789 3,677 12,109 7,966 Provision for income taxes ............................. 1,835 1,399 4,639 3,011 ----------- ----------- ----------- ----------- Net income ................................... $ 2,954 $ 2,278 $ 7,470 $ 4,955 =========== =========== =========== =========== Net income per common share: Primary ........................................... $ 0.35 $ 0.28 $ 0.90 $ 0.61 Fully diluted ..................................... $ 0.35 $ 0.28 $ 0.90 $ 0.61 Average common and common equivalent shares outstanding: Primary ...................................... 8,351,419 8,164,064 8,317,527 8,091,239 =========== =========== =========== =========== Fully diluted ................................ 8,380,359 8,196,329 8,332,036 8,116,262 =========== =========== =========== =========== See accompanying notes to condensed consolidated financial statements.
CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share amounts) UNAUDITED June 29, September 30, 1996 1995 -------- -------- Current assets: Cash and equivalents .................................................... $ 21,105 $ 17,727 Marketable securities ................................................... 9,509 3,716 Accounts receivable, less allowances for doubtful accounts of $1,138 at June 29, 1996 and $1,001 at September 30, 1995 .................... 26,149 28,159 Inventories ............................................................. 4,744 4,469 Deferred income taxes ................................................... 1,515 1,515 Other current assets .................................................... 3,070 1,273 -------- -------- Total current assets ............................................. 66,092 56,859 Equipment, net ............................................................. 13,697 10,079 Excess of cost over net assets of businesses acquired ...................... 6,520 6,606 Other assets ............................................................... 7,442 4,062 -------- -------- Total assets ..................................................... $ 93,751 $ 77,606 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable and accrued expenses ................................... $ 9,910 $ 8,352 Accrued compensation .................................................... 8,527 7,149 Federal and state income taxes payable .................................. 2,099 969 Unearned service revenue ................................................ 17,547 13,815 -------- -------- Total current liabilities ........................................ 38,083 30,285 Other liabilities .......................................................... 657 752 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 12,000,000 shares, 8,099,256 shares and 7,940,468 shares issued at June 29, 1996 and September 30, 1995, respectively ..................................... 81 79 Additional paid-in capital .............................................. 25,373 24,353 Retained earnings ....................................................... 29,818 22,348 Equity adjustment from translation ...................................... (261) (206) Cost of shares of Common Stock held in treasury (1 share and 170 shares at June 29, 1996 and September 30, 1995, respectively) ........ (5) -------- -------- Total shareholders' equity ....................................... 55,011 46,569 -------- -------- Total liabilities and shareholders' equity ....................... $ 93,751 $ 77,606 ======== ======== See accompanying notes to condensed consolidated financial statements.
KRONOS INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) UNAUDITED Nine Months Ended -------------------- June 29, July 1, 1996 1995 -------- -------- Operating activities: Net income .............................................................. $ 7,470 $ 4,955 Adjustments to reconcile net income to net cash and equivalents provided by operating activities: Depreciation .................................................... 3,392 2,758 Amortization of deferred software development costs and excess of cost over net assets of businesses acquired ....... 2,400 1,848 Changes in certain operating assets and liabilities: Accounts receivable, net .................................... 1,752 453 Inventories ................................................. (265) 522 Unearned service revenue .................................... 3,720 1,400 Accounts payable, accrued compensation and other liabilities ................................... 4,189 4,777 Net investment in sales-type leases ......................... (2,806) Other ........................................................... (795) 22 -------- -------- Net cash and equivalents provided by operating activities 19,057 16,735 Investing activities: Purchase of equipment ................................................... (7,220) (3,037) Capitalization of software development costs ............................ (2,703) (1,626) (Increase) decrease in marketable securities ............................ (5,793) 76 Acquisitions of businsesses ............................................. (727) (1,090) Other ................................................................... (217) (21) -------- -------- Net cash and equivalents used in investing activities ... (16,660) (5,698) Financing activities: Principal payments under capital leases ................................. (22) (93) Net proceeds from exercise of stock option and employee stock purchase plans ....................................................... 1,027 648 -------- -------- Net cash and equivalents provided by financing activities 1,005 555 Effect of exchange rate changes on cash and equivalents ...................... (24) (12) -------- -------- Increase in cash and equivalents ............................................. 3,378 11,580 Cash and equivalents at the beginning of the period .......................... 17,727 7,938 -------- -------- Cash and equivalents at the end of the period ................................ $ 21,105 $ 19,518 ======== ======== See accompanying notes to condensed consolidated financial statements.
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, 1995. The results of operations for the three month and nine month periods ended June 29, 1996 and July 1, 1995 are not necessarily indicative of the results for a full fiscal year. Certain amounts have been reclassified in fiscal 1995 to permit comparison with fiscal 1996. These amounts primarily relate to third party maintenance costs which were previously included in product cost of sales and are currently included in service cost of sales. 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 and fourth quarters of each fiscal year may vary slightly 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 - Marketable Securities The Company's marketable securities, which primarily consist of state revenue bonds and generally mature within one year, are classified as held to maturity and are carried at amortized cost. NOTE D - Inventories Inventories consist of the following (in thousands): June 29, September 30, 1996 1995 ------------------- ------------------- Finished goods $1,972 $1,769 Work - in - process 378 315 Raw materials 2,394 2,385 ------------------- ------------------- $4,744 $4,469 =================== =================== NOTE E - Stock Split The Company's Board of Directors approved a three-for-two stock split effected in the form of a 50% stock dividend that was paid on January 29, 1996 to stockholders of record as of January 15, 1996. Accordingly, the presentation of shares outstanding and amounts per share have been restated for all periods presented to reflect the split. The par value of the additional shares was transferred from additional paid-in capital to Common Stock. On November 17, 1995, the Company's Board of Directors adopted a Rights Agreement. Under the Agreement, the Company distributed to stockholders a dividend of one Right for each outstanding share of Common Stock. As a result of the stock split, each stockholder has two-thirds of a Right for each share of Common Stock held as of the Record Date. NOTE F - Credit Agreement On May 28, 1996, the Company amended its credit agreement with a bank to extend the term of the agreement through June 1, 1998. NOTE G - Subsequent Events On July 1, 1996, the Company purchased all of the territories covered by Kronology Pty. Ltd., a dealer of the Company which was headquartered in Sydney, Australia. As a result of this acquisition, which was accounted for under the purchase method of accounting, the Company has established a subsidiary to perform sales and support in Australia. The cost of this acquisition of approximately $.8 million largely relates to intangible assets which are being amortized on the straight-line method over a period of eight years. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations Revenues. Revenues for the third quarter of fiscal 1996 amounted to $36.3 million as compared with $31.1 million for the third quarter of the prior year. Revenues for the first nine months of fiscal 1996 were $100.8 million as compared with $86.4 million for the first nine months of the prior year. The revenue growth rate of 17% in both the quarter and nine month periods ended June 29, 1996, respectively, declined from 32% and 36% for comparable periods of the prior year. The decline in the revenue growth rate for both periods presented is attributable to a variety of factors, the most significant of which was the unusually strong revenue growth rate experienced in fiscal 1995. The Company's historical growth trend of approximately 20% accelerated during fiscal years 1994 and 1995 to 37% and 30%, respectively. This acceleration of revenue growth was attributed to, among other factors, the absorption of acquired dealer territories and the impact of the start-up of the Company's marketing agreement with ADP, Inc. As a result of these factors, the Company's revenue growth rate for the first nine months in fiscal 1996 has been less than that experienced in comparable periods in fiscal 1995. The Company also believes that its revenue growth rate in the fourth quarter of fiscal 1996 may be less than the historical trend because of the Company's product transition from DOS and Unix platforms to the Windows and client/server environments. However, the Company believes that demand for its products and services remains strong and that the revenue growth experienced in the first nine months of fiscal 1996 should continue through the remainder of the fiscal year. Product revenues for the quarter increased 10% to $25.0 million. Service revenues for the quarter increased 35% to $11.2 million. The growth in product revenues was principally driven by customer demand. The growth in service revenues reflects increases in maintenance and professional services revenue from expansion of the installed base as well as an increase in the level of services accompanying the sale of new products. Product revenues for the first nine months of fiscal 1996 increased 12% to $70.8 million and service revenues increased 30% to $30.0 million. The growth in product and service revenues for this nine month period was principally a result of the same factors discussed in this paragraph for the quarter. Gross Profit. Gross profit as a percentage of revenues was 62% in the third quarter of fiscal 1996 as compared with 60% in the third quarter of the prior year. Product gross profit increased to 74% in the quarter from 73% in the third quarter of the prior year. The improvement in product gross profit in the third quarter of fiscal 1996 is primarily attributable to the mix of distribution channel revenues. Revenues in the third quarter of fiscal 1996 include a higher proportion of direct channel revenues than in the prior year. Direct channel revenues typically generate higher gross profit than other distribution channels, and as a result, has a favorable impact on product gross margin. The Company anticipates that product gross margin should approximate 72% to 74% of product revenues in the fourth quarter of fiscal 1996. Service gross profit increased to 36% in the third quarter of fiscal 1996 from 25% in the third quarter of the prior year. The increase in service gross profit is primarily attributable to the growth in service revenues. The Company has been able to absorb the increase in service volume without a ratable increase in service expenses. Over the past year, the Company has focused on increasing service revenues from new and existing customers as well as improving the efficiency and, therefore, reducing the cost of delivering such services. The improved service margins experienced in the third quarter of 1996 are a result of this focus. Gross profit as a percentage of revenues for the first nine months of fiscal 1996 was 61% as compared with 58% for the first nine months of fiscal 1995. Product gross profit increased to 73% in the first nine months of fiscal 1996 from 71% in the first nine months of the prior year. Service gross profit increased to 32% for the first nine months of fiscal 1996 from 22% in the first nine months of the prior year. The increase in both product and service gross profit was principally a result of the same factors discussed in the paragraph above for the quarter. Expenses. Expenses as a percentage of revenues were 49% for the three and nine month periods ended June 29, 1996 as compared with 48% and 49% for the same periods of the prior year. The slight increase in spending relative to sales reflects the Company's concerted effort to increase spending in engineering, research and development. Sales and marketing expenses as a percentage of revenues decreased to 33% in the three and nine month periods ended June 29, 1996 from 34% in the comparable periods of the prior fiscal year. The decline in sales and marketing expenses as a percentage of revenues is a result of various programs implemented by the Company to increase sales productivity and efficiency including but not limited to the development of industry focused vertical business divisions. The Company anticipates that sales and marketing expenses as a percentage of revenues in the fourth quarter of fiscal 1996 should remain comparable to the level achieved in the first nine months of fiscal 1996. Engineering, research and development expenses increased as a percentage of revenues to 9% in the three and nine month periods ended June 29, 1996 as compared with 7% of the prior year. The growth in engineering, research and development expenses as a percentage of revenues was anticipated as the Company continues to invest in new product development, primarily in the Windows and client/server environments. Expenses of $3.2 million and $2.1 million in the third quarter of fiscal 1996 and 1995 are net of capitalized software development costs of $1.2 million and $.6 million, respectively. Expenses of $8.7 million and $5.9 million in the first nine months of fiscal 1996 and 1995 are net of capitalized software development costs of $2.7 million and $1.6 million, respectively. The growth in spending on capitalizable software development costs principally reflects enhancements of new products released in the past four quarters as well as enhancements of existing products. General and administrative expenses as a percentage of revenues amounted to 7% for all periods presented. Expenses in the first nine months of fiscal 1996 include start-up costs incurred for an internally funded customer lease program. Other expense, net amounted to less than 1% of revenues for all periods presented. Other expense, net is composed primarily of amortization of intangible assets related to acquisitions made by the Company which is offset by interest income earned on its investments. Income Taxes. The provision for income taxes as a percentage of pretax income was 38% for all periods presented The Company's effective income tax rate may fluctuate between periods as a result of various factors, none of which are material, either individually or in aggregate, to the consolidated results of operations. Liquidity and Capital Resources Working capital as of June 29, 1996, amounted to $28.0 million as compared with $26.6 million at September 30, 1995. As of those dates, cash and equivalents and marketable securities amounted to $30.6 million and $21.4 million, respectively. Cash generated from operations increased to $19.1 million in the first nine months of fiscal 1996 from $16.7 million in the first nine months of the prior year. The increase in cash generated from operations is principally due to increased earnings and management of the Company's operating assets and liabilities. Cash generated from operations was negatively impacted by the Company's initial investment in its internally funded leasing program. Cash used in investing activities increased to $16.7 million in the first nine months of fiscal 1996 from $5.7 million for the same period in the prior year. Excluding investments in marketable securities, cash used in investing activities amounted to $10.9 million for the first nine months of fiscal 1996 compared to $4.7 million for the prior year. As anticipated, the Company has increased spending on equipment, principally for the expansion of the Company's manufacturing, distribution and corporate facilities and investments in the Company's internal information systems infrastructure. 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 and software development costs over the remainder of its fiscal year with existing cash and equivalents together with internally generated cash. The Company has available a bank line of credit of $3.0 million. During the quarter, the line of credit agreement was extended through June 1, 1998. No amounts were outstanding on the line of credit as of June 29, 1996. Certain Factors That May Affect Future Operating Results The Company's actual operating results may differ from those indicted 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 of new product announcements or introductions by the Company and its competitors, competitive pricing pressures, the ability to attract and retain sufficient technical personnel, the dependence on alternate distribution channels, and the dependence on the Company's time accounting product line and on key vendors, as further described below and in the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended March 30, 1996, 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 quarter are not necessarily indicative of results for any future period. Product Development and Technological Change. The markets for time accounting and data collection systems are characterized by continual change and improvement in computer software and hardware technology. 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. The Company is transitioning its product offerings from DOS and Unix platforms to the Windows and client/server environments. As a result of this transition, the Company does not believe that demand for its products in the near future will increase at the same rate as the Company has experienced in comparable periods in recent years. PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 10.1 Amendment dated June 3, 1996 to Loan Agreement dated June 30, 1993, as amended, between Fleet National Bank and the Registrant 11 Statement re Computation of Per Share Earnings 27.1 Financial Data Schedule (b) Reports on Form 8-K There were no reports on Form 8-K filed during the fiscal quarter ended June 29, 1996. 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) August 12, 1996 KRONOS INCORPORATED EXHIBIT INDEX Exhibit Number Description 10.1 Amendment dated June 3, 1996 to Loan Agreement dated June 30, 1993, as amended, between Fleet National Bank and the Registrant 11 Statement re Computation of Per Share Earnings 27.1 Financial Data Schedule EX-10.1 2 AMENDMENT TO FLEET LOAN AGREEMENT EXHIBIT 10.1 (Graphic - Fleet Letterhead) May 28, 1996 Mr. Paul Lacy Vice President of Finance & Administration Kronos Incorporated 400 Fifth Avenue Waltham, MA 02154 Dear Paul: We are pleased to inform you that Fleet National Bank ("Bank"), successor to Fleet Bank of Massachusetts, N.A., has approved the renewal of the existing $3,000,000 revolver ("Revolver") held available to Kronos, Inc. ("Borrower") for two (2) years, until June 1, 1998. As in the past, advances under the Revolver shall bear interest at your option of either the "Prime" rate, or LIBOR+1.75%. Also, as in the past, the Bank continues to maintain a 3/8% commitment fee on the unused portion of the subject Revolver. "Prime Rate" is defined as that rate from time to time announced and made effective by the Bank as the Prime Rate. Your borrowing rate shall change as the Prime Rate changes. Interest shall be made payable monthly in arrears. Interest and fees are calculated on the basis of a 360 day year and actual days elapsed. It should be noted that at various times within the terms of this commitment, advances may be allocated for Letters of Credit so long as that in aggregate, advances under the revolver do not exceed the total committed amount. Additionally approved was a two (2) year renewal of the existing $1.0MM Foreign Exchange Line, until June 1, 1998. Notwithstanding the aforementioned, all other terms and conditions of the existing Loan Agreement remain in full force and effect. If the aforementioned terms and conditions continue to meet with your approval, please acknowledge your understanding and acceptance by signing this letter and returning it to my attention at: Fleet National Bank 75 State Street Boston, Massachusetts 02109 MABOFO4H Also, please sign the enclosed Addendum to the existing Loan Agreement which serves to address the Bank's recent change in name to Fleet National Bank. If you have any questions, please call me at (617) 346-1856. Sincerely, /s/ Ann M. Dillon Ann M. Dillon Vice President Acknowledged and Accepted: /s/ Paul Lacy 6/3/96 - ------------------------- ------------ Kronos Incorporated Date Paul Lacy Vice President of Finance & Administration ADDENDUM TO Loan Agreement dated June 30, 1993, and subsequently amended (the "Instrument"), between Kronos Incorporated (collectively or singularly, as the case may be, the "obligor") and the Bank referred to in the instrument. Notwithstanding anything to the contrary contained in the Instrument, the Obligor hereby acknowledges and agrees that any and all references therein to "Fleet Bank of Massachusetts, N.A.," shall be deemed to refer to Fleet National Bank. IN WITNESS WHEREOF, the Obligor has executed this Addendum this 3rd day of June, 1996. Obligor: Kronos Incorporated By: __/s/ Paul Lacy_________________ Print Name: Paul Lacy Title: Vice President of Finance & Administration EX-11 3 COMPUTATION OF PER SHARE EARNINGS
KRONOS INCORPORATED Exhibit 11 - Statement re Computation of Per Share Earnings (In thousands, except share and per share amounts) Three Months Ended Nine Months Ended ----------------------- ----------------------- June 29, July 1, June 29, July 1, 1996 1995 1996 1995 ---------- ---------- ---------- ---------- Net income .................................. $ 2,954 $ 2,278 $ 7,470 $ 4,955 ========== ========== ========== ========== Net income per common share: Primary: Weighted average shares outstanding 8,076,878 7,855,761 8,015,612 7,794,203 Common Stock equivalents .......... 274,541 308,303 301,915 297,036 ---------- ---------- ---------- ---------- Total ............................. 8,351,419 8,164,064 8,317,527 8,091,239 ========== ========== ========== ========== Net income per common share ....... $ 0.35 $ 0.28 $ 0.90 $ 0.61 ========== ========== ========== ========== Fully diluted: Weighted average shares outstanding 8,076,878 7,855,761 8,015,612 7,794,203 Common Stock equivalents .......... 303,481 340,568 316,424 322,059 ---------- ---------- ---------- ---------- Total ............................. 8,380,359 8,196,329 8,332,036 8,116,262 ========== ========== ========== ========== Net income per common share ....... $ 0.35 $ 0.28 $ 0.90 $ 0.61 ========== ========== ========== ==========
EX-27.1 4 FDS --
5 This schedule contains summary financial information extracted from the Condensed Consolidated Financial Statements of the Corporation for the nine months ended June 29, 1996 and is qualified in its entirety by reference to such financial statements. 0000886903 Kronos Inc. 1,000 U.S. Dollars 9-mos Sep-30-1996 Oct-01-1995 Jun-29-1996 1 21,105 9,509 27,287 1,138 4,744 66,092 30,689 16,992 93,751 38,083 0 0 0 81 54,930 93,751 70,792 100,819 18,897 39,463 0 226 0 12,109 4,639 7,470 0 0 0 7,470 0.90 0.90
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