8-K

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): April 26, 2004

Kronos Incorporated
(Exact name of registrant as specified in charter)

Massachusetts
(State or other juris-
diction of incorporation 0-20109
(Commission
File Number) 04-2640942
(IRS Employer
Identification No.)

297 Billerica Road, Chelmsford, MA 01824
(Address of principal executive offices)(Zip Code)

Registrant’s telephone number, including area code: 978-250-9800

(Former name or former address, if changed since last report)

Item 12. Results of Operations and Financial Condition

         On April 26, 2004, Kronos Incorporated announced its financial results for the fiscal quarter ended April 3, 2004. The full text of the press release issued in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

         The information in this Form 8-K and the Exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.

SIGNATURE

        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 hereunto duly authorized.

Date: April 26, 2004	KRONOS INCORPORATED
	By: /s/ Paul A. Lacy Paul A. Lacy Executive Vice President, Chief Financial and Administrative officer

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press release dated April 26, 2004

EX-99

EXHIBIT 99.1

For Immediate Release	Kronos Contact:	Paul Lacy
		(978)947-4944
		placy@kronos.com

KRONOS^® REPORTS SECOND QUARTER FISCAL 2004 RESULTS

Results reflect double-digit growth over prior year as customers embrace Kronos’ broad suite of
human resources, payroll, scheduling, and time and labor solutions

CHELMSFORD, Mass., April 26, 2004 — Kronos^® Incorporated (Nasdaq: KRON) today reported financial results for the second quarter of Fiscal 2004. Net income for the second quarter of Fiscal 2004 increased 32 percent to $9.6 million, or $.30 per diluted share, as compared to $7.3 million, or $.24 per diluted share, for the same period a year ago. Net income was favorably impacted in the quarter by an improvement in the tax rate from 35 percent in the first quarter of Fiscal 2004 to 31 percent, resulting from the completion of tax audits that reduced overall tax exposure for the company. Revenue for the second quarter increased 12 percent to $108.0 million as compared to $96.5 million for the same period a year ago.

For the six-month period, net income rose 19 percent to $17.0 million, or $.53 per diluted share, as compared to $14.3 million, or $.47 per diluted share, for the same period last year. For the six-month period, revenue rose 12 percent to $207.7 million as compared to $186.2 million for the first six months of the prior year.

“We are very pleased with the strong performance we demonstrated this quarter. Solid execution in the field combined with the value inherent in our broadened product portfolio enabled Kronos to generate strong top- and bottom-line results,” said Mark S. Ain, Kronos’ chief executive officer. “With healthy performance across the board in the wide spectrum of markets that we serve, it is clear that organizations of all types and sizes need Kronos solutions to help them better align their workforce with corporate objectives.”

This marks Kronos’ 97^th straight quarter of revenue growth compared to the same period in the previous year, and 68^th consecutive quarter of profitability ^{(Note 1)}. Kronos’ balance sheet remains strong with $150.5 million in cash and investments and no debt. Total deferred maintenance, professional services, and product revenue at the end of the quarter was $130.0 million.

(more)

Workforce Central^® 5

Kronos announced general availability of Workforce Central 5 during the final week of the quarter. In addition to containing innovative new applications that allow employers to schedule and manage their workforce more efficiently, Workforce Central 5 also includes significant enhancements in Kronos’ integrated human resources and payroll applications. “With Workforce Central 5, Kronos’ value proposition is more apparent now than ever before across our broad spectrum of target markets,” stated Ain. “We see substantial opportunities for Workforce Central 5.”

Quarterly Wins

“Our product portfolio of human resources, payroll, scheduling, and time and labor solutions is being well received by both long-standing and new customers who are grappling with the challenges of controlling costs and improving productivity,” continued Ain. “We experienced very strong activity from customers who moved from a legacy platform to a Kronos solution during the quarter. Indicative of the strong market acceptance of Kronos solutions was the 30 percent increase in contracts greater than $100,000 during the quarter.”

Kronos continues to be the clear choice for large-scale employers seeking enterprise-wide, single-database, centralized deployments of Web-based time and labor solutions. Kronos is the standard time and labor vendor for large employers across all vertical markets, with thousands of satisfied enterprise customers.

Notable wins from new and existing customers during the quarter for enterprise-wide deployments of Kronos solutions included Beaulieu of America, Best Buy Canada, Clemens Markets, Columbia University, Cox Enterprises, Jersey City Medical Center, Louisiana State University Health Science Centers, New York State Unified Court System, Norton Healthcare, Park Nicollet Health Services, Roseburg Forest Products, Roundy’s, and many others.

(more)

Outlook

“We expect to report third quarter revenue in the range of $113-117 million and earnings in the range of $.32-.38 per share,” concluded Ain. “We have slightly adjusted our guidance for Fiscal 2004. We expect to report Fiscal 2004 revenue of $444-451 million, with earnings per share in the range of $1.29-1.35.”

Conference Call Webcast

Kronos senior management plans to review its second-quarter results during a conference call today beginning at 4:30 p.m. Eastern. The conference call will be webcast live at http://www.kronos.com/invest and will be available for replay purposes.

About Kronos Incorporated

Kronos Incorporated is a single-source provider of human resources, payroll, scheduling, and time and labor solutions. Kronos’ best-in-class Employee Relationship Management solution enables organizations to reduce costs and increase productivity, put real-time information in the hands of decision makers, align employee performance with organizational objectives, and improve employee satisfaction. Learn more at www.kronos.com.

Safe Harbor Statement

This press release contains forward-looking statements that involve a number of risks and uncertainties, including the performance estimates and statements relating to earnings and revenue growth and profitability, the ability to close potential product sales transactions, the ability to realize revenues from the sales pipeline, the market acceptance of our new products and enhancements, our ability to monitor and manage discretionary costs, growth in the market for our products and within the economy generally, and potential acquisitions. Among the important factors that could cause actual operating results to differ materially from those indicated by such forward-looking statements are delays in product development, including enhancements to existing products, product performance issues, competitive pressures, general economic conditions, possible disruption in commercial activities caused by terrorist activity and armed conflict, such as changes in logistics and security arrangement and the risk factors detailed in the company’s periodic reports and registration statements filed with the Securities and Exchange Commission. The timing of the release of new products or product enhancements will take place if and when available and at the sole discretion of Kronos.

Note 1: Excluding a one-time special charge in the second quarter of Fiscal 2001.

###

© 2004 Kronos Incorporated. Kronos, Workforce Central, and the Kronos logo are registered trademarks of Kronos Incorporated or a related company. All other product and company names mentioned are used for identification purposes only and may be trademarks of their respective owners.

KRONOS INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except share and per share amounts)
UNAUDITED

	Three Months Ended						Six Months Ended
	April 3, 2004			March 29, 2003			April 3, 2004			March 29, 2003
Net revenues:
Product	$	44,966		$	44,143		$	84,106		$	83,030
Maintenance		34,595			29,666			68,742			58,651
Professional services		28,418			22,672			54,804			44,509
		107,979			96,481			207,652			186,190
Cost of sales:
Costs of product		10,512			10,929			20,212			20,356
Costs of maintenance and professional services		33,303			28,036			65,348			54,273
		43,815			38,965			85,560			74,629
Gross profit		64,164			57,516			122,092			111,561
Operating expenses and other income:
Sales and marketing		32,344			30,960			63,364			59,649
Engineering, research and development		10,773			9,552			20,448			18,035
General and administrative		8,053			6,390			14,412			12,435
Amortization of intangible assets		1,001			789			2,008			1,508
Other income, net		(1,853	)		(1,522	)		(3,371	)		(2,427	)
		50,318			46,169			96,861			89,200
Income before income taxes		13,846			11,347			25,231			22,361
Provision for income taxes		4,226			4,085			8,199			8,050
Net income	$	9,620		$	7,262		$	17,032		$	14,311
Net income per common share:
Basic	$	0.31		$	0.24		$	0.55		$	0.48
Diluted	$	0.30		$	0.24		$	0.53		$	0.47
Weighted-average common shares outstanding:
Basic		30,992,982			29,780,302			30,841,312			29,620,022
Diluted		32,025,582			30,833,413			31,954,350			30,724,022

KRONOS INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
UNAUDITED

	April 3, 2004			September 30, 2003
ASSETS
Current assets:
Cash, equivalents and marketable securities	$	103,924		$	86,940
Accounts receivable, less allowances of $7,845		83,111			84,275
at April 3, 2004 and $7,833 at September 30, 2003
Deferred income taxes		10,086			8,427
Other current assets		18,605			18,649
Total current assets		215,726			198,291
Marketable securities		46,566			44,065
Property, plant and equipment, net		39,593			39,263
Intangible assets		21,729			22,938
Goodwill		72,807			70,446
Capitalized software, net		23,036			23,012
Other assets		16,340			14,791
Total assets	$	435,797		$	412,806
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	7,450		$	6,584
Accrued compensation		28,079			35,655
Accrued expenses and other current liabilities		9,715			16,169
Deferred product revenues		5,486			3,387
Deferred professional service revenues		36,613			39,745
Deferred maintenance revenues		81,202			75,505
Total current liabilities		168,545			177,045
Deferred maintenance revenues		6,679			7,319
Deferred income taxes		8,665			8,190
Other liabilities		3,650			3,655
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
50,000,000 shares, 31,127,455 and 30,439,778 shares
issued at April 3, 2004 and September 30, 2003, respectively		311			304
Additional paid-in capital		53,484			38,110
Retained earnings		194,873			177,841
Cost of Treasury Stock (45,158 shares and 260 shares at
April 3, 2004 and September 30, 2003, respectively)		(1,503	)		(6	)
Accumulated other comprehensive income:
Foreign currency translation		983			(8	)
Net unrealized gain on available-for-sale investments		110			356
		1,093			348
Total shareholders' equity		248,258			216,597
Total liabilities and shareholders' equity	$	435,797		$	412,806