8-K

UNITED STATES

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 27, 2005

KRONOS INCORPORATED

(Exact Name of Registrant as Specified in Charter)

Massachusetts	0-20109	04-2640942
(State or Other Juris- diction of Incorporation	(Commission File Number)	(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

N/A

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o        Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o        Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o        Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o        Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition

On April 27, 2005, Kronos Incorporated announced its financial results for the fiscal quarter ended April 2, 2005. 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 (including Exhibit 99.1) 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.

Item 9.01. Financial Statements and Exhibits

(c) Exhibits

The following exhibit relating to Item 2.02 shall be deemed to be furnished, and not filed:

99.1 Press Release, entitled “Kronos^® Reports Second Quarter Fiscal 2005 Results,” issued by the company on April 27, 2005.

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.

KRONOS INCORPORATED

Date: April 27, 2005 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, entitled “Kronos® Reports Second Quarter Fiscal 2005 Results”, issued by the company on April 27, 2005.

EX-99

Exhibit 99.1

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

KRONOS^® REPORTS SECOND QUARTER FISCAL 2005 RESULTS

Continues track record of growth and profitability

CHELMSFORD, Mass., April 27, 2005 — Kronos^® Incorporated (Nasdaq: KRON) today reported financial results for the second quarter of Fiscal 2005. Net income for the quarter increased 17 percent to $11.2 million, or $.34 per diluted share, as compared to $9.6 million, or $.30 per diluted share, for the same period a year ago. Revenue for the second quarter increased 12 percent to $120.6 million as compared to $108.0 million for the same period a year ago.

For the six-month period, net income increased 28 percent to $21.9 million, or $.67 per diluted share, as compared to $17.0 million, or $.53 per diluted share, for the same period last year. For the six-month period, revenue increased 15 percent to $238.9 million as compared to $207.7 million for the first six months of the prior year.

“During the quarter, new and existing customers across a broad spectrum of industries selected Workforce Central^® to meet their most complex workforce management challenges. We were especially pleased to see the strong demand for our new scheduling products as well as major increases in the sales of our human resources and payroll applications compared to the same period last year,” said Chief Executive Officer Mark S. Ain. “We are also pleased that during the quarter, we significantly ramped up our mid-market sales team while sustaining solid performance at the enterprise level.”

Kronos’ second-quarter results mark the company’s 101^st consecutive quarter of year-over-year revenue growth and 72^nd consecutive quarter of profitability ^{(Note 1)} _.

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Total deferred maintenance, professional services, and product revenue at the end of the quarter was $148 million. In addition to this deferred revenue, Kronos has a growing backlog of professional services engagements not reflected on its balance sheet. The backlog of uncommitted professional services engagements now exceeds $30 million, nearly double the amount at the end of last year’s second quarter. Kronos’ balance sheet remains strong with $160 million in cash and investments and no debt.

Second-Quarter Highlights

• Track record for growth and profitability — Kronos was recently recognized for its long history of growth and profitability by Sand Hill Group, which named Kronos to its elite list known as “The Sustained Success Honor Roll.” This honor was announced at Sand Hill’s Software 2005 conference, a major industry event for business leaders, venture capitalists, and analysts.

• Notable customer wins across target vertical markets — Leading organizations across multiple industries choose Kronos solutions to staff, develop, deploy, track, and reward their workforce. Notable wins from new and existing customers during the quarter included:

• U.S. Department of Homeland Security: Based on its proven ability to help federal government agencies function more like a business by more efficiently and cost-effectively managing the workforce, Kronos was selected by the U.S. Department of Homeland Security (DHS). DHS chose Kronos to provide time and labor solutions for use by the department’s entire workforce of 180,000 employees across multiple DHS directorates and organizational entities. The DHS selection of Kronos’ webTA application was part of a contract awarded to Sword & Shield Enterprise Security, Inc., a veteran-owned small business, in partnership with immixTechnology, a reseller of Kronos products in the federal government marketplace.

• Tower Automotive, Inc., a global designer and producer of vehicle structural components and assemblies, will utilize the time and labor and scheduling applications within the Workforce Central suite for its thousands of U.S. employees. Tower Automotive chose Kronos because of the company’s market leadership, implementation expertise, and the ability of the products to meet their business needs.

• The City of Montreal selected the Kronos Workforce Central suite, including scheduling, for more than 25,000 city employees. They purchased Kronos' solutions to simplify and to reduce the costs associated with the time management of its large workforce. Kronos’ market leadership and strong local support were key factors in being awarded this deal.

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• Sisters of Mercy Health System, the 9^th largest Catholic healthcare system in the U.S, purchased a Kronos scheduling solution for 26,000 employees. The organization is already implementing the Workforce Central suite and will implement the Kronos scheduling solution to ensure the delivery of quality healthcare services at 18 acute care hospitals as well as a number of other facilities in its system.

Outlook

“With respect to guidance for our third quarter, we expect to report revenue in the range of $127-132 million, with net income per diluted share in the range of $.36-.38,” concluded Ain. “For the fiscal year as a whole, we currently expect to report revenue in the range of $513-523 million, with net income per diluted share in the range of $1.56-1.64.”

The SEC recently concluded that the Financial Accounting Standards Board Statement 123R, Share-Based Payment, which will require all companies to measure compensation cost for all share-based payments (including employee stock options) at fair value, would be effective for public companies for annual periods beginning after June 15, 2005.The new accounting pronouncement will be effective for Kronos in the first quarter of Fiscal 2006. The impact of adopting Statement 123R will reduce Kronos’ net income. Kronos has not yet determined the magnitude of the impact of adopting Statement 123R.

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 the most trusted name in workforce management. Kronos helps organizations staff, develop, deploy, track, and reward their workforce, resulting in reduced costs, increased productivity, better decision-making, improved employee satisfaction, and alignment with organizational objectives. More than 20 million people use a Kronos solution every day. Learn more about Kronos’ high-impact enterprise solutions at www.kronos.com.

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Safe Harbor Statement

This press release contains statements about the business prospects and estimates of Kronos’ financial results for future periods that are 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 and backlog, market acceptance of our new products and enhancements, including those formerly offered by AD OPT Technologies, our ability to monitor and manage discretionary costs, growth in the market for our products and within the economy generally, and potential acquisitions. These statements are based on management’s expectations of future events as of the date of this press release, and Kronos assumes no obligation to update any forward-looking statements as a result of new information or future events or developments. Actual results could differ materially from management’s expectations. 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 Annual Report on Form 10-K filed with the SEC on December 14, 2004 and its quarterly report on Form 10-Q filed with the SEC on February 9, 2005. 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.

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© 2005 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 2, 2005			April 3, 2004			April 2, 2005			April 3, 2004
Net revenues:
Product	$	46,317		$	44,966		$	99,583		$	84,106
Maintenance		42,451			35,802			81,119			71,148
Professional services		31,853			27,211			58,195			52,398
		120,621			107,979			238,897			207,652
Cost of sales:
Costs of product		11,651			10,512			23,024			20,212
Costs of maintenance and professional services		37,102			33,303			71,794			65,348
		48,753			43,815			94,818			85,560
Gross profit		71,868			64,164			144,079			122,092
Operating expenses and other income:
Sales and marketing		34,616			32,344			70,478			63,364
Engineering, research and development		12,027			10,773			24,816			20,448
General and administrative		8,546			8,053			16,992			14,412
Amortization of intangible assets		1,194			1,001			2,290			2,008
Other income, net		(1,611	)		(1,853	)		(3,313	)		(3,371	)
		54,772			50,318			111,263			96,861
Income before income taxes		17,096			13,846			32,816			25,231
Provision for income taxes		5,873			4,226			10,935			8,199
Net income	$	11,223		$	9,620		$	21,881		$	17,032
Net income per common share:
Basic	$	0.35		$	0.31		$	0.69		$	0.55
Diluted	$	0.34		$	0.30		$	0.67		$	0.53
Weighted-average common shares outstanding:
Basic		31,910,961			30,992,982			31,741,255			30,841,312
Diluted		32,835,874			32,025,582			32,716,724			31,954,350

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

	April 2, 2005			September 30, 2004
ASSETS
Current assets:
Cash and equivalents	$	33,617		$	45,877
Marketable securities		44,171			45,260
Accounts receivable, less allowances of $8,584
at April 2, 2005 and $9,143 at September 30, 2004		96,024			93,317
Deferred income taxes		8,729			8,951
Other current assets		28,952			21,434
Total current assets		211,493			214,839
Marketable securities		81,965			98,005
Property, plant and equipment, net		54,311			43,832
Intangible assets		37,146			20,697
Goodwill		121,906			81,154
Capitalized software, net		23,284			22,871
Other assets		23,374			24,432
Total assets	$	553,479		$	505,830
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	10,342		$	9,988
Accrued compensation		35,418			39,788
Accrued expenses and other current liabilities		15,231			17,550
Deferred product revenues		6,397			9,844
Deferred professional service revenues		39,910			40,525
Deferred maintenance revenues		94,169			87,000
Total current liabilities		201,467			204,695
Deferred maintenance revenues		7,403			7,251
Deferred income taxes		18,908			12,000
Other liabilities		5,943			2,824
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, 32,145,188 and
31,335,340 shares issued at April 2, 2005 and September 30, 2004, respectively		321			312
Additional paid-in capital		73,529			54,113
Retained earnings		245,972			224,091
Accumulated other comprehensive income:
Foreign currency translation		853			653
Net unrealized (loss) on available-for-sale investments		(917	)		(109	)
		(64	)		544
Total shareholders' equity		319,758			279,060
Total liabilities and shareholders' equity	$	553,479		$	505,830