Exhibit 99.1
For Immediate Release Kronos Contact: Paul Lacy
(978) 947-4944
placy@kronos.com
Kronos(R) REPORTS FOURTH QUARTER AND
YEAR END RESULTS FOR FISCAL 2003
CHELMSFORD, Mass., Oct. 28, 2003 -- Kronos(R) Incorporated (Nasdaq: KRON) today
reported financial results for the fourth quarter and full year of Fiscal 2003,
reflecting sustained double-digit growth in both net income and revenue. Net
income for the fourth quarter of Fiscal 2003 rose 16 percent to $12.0 million,
or $.57 per diluted share, as compared to $10.4 million, or $.52 per diluted
share, for the same period a year ago. Revenue for the fourth quarter rose 14
percent to $112.9 million as compared to $99.2 million for the same period a
year ago.
For the twelve-month period, net income rose 20 percent to $34.7 million, or
$1.68 per diluted share, as compared to $28.8 million, or $1.42 per diluted
share, for the same period last year. For the twelve-month period, revenue rose
16 percent to $397.4 million as compared to $342.4 million for the twelve months
of the prior year. These results compare favorably to guidance given by Kronos
at the beginning of the fiscal year of revenue in the range of $375-385 million
and earnings in the range of $1.55-1.65 per share.
Mark S. Ain, Kronos' chief executive officer, said, "We are pleased that our
financial results reflect strong, continued demand for our solutions as
organizations strive to align diverse and complex workforces with ever-changing
work and business goals. With double-digit growth in earnings and revenue for
both the quarter and the year, it is clear that Kronos continues to profitably
grow despite the current economic environment."
(more)
This marks Kronos' 95th straight quarter of revenue growth compared to the same
period in the previous year, and 66th consecutive quarter of profitability (Note
1). Kronos' balance sheet remains strong with $131 million in cash and
investments and no debt. Total deferred maintenance, professional services, and
product revenue at the end of the quarter was $126 million. Cash flow from
operations was $29.4 million for the quarter compared to $27.5 million for the
same period last year.
For the twelve-month period, cash flow from operations was $82.6 million
compared to $70.2 million for the same period last year. Days sales outstanding
(DSO) for accounts receivable was 63 days at the end of the quarter.
"We are delighted with the acceptance of our new HR and payroll applications
which we introduced at the end of last year. We have customer wins across a wide
range of vertical markets representing organizations large and small. Including
the users that we acquired, Kronos now has 200 HR and payroll customers, and has
been cited by industry authors as being one of the most active players in the
marketplace," continued Ain. "We are extremely pleased with the acceptance of
our HR and payroll applications and the growth of our customer base."
Quarterly Wins
"Kronos continually finds more dynamic ways to help our customers improve the
performance of their people and their business. We take an immense amount of
pride in helping customers and believe that, among other attributes, our ability
to deliver on promises brings them back to Kronos again and again," stated Ain.
"Organizations of all sizes continue to embrace our blend of human resources,
payroll, scheduling, and time and labor solutions." Notable wins during the
quarter included AmeriPath, California Pacific Medical Center, Fort Worth
Independent School District, Home Shopping Network, Penn State Milton S. Hershey
Medical Center, Republic Services, Sonoma County, and many others.
"We unveiled our product roadmap to more than 1,000 customers and prospects last
week at our KronosWorks Worldwide Customer Conference and the response was
terrific," commented Ain. "Not only were customers very interested in the
product previews that we offered, but for the first time since the late 1990s,
they seem to have the budgeted funds to spend. These are exciting times for
Kronos and Kronos customers alike."
(more)
Fiscal 2004 Outlook
"We anticipate that our upgrade cycle, as well as exciting new applications and
enhancements, will support another year of growth. Because Kronos will introduce
more significant new applications this fiscal year than during any previous year
in our history, we will be making front-end loaded investments to launch
products, train our people, and enhance our infrastructure. Because of these
active investments in our future and because we overachieved early last fiscal
year, we expect profitability to grow at a greater rate in the latter part of
the fiscal year," stated Ain. "Assuming that the current economic environment
continues but does not worsen, we expect to report first quarter revenue in the
range of $99-102 million and earnings in the range of $.35-.39 per share, and
Fiscal 2004 revenue of $446-459 million, with earnings per share in the range of
$1.90 to $2.02."
Conference Call Webcast
Kronos senior management plans to review its fourth-quarter and year-end 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. More than 40,000 organizations trust Kronos to solve
their employee-centric business challenges. 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.
###
(C) 2003 Kronos Incorporated. Kronos 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 Twelve Months Ended
------------------------------- --------------------------------
September 30, September 30, September 30, September 30,
2003 2002 2003 2002
------------- ------------- ------------- -------------
Net revenues:
Product ...................................... $ 53,392 $ 48,815 $ 178,607 $ 158,466
Maintenance .................................. 33,434 28,041 124,911 105,519
Professional services ........................ 26,123 22,388 93,837 78,392
------------ ------------ ------------ ------------
112,949 99,244 397,355 342,377
Cost of sales:
Costs of product ............................. 12,054 10,621 42,507 37,577
Costs of maintenance and professional services 31,241 25,547 112,897 94,061
------------ ------------ ------------ ------------
43,295 36,168 155,404 131,638
------------ ------------ ------------ ------------
Gross profit ............................. 69,654 63,076 241,951 210,739
Operating expenses and other income:
Sales and marketing .......................... 32,463 30,194 123,937 109,780
Engineering, research and development ........ 10,534 10,760 38,463 36,970
General and administrative ................... 7,386 6,082 25,884 21,196
Amortization of intangible assets ............ 988 857 3,481 2,970
Other income, net ............................ (564) (1,001) (4,375) (4,668)
------------ ------------ ------------ ------------
50,807 46,892 187,390 166,248
Income before income taxes ............... 18,847 16,184 54,561 44,491
Provision for income taxes ...................... 6,876 5,824 19,895 15,664
------------ ------------ ------------ ------------
Net income ............................... $ 11,971 $ 10,360 $ 34,666 $ 28,827
============ ============ ============ ============
Net income per common share:
Basic .................................... $ 0.59 $ 0.53 $ 1.74 $ 1.47
============ ============ ============ ============
Diluted .................................. $ 0.57 $ 0.52 $ 1.68 $ 1.42
============ ============ ============ ============
Weighted-average common shares outstanding:
Basic .................................... 20,180,863 19,612,567 19,889,961 19,608,877
============ ============ ============ ============
Diluted .................................. 21,054,345 19,946,839 20,668,679 20,362,541
============ ============ ============ ============
KRONOS INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
UNAUDITED
September 30, September 30,
2003 2002
------------- -------------
ASSETS
Current assets:
Cash and equivalents ................................................................... $ 69,884 $ 34,117
Marketable securities .................................................................. 17,056 16,096
Accounts receivable, less allowances of $7,833 ......................................... 84,275 84,128
at September 30, 2003 and $9,697 at September 30, 2002
Deferred income taxes .................................................................. 8,427 6,893
Other current assets ................................................................... 18,649 17,835
--------- ---------
Total current assets ............................................................ 198,291 159,069
Property, plant and equipment, net .......................................................... 39,263 38,635
Marketable securities ....................................................................... 44,065 24,534
Intangible assets ........................................................................... 22,938 20,545
Goodwill .................................................................................... 70,446 56,167
Capitalized software, net ................................................................... 23,012 22,237
Other assets ................................................................................ 14,791 11,837
--------- ---------
Total assets .................................................................... $ 412,806 $ 333,024
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable ....................................................................... $ 6,584 $ 6,212
Accrued compensation ................................................................... 35,655 32,674
Accrued expenses and other current liabilities ......................................... 16,169 10,831
Deferred product revenues .............................................................. 3,387 6,853
Deferred professional service revenues ................................................. 39,745 33,551
Deferred maintenance revenues .......................................................... 75,505 66,550
--------- ---------
Total current liabilities ....................................................... 177,045 156,671
Deferred maintenance revenues ............................................................... 7,319 8,588
Deferred income taxes ....................................................................... 8,190 4,565
Other liabilities ........................................................................... 3,655 3,531
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, 20,293,185 and
19,911,952 shares issued at September 30, 2003 and September 30, 2002, respectively 203 199
Additional paid-in capital ............................................................. 38,211 31,494
Retained earnings ...................................................................... 177,841 143,175
Cost of Treasury Stock (173 shares and 366,062 shares at
September 30, 2003 and September 30, 2002, respectively) ........................... (6) (14,020)
Accumulated other comprehensive loss:
Foreign currency translation ....................................................... (8) (1,372)
Net unrealized gain on available-for-sale investments .............................. 356 193
--------- ---------
348 (1,179)
Total shareholders' equity ...................................................... 216,597 159,669
--------- ---------
Total liabilities and shareholders' equity ...................................... $ 412,806 $ 333,024
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