Exhibit 99.1 For Immediate Release Kronos Contact: Paul Lacy (978) 947-4944 placy@kronos.com Kronos(R) REPORTS FIRST QUARTER FISCAL 2004 RESULTS CHELMSFORD, Mass., Jan. 29, 2004 -- Kronos(R) Incorporated (Nasdaq: KRON) today reported financial results for the first quarter of Fiscal 2004. Net income for the first quarter of Fiscal 2004 increased 5.1 percent to $7.4 million, or $.23 per diluted share, as compared to $7.0 million, or $.23 per diluted share, for the same period a year ago. Revenue for the first quarter totaled $99.7 million as compared to $89.7 million for the same period a year ago. "Kronos has performed well over the past year, consistently meeting or exceeding our guidance in what has been a very challenging software environment," said Mark S. Ain, Kronos' chief executive officer. "We continued this impressive track record in our first quarter even with the investments that we're making to execute our product delivery schedule and enhance our infrastructure. Demand for our human resources, payroll, scheduling, and time and labor solutions remains strong as organizations strive to reduce costs and improve labor productivity. We are particularly pleased with the level of interest in our HR and payroll solutions." This marks Kronos' 96th straight quarter of revenue growth compared to the same period in the previous year, and 67th consecutive quarter of profitability (Note 1). Kronos' balance sheet remains strong with $145.0 million in cash and investments and no debt. Total deferred maintenance, professional services, and product revenue at the end of the quarter was $124.0 million. Cash flow from operations was $14.8 million for the quarter compared to $13.8 million for the same period last year. Days sales outstanding for accounts receivable was 66 days at the end of the quarter. (more) Quarterly Wins In addition to gaining market share through strong customer acceptance of HR and payroll solutions, Kronos continues to experience enthusiastic customer adoption of its time and labor solutions from large employers around the world. Kronos has hundreds of large-scale, enterprise-wide, centralized deployments of its entirely Web-based solution. Many large-scale, enterprise customers are broadening their use of a Kronos solution, including Cendant, which expanded its enterprise license from 60,000 to 100,000 employees during the quarter, and Cargill, which expanded its enterprise license from 15,000 to 32,000 employees. In both cases, the organizations expanded their use of a Kronos solution to accommodate additional business units and achieve an even broader enterprise-wide view of their entire workforce. "We believe that dynamics such as the nursing shortage in healthcare, the desire to deploy the workforce more effectively in retail, and budget and funding cuts in government and education are all driving organizations to seek help from Kronos. While these are prevalent business drivers for Kronos today, the overarching benefits achieved through the use of a Kronos solution remain the same. Organizations turn to Kronos in an effort to boost worker productivity," continued Ain. In addition to Cargill and Cendant, notable wins from new and existing customers during the quarter for enterprise-wide deployments of Kronos solutions included Auburn University, Centegra Health System, The Gymboree Corporation, McGraw-Hill, Montefiore Medical Center, Nokia, North American Manufacturing, Orange County Public Schools in Florida, Pacific Choice, Potlatch Corp., See's Candies, Sunrise Growers, and many others. Outlook "We expect to report second quarter revenue in the range of $106-110 million and earnings in the range of $.22-.28 per share," concluded Ain. "Our guidance for Fiscal 2004 as a whole remains unchanged. We expect to report Fiscal 2004 revenue of $446-459 million, with earnings per share in the range of $1.27-1.35." Conference Call Webcast Kronos senior management plans to review its first-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. (more) 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) 2004 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 --------------------------- January 3, December 28, 2004 2002 ---------- ------------ Net revenues: Product ...................................... $ 39,140 $ 38,887 Maintenance .................................. 34,147 28,985 Professional services ........................ 26,386 21,837 ------------ ------------ 99,673 89,709 Cost of sales: Costs of product ............................. 9,700 9,427 Costs of maintenance and professional services 32,045 26,237 ------------ ------------ 41,745 35,664 ------------ ------------ Gross profit ........................... 57,928 54,045 Operating expenses and other income: Sales and marketing .......................... 31,020 28,689 Engineering, research and development ........ 9,675 8,483 General and administrative ................... 6,359 6,045 Amortization of intangible assets ............ 1,007 719 Other income, net ............................ (1,518) (905) ------------ ------------ 46,543 43,031 Income before income taxes ............. 11,385 11,014 Provision for income taxes ....................... 3,973 3,965 ------------ ------------ Net income ............................. $ 7,412 $ 7,049 ============ ============ Net income per common share: Basic .................................. $ 0.24 $ 0.24 ============ ============ Diluted ................................ $ 0.23 $ 0.23 ============ ============ Weighted-average common shares outstanding: Basic .................................. 30,689,641 29,459,739 ============ ============ Diluted ................................ 31,883,117 30,614,628 ============ ============ KRONOS INCORPORATED CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share amounts) UNAUDITED January 3, September 30, 2004 2003 ---------- ------------- ASSETS Current assets: Cash and equivalents ................................................................ $ 49,733 $ 69,884 Marketable securities ............................................................... 46,474 17,056 Accounts receivable, less allowances of $7,551 ...................................... 73,480 84,275 at January 3, 2004 and $7,833 at September 30, 2003 Deferred income taxes ............................................................... 8,818 8,427 Other current assets ................................................................ 19,076 18,649 --------- --------- Total current assets ........................................................ 197,581 198,291 Property, plant and equipment, net ....................................................... 39,491 39,263 Marketable securities .................................................................... 48,771 44,065 Intangible assets ........................................................................ 22,723 22,938 Goodwill ................................................................................. 72,591 70,446 Capitalized software, net ................................................................ 23,061 23,012 Other assets ............................................................................. 14,811 14,791 --------- --------- Total assets ................................................................ $ 419,029 $ 412,806 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable .................................................................... $ 6,275 $ 6,584 Accrued compensation ................................................................ 30,356 35,655 Accrued expenses and other current liabilities ...................................... 10,834 16,169 Deferred product revenues ........................................................... 3,312 3,387 Deferred professional service revenues .............................................. 36,856 39,745 Deferred maintenance revenues ....................................................... 76,944 75,505 --------- --------- Total current liabilities ................................................... 164,577 177,045 Deferred maintenance revenues ............................................................ 6,925 7,319 Deferred income taxes .................................................................... 8,715 8,190 Other liabilities ........................................................................ 3,792 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, 30,887,026 and 30,439,778 shares issued at January 3, 2004 and September 30, 2003, respectively 309 304 Additional paid-in capital .......................................................... 48,335 38,110 Retained earnings ................................................................... 185,253 177,841 Cost of Treasury Stock (132 shares and 260 shares at January 3, 2004 and September 30, 2003, respectively) ........................... (5) (6) Accumulated other comprehensive income: Foreign currency translation .................................................... 991 (8) Net unrealized gain on available-for-sale investments ........................... 137 356 --------- --------- 1,128 348 Total shareholders' equity .................................................. 235,020 216,597 --------- --------- Total liabilities and shareholders' equity .................................. $ 419,029 $ 412,806 ========= =========