[May 08, 2013]

Kronos Cloud Growing at Breathtaking Rate; Kronos Reports Outstanding Second-Quarter Results

Kronos Incorporated, the global leader in delivering workforce management solutions in the cloud, today announced financial results, company advancements, and customer successes for the second quarter of Fiscal 2013. Kronos (News - Alert) revenue for the quarter increased 13 percent to $234.4 million. Earnings before interest, tax, depreciation, and amortization (EBITDA) increased 21 percent to $75.3 million.¹

"We delivered outstanding growth in our second quarter - including a 119-percent increase in workforce management cloud revenue," said Aron Ain, Kronos chief executive officer. "Kronos continues to grow significantly faster than the global workforce management market, with double-digit growth in revenue and a rapid pace of new customer adoption. Kronos is leading the global workforce management market through an incredibly invigorating transition whereby organizations are enthusiastically adopting the cloud, mobile, and big data labor analytics to more effectively manage in the moment. We are thrilled to be leading this exciting transformation."

Second-Quarter News Facts

• Kronos Cloud a major growth engine - The Kronos Cloud is growing at a breathtaking rate. More than 8,000 organizations now leverage the Kronos Cloud, the industry's most robust and comprehensive workforce management cloud platform. Kronos continues to experience a tremendous customer response to its new Workforce Ready^™ suite in the Kronos Cloud for small and midsize businesses (SMBs), as well as its Workforce Central^® suite in the Kronos Cloud for medium and large enterprise organizations.
• Exceptional momentum in SMB sector - Kronos experienced another exceptional quarter in the SMB sector, driven by an accelerated pace of adoption for its Workforce Ready suite in the cloud. During the quarter, Kronos delivered an enhanced version of its fast-selling Workforce Ready cloud solution. Also driving growth in the SMB sector is significant customer and channel growth expansion through the Kronos SMB partner network, with the addition of thousands of new organizations to its workforce management platform.
• Strong international performance - International product bookings experienced double-digit growth year on year, with excellent momentum in Australia as both new customers signed on and existing customers expanded their use of Kronos. Europe performed very well, including a major contract with an existing multinational retail customer that is centralizing its 100,000+ employees around the world on a Kronos solution. India had its strongest quarter to date, with significant growth in new customers and two major global car manufacturers going live with their implementations. All international regions are seeing strong demand for the Kronos Cloud.
• Affordable Care Actcompliance driving demand - As the January 1, 2014 deadline for Affordable Care Act (ACA) compliance draws closer, organizations in every corner of the U.S. are turning to Kronos for help. Kronos is actively educating organizations about how automating with Kronos can directly impact their ACA compliance efforts by: having the data necessary to determine benefit eligibility; gaining the ability to create, monitor, and analyze employee schedules and time records, and initiate benefits enrollment; and leveraging comprehensive auditing and reporting features.
• Enabling omni-channel strategies in retail - As brick and mortar and online retail channels merge, store operations executives are struggling with how to gain visibility into incoming online demand, and how to align this demand with in-store labor. Kronos and Manhattan Associates formed a relationship to address this concern and help retailers profitably integrate their stores into their digital selling strategy to increase customer satisfaction and drive sales by freeing up trapped inventory in the store, while managing labor costs.
• Customer successes around the globe - In the second quarter of Fiscal 2013, Kronos signed agreements with organizations around the world such as: Bupa (Australia), the largest private-aged care provider with 60 homes caring for more than 5,000 residents; Callaway Golf Company, manufacturer and seller of golf clubs, golf balls, and golf accessories under the Callaway Golf and Odyssey brands worldwide; Catholic Health, a non-profit, faith-based healthcare system serving patients throughout Western New York; Co-operative Food, with 80,000 colleagues and 2,300 retail outlets in the UK; Forever 21, Inc., a specialty retailer of women's, men's, and girl's clothing and accessories; IHC, New Zealand's largest provider of services to people with intellectual disabilities and their families; Ladbrokes Ltd (UK), a world leader in online betting and gaming; New York Methodist Hospital (NYM), a voluntary, acute-care teaching facility; South Jersey Healthcare, a nonprofit, integrated healthcare system serving the medical and healthcare needs of southern New Jersey residents; The Baldwin County Board of Education, which oversees all public schools in Baldwin County, Alabama; The Methodist Hospital System, a nonprofit healthcare system comprised of five hospitals in the greater Houston area; Village Roadshow Theme Parks (VRTP), a division of Village Roadshow Limited, owner and operator of Australia's most popular theme parks and Wet 'n' Wild branded water parks in the U.S.; and West Palm Beach, a city in and the county seat of Palm Beach County, Florida.
• Industry recognizes Kronos for success and innovation
  • Forbes profiled Kronos CEO Aron Ain in an article that highlights success and innovation at Kronos, stating that "Thirty-five years young, time seems to be on Kronos' side, making it a company worth watching."
  • The Dennis Miller Show hosted Ain for a radio interview about how Kronos helps organizations effectively manage their workforce in the cloud.
  • MicroStrategy (News - Alert) recognized Kronos for excellence in analytics and its innovative approach to solving critical business issues for customers.
  • The Today Show and USA Today featured a survey conducted by The Workforce Institute at Kronos about workplace absenteeism associated with sporting events.

© 2013 Kronos Incorporated. All rights reserved. Kronos and Workforce Central are trademarks and Workforce Ready is a trademark of Kronos Incorporated or a related company. All other trademarks are property of their respective owners.

Footnote: This press release contains non-GAAP financial measures. Kronos believes that non-GAAP measures of financial results provide useful information regarding certain financial and business trends relating to Kronos' results of operations. Non-GAAP revenue consists of GAAP revenue excluding the effect of the write-down of deferred revenue associated with purchase accounting for certain acquisitions and includes timing adjustments related to international product deliveries which management includes when evaluating operating results. EBITDA consists of GAAP income from operations excluding: (1) share-based compensation expense for stock options and stock awards in accordance with ASC (News - Alert) 718; (2) amortization of capitalized software development costs (3) depreciation of property, plant and equipment; (4) amortization of acquired intangible assets; (5) acquisition-related expenses including advisory, legal, accounting, acquired employee-related costs, and integration costs; and (6) consulting expenses that are excluded from the definition of EBITDA under the terms of the Company's Credit Agreement.

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