Kronos Workforce Management Cloud Revenue Increases 60 Percent as Shift to Kronos Cloud Continues; Kronos Announces First-Quarter Fiscal 2015 Financial Performance
CHELMSFORD, Mass., Jan. 21, 2015 - Kronos Incorporated today announced financial results, company advancements, and customer successes for the first quarter of Fiscal 2015. Kronos recognized revenue for the quarter increased to $257.8 million. Earnings before interest, tax, depreciation, and amortization (EBITDA) increased to $82.3 million. 1
“Kronos launched into Fiscal 2015 with solid execution of our winning growth strategy,” said Aron Ain, Kronos chief executive officer. “With our well-established Kronos Cloud – the fastest-growing aspect of our business – as well as our global scale, industry expertise, and innovative offerings, we are helping organizations achieve their workforce goals faster and delivering unprecedented value. All of this is made possible with the support of our incredibly talented workforce of more than 4,000 employees worldwide. Kronos is poised to have another exciting year.”
First-Quarter News Facts
Kronos Cloud expansion - Kronos workforce management cloud revenue increased 60 percent, as new customers deploy in the cloud and existing customers move their on-premise instances to the cloud. In continuation of a trend, the majority of new customer bookings in the quarter were from an array of Kronos Cloud offerings.
Growth through innovation - Kronos product bookings continued to increase, with particular strength in the Americas with software bookings up 15 percent. Kronos delivered several new products and enhancements while delivering industry expertise with:
- New gamification functionality brings the concept of game design and game thinking into workforce management, with leaderboards designed to reward, recognize, and engage employees, managers, and teams for positive job performance and adhering to an organization’s time and attendance policies and procedures.
- The latest release of the Kronos Workforce Ready suite delivers enterprise-class workforce management solutions in the cloud to small and midsize businesses (SMBs), providing expanded human resources capabilities including enterprise-class recruitment, automated onboarding, compensation management, and employee self-service options for benefits management; extended global capabilities including multi-lingual support, biometric identification, and global labor management features; enhancements to minimize compliance risk; and a series of ease-of-use enhancements.
- New grant and project tracking solution for the public sector provides project and grant managers, project sponsors, and principal investigators with a solution to optimize how labor and non-labor hours and associated costs are tracked to grants and projects.
- New professional project tracking for services industries provides greater visibility into allocated and actual hours for deeper insight into labor costs, enabling resources to be optimized for improved client service among field and contract services employees as well as professional exempt employees across services industries such as banking, insurance, IT, consulting, and legal.
- Enhanced production labor tracking solution for manufacturers to better understand how operations are performing against productivity goals and extend existing Kronos capabilities beyond the plant floor, allowing manufacturers to track projects performed by salaried employees in addition to hourly employees.
- Various enhancements specifically designed for human resources streamline tedious processes, improve productivity, help maintain compliance, and improve employee engagement with features including a new user interface, advanced search and query functionality, and mobile access for talent acquisition.
- Formation of the Kronos Big Data for Workforce Management practice group delivers a dedicated approach to simplifying complex workforce data for customers and partners while providing insight into costly workforce issues, synthesizing volumes of overtime, absence, scheduling, productivity data, and time clock entries against key performance indicators (KPIs).
Expansion in the enterprise and within targeted industry segments - The three largest transactions for the quarter were in the public sector, including departments in states spanning the east, west, and central regions of the U.S. These organizations purchased a range of Kronos solutions, some of which selected Kronos TeleStaff for public safety scheduling. The fourth-largest transaction in the quarter was with one of the largest children’s hospitals in the U.S. Other enterprise transactions included new and existing customers from around the world, such as a leading food retailer; a leading lifestyle specialty retail company; one of the world’s largest express transportation companies; one of the world’s largest international oil and gas companies; and a global supplier of office products and services. Some organizations expanded their use of Kronos to accommodate growth or add additional applications, some chose Kronos to replace other workforce management applications, and others automated manual processes for the first time or replaced legacy homegrown applications.
Market adoption in SMB sector - Momentum in the SMB sector was driven by sales of the Kronos Workforce Ready and Kronos Workforce Central suites, and included sales to new customers as well as the migration of existing Kronos customers to Workforce Ready. Kronos also continues to experience significant traction in the Kronos SaaShr partner channel.
Multinational and international momentum - In response to an increase in demand for centrally managed multinational deployments, Kronos bolstered its global delivery capabilities with the formation of global delivery and program management teams to provide rapid and standardized deployments. Kronos offers individual, country-specific blueprints for meeting cultural, legislative, union, and many other requirements.
Employer of choice - The Boston Globe named Kronos the top place to work in the Largest company category in its annual Top Places to Work ranking of the most admired workplaces in Massachusetts, where Kronos is headquartered. The survey measured employee responses regarding company direction, execution, employee connection, workload and responsibility, management, and pay and benefits. Kronos, with more than 4,000 employees worldwide, is actively hiring and currently has more than 200 job openings.
Record number of attendees at KronosWorks - The world’s largest vendor-led workforce management gathering took place in November. With more than 2,500 attendees from around the world and hundreds of industry- and product-specific sessions, KronosWorks 2014 offered deep-dive product demonstrations, customer success sessions, and a forum for customers to network with peers and Kronos experts.
Customer success around the globe - In the first quarter of Fiscal 2015, Kronos signed agreements with organizations around the world including: Alden Management Services Inc., provider of short-term rehabilitation, post-acute programs, and senior living care with more than 40 locations in Illinois and Wisconsin; Blount County, a county in Tennessee; CNOOC and Shell Petrochemicals, operator of a petrochemical complex in southern China; Diamond Power Machine, global provider of innovative technologies for power generation, industrial boiler cleaning, and ash handling in China; Harsco Metals & Minerals, global provider of logistics and resource recovery services for the steel industry; Kirkland’s, a leading specialty retailer in the U.S. with more than 320 stores in 35 states; Mount Nittany Medical Center, a 260-bed acute care facility offering medical, surgical, diagnostic, and community services in Pennsylvania; Navajo Nation Gaming Enterprise, a Tribal Nation Organization operating casinos in New Mexico and Arizona; Provider Management and Development Corporation, long-term care provider with skilled nursing and assisted living facilities in Kentucky; Rockford Public School District, one of the largest school districts in Illinois educating more than 28,000 students; Shenzhen O-film Tech, manufacturer of information input and output modules in the mobile internet industry in China; Sukarne, a Mexican multi-national food manufacturer; TBC Corporation, one of North America’s largest marketers of automotive replacement tires through a multi-channel strategy; Time Warner Cable, one of the largest providers of video, high speed data, and voice services in the U.S.; Trendy International, a fast- growing fashion apparel, sales, and distribution company with more than 700 stores in China; and White Oak Management, Inc., provider of long-term care, short-term rehabilitation, assisted living, senior living, and wellness centers with 15 locations in North and South Carolina.
About Kronos Incorporated
Kronos is the global leader in delivering workforce management solutions in the cloud. Tens of thousands of organizations in more than 100 countries - including more than half of the Fortune 1000® - use Kronos to control labor costs, minimize compliance risk, and improve workforce productivity. Learn more about Kronos industry-specific time and attendance, scheduling, absence management, HR and payroll, hiring, and labor analytics applications at www.kronos.com. Kronos: Workforce Innovation That Works™.
© 2015 Kronos Incorporated. All rights reserved. Kronos and the Kronos logo are registered trademarks and Workforce Innovation That Works is a trademark of Kronos Incorporated or a related company. See a complete list of Kronos trademarks. All other trademarks, if any, are property of their respective owners.
Footnote 1: All financial information within this press release is presented using 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. Product bookings represent gross product value of product orders and the product equivalent value of SaaS orders. EBITDA consists of GAAP income from operations excluding: (1) share-based compensation expense for stock options and stock awards in accordance with ASC 718 and compensation expenses related to ordinary dividends; (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 and other financing-related expenses that are excluded from the definition of EBITDA under the terms of the company’s Credit Agreement.