Kronos^® Has Another Successful Fiscal Year

CHELMSFORD, Mass.--(BUSINESS WIRE)--Illustrating the strength of its value proposition, Kronos^® Incorporated today announced that it closed another successful fiscal year. Kronos revenues for Fiscal 2008 grew to approximately $715 million. Earnings before interest, tax, and amortization (EBITA) rose 20 percent to approximately $138 million. Kronos’ fourth-quarter Fiscal 2008 results mark the company’s 115^th consecutive quarter of year-over-year revenue growth and 86^th consecutive quarter of EBITA profitability.¹

“Against the backdrop of a difficult global economy, Kronos grew and surpassed $700 million in revenue in Fiscal 2008,” commented Aron Ain, Kronos chief executive officer. “We are operating in an environment where organizations must carefully control labor costs and improve productivity. Our solutions deliver hard-dollar savings that directly impact the bottom line.”

In the last quarter of Fiscal 2008, Kronos signed agreements with organizations around the world such as the China subsidiary of Ajisen Holdings Limited, a Japan-based chain of fast food restaurants; the Chinese subsidiary of Alcan Alloy Products Co. Ltd., part of the Rio Tinto Alcan conglomerate and the world’s third-largest aluminum producer; The BURGER KING^®, which operates more than 11,500 restaurants in all 50 states and in 71 countries; DB Schenker, a leading logistics provider, operating 140 branches in the U.S.; Hastings Entertainment, an entertainment retailer which operates 153 superstores; Huntsville Hospital, one of the largest locally owned not-for-profit hospitals in the U.S.; Kerry Foods, a major supplier of chilled foods across Ireland and the UK; K-VA-T, a large grocery retailer; Life Care Retirement Communities, Inc., a large provider of not-for-profit retirement communities; Mater Health Services, with a network of seven hospitals and 6,000 staff across Australia; Nokia Siemens Networks India, the manufacturing arm for Nokia Siemens Networks; Republic Engineered Products, a leading supplier of quality steel products; Saint Michael’s Medical Center, a N.J.-based, 357-bed regional tertiary-care, teaching, and research center; Siemens Medical Solutions USA, Inc., one of the world’s largest suppliers to the healthcare industry; the State of Illinois, which employs 56,000 government workers; the China subsidiary of Techtronic Industries Co. Ltd., one of the world’s leading electronics manufacturers; Temple University, a public research university; ThyssenKrupp Safway, Inc., a full-service scaffold company; Timken India Limited, the manufacturing plant of The Timken Company in India; Valeo, one of the world’s top automotive suppliers; and Viraj Profiles, a Mumbai, India-based producer of stainless steel products.

Fiscal 2008 highlights

In Fiscal 2008, Kronos made major strides in executing against strategic objectives in the areas of global expansion, workforce management, and talent management.

Global expansion

“Expanding global operations has been one of our strategic initiatives for the past several years,” stated Ain. “Fiscal 2008 was a particularly good year for our global operations with momentum across several key regions.”

• Asia-Pacific (APAC) – Gained significant traction in China and India by selling more than 90,000 employee seat licenses into local businesses and multinational organizations, demonstrating an increasing demand for workforce management throughout the APAC region. During the year, Kronos established additional regional offices in Shanghai and Mumbai. Kronos Australia maintained its market-leading position and reported an extraordinary year in sales to the healthcare market.
• Canada – Achieved record financial performance and significant growth. Demonstrated noteworthy momentum across targeted verticals, with particular success in the healthcare and retail markets.
• Europe, Middle East, and Asia (EMEA) – Completed first full year of operation in Western Europe, a territory which Kronos entered through its June 2007 acquisition of Captor. Kronos UK maintained its leadership position and closed a variety of notable deals, including three major healthcare wins. In addition, Kronos established distribution channels in the Middle East to capitalize on one of the fastest-growing economies in the world.
• Latin America – Achieved objectives by selling global solution to multinational organizations that have significant operations in Mexico and other territories in Latin America.

Workforce management leadership

“Tens of thousands of organizations use our time and attendance application to control labor costs and increase productivity,” continued Ain. “In the past several years, we have expanded beyond our roots to offer additional applications in the areas of employee scheduling, labor activities, workforce analytics, absence management, human resources, and payroll. These strategic applications are helping customers compete more effectively in the face of a difficult economy.”

• Small- and mid-size businesses (SMBs) – Demand for the Kronos Essentials^™ solution designed specifically for SMBs continued to accelerate. During the year, Kronos added analytics and scheduling to the Kronos Essentials suite for customers who have already automated time and attendance processes and now want to optimize their workforce by using complementary applications.
• Global demand in healthcare – While healthcare systems vary greatly from region to region, they all share the singular goal of balancing the delivery of high-quality patient care with the cost to deliver it. To help balance these competing needs, healthcare organizations across the globe are turning to Kronos. In Fiscal 2008, Kronos closed major healthcare contracts in Australia, Canada, the Middle East, United Kingdom, and the United States, representing hundreds of thousands of employees.
• Multinational deployments – Multinational organizations are increasingly pursuing centralized, global deployments of Kronos workforce management solutions, which provide visibility into their entire employee population, resulting in more effective management of labor costs. During the year, Kronos gained significant traction in selling to multinational organizations including contracts with a large discount retailer; a major mobile phone manufacturer; a large consumer goods manufacturer; a leading engineering and construction company; and a global pharmaceutical, medical devices, and consumer packaged goods manufacturer. Today, Kronos serves customers in more than 60 countries through its network of offices, subsidiaries, and distributors.

• Alternative to ERP – With predefined interfaces to leading ERP packages, integration between Kronos and ERP applications has never been easier. Organizations with existing ERP applications are increasingly turning to Kronos to rapidly capture workforce management-related savings. These organizations recognize that ERP systems typically require costly customization; automate only a fraction of their workforce management processes; provide limited and out-of-date access to labor data; and rely on an impractical approach to the challenge of managing compliance.

Talent management momentum

“Kronos is the undisputed leader in helping organizations with a high concentration of field-based workers to recruit and retain a high-quality workforce,” stated Ain. “During the fiscal year, we made significant progress in this area of our business.”

• Expanded market presence – Kronos rolled out its selection and hiring solution to nearly 11,500 additional hiring locations across the retail, grocery, healthcare, casual dining, and other service-oriented industry sectors. With an 18 percent increase in completed job applications over the previous financial year, Kronos has administered and scored more hourly assessments than any other vendor.
• Integration of Deploy acquisition – Kronos acquired Deploy Solutions in October 2007, fortifying its ability to help organizations hire the best people and maximize their performance. Immediately following the transaction, Kronos announced availability of Workforce Acquisition^™ version 8, a solution which combined behavioral assessments and workforce analytics expertise from Kronos with the strength of the hiring and automation platform from Deploy. Throughout the year, Kronos delivered three additional releases of Workforce Acquisition.
• Behavioral assessments – Kronos delivers scientifically validated behavioral assessments which help organizations improve workforce quality and retention. During the year, Kronos delivered two new assessments: the Service Reliability Assessment, which helps managers identify more reliable applications for public-facing, hourly service jobs; and the Skilled Staff Assessment, which helps managers identify higher-quality nurses in long-term care.

Outlook for Fiscal 2009

“We are seeing big dividends as a result of having been privately held for a full fiscal year,” concluded Ain. “As a privately held company, we are able to make significant investments to build an even stronger foundation for future growth.”

About Kronos Incorporated

Kronos Incorporated empowers organizations around the world to effectively manage their workforce. At Kronos, we are experts who are solely focused on delivering software and services that enable organizations to reduce costs, increase productivity, improve employee satisfaction, and ultimately enhance the level of service they provide. Kronos serves customers in more than 60 countries through its network of offices, subsidiaries, and distributors. Widely recognized as a market and thought leader in managing the workforce, Kronos has unrivaled reach with more than 30 million people using a Kronos solution every day. Learn more about Kronos at www.kronos.com.

Note: As of June 2007, Kronos is a private company.

© 2008 Kronos Incorporated. Kronos and the Kronos logo are registered trademarks and Kronos Essentials and Workforce Acquisition are 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.

Footnote 1: Revenue excludes purchase accounting adjustments related to the company going private in June 2007 and its acquisition of Unicru and Captor businesses in 2006 and 2007. EBITA excludes purchase accounting adjustments, FAS 123R charges, and non-recurring one-time charges.