Kronos Announces Another Strong Quarter as SaaS Bookings Grow 97 Percent

  Kronos Announces Another Strong Quarter as SaaS Bookings Grow 97 Percent

Business Wire

CHELMSFORD, Mass. -- July 23, 2014

Kronos Incorporated – which recently surpassed $1 billion in annual revenue^1
– today announced financial results, company advancements, and customer
successes for the third quarter of Fiscal 2014. Product bookings continued to
accelerate, with Kronos Cloud bookings as the fastest-growing part of the
business. Kronos recognized revenue for the quarter increased to $265 million.
Earnings before interest, tax, depreciation, and amortization (EBITDA)
increased to $88.5 million.^2

“It’s thrilling to be part of the exclusive group of software companies that
have grown beyond $1 billion in annual revenue, and the first vendor to do so
in the workforce management market,” said Aron Ain, Kronos chief executive
officer. “Equally thrilling is the pace of our growth compared to the global
workforce management market, our increasing market share, and our rapidly
expanding cloud footprint. Kronos is in a fantastic position moving into the
final quarter of our Fiscal 2014. Our strong financial results and the
investments we are making in our company – including continued product
innovation, expansion of our sales force, and delivery of a superior customer
experience – all reinforce that the best days are still ahead for Kronos.”

Third-Quarter News Facts

  *Outpacing the workforce management market – Deployed in more than 100
    countries, Kronos is the leader in the global workforce management market.
    According to a global study of workforce management solutions^3 published
    by IHS Technology (NYSE: IHS), Kronos grew more than 11 percent. The IHS
    report determined that the overall worldwide workforce management market
    grew 7.9 percent during the same period, indicating that Kronos continues
    to increase its market share. Only Kronos was found to have positive
    market share growth in all global regions during this period, while the
    share of other leading suppliers of workforce management solutions
    declined. Also according to IHS, Kronos led all vendors with more than 25
    percent share of the global workforce management market. In the Americas,
    Kronos broadened its number-one position by increasing its share to nearly
    38 percent.
  *Tremendous growth of the Kronos Cloud – The Kronos Cloud is experiencing
    significant growth across all market segments. 77 percent of new customer
    bookings were from an array of Kronos Cloud offerings, bringing the total
    number of organizations leveraging the Kronos Cloud to nearly 12,000.
    Kronos workforce management cloud revenue increased 57 percent and SaaS
    bookings increased 97 percent during the quarter.
  *Vertical expertise – Kronos experienced strong momentum across targeted
    vertical segments – including retail and hospitality, healthcare, services
    and distribution, manufacturing, and the public sector. The services and
    distribution sector was particularly strong, having its best-ever product
    bookings quarterly performance.
  *Extraordinary growth in SMB sector – Product bookings in the small and
    midsize business (SMB) sector increased 42 percent driven by strong
    performance of the Workforce Ready^® and Workforce Central^® suites and
    increased traction in the SaaShr partner channel. Workforce Ready is
    increasingly being adopted by new customers, as well as those upgrading
    from prior generations of Kronos solutions. During the quarter, Kronos
    delivered the latest release of Workforce Ready, providing even greater
    value to SMBs, making it easier than ever for them to effectively manage
    their workforces.
  *Rapid pace of innovation – Continued innovations in Kronos workforce
    management solutions was a key driver in the strong double-digit increase
    in product bookings during the quarter. Recent product releases include:
    the latest version of the Kronos Workforce Central suite including
    hundreds of enhancements; Workforce Collaboration^™ social networking and
    collaboration; Workforce Analytics^™ and Workforce Analytics on Tablet
    with visualization and exploration; Workforce Mobile^™ and Workforce
    Tablet^™ with geo-fencing capabilities; the latest version of the Kronos
    InTouch^® time clock with new biometric technology; availability of
    Workforce Task Management^™ via tablet devices; the latest version of the
    Kronos Workforce Ready^® suite; many enhancements to meet specific
    vertical and global requirements; and additions and advancements to many
    other Kronos applications. There has never before been a timeframe in
    which Kronos has released so many new product offerings in such a short
    period of time.

  *Engaged and satisfied customers – During the quarter, Kronos hosted
    thousands of customers in a 30-city world tour of KronosLIVE, a series of
    events that offered the latest insights into how Kronos’ game-changing
    workforce management solutions combine ease of use and deep functionality
    to help organizations control labor costs, minimize compliance risk, and
    improve workforce productivity. KronosLIVE was offered in cities
    throughout the U.S. and in international locations such as London, Mexico
    City, Montreal, Mumbai, and Shanghai. In addition, during the quarter
    Kronos was recognized for consistently exceeding customer expectations by
    Omega Management Group Corp. Kronos is one of only two companies to
    receive this award 14 consecutive years.
  *Customer successes around the globe – In the third quarter of Fiscal 2014,
    Kronos signed agreements with organizations around the world such as:
    Allity Pty Ltd., a for-profit organization with 31 aged care facilities in
    Australia; CenterLight Health System, a leading resource for long-term
    residential and community-based healthcare; Century 21 Department Stores,
    a retailer located in New York City offering designer merchandise;
    Charleston County School District, a K-12 school system comprised of 80
    schools; City of Hampton, a city in Virginia; Country Fire Authority,  a
    volunteer- and community-based fire and emergency services organization in
    Australia; Crittenton Hospital Medical Center, a full continuum provider
    of nationally ranked clinical programs representing a wide range of
    medical specialties providing primary, secondary, and tertiary-level care;
    Department of Justice Federal Prison Industries (FPI), a U.S. government
    corporation that employs and provides job opportunities to inmates in the
    Federal Bureau of Prisons; Dulsco,  a leading provider of  human resource
    solutions and waste management services headquartered in Dubai with
    operations throughout the UAE and Qatar; Element Fresh, a fast-growing
    dining chain company with more than 20 locations in Beijing, Guangzhou,
    Nanjing, and Shanghai; Emory Healthcare, a comprehensive hospital system
    in Georgia; EnviroWaste, a company that delivers EnviroSolutions to
    address the waste and recycling needs of New Zealand’s communities and
    businesses; Hastings Entertainment, Inc., a leading multimedia
    entertainment retailer; Indiana University Health, a comprehensive
    healthcare system in Indiana; Nebraska Department of Roads, a state agency
    responsible for surface transportation programs; NYC Transit Authority,
    one of the largest transit systems in North America; Presence Health, the
    second-largest healthcare system in Illinois; Ridley Family Markets, a
    family-owned chain of grocery stores operating 24 supermarkets in Idaho,
    Utah, Nevada, and Wyoming; Sky Lakes Medical Center, an internationally
    accredited, community-owned acute-care hospital in Oregon; Silver Reef
    Casino, a casino resort serving the northwestern region of the U.S.; St
    Andrews Healthcare,  one of the largest charities in the UK providing
    specialist mental healthcare services; Town Sports International, an
    operator of fitness centers in the U.S. and Switzerland; Trusthouse
    Services, provider of outsourced food management services, operating
    primarily in the education and healthcare sectors; and Wyoming Department
    of Health, an organization dedicated to supporting and enhancing the
    health of citizens in Wyoming.

Supporting Resources

  *Connect with Kronos via Facebook, Twitter, Google+, LinkedIn, and YouTube.
  *Subscribe to our workforce management blogs.
  *Take a look at the lighter side of workforce management in our Time Well
    Spent cartoons.

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^™.

© 2014 Kronos Incorporated.  Kronos, the Kronos logo, Workforce Central,
InTouch, and Workforce Ready are registered trademarks and Workforce
Collaboration, Workforce Analytics, Workforce Mobile, Workforce Tablet,
Workforce Task Management, and Workforce Innovation That Works are trademarks
of Kronos Incorporated or a related company. All other trademarks are property
of their respective owners.

Footnote 1:As announced May 7, 2014 on a last-twelve-month basis, ending
March 29, 2014.

Footnote 2: 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; (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.

Footnote 3: “The Workforce Management Solutions – World Report” (2011-2013),
published April 2014 and written by Sam Grinter, market analyst at IHS.

Contact:

Kronos Incorporated
Michele Glorie, +1 978-947-2855
michele.glorie@kronos.com
 
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