Kronos Keeps Ticking, Posts Successful Q3
August 13, 2007 Dan Burger
It wasn’t exactly a surprise when the publicly held labor management software company, Kronos, was purchased and taken private by a private equity firm. Kronos had all the markings of a deal just waiting to happen. Since the announcement of that transition, however, the number of watchful eyes on this company has, no doubt, increased significantly. Employees, customers, and business partners certainly are dialed in a little closer to gains and losses.
If anyone was ill at ease, the latest round of financial reporting from the company should indicate that change is being handled quite nicely.
In its first quarter since becoming a private company, Kronos is reporting revenues grew 19 percent to $168.7 million. Earnings before interest, tax, and amortization (EBITA) rose 45 percent to $28.9 million in the company’s fiscal third quarter. It is the company’s 110th consecutive quarter of year-over-year revenue growth and 81st consecutive quarter of EBITA profitability.
Reflecting on the financial good fortune resulting from the Kronos purchase by the private equity firm Hellman & Friedman Capital Partners (H&F), Aron Ain, Kronos chief executive officer, said his company gained the “increased flexibility to invest in our customers, technology, and people.” Beyond the numbers, Ain also noted that Kronos accomplished “strategic objectives in the areas of global expansion, workforce management, and talent management.” H&F paid $1.8 billion to acquire Kronos in May.
Specific accomplishments include the acquisition of Captor, a provider of workforce management solutions serving customers throughout Europe; the launching of a subsidiary in India; a partnership with a Latin America reseller, Meta4; and a foot in the door introduction of Kronos to the Chinese market.
Kronos said in a statement that product revenue was being fueled by increasing adoption of applications in the areas of scheduling, absence management, human resources and payroll, analytics, and labor activities.”
On the product side last quarter, Kronos delivered version 6 of its Workforce Central suite, which is used to manage workforce performance and measure effectiveness. It does not run on the IBM System i, by the way. Kronos has a separate product, the iSeries Central Suite, for its substantial AS/400, iSeries, and System i customer base. Kronos also delivered a mobile product called webTA Mobile during its last quarter.
Notable new customer wins and existing customer product upgrades during the quarter included Huntington Memorial Hospital in California, Swissport in the UK, the Audubon Institute in Louisiana, the Venetian Resort Hotel Casino in Nevada, and American Woodmark in Virginia.