Workforce management software provider Kronos Inc. posted a double-digit increase in revenue in the first quarter of its fiscal year, and tomorrow will announce a new packaged application dedicated to manufacturers.
For the quarter ended Dec. 30, 2006, revenue rose to $148.7 million, a 16% jump from the $127.9 million reported in 2006's fiscal first quarter. Earnings dipped slightly to $5.7 million from $6.2 million in the year-earlier period.
The earnings release comes on the eve of a new product announcement from the company: Kronos for Manufacturing, a hybrid software/services offering that is tailored to industrial customers. Applications included in the suite run the gamut of workforce management tools, from time and attendance, scheduling, and absence management to analytics, labor tracking, and shop-floor data collection. The service component offers manufacturers the industry knowledge of Kronos's consultant team, which can be used to help maximize results from projects such as lean manufacturing and Six Sigma, the company said.
Products for the manufacturing vertical are nothing new for Kronos, but a spokesperson said Kronos for Manufacturing is part of a larger company strategy to market all-in-one offerings to specific vertical industries. The first product was targeted at the retail industry. Kronos for Manufacturing is currently available.
The recently closed period was the first full quarter of results for one of Kronos's new additions. In 2006, the company expanded its product line with the acquisition of Unicru, a provider of software that helps companies manage the hiring process. The addition was a natural complement to Kronos's existing product portfolio, allowing a company to glean from its current workforce the qualities it values and then apply those to the hiring process, Kronos said at the time.
Unicru's Talent Management Platform also brought Kronos into the world of software-as-a-service, which delivers a more predictable, subscription-based revenue stream to the top line.
According to company officials, the Unicru purchase is already paying dividends. In the first quarter, Kronos's Talent Management Division — the new home of Unicru's technology — closed more deals than in any quarter in Unicru's history, Kronos CEO Aron Ain said. In the first three months of fiscal 2007, Kronos reported $10.6 million in subscription revenue attributable to sales of the Unicru technology.
Last year was an acquisitive one for the vendor, as it closed a number of smaller acquisitions in addition to the Unicru deal. In July, the company announced that it was buying SmartTime Software, a competitor with specific expertise in workforce management manufacturing applications built to integrate with MES and ERP systems. SmartTime was a Managing Automation Company to Watch in 2005.
A major initiative for Kronos going forward, Ain said on a conference call with investors to announce the quarter's results, is to fortify its sales efforts in the U.S. and around the world. As part of its effort to bulk up its direct sales force, Kronos in November bought Time Controls, which had been a reseller of the vendor's products, and brought its salesforce in house.
Earlier this month, the company announced that it would establish a subsidiary in Singapore, part of an effort to broaden its presence in the Asia-Pacific market. Existing customers in that geography include Freescale, TeleTech, and TNT, the company noted.
Guidance announced today for the second quarter and full year was up slightly from earlier projections. Revenue for the second quarter is expected to come in between $154 million and $159 million, while full year totals are anticipated to fall between $647 million and $660 million. Last year, Kronos notched $578 million in revenue. On today's conference call, Ain said he believes the company can become a $1 billion entity, without specifying a timeframe for that goal.
The company is also taking stock in itself with a repurchasing program that authorizes it to buy back 1.25 million shares. Through previous such programs, Kronos has repurchased more than 6 million of its common shares.