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Kronos: So, Are Your Employees Working?

The traditional concept of the time clock for workers is undergoing major change -- and a company leading the change is Kronos . The 52-week range is $21-$80 and the stock currently trades at $36-15/16. The market cap is $455 million.

The company is a pioneer of the time-clock industry (founded in 1977). Now, the company has a comprehensive technology product suite for frontline labor management. Kronos allows for time & attendance (a rules engine can apply pay policies across the enterprise); leave management (real-time management of vacation, medical leaves and personal leaves); employee scheduling (manages employee schedules, as well as forecasts business volume and workload requirements); and labor analytics (provides useful information to make labor resource decisions).

The software is versatile. Employees can access it from the phone, green-lit terminals and, of course, the Web. What's more, Kronos has a strong service organization, which helps with implementation, training and maintenance. Thus, it makes it easier to tailor the technology for a myriad of industries, such as healthcare, financial services, manufacturing, retail, hospitality, education and so on.

In the past quarter, revenues were $75 million, which was up from $72 million from the same period a year ago. Although, the company is profitable, with net income of $6.1 million.

True, the company does not have a fast growth rate. But there is a reason: the Y2K slowdown. Basically, last year's revenues were artificially high because of Y2K upgrades. However, going forward, the company should have much better performance metrics.

In fact, the company has shown profits for the past fifty-four consecutive quarters. The balance sheet is strong, with about $51.4 million in cash. The company also recently repurchased 545,000 of its shares.

The marketplace for frontline labor management technologies is expected to reach about $2.5 billion over the next three years. And, as for Kronos, it is positioned to take advantage of this lucrative market. Moreover, the company is launching new Web-based products, which have higher margins and also make it easier for companies to implement the solutions.