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.
