SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    Form 10-Q

(X)     QUARTERLY  REPORT  PURSUANT  TO  SECTION  13  OR  15(d)  OF  THE
              SECURITIES  EXCHANGE  ACT  OF  1934

                For the quarterly period ended December 28, 2002

                                       OR

(   )   TRANSITION  REPORT  PURSUANT  TO  SECTION  13  OR  15(d)  OF  THE
              SECURITIES  EXCHANGE  ACT  OF  1934

For the transition period from                    to
                               ------------------    -------------------------
Commission file number               0-20109
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                               Kronos Incorporated
------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

       Massachusetts                                       04-2640942
--------------------------------                   ---------------------------
(State or other jurisdiction of                         (I.R.S. Employer
incorporation or organization)                         Identification No.)

          297 Billerica Road, Chelmsford,  MA              01824
------------------------------------------------------------------------------
          (Address of principal executive offices)         (Zip Code)

                                 (978) 250-9800
------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)


------------------------------------------------------------------------------
        (Former name, former address and former fiscal year, if changed
                               since last report)

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

                          Yes  X        No
                             -------      --------

     Indicate by check mark whether the registrant is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act).

                          Yes           No  X
                             -------      --------

As of January 25, 2003, 19,911,395 shares of the registrant's common stock, $.01
par value, were outstanding.

<PAGE>


                               KRONOS INCORPORATED

                                      INDEX



PART I.   FINANCIAL INFORMATION                                            Page
                                                                           ----

Item 1.   Condensed Consolidated Financial Statements (Unaudited)

          Condensed Consolidated Statements of Income for the Three
             Months Ended December 28, 2002 and December 29, 2001             1

          Condensed Consolidated Balance Sheets at December 28, 2002
             and September 30, 2002                                           2

          Condensed Consolidated Statements of Cash Flows for the Three
             Months Ended December 28, 2002 and December 29, 2001             3

          Notes to Condensed Consolidated Financial Statements                4

Item 2.   Management's Discussion and Analysis of Financial Condition and
             Results of Operations                                           14

Item 3.   Quantitative and Qualitative Disclosure About Market Risk          27

Item 4.   Evaluation of Disclosure Controls and Procedures                   27

PART II.  OTHER INFORMATION

Item 6.   Exhibits and Reports on Form 8-K                                   28

Signatures

<PAGE>


PART I.  FINANCIAL INFORMATION

Item 1.  Condensed Consolidated Financial Statements (Unaudited)

                               KRONOS INCORPORATED
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
               (In thousands, except share and per share amounts)
                                    UNAUDITED
<TABLE>
<CAPTION>

                                                              Three Months Ended
                                                        -------------------------------
                                                        December 28,       December 29,
                                                            2002               2001
                                                        ------------       ------------
<S>                                                     <C>                <C>
Net revenues:
    Product ......................................      $     38,887       $     35,214
    Maintenance ..................................            28,985             23,421
    Professional services ........................            21,837             17,494
                                                        ------------       ------------
                                                              89,709             76,129
Cost of sales:
    Costs of product .............................             9,427              8,454
    Costs of maintenance and professional services            25,873             20,814
                                                        ------------       ------------
                                                              35,300             29,268
                                                        ------------       ------------
          Gross profit ...........................            54,409             46,861
Operating expenses and other income:
    Sales and marketing ..........................            29,053             25,191
    Engineering, research and development ........             8,483              7,936
    General and administrative ...................             6,045              4,532
    Amortization of intangible assets ............               719                643
    Other income, net ............................              (905)              (975)
                                                        ------------       ------------
                                                              43,395             37,327

          Income before income taxes .............            11,014              9,534
Provision for income taxes .......................             3,965              3,337
                                                        ------------       ------------
          Net income .............................      $      7,049       $      6,197
                                                        ============       ============

Net income per common share:
          Basic ..................................      $       0.36       $       0.32
                                                        ============       ============
          Diluted ................................      $       0.35       $       0.30
                                                        ============       ============

Weighted-average common shares outstanding:
          Basic ..................................        19,639,827         19,404,923
                                                        ============       ============
          Diluted ................................        20,409,753         20,388,203
                                                        ============       ============
</TABLE>

     See accompanying notes to condensed consolidated financial statements.

<PAGE>


                               KRONOS INCORPORATED
                      CONDENSED CONSOLIDATED BALANCE SHEETS
               (In thousands, except share and per share amounts)
                                    UNAUDITED


<TABLE>
<CAPTION>


                                                                                   December 28,    September 30,
                                                                                       2002             2002
                                                                                   ------------    -------------

                                     ASSETS
<S>                                                                                 <C>             <C>
Current assets:
     Cash and equivalents ....................................................      $  49,745       $  34,117
     Marketable securities ...................................................         13,262          16,096
     Accounts receivable, less allowances of $10,062 .........................         78,076          84,128
         at December 28, 2002 and $9,697 at September 30, 2002
     Deferred income taxes ...................................................          7,394           6,893
     Other current assets ....................................................         18,665          17,835
                                                                                    ---------       ---------
             Total current assets ............................................        167,142         159,069

Property, plant and equipment, net ...........................................         38,294          38,635
Marketable securities ........................................................         24,175          24,534
Intangible assets ............................................................         20,111          20,545
Goodwill .....................................................................         57,480          56,167
Capitalized software, net ....................................................         22,296          22,237
Other assets .................................................................         11,136          11,837
                                                                                    ---------       ---------
             Total assets ....................................................      $ 340,634       $ 333,024
                                                                                    =========       =========

                             LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
     Accounts payable ........................................................      $   5,992       $   6,212
     Accrued compensation ....................................................         24,936          32,674
     Accrued expenses and other current liabilities ..........................         10,153          10,831
     Deferred product revenues ...............................................          6,333           6,853
     Deferred professional service revenues ..................................         33,010          33,551
     Deferred maintenance revenues ...........................................         68,809          66,550
                                                                                    ---------       ---------
             Total current liabilities .......................................        149,233         156,671

Deferred maintenance revenues ................................................          8,109           8,588
Other liabilities ............................................................          8,866           8,096

Shareholders' equity:
     Preferred Stock, par value $1.00 per share:  authorized 1,000,000 shares,
         no shares issued and outstanding ....................................           --              --
     Common Stock, par value $.01 per share:  authorized 50,000,000 shares,
         19,911,952 shares issued at December 28, 2002 and September 30, 2002             199             199
     Additional paid-in capital ..............................................         30,460          31,494
     Retained earnings .......................................................        150,224         143,175
     Cost of Treasury Stock (139,610 shares and 366,062 shares at
         December 28, 2002 and September 30, 2002, respectively) .............         (5,361)        (14,020)
     Accumulated other comprehensive loss:
         Foreign currency translation ........................................         (1,174)         (1,372)
         Net unrealized gain on available-for-sale investments ...............             78             193
                                                                                    ---------       ---------
                                                                                       (1,096)         (1,179)

             Total shareholders' equity ......................................        174,426         159,669
                                                                                    ---------       ---------
             Total liabilities and shareholders' equity ......................      $ 340,634       $ 333,024
                                                                                    =========       =========

</TABLE>

     See accompanying notes to condensed consolidated financial statements.

<PAGE>

                               KRONOS INCORPORATED
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                    UNAUDITED


<TABLE>
<CAPTION>

                                                                                Three Months Ended
                                                                           ----------------------------
                                                                           December 28,    December 29,
                                                                               2002            2001
                                                                           ------------    ------------

<S>                                                                          <C>            <C>
Operating activities:
     Net income .......................................................      $  7,049       $  6,197
     Adjustments to reconcile net income to net cash and equivalents
        provided by operating activities:
           Depreciation ...............................................         2,610          2,217
           Amortization of intangible assets ..........................           719            643
           Amortization of capitalized software .......................         2,764          2,044
           Provision for deferred income taxes ........................           263           (206)
           Changes in certain operating assets and liabilities:
              Accounts receivable, net ................................         6,829         12,053
              Deferred product revenues ...............................          (549)        (1,284)
              Deferred professional service revenues ..................          (559)          (596)
              Deferred maintenance revenues ...........................         1,469           (626)
              Accounts payable, accrued compensation
              and other liabilities ...................................        (8,342)        (8,777)
              Taxes payable ...........................................          (337)        (6,634)
              Other ...................................................          (547)           (29)
           Tax benefit from exercise of stock options .................         2,413          7,144
                                                                             --------       --------
              Net cash and equivalents provided by operating activities        13,782         12,146
Investing activities:
     Purchase of property, plant and equipment ........................        (2,238)        (2,237)
     Capitalized internal software development costs ..................        (2,824)        (2,641)
     Decrease (increase) in marketable securities .....................         3,193        (12,449)
     Acquisitions of businesses, net of cash acquired .................        (1,646)       (23,993)
                                                                             --------       --------
              Net cash and equivalents used in investing activities ...        (3,515)       (41,320)
Financing activities:
     Net proceeds from exercise of stock options and
        employee purchase plans .......................................         5,126         10,955
     Purchase of treasury stock .......................................        (2,518)        (2,623)
     Proceeds from (net investment in) call options ...................         2,596         (2,000)
                                                                             --------       --------
              Net cash and equivalents provided by financing activities         5,204          6,332
Effect of exchange rate changes on cash and equivalents ...............           157             (4)
                                                                             --------       --------
Increase (decrease) in cash and equivalents ...........................        15,628        (22,846)
Cash and equivalents at the beginning of the period ...................        34,117         36,561
                                                                             --------       --------
Cash and equivalents at the end of the period .........................      $ 49,745       $ 13,715
                                                                             ========       ========
</TABLE>

     See accompanying notes to condensed consolidated financial statements.

<PAGE>



                               KRONOS INCORPORATED
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE A - General

The accompanying  unaudited condensed  consolidated financial statements include
all  adjustments,  consisting of normal  recurring  accruals that  management of
Kronos  Incorporated (the "Company" or "Kronos")  considers necessary for a fair
presentation of the Company's financial position and results of operations as of
and for the interim periods  presented  pursuant to the rules and regulations of
the Securities and Exchange  Commission.  Certain footnote  disclosures normally
included in financial  statements prepared in accordance with generally accepted
accounting  principles have been condensed or omitted pursuant to such rules and
regulations,  although the Company  believes the  disclosures in these financial
statements are adequate to make the information presented not misleading.  These
condensed  consolidated  financial statements should be read in conjunction with
the Company's audited  financial  statements for the fiscal year ended September
30, 2002. The results of operations for the three months ended December 28, 2002
are not  necessarily  indicative of the results for a full fiscal year.  Certain
reclassifications  have been  made in the  accompanying  consolidated  financial
statements in order to conform to the fiscal 2003 presentation.

NOTE B  -  Fiscal Quarters

The Company utilizes a system of fiscal quarters.  Under this system,  the first
three  quarters  of each  fiscal  year end on a  Saturday.  However,  the fourth
quarter of each fiscal year will always end on  September  30.  Because of this,
the number of days in the first  quarter  (89 days in fiscal 2003 and 90 days in
fiscal  2002) and fourth  quarter  (94 days in fiscal 2003 and 93 days in fiscal
2002) of each  fiscal  year  varies  from  year to year.  The  second  and third
quarters of each fiscal year will be exactly  thirteen  weeks long.  This policy
does not have a material  effect on the  comparability  of results of operations
between quarters.

NOTE C - Other Current Assets

Other current assets consists of the following (in thousands):

                                   December 28,        September 30,
                                      2002                 2002
                                   ------------        -------------

Inventory                            $7,087                 $6,492
Prepaid expenses                     11,578                 11,343
                                    -------                -------
    Total                           $18,665                $17,835
                                    =======                =======


<PAGE>


NOTE D - Intangible Assets

Acquired  intangible  assets  subject  to  amortization  are  presented  in  the
following table (in thousands).

As of December 28, 2002:

<TABLE>
<CAPTION>
                                             Weighted
                                             Average          Gross
                                             Life in         Carrying        Accumulated           Net Book
                                              Years           Value          Amortization           Value
                                             -------         --------        ------------          --------
<S>                                             <C>           <C>                <C>                <C>
Intangible assets:
    Customer related ........                    9.7          $19,328            $ 7,425            $11,903

    Maintenance relationships                   11.9            6,381                592              5,789

    Tax benefits ............                   10.7            2,131                363              1,768

    Non-compete agreements ..                    5.0            1,943              1,292                651
                                                              -------            -------            -------

Total intangible assets .....                                 $29,783            $ 9,672            $20,111
                                                              =======            =======            =======


As of September 30, 2002:

Intangible assets:
    Customer related ........                    9.5          $19,166            $ 6,851            $12,315

    Maintenance relationships                   11.9            6,267                535              5,732

    Tax benefits ............                   10.7            2,127                309              1,818

    Non-compete agreements ..                    5.1            1,908              1,228                680
                                                              -------            -------            -------

Total intangible assets .....                                 $29,468            $ 8,923            $20,545
                                                              =======            =======            =======
</TABLE>

The amount of goodwill  acquired during the three months ended December 28, 2002
and December 29, 2001 is $1.2 million and $15.0 million, respectively.

For the three months ended December 28, 2002, the Company recorded  amortization
expense for intangible assets of $0.7 million. The estimated annual amortization
expense for  intangible  assets for the current and next five fiscal years is as
follows (in thousands):

<PAGE>


          Fiscal Year Ending                     Estimated Annual
            September 30,                      Amortization Expense
          ------------------                   --------------------

                 2003                                   $3,024
                 2004                                    2,723
                 2005                                    2,255
                 2006                                    2,190
                 2007                                    2,172
                 2008                                    2,072


NOTE E - Acquisitions

On November 20, 2002,  the Company  completed the  acquisition of certain assets
and the ongoing business operations of Hi-Tek Special Systems,  Inc. ("HT"), the
former  Texas-based Kronos dealer. The aggregate purchase price was not material
to the Company's financial position.  The results of HT's operations,  which are
not material to the Company's  results of operations,  have been included in the
consolidated  financial  statements  since that date. HT was engaged in the sale
and  service  of  employee  time  and  attendance,   employee  scheduling,  data
collection and labor  management  hardware and software  systems,  including the
resale of the Company's products through a dealer  relationship.  As a result of
the acquisition, the Company gained access to existing and prospective customers
in the Texas,  New Mexico and Mexico area  through its direct  sales and service
organizations, as well as access to the existing maintenance revenue stream from
HT customers.  The deferred  revenue related to the maintenance  revenue stream,
which was recorded at an amount approximating cost, plus a normal profit margin,
was  recognized  as the Company had assumed a legal  performance  obligation  as
described in EITF 01-03.

On December 28, 2001,  the Company  completed the  acquisition of certain assets
and the ongoing  business  operations  of the  Integrated  Software  Business of
SimplexGrinnell's   Workforce   Solutions  Division   ("SimplexGrinnell").   The
aggregate   purchase   price  was  $22.1   million  in  cash.   The  results  of
SimplexGrinnell's  operations have been included in the  consolidated  financial
statements  since that date.  SimplexGrinnell  was  engaged in the  development,
sales and support of integrated  workforce  management software solutions.  As a
result of the  acquisition,  the  Company  has  increased  its  presence  in the
mid-market  sector,   which  includes  companies  with  between  100  and  1,000
employees.

The  SimplexGrinnell  transaction was accounted for under the purchase method of
accounting and accordingly, the assets and liabilities acquired were recorded at
their  estimated  fair  values at the  effective  date of the  acquisition.  The
goodwill  recognized is deductible for income tax purposes.  The following table
summarizes  the  estimated  fair values of the assets  acquired and  liabilities
assumed at the date of the acquisition (in thousands).

<PAGE>


                                                           At December 28, 2001
                                                           --------------------

Accounts receivable                                                  $6,678
Customer related intangible asset (amortized over                     1,100
12 years)
Maintenance relationships intangible asset                            2,500
(amortized over 12 years)
Goodwill                                                             18,065
Other assets                                                            768
                                                                    -------
    Total assets acquired                                            29,111

Deferred professional services revenue                               (1,564)
Deferred maintenance revenue                                         (5,157)
Other liabilities                                                      (340)
                                                                    -------
    Total liabilities assumed                                        (7,061)
                                                                    -------

Net assets acquired                                                 $22,050
                                                                    =======


In  connection   with  the   acquisition  of  the  assets  and   liabilities  of
SimplexGrinnell  in December 2001, the Company  acquired  obligations to provide
services  associated  with  maintenance  contracts  and  obligations  to provide
professional services,  primarily installation services. The amounts of deferred
revenue ascribed to acquired maintenance  obligations and professional  services
amounts to $5.2 million and $1.6 million,  respectively.  The deferred  revenue,
which was recorded at an amount approximating cost, plus a normal profit margin,
was  recognized  as the Company had assumed a legal  performance  obligation  as
described in EITF 01-03.  The  acquired  maintenance  arrangements  required the
Company to provide phone  support,  bug fixes and  unspecified  upgrades for the
remaining  contract  terms.  The  acquired   professional  services  obligations
required the Company to provide installation services.

Certain  agreements  contain  provisions  that  require  the  Company  to make a
guaranteed  payment and/or contingent  payments based upon  profitability of the
business  unit or if  specified  minimum  revenue  requirements  are met.  These
provisions  expire  during  fiscal 2003 through  2006.  Guaranteed  payments are
accrued at the time of the  acquisition  and are included in the purchase  price
allocation.  Contingent  payments  due  under the  terms of the  agreements  are
recognized when earned and are principally recorded as goodwill.  However, under
certain  circumstances,  a portion of the contingent  payment may be recorded as
compensation  expense.  During the first  quarter of fiscal 2003 and 2002,  $0.6
million and $0.2 million,  respectively, of contingent payments were earned, all
of which  was  recorded  as  goodwill.  There  are  several  contingent  payment
arrangements currently outstanding, on which the Company may have future payment
obligations,  contingent upon the achievement of various  financial  performance
goals.  As of December  28,  2002,  the Company has the  obligation  to pay $4.2
million in  guaranteed  payments.  These  payments will be made at various dates
through fiscal 2006.

<PAGE>

NOTE F - Comprehensive Income

For  the  three  months   ended   December  28,  2002  and  December  29,  2001,
comprehensive income consisted of the following (in thousands):

                                                  Three Months Ended
                                             --------------------------------
                                             December 28,        December 29,
                                                 2002                2001
                                             ------------        ------------
Comprehensive income:
Net income                                      $7,049              $6,197
Cumulative translation adjustment                  198                 203
Unrealized gain (loss)on
available-for-sale securities                     (115)               (151)
                                                -------             -------
Total comprehensive income                      $7,132              $6,249
                                                =======             =======


NOTE G - Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per
share (in thousands, except share and per share data):

                                               Three Months Ended
                                     -----------------------------------------
                                     December 28, 2002       December 29, 2001
                                     -----------------       -----------------

Net income                                   $7,049                  $6,197
                                         ==========              ==========
Weighted-average shares                  19,639,827              19,404,923
Effect of dilutive securities:
    Employee stock options                  769,926                 983,280
                                         ----------              ----------
Adjusted weighted-average shares
and assumed conversions                  20,409,753              20,388,203
                                         ==========              ==========
Basic earnings per share                      $0.36                   $0.32
                                              =====                   =====
Diluted earnings per share                    $0.35                   $0.30
                                              =====                   =====


NOTE H - New Accounting Pronouncements

In December  2002,  the FASB issued SFAS No. 148,  "Accounting  for  Stock-Based
Compensation  - Transition  and  Disclosure - an amendment of FASB Statement No.
123." This statement provides  alternative methods of transition for a voluntary
change to the fair value method of accounting for stock-based compensation.  The
statement  amends  the  disclosure  requirements  of FASB  Statement  No. 123 to
require  prominent  disclosure in both annual and interim  financial  statements
about the method of accounting for  stock-based  compensation  and the effect of
the method  used on  reported  results.  The Company  accounts  for  stock-based
compensation  arrangements  in  accordance  with the  provisions  of  Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," and
complies  with  the  disclosure  provisions  of  FASB  Statement  No.  123.  The
transition  provisions  are effective for fiscal years ending after December 15,
2002. The  disclosure  provisions  are effective for interim  periods  beginning
after  December 15, 2002.  The Company will  implement  the required  disclosure
provisions in the three month period ending March 29, 2003. The adoption of this
statement  is  not  expected  to  have  a  material   impact  on  the  Company's
consolidated  financial  position,  results of  operations  or cash flows as the
Company does not anticipate making the voluntary change to the fair value method
of accounting for stock-based compensation.

<PAGE>

NOTE I - Call Option Arrangements

The  Company  periodically  enters  into  call  option  arrangements,  which are
classified as an equity  instrument in  accordance  with the  provisions of EITF
00-19,   "Accounting  for  Derivative  Financial  Instruments  Indexed  to,  and
Potentially  Settled in, a  Company's  Own Stock."  During the  quarter,  a call
option  arrangement  matured in December 2002. At maturity,  the Company's stock
price  exceeded the strike price of $25.00 per share and the Company  received a
return of its cash investment and a premium totaling approximately $2.6 million,
which is credited to  additional  paid-in-capital.  If at maturity the Company's
stock  price was less than the  strike  price,  the  Company  would use its cash
investment to purchase  Company shares at a  predetermined  price. A call option
arrangement  provides the Company an opportunity  to lock in a repurchase  price
for shares under the Company's stock repurchase  program.  There are no dividend
and liquidation preferences,  participation rights,  sinking-fund  requirements,
unusual voting rights or any other  significant  terms  pertaining to these call
option arrangements.  As of the balance sheet date, the Company did not have any
call option arrangements outstanding.

NOTE J - Additional Stock Option Program Information

Option Program Description: The Company intends that its stock option program be
its  primary  vehicle  for  offering  long-term  incentives  and  rewarding  its
executives and key employees.  Stock options are granted to key employees  based
upon,  among other things,  prior  performance of the executive or key employee,
the importance of retaining their services for the Company and the potential for
their  performance to help the Company attain its long-term  goals.  There is no
set formula for the award of options to individual executives or employees.

Stock  options  are  generally   granted   annually  in  conjunction   with  the
Compensation  Committee's formal review of the individual performance of its key
executives,  including its Chief Executive Officer,  and their  contributions to
the  Company.  In the three month period  ended  December  28, 2002,  75% of the
options  granted  went to  employees  other than the top five  officers  ("Named
Executive  Officers").  The Named  Executive  Officers for the first  quarter of
fiscal  2003,  for  purposes  of this  footnote,  are the same  Named  Executive
Officers for fiscal 2002, which are identified in the Company's definitive proxy
statement  for the 2003  Annual  Meeting of  Stockholders.  The Named  Executive
Officers for fiscal 2001 are the officers  which are identified in the Company's
definitive proxy statement for the 2002 Annual Meeting of Stockholders.  All the
options  awarded are granted from the same plan.  Options,  which are granted at
the fair  market  value on the date of grant,  typically  vest  annually  over a
four-year  period  beginning  one  year  from  the  date  of  grant  and  have a
contractual life of four years and six months.

<PAGE>

Distribution and Dilutive Effect of Options:

Employee and Executive Option Grants:

<TABLE>
<CAPTION>

                                                         For the Three
                                                         Month Period         For the Fiscal       For the Fiscal
                                                            Ended               Year Ended           Year Ended
                                                       December 28, 2002    September 30, 2002   September 30, 2001
                                                       -----------------    ------------------   ------------------
<S>                                                              <C>                 <C>                <C>
Net grants during period as % of outstanding ...                  4.0%                4.7%                4.2%
shares
Grants to Named Executive Officers during period                 25.2%               25.3%               17.0%
as % of options granted
Grants to Named Executive Officers .............                  1.0%                1.2%                0.7%
during period as % of shares outstanding

</TABLE>


General Option Information:

Summary of Option Activity
(in thousands, except per share data)

<TABLE>
<CAPTION>


                                                                                Number of            Weighted-Average
                                                      Shares Available        Option Shares           Exercise Price
                                                        for Options            Outstanding              per Share
                                                      ----------------        -------------          ----------------

<S>                                                           <C>                   <C>                  <C>
Outstanding at  September 30, 2002 ...........                1,624                 2,641                $   23.18

                    Grants ...................                 (794)                  794                    24.86
                    Exercises ................                 --                    (291)                   17.61


                    Cancellations ............                 --                     (16)                   22.02
                    Additional shares reserved                 --                     --                     --
                                                             ------                ------                ---------

Outstanding at  December 28, 2002 ............                  830                 3,128                $   24.13
                                                             ======                ======                =========
</TABLE>

<PAGE>


In-the-Money and Out-of-the-Money Option Information as of December 28, 2002
(in thousands, except per share data)

<TABLE>
<CAPTION>

                                     Exercisable                 Unexercisable                  Total
                                -----------------------     ----------------------     ----------------------
                                              Weighted-                  Weighted-                  Weighted-
                                               Average                    Average                    Average
                                              Exercise                   Exercise                   Exercise
                                               Price                      Price                      Price
                                Shares        per Share     Shares       per Share     Shares       per Share
                                ------        ---------     ------       ---------     ------       ---------

<S>                                <C>        <C>           <C>          <C>           <C>          <C>
In-the-Money ............          936        $   21.59     2,090        $   24.35     3,026        $   23.50

Out-of-the-Money (1) ....            9        $   43.33        93        $   43.02       102        $   43.05
                                 -----        ---------     -----        ---------     -----        ---------

Total Options Outstanding          945        $   21.80     2,183        $   25.14     3,128        $   24.13
                                 =====        =========     =====        =========     =====        =========
</TABLE>


(1)  Out-of-the-Money  options are those options with an exercise price equal to
     or above the closing price of $38.179 at the end of the current quarter.


Executive  Options:  The following  tables summarize option grants and exercises
during the three month period ended  December  28, 2002 to the  Company's  Named
Executive Officers and the value of the options held by such persons at December
28, 2002.

<PAGE>

Options Granted to Named Executive Officers
-------------------------------------------

<TABLE>
<CAPTION>
                                                                                             Potential Realizable
                                                                                               Value at Assumed
                                                                                               Annual Rates of
                                                                                                 Stock Price
                                                                                               Appreciation for
                                               Individual Grants                                Option Term(4)
                            ---------------------------------------------------------      ------------------------
                                              Percent of Total
                                              Options Granted
                                Number of     to Employees in
                               Securities       Three Month     Exercise or
                               Underlying       Period Ended    Base Price
                             Options Granted    December 28,    per Share   Expiration
Name                               (1)            2002 (2)         (3)         Date           5%             10%
----                         ---------------  ---------------   ---------- -----------     --------        --------

<S>                                <C>             <C>          <C>        <C>             <C>             <C>
Mark S. Ain .............          60,000          7.6%         $24.86     04/07/07        $366,775        $801,444
CEO and Chairman

Paul A. Lacy ............          40,000          5.0%          24.86     04/07/07         244,517         534,296
Exec. V.P. and Chief
Financial &
Administrative Officer

Aron J. Ain .............          40,000          5.0%          24.86     04/07/07         244,517         534,296
Exec. V.P. and Chief
Operating Officer

Peter C. George .........          30,000          3.8%          24.86     04/07/07         183,388         400,722
V.P., Engineering & Chief
Technology Officer

James Kizielewicz .......          30,000          3.8%          24.86     04/07/07         183,388         400,722
V.P., Marketing and
Corporate Strategy

</TABLE>

(1)  Each option vests in four equal  annual  installments  commencing  one year
     from the date of grant.

(2)  Based on an  aggregate  of 793,900  shares  subject  to options  granted to
     employees of the Company in the three month period ended December 28, 2002.

(3)  The exercise price of each option was equal to the fair market value of the
     Company's  common  stock on the date of grant  as  reported  by The  NASDAQ
     National Market(R).

(4)  Amounts  represent  hypothetical  gains  that  could  be  achieved  for the
     respective  options if exercised at the end of the option term. These gains
     are based on assumed rates of stock  appreciation  of 5% and 10% compounded
     annually  from  the date  the  respective  options  were  granted  to their
     expiration date (and are shown net of the option exercise price, but do not
     include deductions for taxes or other expenses associated with the exercise
     of the options or the sale of the underlying shares.) Actual gains, if any,
     on stock  option  exercises  will depend on the future  performance  of the
     common stock,  the  optionholder's  continued  employment  with the Company
     through  the option  vesting  period and the date on which the  options are
     exercised.

<PAGE>

Option  Exercises and Remaining  Holdings of Named  Executive  Officers (for the
three month period ended December 28, 2002)

<TABLE>
<CAPTION>

                                                                     Number of Securities
                                                                          Underlying                    Value of Unexercised
                                                                     Unexercised Options               In-The-Money Options at
                                                                     at December 28, 2002               December 28, 2002 (2)

                          Shares Acquired       Value Realized           Exercisable/                       Exercisable/
    Name                    on Exercise              (1)                Unexercisable                      Unexercisable
    ----                  ---------------       --------------       --------------------              ----------------------


<S>                              <C>                  <C>                  <C>                           <C>
Mark S. Ain .....                  --                 $  --                161,250/155,250               $3,035,464/1,939,579


Paul A. Lacy ....                20,000               563,400               57,625/100,375                889,771/1,240,613

Aron J. Ain .....                27,000               783,720               50,625/100,375                708,478/1,240,613


Peter C. George                    --                    --                 46,125/80,625                 841,105/1,053,184

James Kizielewicz                13,500               398,620               25,500/76,500                 362,795/935,300

</TABLE>

(1)  Represents  the  difference  between the exercise price and the fair market
     value of the common stock on the date of exercise.

(2)  Based on the fair market  value of the common  stock on  December  28, 2002
     ($38.179),  the last day of the first quarter of the Company's  2003 fiscal
     year, less the option exercise price.

<PAGE>

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations

Forward-Looking Statements

     This discussion includes certain  forward-looking  statements about Kronos'
business  and its  expectations,  including  statements  relating  to  revenues,
product and service  revenues and revenue  growth  rates,  deferred  maintenance
revenue,  gross profit, future acquisitions and available cash,  investments and
operating cash flow,  Kronos' ability to obtain third-party  financing,  and the
future effects of accounting pronouncements.  Any such statements are subject to
risk that could cause the actual results to vary materially  from  expectations.
For a further  discussion of the various risks that may affect Kronos'  business
and expectations, see "Certain Factors That May Affect Future Operating Results"
at the end of  Management's  Discussion and Analysis of Financial  Condition and
Results of Operations.

Critical Accounting Policies

     Management's  discussion and analysis of financial condition and results of
operations are based upon Kronos' consolidated financial statements,  which have
been prepared in accordance with accounting principles generally accepted in the
United States of America. The preparation of these financial statements requires
Kronos to make  estimates and  assumptions  that affect the reported  amounts of
assets and  liabilities,  revenue  and  expenses,  and  related  disclosures  of
contingent  assets and  liabilities.  Kronos bases its  estimates on  historical
experience  and various  other  assumptions  that are believed to be  reasonable
under the circumstances.  Actual results could differ from these estimates under
different assumptions or conditions.

     Kronos has  identified  the  following  critical  accounting  policies that
affect the more  significant  judgments and estimates used in the preparation of
consolidated  financial statements.  This listing is not a comprehensive list of
all of  Kronos'  accounting  policies.  Please  refer to Note A in the  Notes to
Consolidated  Financial  Statements in Item 15 of Kronos'  Annual Report on Form
10-K for the fiscal year ended September 30, 2002 for further information.

     Revenue  Recognition  -  The  Company  licenses  software  and  sells  data
collection hardware and related ancillary products to end-user customers through
its direct sales force as well as indirect  channel  customers,  Automatic  Data
Processing, Inc. ("ADP") and its independent resellers. Substantially all of the
Company's  software  license  revenue  is  earned  from  perpetual  licenses  of
off-the-shelf software requiring no modification or customization.  The software
license,  data collection  hardware and related  ancillary product revenues from
the Company's  end-user  customers and indirect channel  customers are generally
recognized using the residual method when:

o    persuasive  evidence of an  arrangement  exists,  which is typically when a
     non-cancelable sales and software license agreement has been signed;

<PAGE>


o    delivery,  which is  typically  FOB  shipping  point,  is complete  for the
     software (either physically or  electronically),  data collection  hardware
     and related ancillary products;

o    the  customer's  fee is  deemed  to be  fixed or  determinable  and free of
     contingencies or significant uncertainties;

o    collectibility is probable; and

o    vendor specific objective evidence of fair value exists for all undelivered
     elements, typically maintenance and professional services.

     Under the residual  method,  the fair value of the undelivered  elements is
deferred and the remaining  portion of the  arrangement  fee is allocated to the
delivered  elements and is recognized as revenue,  assuming all other conditions
for revenue recognition have been satisfied.  Substantially all of the Company's
product  revenue is recognized in this manner.  If the Company cannot  determine
the fair  value of any  undelivered  element  included  in an  arrangement,  the
Company  will defer  revenue  until all  elements  are  delivered,  services are
performed or until fair value can be objectively determined.

     As  part  of  an  arrangement,   end-user   customers   typically  purchase
maintenance  contracts  as well  as  professional  services  from  the  Company.
Maintenance  services include  telephone and Web-based support as well as rights
to  unspecified  upgrades and  enhancements,  when and if the Company makes them
generally  available.  Professional  services are deemed to be non-essential and
typically are for implementation planning, loading of software,  installation of
the data collection hardware, training, building simple interfaces, running test
data, and assisting in the development and  documentation  of pay rules and best
practices consulting.

     Revenues from maintenance  services are recognized ratably over the term of
the maintenance  contract period based on vendor specific  objective evidence of
fair value.  Vendor specific  objective evidence of fair value is based upon the
amount  charged when  purchased  separately,  which is typically the  contract's
renewal  rate.  Maintenance  services  are  typically  stated  separately  in an
arrangement.  The Company has  classified  the allocated  fair value of revenues
pertaining  to the  contractual  maintenance  obligations  that  exist  for  the
12-month period subsequent to the balance sheet date as a current liability, and
the  contractual  obligations  with a term  beyond 12  months  as a  non-current
liability.  Revenues from time and material  maintenance services are recognized
as the services are delivered.

     Revenues  from  professional  services are  generally  recognized  based on
vendor  specific  objective  evidence of fair value when:  (1) a  non-cancelable
agreement  for the services has been signed or a customer's  purchase  order has
been received;  and (2) the  professional  services have been delivered.  Vendor
specific  objective  evidence of fair value is based upon the price charged when
these  services  are  sold  separately  and are  typically  an  hourly  rate for
professional  services  and a per  class  rate  for  training.  Based  upon  the
Company's  experience in completing product  implementations,  it has determined
that these services are typically  delivered within a 12-month period subsequent
to the contract signing and therefore classifies deferred  professional services
as a current liability.

<PAGE>

     The Company's arrangements with its end-user customers and indirect channel
customers  do not  include  any  rights of return  or price  protection,  nor do
arrangements with indirect channel customers include any acceptance  provisions.
Generally,  the  Company's  arrangements  with  end-user  customers  also do not
include any  acceptance  provisions.  However,  if an  arrangement  does include
acceptance  provisions,  they  typically  are  based on the  Company's  standard
acceptance  provision.  The Company's standard acceptance provision provides the
end-user  customer  with a right to a refund if the  arrangement  is  terminated
because the product did not meet Kronos'  published  specifications.  Generally,
the Company determines that these acceptance  provisions are not substantive and
therefore should be accounted for as a warranty in accordance with SFAS No. 5.

     At the time the Company enters into an  arrangement,  the Company  assesses
the  probability of collection of the fee and the terms granted to the customer.
For end-user  customers,  the Company's  typical payment terms include a deposit
and subsequent payments, based on specific due dates, such that all payments for
the software license,  data collection  hardware and related ancillary products,
as well as services  included in the original  arrangement  are  ordinarily  due
within  one year of  contract  signing.  The  Company's  payment  terms  for its
indirect  channel  customers  are less than 90 days and  typically due within 30
days of invoice date.

     If the payment terms for the arrangement are considered  extended or if the
arrangement  includes a substantive  acceptance  provision,  the Company  defers
revenue not meeting the criterion for recognition  under SOP 97-2 and classifies
this revenue as deferred  revenue,  including  deferred  product  revenue.  This
revenue is recognized,  assuming all other  conditions  for revenue  recognition
have been satisfied,  when the payment of the arrangement fee becomes due and/or
when the uncertainty  regarding acceptance is resolved as generally evidenced by
written  acceptance or payment of the  arrangement  fee. The Company reports the
allocated fair value of revenues  related to the product element of arrangements
as a current  liability  because of the expectation  that these revenues will be
recognized within 12 months of the balance sheet date.

     Since  fiscal  1996,  the Company has had a standard  practice of providing
creditworthy end-user customers the option of financing  arrangements beyond one
year. These  arrangements,  which encompass  separate fees for software license,
data  collection  hardware  and  ancillary  products,  maintenance  and  support
contracts and professional  services,  are evidenced by distinct standard sales,
license and maintenance agreements and typically require equal monthly payments.
The term of these arrangements  typically range between 18 and 36 months. At the
time  the  Company  enters  into  an  arrangement,   the  Company  assesses  the
probability  of  collection  and  whether  the   arrangement  fee  is  fixed  or
determinable.   The  Company   considers  its  history  of  collection   without
concessions as well as whether each new transaction  involves similar customers,
products and  arrangement  economics to ensure that the history  developed under
previous  arrangements remains relevant to current  arrangements.  If the fee is
not  determined  to be  collectible,  fixed or  determinable,  the Company  will
initially  defer the revenue and recognize  when  collection  becomes  probable,
which typically is when payment is due assuming all other conditions for revenue
recognition have been satisfied.

<PAGE>


     Allowance  for  Doubtful  Accounts  and Sales  Returns  Allowance  - Kronos
maintains  an  allowance  for  doubtful  accounts  to reflect  estimated  losses
resulting  from the  inability  of  customers to make  required  payments.  This
allowance is based on estimates  made by Kronos after  consideration  of factors
such as the composition of the accounts  receivable  aging and bad debt history.
If the financial  condition of customers  were to  deteriorate,  resulting in an
impairment of their ability to make payments, additional allowances and bad debt
expense may be required. In addition, Kronos maintains a sales returns allowance
to reflect estimated losses for sales returns and adjustments. Sales returns and
adjustments are generally due to incorrect ordering of product, general customer
satisfaction  issues or incorrect  billing.  This  allowance is  established  by
Kronos using estimates based on historical experience.  If Kronos experiences an
increase in sales returns and  adjustments,  additional  allowances  and charges
against revenue may be required.

     Valuation  of   Intangible   Assets  and   Goodwill  -  In  assessing   the
recoverability  of  goodwill  and  other  intangible  assets,  Kronos  must make
assumptions  regarding  the  estimated  future  cash flows and other  factors to
determine  the fair value of these assets.  If these  estimates or their related
assumptions  change in the future,  Kronos may be required to record  impairment
charges against these assets in the reporting  period in which the impairment is
determined.  For  intangible  assets,  this  evaluation  includes an analysis of
estimated  future  undiscounted  net cash flows  expected to be generated by the
assets over their estimated useful lives. If the estimated  future  undiscounted
net cash flows are insufficient to recover the carrying value of the assets over
their  estimated  useful lives,  Kronos will record an impairment  charge in the
amount by which the carrying value of the assets  exceeds their fair value.  For
goodwill,  the impairment evaluation includes a comparison of the carrying value
of the reporting unit which houses goodwill to that reporting unit's fair value.
Kronos has only one  reporting  unit.  The fair value of the  reporting  unit is
based upon the net  present  value of future  cash  flows,  including a terminal
value  calculation.  If the reporting  unit's  estimated  fair value exceeds the
reporting unit's carrying value, no impairment of goodwill  exists.  If the fair
value of the  reporting  unit does not exceed its carrying  value,  then further
analysis would be required to determine the amount of the impairment, if any.


<PAGE>


     Capitalization  of  Software  Development  Costs  - Costs  incurred  in the
research,  design and  development of software for sale to others are charged to
expense until  technological  feasibility is established.  Thereafter,  software
development  costs are  capitalized  and amortized to product cost of sales on a
straight-line  basis over the lesser of three  years or the  estimated  economic
lives of the  respective  products,  beginning when the products are offered for
sale. Costs incurred in the development of software for internal use are charged
to expense  until it becomes  probable  that future  economic  benefits  will be
realized.  Thereafter,  certain costs are capitalized and amortized to operating
expense on a straight-line basis over the lesser of three years or the estimated
economic life of the software.

Results of Operations

     Revenues.  Revenues for the first quarter of fiscal 2003 were $89.7 million
as compared to $76.1  million for the first  quarter of the prior year.  Revenue
growth,  as compared to the same period in the prior year,  was 18% in the first
quarter of fiscal 2003,  as compared to 17% in the first quarter of fiscal 2002.
Revenues from core business  (business  generated  from  customers that have not
been part of an acquired business  transaction over the last four quarters) grew
11% in the first quarter of fiscal 2003 and 2002, and revenues  attributable  to
acquisitions of businesses over the last four quarters  contributed 7% and 6% of
revenue  growth in the first  quarter  of  fiscal  2003 and 2002,  respectively.
Management presently  anticipates that revenue growth for the second quarter and
for the entire fiscal 2003,  including  revenues from customers  obtained in the
acquisition  of  businesses,  will  range  between  16% -  20%  and  11% -  13%,
respectively.

     Product revenues for the first quarter of fiscal 2003 were $38.9 million as
compared to $35.2 million for the first quarter of fiscal 2002.  Product revenue
growth,  as compared to the same period in the prior year,  was 10% in the first
quarter of fiscal 2003, as compared to 4% in first  quarter of fiscal 2002.  One
factor driving the product  revenue  growth  experienced in the first quarter of
fiscal 2003 was revenues  related to the  conversion to Kronos  products by, and
add-on sales to,  customers  acquired from other  providers of labor  management
solutions.  Product revenue derived from acquired customers  accounted for 6% of
the growth in the first  quarter of fiscal  2003,  or $2.1  million in  revenue.
Other less  significant  factors  include  increased  customer demand for Kronos
products,  as well as platform and capacity  upgrades and upgrades to the newest
badge terminals from existing  customers.  Although product  revenues  increased
during the quarter, management believes that the continued economic downturn may
result in many customers deferring or reducing their technology purchases in the
future.  While  management  believes the impact on technology  purchasing may be
temporary,  the effect may  continue to cause delays or  reductions  in customer
purchases of Kronos  products and services in the future.  The product growth in
the first  quarter  of fiscal  2002 was  attributable  to  customer  demand  for
platform and capacity  upgrades from  existing  customers and demand for Kronos'
new products,  as well as, revenues from customers obtained from acquisitions of
businesses.

<PAGE>

     Maintenance  revenues  for the  first  quarter  of fiscal  2003 were  $29.0
million  as  compared  to $23.4  million in the first  quarter  of fiscal  2002.
Maintenance  revenues,  as  compared  to the  same  period  in the  prior  year,
increased  24% in the first  quarter of fiscal  2003,  as compared to 25% in the
first  quarter of fiscal  2002.  The  increase in  maintenance  revenues in both
periods is a result of expansion of the installed base, an increase in the value
of maintenance  contracts and incremental  maintenance revenues  attributable to
customers obtained from the acquisition of businesses. The increase in the value
of the  maintenance  contracts  was  principally  attributable  to the  platform
upgrade of existing  customers  to Kronos' new  products.  Platform and capacity
upgrade sales generally  result in an increased value of maintenance  contracts.
Excluding the effect of incremental  maintenance  revenues from  acquisitions of
businesses in the  preceding  four  quarters,  maintenance  revenues  would have
increased 14% in the first quarter of fiscal 2003 and 2002.

     Professional  services  revenues for the first  quarter of fiscal 2003 were
$21.8  million as compared to $17.5 million in the first quarter of fiscal 2002.
Professional service revenues, as compared to the same period in the prior year,
increased  25% in the first  quarter of fiscal  2003 as  compared  to 40% in the
first quarter of fiscal 2002. The growth in  professional  services is primarily
due to an increase in the level of professional  services  accompanying  new and
platform  upgrade sales,  an increase in demand for Kronos'  services,  and to a
lesser extent,  incremental  revenues from acquisition of businesses.  Excluding
the effect of incremental  professional  service  revenues from  acquisitions of
businesses in the preceding four quarters,  professional  service revenues would
have  increased  19% and 31% in the  first  quarter  of  fiscal  2003 and  2002,
respectively.  The growth in professional service revenues for the first quarter
of fiscal  2002  reflects  an  increase  in the level of  professional  services
accompanying new and upgrade sales, an increase in the level of services sold to
the installed base, an increase in delivery of professional  services  resulting
from  improving  the  efficiency  of Kronos  services  organization,  as well as
incremental revenues from acquisitions of businesses.

     Deferred maintenance revenues increased 2% from September 30, 2002. Current
deferred  maintenance  revenues increased 3% and long-term deferred  maintenance
revenues  decreased 6% from  September 30, 2002.  Although  maintenance  revenue
increased  24% in the first  quarter of fiscal  2003,  as  compared  to the same
period  of  last  year,  the  deferred  maintenance  revenue  increased  2% from
September  30, 2002  primarily  due to the  positive  impact on the  maintenance
revenues of the acquisitions  completed  during the past fiscal year,  primarily
the  December  28,  2001  acquisition  of the  Integrated  Software  Business of
SimplexGrinnell's  Workforce  Solutions  Division,  as well as the effect of the
timing of the  expiration of multi-year  maintenance  contracts sold in previous
years.  The  decrease in the  long-term  portion was due to Kronos'  decision in
fiscal 2000 to curtail the practice of selling multi-year maintenance contracts.
Kronos management does not anticipate  significant reductions in the growth rate
of  deferred  maintenance  in  the  foreseeable  future.  Deferred  professional
services revenues decreased 2% from September 30, 2002. The decrease in deferred
professional  services  revenue  is the result of an  increase  in volume of the
delivery of  professional  services which  accompanied  product sales during the
fourth  quarter of fiscal  2002.  As the  volume of sales in the fourth  quarter
typically result in a larger deferred professional services revenue balance, the
combination of the delivery of these services during the first quarter,  as well
as typically lower sales in the first quarter as compared to the fourth quarter,
will  typically  result  in a similar  or lower  deferred  professional  service
revenue balance at the end of the first quarter of the fiscal year.

<PAGE>

     Gross  Profit.  Gross profit as a  percentage  of revenues was 61% in first
quarter of fiscal  2003,  compared  to 62% in the same period in the prior year.
The reduction in gross profit is primarily  attributable to a higher  proportion
of service  revenue,  which generally  carries a lower gross profit than product
revenue. Product gross profit as a percentage of product revenues was 76% in the
first  quarter of fiscal 2003 and 2002.  Service gross profit as a percentage of
service  revenues  was  49% in the  first  quarter  of  fiscal  2003  and  2002.
Management  anticipates  overall  gross profit to decline in fiscal 2003 as more
revenue derives from newer products including its Kronos 4500 terminal and Human
Resources  Management  System (HRMS)  products,  which carry higher  royalty and
production  costs, and as Kronos increases its investment in  infrastructure  to
support the introduction of its HRMS products.  In addition, if service revenues
continue to grow proportionately faster than product revenues, gross margins may
decrease as service revenues have a lower gross profit.

     Net Operating Expenses.  Net operating expenses as a percentage of revenues
were 48% and 49% in the first quarter of fiscal 2003 and 2002, respectively. The
reduction in net operating  expenses as a percentage of revenues is attributable
to a  corporate-wide  effort to contain  costs,  as well as leveraging  existing
investments  in  infrastructure  to  generate  higher  sales  volumes.  Although
management  intends to decrease  operating  expenses as a percentage of revenues
during the remainder of fiscal 2003,  principally through continued productivity
improvements, uncertainty related to the current economic climate and its impact
on the  timing of  customers'  purchases,  as well as  increased  investment  in
infrastructure  to support the introduction of the new HRMS products may prevent
decreases in operating expenses as a percentage of revenues from being realized.

     Sales and  marketing  expenses as a percentage of revenues were 32% and 33%
in the first  quarter of fiscal  2003 and 2002,  respectively.  The  increase in
sales and marketing  expenses is  attributable  to Kronos'  investments in sales
personnel  and related  support  costs to maximize the  penetration  of existing
accounts  and to add new  customers  as well as  initiatives  to  expand  market
awareness of Kronos  products and services.  The decrease in sales and marketing
expense  as a  percentage  of revenue  in the first  quarter of fiscal  2003 was
primarily due to leveraging our investment in  infrastructure to generate higher
sales volumes.

     Engineering,  research and development expenses as a percentage of revenues
were  9% and 10% in the  first  quarter  of 2003  and  2002,  respectively.  The
decrease as a  percentage  of revenues  for the first  quarter of fiscal 2003 as
compared to the same quarter in fiscal 2002 is  primarily  due to a reduction in
costs associated with engineering consultants,  coupled with higher sales volume
in fiscal 2003.  Engineering,  research and development expenses of $8.5 million
and $7.9 million in the first quarter of fiscal 2003 and 2002, respectively, are
net of capitalized  software development costs of $2.8 million and $2.6 million,
respectively.  The  increase in expenses in the first  quarter of fiscal 2003 as
compared to the same period of the prior year is principally  attributable to an
increase in salary-related  expenses for additional engineering  personnel.  The
significant  project  development  efforts in the first  quarter of fiscal  2003
principally  related to further  development  and  enhancement  of the Workforce
Central(R)  suite,  Workforce  HR(TM),  Workforce  Payroll(TM),  Kronos 4500(TM)
terminal  and,  to  a  lesser  extent,  the  eForce(R)  software  acquired  from
SimplexGrinnell on December 28, 2001.

<PAGE>

     General and administrative expenses as a percentage of revenues were 7% and
6% in the first  quarter  of fiscal  2003 and 2002,  respectively.  General  and
administrative  expenses  primarily  consist of personnel  and overhead  related
expenses for administrative,  information  technology,  finance, legal and human
resources support functions. The increase in general and administrative expenses
in fiscal 2003 is primarily  due to Kronos'  investment  in personnel  and other
infrastructure to support the growth of operations.

     Amortization  of  intangible  assets as a percentage of revenues were 1% in
the first quarter of fiscal 2003 and 2002. Other income,  net as a percentage of
revenues were 1% in the first quarter of fiscal 2003 and 2002. Other income, net
is principally  interest  income earned from Kronos' cash as well as investments
in its marketable securities and financing arrangements.

     Income  Taxes.  The  provision  for income taxes as a percentage  of pretax
income  was 36% and 35% in the  first  quarter  of  fiscal  year  2003 and 2002,
respectively. Kronos' effective income tax rate may fluctuate between periods as
a result of various  factors,  including  income tax  credits,  amortization  of
goodwill  for tax  purposes,  foreign tax rate  differentials  and state  income
taxes.

     Newly Issued Accounting  Standards.  In December 2002, the FASB issued SFAS
No. 148, "Accounting for Stock-Based  Compensation - Transition and Disclosure -
an amendment of FASB  Statement No. 123." This  statement  provides  alternative
methods  of  transition  for a  voluntary  change  to the fair  value  method of
accounting for  stock-based  compensation.  The statement  amends the disclosure
requirements of FASB Statement No. 123 to require  prominent  disclosure in both
annual and  interim  financial  statements  about the method of  accounting  for
stock-based  compensation and the effect of the method used on reported results.
The Company  accounts for  stock-based  compensation  arrangements in accordance
with the provisions of Accounting  Principles Board Opinion No. 25,  "Accounting
for Stock Issued to Employees,"  and complies  with the disclosure provisions of
FASB Statement No. 123. The transition provisions are effective for fiscal years
ending after  December 15, 2002.  The  disclosure  provisions  are effective for
interim  periods  beginning  after  December  15,  2002.  The  adoption  of this
statement  is  not  expected  to  have  a  material   impact  on  the  Company's
consolidated  financial  position,  results of  operations  or cash flows as the
Company does not anticipate making the voluntary change to the fair value method
of accounting for stock-based compensation. The Company expects to implement the
required disclosure provisions in the three month period ending March 29, 2003.

<PAGE>

Liquidity and Capital Resources

     Kronos  funds  its  business  through  cash  generated  by  operations.  If
near-term  demand for Kronos'  products  weakens or if  significant  anticipated
sales in any quarter do not close when expected,  the availability of such funds
may be adversely impacted.  If the need arose, Kronos believes that based on its
current  debt-free  balance  sheet  and its  financial  position,  it  would  be
successful in securing financing from the capital markets.

     Cash, cash equivalents and marketable securities (which includes both short
and long term  securities)  at December 28, 2002 increased to $87.2 million from
$74.7 million at September 30, 2002. This increase in cash, cash equivalents and
marketable securities is due to cash generated from operations.  Working capital
as of December 28, 2002  amounted to $17.9 million as compared with $2.4 million
at September 30, 2002.  This increase in working  capital is primarily due to an
increase in cash resulting from cash provided by operations.

     Cash provided by operations  amounted to $13.8 million in the first quarter
of fiscal  2003 as  compared  to $12.1  million for the same period in the prior
year.  The  increase  in  operating  cash  flows in fiscal  2003 is  principally
attributable  to an  increase  in deferred  revenues,  particularly  maintenance
revenues to be recognized over the next twelve months,  and increased net income
as well as increased  non-cash  charges related to deprecation and  amortization
that are added  back in the  calculation  of cash flow  from  operations.  These
increases were offset by a lower rate of accounts  receivable  collections  from
customer  financing  arrangements.  In  addition,  although the tax benefit from
exercise of stock options  contributed  less to cash flow from operations in the
first  quarter of fiscal  2003,  as compared  to the same period last year,  the
resulting increase in taxes payable offsets this effect.

     Cash used for  property,  plant and equipment was $2.2 million in the first
quarter of fiscal 2003 compared to $2.2 million for the same period in the prior
year.  Kronos' use of cash for  property,  plant and  equipment  in both periods
presented  includes  investments in  information  system and  infrastructure  to
improve  and  support  expanding  operations.   Kronos'  use  of  cash  for  the
acquisition  of  businesses  in the first  quarter  of fiscal  2003 and 2002 was
principally related to the acquisitions of specified assets and/or businesses of
Kronos' dealers and/or other providers of labor management solutions.  Kronos is
assessing several acquisition  opportunities that may be completed over the next
twelve months,  although there can be no assurance that these  acquisitions will
be completed.  Excess cash reserves not required for operations,  investments in
property,  plant and  equipment  or  acquisitions  are  invested  in  marketable
securities.  Net investments in marketable  securities decreased by $3.2 million
in the first  quarter of fiscal 2003 compared to an increase of $12.5 million in
the first quarter of fiscal 2002.

     Under Kronos' stock repurchase program, Kronos repurchased 65,000 shares of
common  stock during the first  quarter of fiscal 2003 at an  aggregate  cost of
$2.5 million  compared to 22,500  common shares at a cost of $0.6 million in the
first quarter of fiscal 2002.  The common shares  repurchased  under the program
are used for Kronos'  employee  stock option plans and employee  stock  purchase
plan. During the first quarter of fiscal 2003, Kronos received $2.6 million upon
the maturity of a call option  arrangement.  As of December 28, 2002, Kronos did
not have any outstanding call option arrangements. Please refer to Note I in the
Notes  to  Condensed  Consolidated  Financial  Statements  for  further  details
regarding call option  arrangements.  Cash provided by operations was sufficient
to fund investments in capitalized software development costs,  property,  plant
and equipment and stock repurchases.

<PAGE>

     Kronos leases certain office space,  manufacturing facilities and equipment
under long-term  operating lease agreements.  Future minimum rental  commitments
under  operating  leases  with  noncancellable  terms of one year or more are as
follows (in thousands):

                                                 Operating Lease
              Fiscal Year                          Commitments
              --------------------------------------------------
              2003 (remaining 9 months)               $ 7,043
              2004                                      8,926
              2005                                      8,075
              2006                                      6,086
              2007                                      4,230
              Thereafter                                4,238
                                                      -------
                                                      $38,598

     Certain  acquisition  agreements  contain provisions that require Kronos to
make a guaranteed payment and/or contingent payments based upon profitability of
the business unit or if specified  minimum revenue  requirements are met. Please
refer to Note E in the Notes to Condensed  Consolidated Financial Statements for
further details regarding guaranteed and/or contingent payments.

     Kronos  believes that with cash  generated  from ongoing  operations it has
adequate cash and investments and operating cash flow to fund its investments in
property,  plant and equipment,  software  development  costs, cash requirements
under operating leases,  cash payments related to acquisitions,  if any, and any
additional stock repurchases for the foreseeable future.

During the first quarter of fiscal 2003, Kronos did not engage in:

o    material  off-balance  sheet  activities,  including  the use of structured
     finance or special purpose entities,

o    material trading activities in non-exchange traded commodity contracts, or

o    transactions   with   persons  or   entities   that   benefit   from  their
     non-independent relationship with Kronos.

<PAGE>

Certain Factors That May Affect Future Operating Results

     Except for  historical  matters,  the matters  discussed in this  Quarterly
Report on Form 10-Q are  "forward-looking  statements" within the meaning of the
Private Securities  Litigation Reform Act of 1995 (the "Act"). Kronos desires to
take  advantage of the safe harbor  provisions of the Act and is including  this
statement for the express  purpose of availing  itself of the  protection of the
safe harbor with respect to all  forward-looking  statements  that involve risks
and uncertainties.

     Kronos'  actual  operating  results  may  differ  from those  indicated  by
forward-looking  statements  made in this  Quarterly  Report  on Form  10-Q  and
presented  elsewhere  by  management  from time to time  because  of a number of
factors including the potential  fluctuations in quarterly  results,  timing and
acceptance  of new  product  introductions  by Kronos and its  competitors,  the
dependence on Kronos' time and  attendance  product line, the ability to attract
and  retain   sufficient   technical   personnel,   the  protection  of  Kronos'
intellectual  property and the potential  infringement  on Kronos'  intellectual
property rights,  competitive pricing pressure,  and the dependence on alternate
distribution  channels and on key  vendors,  as further  described  below and in
Kronos' Annual Report on Form 10-K for the fiscal year ended September 30, 2002,
which are specifically incorporated by reference herein.

     Potential  Fluctuations in Results.  Kronos' operating  results,  including
revenue  growth,  sources of  revenue,  effective  tax rate and  liquidity,  may
fluctuate as a result of a variety of factors, including the purchasing patterns
of its  customers,  mix of products and services  sold, the ability of Kronos to
effectively integrate acquired businesses into Kronos' operations, the timing of
the  introduction  of new  products and product  enhancements  by Kronos and its
competitors,  the  strategy  employed  by Kronos  to enter  the Human  Resources
Management   System  ("HRMS")  market,   market   acceptance  of  new  products,
competitive   pricing   pressure  and  general   economic   conditions.   Kronos
historically has realized a relatively  larger percentage of its annual revenues
and profits in the third and fourth quarters and a relatively smaller percentage
in the first and second  quarters of each fiscal year,  although there can be no
assurance that this pattern will  continue.  In addition,  substantially  all of
Kronos'  product revenue and profits in each quarter result from orders received
in that  quarter.  If  near-term  demand  for  Kronos'  products  weakens  or if
significant anticipated sales in any quarter do not close when expected, Kronos'
revenues for that quarter will be adversely  affected.  Kronos believes that its
operating  results for any one period are not necessarily  indicative of results
for any future period.

     Dependence on Labor  Management  Product  Line.  To date,  more than 90% of
Kronos' revenues have been attributable to sales of labor management systems and
related  services.  Although Kronos has introduced its products for the licensed
HRMS market during fiscal 2002,  Kronos expects that its dependence on the labor
management  product line for revenues will continue for the foreseeable  future.
Competitive  pressures or other factors  could cause  Kronos'  labor  management
products to lose market  acceptance or  experience  significant  price  erosion,
adversely affecting the results of Kronos' operations.

<PAGE>

     Product  Development  and  Technological   Change.   Continual  change  and
improvement  in computer  software  and  hardware  technology  characterize  the
markets for labor management systems. Kronos' future success will depend largely
on its ability to enhance the  capabilities  and increase the performance of its
existing  products  and to develop new products and  interfaces  to  third-party
products on a timely basis to meet the increasingly  sophisticated  needs of its
customers.  Although Kronos is continually  seeking to further enhance its labor
management,  HR and payroll product offerings  (including  products for the HRMS
market) and to develop new  products and  interfaces,  there can be no assurance
that  these  efforts  will  succeed,  or  that,  if  successful,   such  product
enhancements or new products will achieve widespread market acceptance,  or that
Kronos'  competitors  will not develop and market products which are superior to
Kronos' products or achieve greater market acceptance.

     Dependence on Alternate Distribution Channels. Kronos markets and sells its
products through its direct sales  organization,  independent  resellers and ADP
under an OEM agreement.  In the first quarter of fiscal 2003,  approximately 10%
of Kronos' revenue was generated through sales to resellers and ADP.  Management
does not anticipate  that its entrance into the HRMS market will have a negative
impact on its relationship with ADP.  However,  a reduction in the sales efforts
of either  Kronos' major  resellers or ADP, or  termination  or changes in their
relationships  with Kronos,  could have a material adverse effect on the results
of Kronos' operations.

     Competition.   The  labor  management   industry  is  highly   competitive.
Technological  changes such as those  allowing for increased use of the Internet
have resulted in new entrants into the market.  Although  Kronos believes it has
core  competencies  that  position it strongly in the  marketplace,  maintaining
Kronos'  technological  and  other  advantages  over  competitors  will  require
continued  investment  by Kronos in research and  development  and marketing and
sales  programs.  There can be no  assurance  that Kronos  will have  sufficient
resources  to make such  investments  or be able to  achieve  the  technological
advances necessary to maintain its competitive advantages. Increased competition
could adversely affect Kronos' operating results through price reductions and/or
loss of market  share.  With  Kronos'  efforts  to expand  its labor  management
offering with the recent  introduction  of its HRMS product  suite,  Kronos will
continue to meet strong  competition.  Many of these  competitors may be able to
adapt  more  quickly  to new  or  emerging  technologies  or to  devote  greater
resources to the promotion and sale of their HRMS products. Many of Kronos' HRMS
competitors  have  significantly  greater  financial,  technical  and  sales and
marketing  resources than Kronos,  as well as more experience in delivering HRMS
solutions.  There  can be no  assurance  that  Kronos  will be  able to  compete
successfully  in the HRMS  marketplace,  and its  failure  to do so could have a
material adverse impact upon its business,  prospects,  financial  condition and
operating results.

<PAGE>

     Attracting  and  Retaining   Sufficient  Technical  Personnel  for  Product
Development,  Support and Sales.  Kronos has encountered intense competition for
experienced  technical personnel for product development,  technical support and
sales and expects such  competition to continue in the future.  Any inability to
attract and retain a sufficient  number of qualified  technical  personnel could
adversely  affect  Kronos'  ability to produce,  support and sell  products in a
timely manner.

     Protection of Intellectual Property.  Kronos has developed, and through its
acquisitions  of businesses and software,  acquired  proprietary  technology and
intellectual  property rights.  Kronos' success is dependent upon its ability to
further develop and protect its proprietary technology and intellectual property
rights.  Kronos seeks to protect  products,  software,  documentation  and other
written  materials  primarily  through a combination  of trade  secret,  patent,
trademark  and  copyright  laws,   confidentiality  procedures  and  contractual
provisions. While Kronos has attempted to safeguard and maintain its proprietary
rights, it is unknown whether Kronos has been or will be successful in doing so.

     Despite  Kronos' efforts to protect its  proprietary  rights,  unauthorized
parties  may  attempt  to  copy  aspects  of its  products  or  obtain  and  use
information  that is  regarded  as  proprietary.  Policing  unauthorized  use of
Kronos' products is difficult. While Kronos is unable to determine the extent to
which piracy of its software products exists, software piracy can be expected to
be a persistent  problem,  particularly in foreign  countries where the laws may
not  protect  proprietary  rights as fully as in the United  States.  Kronos can
offer no assurance that it can adequately protect its proprietary rights or that
its  competitors  will not reverse  engineer or  independently  develop  similar
technology.

     Infringement  of  Intellectual   Property  Rights.  Kronos  cannot  provide
assurance  that  others  will  not  claim  that  Kronos  developed  or  acquired
intellectual  property  rights are  infringing  on their  intellectual  property
rights or that Kronos does not in fact infringe on those  intellectual  property
rights.

     Any litigation regarding  intellectual  property rights could be costly and
time-consuming  and divert the attention of Kronos' management and key personnel
from business  operations.  The  complexity of the  technology  involved and the
uncertainty of intellectual  property litigation increase these risks. Claims of
intellectual  property  infringement  might  also  require  Kronos to enter into
costly royalty or license agreements,  and in this event, Kronos may not be able
to obtain royalty or license  agreements on acceptable  terms, if at all. Kronos
may also be subject to significant  damages or an injunction  against the use of
its  products.  A  successful  claim of  patent or other  intellectual  property
infringement  against Kronos could cause immediate and substantial damage to its
business and financial condition.

<PAGE>


Item 3.  Quantitative and Qualitative Disclosures About Market Risk

     Kronos is  exposed  to a variety  of market  risks,  including  changes  in
interest  rates  affecting  the  return  on its  investments,  foreign  currency
fluctuations  and  decreases  in its common  stock price  affecting  capped call
options.  Refer to Note A "Summary of  Significant  Accounting  Policies" in the
Notes to Consolidated Financial Statements in the Annual Report on Form 10-K for
the year ended September 30, 2002 for further  discussion  regarding  marketable
securities,  foreign currency forward exchange  contracts and capped call option
arrangements.  Kronos' marketable securities that expose it to market rate risks
are  comprised  of debt  securities.  A decrease  in  interest  rates  would not
adversely  impact interest income or related cash flows pertaining to securities
held at  December  28,  2002,  as all of these  securities  have fixed  rates of
interest.  A 100 basis  point  increase in  interest  rates would not  adversely
impact the fair value of these  securities by a material  amount due to the size
and  average  duration  of the  portfolio.  Kronos'  exposure to market risk for
fluctuations  in foreign  currency  relate  primarily  to the  amounts  due from
subsidiaries. Exchange gains and losses related to amounts due from subsidiaries
have not been material.  For foreign currency exposures existing at December 28,
2002,  a 10%  unfavorable  movement  in the  foreign  exchange  rates  for  each
subsidiary  location would not expose the Company to material losses in earnings
or cash flows.  The calculation  assumes that each exchange rate would change in
the same direction relative to the U.S. dollar.

     Kronos has  periodically  entered  into short term capped  call  options in
conjunction  with its stock  repurchase  initiatives.  As of December  28, 2002,
there were no capped call option arrangements outstanding.

Item 4. Evaluation of Disclosure Controls and Procedures

1.   Evaluation of disclosure controls and procedures. Based on their evaluation
     of the Company's  disclosure  controls and  procedures (as defined in Rules
     13a-14( c) and 15d-14( c) under the Securities  Exchange Act of 1934) as of
     a date within 90 days of the filing of this quarterly  report on Form 10-Q,
     the Company's  chief  executive  officer and chief  financial  officer have
     concluded  that  the  Company's  disclosure  controls  and  procedures  are
     designed to ensure that information required to be disclosed by the Company
     in the reports that it files or submits under the Exchange Act is recorded,
     processed, summarized and reported within the time periods specified in the
     SEC's rules and forms and are operating in an effective manner.

2.   Changes in  internal  controls.  There were no  significant  changes in the
     Company's  internal  controls or in other factors that could  significantly
     affect  these  controls  subsequent  to  the  date  of  their  most  recent
     evaluation.

<PAGE>


PART II.   OTHER INFORMATION


Item 6.    Exhibits and Reports on Form 8-K

(a)        Exhibits

           99.1    Certification pursuant to 18 U.S.C. Section 1350, as adopted
                   pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


(b)        Reports on Form 8-K

           There were no reports on Form 8-K filed during the fiscal quarter
           ended December 28, 2002.

<PAGE>

                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                                     KRONOS INCORPORATED


                                     By    /s/ Paul A. Lacy
                                        ---------------------------------------
                                               Paul A. Lacy
                                             Executive Vice President,
                                     Chief Financial and Administrative Officer
                                             (Duly Authorized Officer and
                                              Principal Financial Officer)


February 10, 2003

<PAGE>


                    CERTIFICATION OF CHIEF EXECUTIVE OFFICER


I, Mark S. Ain, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Kronos Incorporated;

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c)   presented  in  this  quarterly   report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent function):


     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     quarterly report whether or not there were significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.


Date: February 10, 2003                          /s/ Mark S. Ain
                                              -----------------------
                                                     Mark S. Ain
                                              Chief Executive Officer

<PAGE>

                    CERTIFICATION OF CHIEF FINANCIAL OFFICER


I, Paul A. Lacy, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Kronos Incorporated;

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a.   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared;

     b.   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c.   presented  in  this  quarterly   report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent function):

     a.   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b.   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     quarterly report whether or not there were significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.


Date: February 10, 2003                          /s/ Paul A. Lacy
                                               -----------------------
                                                     Paul A. Lacy
                                               Chief Financial Officer
<PAGE>


                               KRONOS INCORPORATED

                                  EXHIBIT INDEX


Exhibit
Number      Description

99.1        Certification pursuant to 18 U.S.C. Section 1350, as adopted
            pursuant to section 906 of the Sarbanes-Oxley Act of 2002.


<PAGE>

                                                                   EXHIBIT 99.1

                CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     In connection with the Quarterly Report on Form 10-Q of Kronos Incorporated
(the  "Company")  for the  period  ended  December  28,  2002 as filed  with the
Securities  and  Exchange  Commission  on the date  hereof (the  "Report"),  the
undersigned,  Mark S. Ain, Chief Executive  Officer of the Company,  and Paul A.
Lacy,  Executive Vice President,  Chief Financial and Administrative  Officer of
the Company, each hereby certifies, pursuant to 18 U.S.C. Section 1350, that:

     (1) The Report fully  complies  with the  requirements  of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

     (2)  The  information  contained  in the  Report  fairly  presents,  in all
material  respects,  the  financial  condition  and results of operations of the
Company.


                                          /s/ Mark S. Ain
                                        -----------------------
Dated:  February 10, 2003                     Mark S. Ain
                                        Chief Executive Officer


                                          /s/ Paul A. Lacy
                                        -----------------------
Dated:  February 10, 2003                     Paul A. Lacy
                                        Executive Vice President, Chief
                                        Financial and Administrative Officer