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 30, 2000

                                   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
                             ---------------------------------------------------
                                           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
                        --------                    --------

        As of January 27, 2001,  12,504,613  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 30, 2000 and January 1, 2000                1

         Condensed Consolidated Balance Sheets at December 30, 2000
           and September 30, 2000                                            2

         Condensed Consolidated Statements of Cash Flows for the Three
           Months Ended December 30, 2000 and January 1, 2000                3

         Notes to Condensed Consolidated Financial Statements                4

 Item 2. Management's Discussion and Analysis of Financial Condition and
           Results of Operations                                             7

PART II. OTHER INFORMATION

Item 5.  Other Information

Item 6.  Exhibits and Reports on Form 8-K

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 30,      January 1,
                                                             2000              2000
                                                         --------------    ------------
<S>                                                        <C>             <C>
Net revenues:
      Product ..........................................   $     33,722    $     36,152
      Service ..........................................         31,031          28,456
                                                           ------------    ------------
                                                                 64,753          64,608
                                                           ------------    ------------
Cost of sales:
      Product ..........................................          7,797           8,291
      Service ..........................................         17,723          16,255
                                                           ------------    ------------
                                                                 25,520          24,546
                                                           ------------    ------------
          Gross profit .................................         39,233          40,062
Operating expenses and other income:
      Sales and marketing ..............................         22,302          21,931
      Engineering, research and development ............          7,920           7,016
      General and administrative .......................          4,140           4,154
      Amortization of intangible assets ................          1,734           1,551
      Other income, net ................................         (1,153)         (1,335)
                                                           ------------    ------------
                                                                 34,943          33,317

          Income before income taxes ...................          4,290           6,745
Provision for income taxes .............................          1,501           2,496
                                                           ------------    ------------
          Net income ...................................   $      2,789    $      4,249
                                                           ============    ============


Net income per common share:
          Basic ........................................   $       0.23    $       0.34
                                                           ============    ============
          Diluted ......................................   $       0.22    $       0.32
                                                           ============    ============

Average common and common equivalent shares outstanding:
          Basic ........................................     12,368,715      12,462,471
                                                           ============    ============
          Diluted ......................................     12,811,696      13,152,909
                                                           ============    ============

</TABLE>

     See accompanying notes to condensed consolidated financial statements.

<PAGE>


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

<TABLE>
<CAPTION>

                                                                          December 30,     September 30,
                                                                             2000             2000
                                                                          --------------   --------------
                                      ASSETS
<S>                                                                            <C>          <C>
Current assets:
   Cash and equivalents ....................................................   $  21,197    $  23,201
   Marketable securities ...................................................      21,833       10,788
   Accounts receivable, less allowances  of $7,033
      at December 30, 2000 and $6,986 at September 30, 2000 ................      64,512       71,493
   Deferred income taxes ...................................................       6,466        5,916
   Other current assets ....................................................      14,481       13,750
                                                                               ---------    ---------
          Total current assets .............................................     128,489      125,148

Property, plant and equipment, net .........................................      36,796       37,082
Marketable securities ......................................................      16,400       17,450
Excess of cost over net assets of businesses acquired, net .................      31,526       29,421
Deferred software development costs, net ...................................      14,509       13,788
Other assets ...............................................................      14,133       16,600
                                                                               ---------    ---------
         Total assets ......................................................   $ 241,853    $ 239,489
                                                                               =========    =========

                     LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Accounts payable ........................................................   $   6,670    $   8,278
   Accrued compensation ....................................................      18,940       19,879
   Accrued expenses and other current liabilities ..........................      14,040       14,339
   Deferred professional service revenues ..................................      23,586       23,451
   Deferred maintenance revenues ...........................................      51,021       48,483
                                                                               ---------    ---------
         Total current liabilities .........................................     114,257      114,430
Deferred maintenance revenues ..............................................      14,202       15,814
Other liabilities ..........................................................       1,546        1,455
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 20,000,000 shares,
     12,634,728 shares issued at December 30, 2000 and September 30, 2000 ..         126          126
   Additional paid-in capital ..............................................      20,985       23,842
   Retained earnings .......................................................     100,633       97,844
   Accumulated other comprehensive loss ....................................      (1,035)      (1,366)
   Cost of Treasury Stock  (222,051 shares and 310,038
      shares at December 30, 2000 and September 30, 2000, respectively) ....      (8,861)     (12,656)
                                                                               ---------    ---------
         Total shareholders' equity ........................................     111,848      107,790
                                                                               ---------    ---------
         Total liabilities and shareholders' equity ........................   $ 241,853    $ 239,489
                                                                               =========    =========
</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 30,    January 1,
                                                                                  2000            2000
                                                                              -------------    ----------
<S>                                                                                <C>         <C>
Operating activities:
     Net income ................................................................   $  2,789    $  4,249
     Adjustments to reconcile net income to net cash and equivalents
        provided by operating activities:
           Depreciation ........................................................      2,016       1,873
           Amoritzation of excess of cost over net assets of businesses acquired      1,735       1,551
           Amortization of deferred software development costs .................      1,919       1,643
           Provision for deferred income taxes .................................       (264)       (895)
           Changes in certain operating assets and liabilities:
               Accounts receivable, net ........................................      6,710       8,591
               Deferred maintenance revenue ....................................       (522)        467
               Accounts payable, accrued compensation
                  and other liabilities ........................................     (2,722)     (8,044)
               Long term investment in leases ..................................      2,367       1,128
               Other ...........................................................       (513)     (1,144)
           Tax benefit from exercise of stock options ..........................      1,670       2,805
                                                                                   --------    --------
                  Net cash and equivalents provided by operating activities ....     15,185      12,224

Investing activities:
     Purchase of property, plant and equipment .................................     (1,677)     (7,024)
     Capitalization of software development costs ..............................     (2,813)     (2,326)
     Increase  in marketable securities ........................................     (9,993)       (956)
     Acquisitions of businesses ................................................     (2,056)       (514)
                                                                                   --------    --------
                  Net cash and equivalents used in investing activities ........    (16,539)    (10,820)

Financing activities:
     Net proceeds from exercise of stock option and employee stock
        purchase plans .........................................................      3,055       3,844
     Purchase of treasury stock ................................................     (3,800)     (8,799)
                                                                                   --------    --------
                  Net cash and equivalents used in  financing activities .......       (745)     (4,955)

Effect of exchange rate changes on cash and equivalents ........................         95           5
                                                                                   --------    --------
Decrease in cash and equivalents ...............................................     (2,004)     (3,546)
Cash and equivalents at the beginning of the period ............................     23,201      20,148
                                                                                   --------    --------
Cash and equivalents at the end of the period ..................................   $ 21,197    $ 16,602
                                                                                   ========    ========
</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
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,  2000.  The  results of
operations  for the three  months ended  December  30, 2000 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 2001 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  (91 days in fiscal 2001 and 93 days in
fiscal  2000) and fourth  quarter  (92 days in fiscal 2001 and 91 days in fiscal
2000) 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  -  Newly Issued Accounting Standards:

The Company adopted Financial  Accounting  Standards Board Statement ("FAS") No.
133,  "Accounting for Derivative  Instruments and Hedging Activities" on October
1, 2000." SFAS 133  requires  the Company to recognize  all  derivatives  on the
balance sheet at fair value. Derivatives that are not hedges must be adjusted to
fair value through income. If the derivative is a hedge, depending on the nature
of the hedge, changes in the fair value of derivatives are either offset against
the change in fair value of assets,  liabilities,  or firm  commitments  through
earnings or  recognized in other  comprehensive  income until the hedged item is
recognized in earnings. The ineffective portion of a derivative's change in fair
value is  immediately  recognized  in earnings.  The adoption of SFAS 133 by the
Company as of  October 1, 2000 had no  material  effect on Kronos'  earnings  or
financial position.

At  December  30, 2000 the  Company  holds  foreign  currency  forward  exchange
contracts  having  original  durations  of less than 12  months.  These  forward
contracts  offset  the  impact of  exchange-rate  fluctuations  on  intercompany
payables due from one of the  Company's  subsidiaries.  At December 30, 2000 the
forward  contracts  are accounted for as cash flow hedges and have an immaterial
fair value.


NOTE D - Comprehensive Income

For the three months ended  December 30, 2000 and January 1, 2000  comprehensive
income consisted of the following (in thousands):

<TABLE>
<CAPTION>


                                     Three Months Ended
                                  ------------------------
                                  December 30,  January 1,
                                      2000         2000
                                  ------------  ----------
<S>                                     <C>      <C>
Comprehensive income:
    Net income ......................   $2,789   $4,249
    Cumulative translation adjustment      125     --
    Unrealized gains
    on ..............................      206     --
    available-for-sale securities
                                        ------   ------
Total comprehensive income ..........   $3,120   $4,249
                                        ======   ======
</TABLE>
<PAGE>


NOTE E - Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per
share:

<TABLE>
<CAPTION>

                                       Three Months Ended
                                   -------------------------
                                   December 30,   January 1,
                                      2000           2000
                                   -----------   -----------
<S>                                <C>           <C>
Net income (in thousands) ......   $     2,789   $     4,249
                                   ===========   ===========


Weighted-average shares ........    12,368,715    12,462,471

Effect of dilutive securities:
   Employee stock options ......       442,981       690,438
                                   -----------   -----------

Adjusted weighted-average shares
   and assumed conversions .....    12,811,696    13,152,909
                                   ===========   ===========

Basic earnings per share .......   $      0.23   $      0.34
                                   ===========   ===========

Diluted earnings per share .....   $      0.22   $      0.32
                                   ===========   ===========
</TABLE>
<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.  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.

Results of Operations

       Revenues.  Revenues  for the  first  quarter  of fiscal  2001 were  $64.8
million as  compared to $64.6  million for the first  quarter of the prior year.
Revenue growth was flat in the first quarter of fiscal 2001 and 22% in the first
quarter of fiscal 2000. The revenue growth rate experienced in the first quarter
of fiscal 2000 was favorably impacted in part due to demand for new products and
product  upgrades  as well as  related  professional  services  and  maintenance
revenues resulting from customers' Year 2000 compliance efforts, and incremental
revenues resulting from acquisitions of dealer territories during calendar 1999.
Kronos has experienced  lower growth rates over the past four quarters  compared
to historical growth rates.  Management has attributed the lower growth rates to
a combination of factors,  including the transitory impact on demand for Kronos'
products  and  services  as a result of Year  2000  compliance  efforts  and the
elongation of Kronos' sales cycle.  Management  believes that demand for Kronos'
products and services continues to exist and anticipates that the revenue growth
rates over the  remainder  of the  fiscal  year will  exceed  the  growth  rates
experienced in fiscal 2000.

       Product revenues for the quarter declined 7% to $33.7 million as compared
to $36.2 million and product revenue growth of 9% in the first quarter of fiscal
2000. The decline in product revenues is principally  attributable to lower than
anticipated  revenues  from  Kronos'  independent  dealer  channel.   Management
believes that,  given the increased  sophistication  of Kronos' products and the
related  heightened  need for  pre-sales  technological  support and other sales
support,  the dealer  channel's  sales cycle  requires  greater  management  and
participation by Kronos. To address this trend, management anticipates expending
greater  resources to assist the dealer channel in the short term and increasing
Kronos' emphasis on direct sales in the longer term.

       Service  revenues  for the first  quarter of fiscal 2001  increased 9% to
$31.0 million as compared to $28.5 million and service  revenue growth of 43% in
the first  quarter of fiscal 2000.  The growth in service  revenues in the first
quarter of fiscal 2001 principally  reflects an increase in maintenance  revenue
from  expansion  of the  installed  base and,  to a lesser  extent,  incremental
maintenance  revenues  resulting  from Kronos'  acquisitions  of various  dealer
territories  over the past four quarters.  The growth in service revenues in the
first  quarter of fiscal 2000  principally  reflects an increase in  maintenance
revenue from  expansion of the installed  base and the level of services sold to
the installed base, as well as an increase in the level of maintenance contracts
and professional  services accompanying new and upgrade sales. Also contributing
to the  growth  in the  first  quarter  of  fiscal  2000  were  maintenance  and
professional  service revenues resulting from Kronos' acquisition of its largest
dealer territory in June 1999.

       Gross  Profit.  Gross profit as a  percentage  of revenues was 61% in the
first quarter of fiscal 2001,  decreasing  from 62% in the comparable  period of
the prior  year.  The  decrease  in margin was  directly  attributable  to lower
product revenues. Service revenue, which generates lower gross margin, has grown
faster than product revenue and represents a greater proportion of total revenue
in the first quarter than in the  comparable  period of the prior year.  Product
gross profit as a percentage of product revenues was 77% in the first quarter of
fiscal 2001 and 2000.  Software,  which typically generates higher gross profit,
was a greater proportion of product revenues in the first quarter as compared to
the prior year. However, higher software development amortization and production
costs due to lower sales volume offset the effect of this favorable mix. Service
gross profit as a percentage of service revenues was 43% in the first quarter of
2001 and 2000. Management  anticipates that product and service gross margin for
the remainder of the fiscal year will be comparable to that  experienced  in the
first quarter.

       Net  Operating  Expenses.  Net  operating  expenses  as a  percentage  of
revenues  were 54% and 52% in the first  quarter  of fiscal  2001 and 2000.  The
increase in  operating  expenses  in the first  quarter as compared to the prior
year was attributable to increases in program and infrastructure  costs incurred
to support anticipated increases in business volume, product development efforts
and  amortization  of  intangible  assets  related  to  acquisitions.  Sales and
marketing  expenses as a percentage of revenues were 34% in the first quarter of
fiscal 2001 and 2000.  Management  anticipates sales and marketing expenses as a
percentage of revenues to increase in the second  quarter of fiscal 2001, but at
a lower rate than the comparable period of the prior year. Engineering, research
and  development  expenses as a  percentage  of  revenues  were 12% in the first
quarter  of fiscal  2001 as  compared  to 11% in the first  quarter in the prior
year. Engineering expenses of $7.9 million and $7.0 million in the first quarter
of  fiscal  2001  and  2000,  respectively,  are  net  of  capitalized  software
development costs of $2.8 million and $2.3 million,  respectively. The growth in
engineering,  research and development  expenses this year resulted  principally
from the continuing  research,  design and  development of software and hardware
technology. General and administrative expenses as a percentage of revenues were
6% in the first  quarter of fiscal  2001 and 2000.  Amortization  of  intangible
assets as a percentage  of revenues was 3% and 2% in the first quarter of fiscal
2001 and 2000, respectively. The increase in amortization expense is principally
related to various  dealer  territory  acquisitions  completed  in the past four
quarters.  Kronos  amortizes  these  costs over the assets  estimated  remaining
economic lives. Other income, net is principally attributable to interest income
earned from Kronos' cash as well as investments in its marketable securities and
lease portfolio.


       Income  Taxes.  The  provision for income taxes as a percentage of pretax
income  was  35%  and  37% in  the  first  quarter  of  fiscal  2001  and  2000,
respectively. The lower effective income tax rate experienced in fiscal 2001 was
principally  attributable to tax benefits  resulting from Kronos' investment tax
credits.  Management anticipates the effective income tax rate for the remainder
of the  fiscal  year will be  comparable  to the rate  experienced  in the first
quarter.


Liquidity and Capital Resources

         Working  capital as of December 30, 2000,  amounted to $14.2 million as
compared to $10.7  million at  September  30, 2000.  During  fiscal 2000 Kronos'
working  capital was reduced as Kronos'  funded its  investment in its corporate
headquarters  facility and other property,  plant and equipment,  as well as the
repurchase of common shares under  Kronos'  stock  repurchase  program and, to a
lesser extent, payments related to acquisitions of dealer territories.  Cash and
equivalents and marketable  securities  amounted to $59.4 million as of December
30, 2000 and $51.4 million as of September 30, 2000.

         Cash generated from  operations  amounted to $15.2 million in the first
quarter of fiscal  2001 as  compared  to $12.2  million in the first  quarter of
fiscal 2000. The increase is principally  attributable  to a smaller  decline in
accrued compensation and deferred professional services in the Q1 of fiscal 2001
as compared  Q1 of fiscal  2000.  Cash used for  property,  plant and  equipment
decreased to $1.7 million in the first  quarter of fiscal 2001 from $7.0 million
in the first quarter of fiscal 2000. Fiscal 2000 investments in property,  plant
and equipment included approximately $5.0 million related to the construction of
Kronos' corporate  headquarters  campus.  Kronos' use of cash for acquisition of
businesses in Q1 of fiscal 2001 was principally  related to the acquisition of a
dealer territory in November 2000.

         Under Kronos'  stock  repurchase  program,  Kronos  repurchased  61,000
common shares in the first quarter of fiscal 2001 at a cost of $2.3 million. The
common shares  repurchased under the program are used for Kronos' employee stock
option plans and employee stock  purchase plan.  Cash provided by operations was
more than  sufficient to fund  investments in capitalized  software  development
costs, property,  plant and equipment and stock repurchases.  Kronos believes it
has available  adequate cash and investments and operating cash flow to fund its
investments in property,  plant and equipment,  software development costs, cash
payments related to acquisitions  and any additional  stock  repurchases for the
foreseeable future.



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
ability  to attract  and  retain  sufficient  technical  personnel,  competitive
pricing  pressure,  the dependence on Kronos' time and attendance  product line,
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, 2000, which are specifically  incorporated by reference
herein.

         Potential   Fluctuations  in  Quarterly   Results.   Kronos'  quarterly
operating  results may fluctuate as a result of a variety of factors,  including
the purchasing patterns of its customers, mix of products and services sold, the
timing of the  introduction  of new products and product  enhancements by Kronos
and its  competitors,  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 fourth
quarter and a relatively  smaller percentage in the first quarter of each fiscal
year,  although there can be no assurance  that this pattern will  continue.  In
addition, while Kronos has contracts to supply systems to certain customers over
an extended  period of time,  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.

         Product  Development and  Technological  Change.  Continual  change and
improvement  in computer  software  and  hardware  technology  characterize  the
markets for frontline  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 product offerings 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  dealers and
OEMs. In Q1 of fiscal 2001,  approximately  14% of Kronos' revenue was generated
through  sales to dealers and OEMs. A reduction in the sales  efforts of Kronos'
major dealers  and/or OEMs, the  termination  or changes in their  relationships
with  Kronos,  or the  failure of Kronos to monitor  and incent its  independent
dealers and OEMs, could have a material adverse affect on the results of Kronos'
operations.

         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.

         Competition.   The  frontline  labor  management   industry  is  highly
competitive.  Technological  changes such as those allowing for increased use of
the Internet may also create the  potential for new  entrants.  Although  Kronos
believes it has core competencies that are not easily obtainable by competitors,
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.

<PAGE>


PART II.         OTHER INFORMATION

Item 5.          Other Information

                 None



Item 6.          Exhibits and Reports on Form 8-K

                 (a)          Exhibits

                              None

                 (b)          Reports on Form 8-K

                              There were no reports on Form 8-K filed during the
                              fiscal quarter ended December 30, 2000.

<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
                                              Vice President of Finance
                                              and Administration

                                              (Duly Authorized Officer and
                                               Principal Financial Officer)



February 9, 2001