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 April 1, 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)

                       400 Fifth Avenue,  Waltham,  MA                  02154
--------------------------------------------------------------------------------
              (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 April  30,  2000,  12,432,840  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 and Six Months Ended April 1, 2000 and April 3, 1999      1

         Condensed Consolidated Balance Sheets at April 1, 2000
          and September 30, 1999                                           2

         Condensed Consolidated Statements of Cash Flows for the Six
          Months Ended April 1, 2000 and April 3, 1999                     3

         Notes to Condensed Consolidated Financial Statements            4 - 6

 Item 2. Management's Discussion and Analysis of Financial Condition
          and Results of Operations                                      7 - 13

PART II.  OTHER INFORMATION

 Item 2. Changes in Securities and of Proceeds                            14

 Item 4. Submission of Matters to a Vote of Security Holders              14

 Item 5. Other Information                                                15

 Item 6. Exhibits and Reports on Form 8-K                                 15

      Signatures                                                          16

      Exhibit Index                                                       17

<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             Six Months Ended
                                                           ----------------------------   ---------------------------
                                                              April 1,        April 3,      April 1,        April 3,
                                                                2000            1999          2000            1999
                                                           ------------    ------------   ------------   ------------
<S>                                                        <C>             <C>            <C>            <C>
Net revenues:
     Product ...........................................   $     32,091    $     40,643   $     68,243   $     73,823
     Service ...........................................         29,735          21,043         58,191         40,978
                                                           ------------    ------------   ------------   ------------
                                                                 61,826          61,686        126,434        114,801
                                                           ------------    ------------   ------------   ------------
Cost of sales:
     Product ...........................................          7,566           9,474         15,857         17,313
     Service ...........................................         17,000          12,744         33,255         24,857
                                                           ------------    ------------   ------------   ------------
                                                                 24,566          22,218         49,112         42,170
                                                           ------------    ------------   ------------   ------------
         Gross profit ..................................         37,260          39,468         77,322         72,631
Expenses:
     Sales and marketing ...............................         22,415          21,676         44,345         40,364
     Engineering, research and development .............          7,573           6,625         14,589         12,628
     General and administrative ........................          4,290           3,842          8,444          7,216
     Other (income) expense, net .......................           (121)            561             95            465
                                                           ------------    ------------   ------------   ------------
                                                                 34,157          32,704         67,473         60,673
                                                           ------------    ------------   ------------   ------------
         Income before income taxes ....................          3,103           6,764          9,849         11,958
Provision for income taxes .............................          1,148           2,213          3,644          4,197
                                                           ------------    ------------   ------------   ------------
         Net income ....................................   $      1,955    $      4,551   $      6,205   $      7,761
                                                           ============    ============   ============   ============


Net income per common share:

         Basic .........................................   $       0.16    $       0.36   $       0.50   $       0.62
                                                           ============    ============   ============   ============
         Diluted .......................................   $       0.15    $       0.35   $       0.47   $       0.60
                                                           ============    ============   ============   ============

Average common and common equivalent shares outstanding:

         Basic .........................................     12,515,139      12,595,809     12,488,805     12,541,659
                                                           ============    ============   ============   ============
         Diluted .......................................     13,162,020      13,069,640     13,157,464     13,019,653
                                                           ============    ============   ============   ============
</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>

                                                                                April 1,   September 30,
                                                                                  2000          1999
                                                                                ---------    ---------
       ASSETS

<S>                                                                            <C>          <C>
Current assets:
   Cash and equivalents ....................................................   $  12,603    $  20,148
   Marketable securities ...................................................      27,958       20,893
   Accounts receivable, less allowances  of $7,002
      at April 1, 2000 and $6,791 at September 30, 1999 ....................      57,718       66,817
   Deferred income taxes ...................................................       5,839        5,414
   Other current assets ....................................................      13,527       11,872
                                                                               ---------    ---------
          Total current assets .............................................     117,645      125,144

Property, plant and equipment, net .........................................      39,523       23,981
Marketable securities ......................................................      10,900       21,400
Excess of cost over net assets of businesses acquired, net .................      30,847       29,946
Deferred software development costs, net ...................................      13,567       12,218
Other assets ...............................................................      15,243       15,554
                                                                               ---------    ---------
          Total assets .....................................................   $ 227,725    $ 228,243
                                                                               =========    =========

      LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Accounts payable ........................................................   $   7,957    $   8,503
   Accrued compensation ....................................................      17,454       21,106
   Accrued expenses and other current liabilities ..........................      40,539       32,753
   Deferred maintenance revenues ...........................................      43,808       41,636
                                                                               ---------    ---------
          Total current liabilities ........................................     109,758      103,998
Deferred maintenance revenues ..............................................      17,546       18,818
Other liabilities ..........................................................       1,288        1,169
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,
     12,634,728 shares and 12,634,728 shares issued at April 1, 2000 and
      September 30, 1999, respectively .....................................         126          126
   Additional paid-in capital ..............................................      21,122       31,087
   Retained earnings .......................................................      88,348       82,143
   Equity adjustment from translation ......................................        (646)        (337)
   Cost of Treasury Stock  (209,070 shares and 192,165
      shares at April 1, 2000 and September 30, 1999, respectively) ........      (9,817)      (8,761)
                                                                               ---------    ---------
          Total shareholders' equity .......................................      99,133      104,258
                                                                               ---------    ---------
          Total liabilities and shareholders' equity .......................   $ 227,725    $ 228,243
                                                                               =========    =========
</TABLE>

           See accompanying notes to condensed consolidated financial
                                  statements.

<PAGE>

                               KRONOS INCORPORATED
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                    UNAUDITED
<TABLE>
<CAPTION>

                                                                                             Six Months Ended
                                                                                           --------------------
                                                                                           April 1,    April 3,
                                                                                             2000        1999
                                                                                           --------    --------
<S>                                                                                        <C>         <C>
Operating activities:
     Net income ........................................................................   $  6,205    $  7,761
     Adjustments to reconcile net income to net cash and equivalents
          provided by operating activities:
             Depreciation ..............................................................      3,753       4,105
             Amoritzation of excess of cost over net assets of businesses acquired .....      3,182       1,934
             Amortization of deferred software development costs .......................      3,461       2,777
             Provision for deferred income taxes .......................................       (865)
             Changes in certain operating assets and liabilities:
                 Accounts receivable, net ..............................................      9,640         257
                 Deferred maintenance revenue ..........................................        104       7,736
                 Accounts payable, accrued compensation
                     and other liabilities .............................................     (2,220)        648
                 Other .................................................................       (795)     (2,594)
                                                                                           --------    --------
                     Net cash and equivalents provided by operating activities .........     22,465      22,624

Investing activities:
     Purchase of property, plant and equipment .........................................    (14,192)     (3,982)
     Capitalization of software development costs ......................................     (4,810)     (4,159)
      Decrease (increase) in marketable securities .....................................      3,435     (24,221)
     Acquisitions of businesses ........................................................     (4,009)       (489)
                                                                                           --------    --------
                     Net cash and equivalents used in investing activities .............    (19,576)    (32,851)

Financing activities:
     Net proceeds from exercise of stock option and employee stock
          purchase plans ...............................................................      5,139       2,140
     Purchase of treasury stock ........................................................    (15,623)     (4,347)
     Proceeds from sale of put options .................................................        169        --
                                                                                           --------    --------
                     Net cash and equivalents (used in) provided by financing activities    (10,315)     (2,207)

Effect of exchange rate changes on cash and equivalents ................................       (119)         27
                                                                                           --------    --------
Decrease in cash and equivalents .......................................................     (7,545)    (12,407)
Cash and equivalents at the beginning of the period ....................................     20,148      29,888
                                                                                           --------    --------
Cash and equivalents at the end of the period ..........................................   $ 12,603    $ 17,481
                                                                                           ========    ========
</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,  1999.  The  results of
operations for the three and six months ended April 1, 2000 are not  necessarily
indicative of the results for a full fiscal year.

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  (93 days in fiscal 2000 and 94 days in
fiscal  1999) and fourth  quarter  (91 days in fiscal 2000 and 89 days in fiscal
1999) 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 - Accrued Expenses and Other Current Liabilities

Accrued  expenses and other  current  liabilities  consist of the  following (in
thousands):
<TABLE>
<CAPTION>

                                               April 1,      September 30,
                                                 2000             1999
                                               -------          -------
<S>                                            <C>              <C>
Deferred professional service revenue ..       $15,710          $17,262
Accrued acquisition payments ...........         6,112            6,461
Federal and state taxes payable ........         6,378            2,522
Accrued construction costs .............         5,000             --
Accrued other ..........................         7,339            6,508
                                               -------          -------
                                               $40,539          $32,753
                                               =======          =======
</TABLE>





<PAGE>


NOTE D -  Capital Stock

During the second  quarter of fiscal  2000 the  Company  sold put  options  that
entitle  the holder of each  option to sell to the  Company  one share of Common
Stock at an exercise price of $50.00.  The Company may, at its sole  discretion,
elect to settle  the  obligation  with  either  cash or shares of the  Company's
Common Stock and  accordingly,  no put option  liability has been recorded.  The
50,000 options  outstanding at April 1, 2000 expire on June 9, 2000. The premium
of $169,000  received in conjunction with this private placement was recorded as
additional paid in capital.  There was no significant effect on diluted earnings
for the three or six month periods ended April 1, 2000.

NOTE E - Comprehensive Income

For the three and six months ended April 1, 2000 and April 3, 1999 comprehensive
income consisted of the following (in thousands):
<TABLE>
<CAPTION>

                                           Three Months Ended          Six Months Ended
                                          --------------------       ---------------------
                                           April 1,    April 3,       April 1,     April 3,
                                            2000         1999          2000         1999
                                          -------      -------       --------     --------
<S>                                       <C>          <C>           <C>          <C>
Comprehensive income:
    Net income .........................  $ 1,955      $ 4,551       $ 6,205      $ 7,761
    Cumulative translation adjustment ..     (309)         499          (309)         598
                                          -------      -------       --------     --------
Total comprehensive income .............  $ 1,646      $ 5,050       $ 5,896      $ 8,359
                                          =======      =======       ========     ========
</TABLE>
<PAGE>



NOTE F - Earnings Per Share

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

<TABLE>
<CAPTION>
                                                              Three Months Ended              Six Months Ended
                                                         ---------------------------     --------------------------
                                                           April 1,         April 3,       April 1,      April 3,
                                                             2000             1999           2000          1999
                                                         ----------       -----------    -----------    -----------

<S>                                                     <C>               <C>            <C>            <C>
Net income (in thousands) ........................      $     1,955       $     4,551    $     6,205    $     7,761
                                                         ==========       ===========    ===========    ===========


Weighted-average shares ..........................       12,515,139        12,595,809     12,488,805     12,541,659

Effect of dilutive securities:
   Put options ...................................           30,802             -             15,401          -

   Employee stock options ........................          616,079           473,831        653,258        477,994
                                                        -----------       -----------    -----------    -----------

Adjusted weighted-average shares
   and assumed conversions .......................       13,162,020        13,069,640     13,157,464     13,019,653
                                                        ===========       ===========    ===========    ===========

Basic earnings per share .........................      $      0.16       $      0.36    $      0.50    $      0.62
                                                        ===========       ===========    ===========    ===========

Diluted earnings per share .......................      $      0.15       $      0.35    $      0.47    $      0.60
                                                        ===========       ===========    ===========    ===========
</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 three  and six  months  ended  April 1, 2000
amounted to $61.8 million and $126.4 million,  respectively as compared to $61.7
million and $114.8 million for the comparable periods in the prior year. Revenue
growth  was flat in the second  quarter of fiscal  2000 and 10% in the first six
months of fiscal 2000 as compared to 33% and 26% for the  comparable  periods in
the prior year.  The revenue growth rate  experienced  in the second,  third and
fourth  quarters  of fiscal  1999  exceeded  Kronos'  historical  growth rate of
approximately  20%. The unusually strong growth rates experienced  during fiscal
1999 were in part due to demand for new products and product upgrades  resulting
from  customers'  Year 2000 compliance  efforts.  Management  believes that as a
result of customers'  Year 2000  compliance  efforts,  Kronos  benefited from an
accelerated  sales cycle during this period.  The  combination  of the unusually
strong  product  demand and  accelerated  sales cycle during fiscal 1999 reduced
demand for  Kronos'  products  during the first two  quarters  of fiscal 2000 as
customers  postponed  product  purchases  in order to  complete  their Year 2000
compliance  efforts  and  began  the  process  of  identifying  and  redirecting
resources to non-Year 2000  projects.  During this period the Kronos sales force
focused on  rebuilding  its sales  pipeline.  Management  believes  that  demand
continues to exist for Kronos'  products and  services.  The negative  impact on
revenues in the first six months of fiscal 2000 is principally attributable to a
loss  of  unusually  strong  revenue  momentum  and  accelerated   sales  cycles
experienced in fiscal 1999 due to customers' Year 2000 compliance efforts.

       Product revenues for the quarter amounted to $32.1 million as compared to
$40.6 million in the same period of fiscal 1999.  Product revenues for the first
six months of fiscal 2000 were $68.2  million as  compared to $73.8  million for
the first six months of the prior year.  Product revenue  declined 21% and 8% in
the  three  and six  months  periods  ended  April 1,  2000,  respectively,  and
increased  35% and 23% in each of the  comparable  periods in the prior year. As
previously  indicated,  management  believes that as a result of customers' Year
2000  compliance  efforts  during fiscal 1999,  Kronos  product  revenue  growth
benefited  from  the   combination  of  unusually   strong  product  demand  and
accelerated sales cycles. Product revenues were negatively impacted in the first
six months of fiscal 2000 as customers  postponed orders in the first quarter in
anticipation  of Year 2000  and,  in the  second  quarter,  the sales  force was
challenged with  replenishing  its sales pipeline as companies began the process
of identifying their non-Year 2000 projects.  Management anticipates that Kronos
will experience moderate product revenue growth over the remainder of the fiscal
year.

       Service  revenues for the second quarter of fiscal 2000 amounted to $29.7
million as compared  to $21.0  million  for the second  quarter of fiscal  1999.
Service  revenues for the first six months of fiscal 2000 were $58.2  million as
compared to $41.0  million  for the first six months of the prior year.  Service
revenue  growth of 41% and 42% in the three and six month periods ended April 1,
2000, respectively, increased from 29% and 31% in each of the comparable periods
in the prior year.  The growth in service  revenues  in all periods  principally
reflects an increase in maintenance revenue from expansion of the installed base
and the level of services sold to the installed base, and to a lesser extent, an
increase  in the  level  of  maintenance  contracts  and  professional  services
accompanying new and upgrade sales. Also contributing to the growth in the three
and six month  periods  ended April 1, 2000 were  maintenance  and  professional
service revenues  resulting from acquisitions of various dealer territories over
the past four quarters. As a result of the level of product revenues achieved in
the  first  six  months  of fiscal  2000  and,  to a lesser  extent,  due to the
normalization of service  revenues  related to dealer  acquisitions in the prior
year,  management  anticipates  that the  service  revenue  growth rate over the
remainder of the fiscal year will be in the 25% to 30% range.

       Gross Profit. Gross profit as a percentage of revenues was 60% and 61% in
the three and six month  periods ended April 1, 2000,  respectively,  decreasing
from 64% and 63% for the  comparable  periods of the prior year. The decrease in
margin is 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 three and six month
periods  ended April 1, 2000 than in the  comparable  periods of the prior year.
Management anticipates that gross profit will continue to be negatively impacted
over the remainder of the year due to the mix of product and service revenues.

       Product gross profit as a percentage of product  revenues was 76% and 77%
in the three and six month periods ended April 1, 2000,  respectively,  compared
to  77% in  each  of the  comparable  periods  in  the  prior  year.  Management
anticipates  that  product  gross  margin  for the  remainder  of the year to be
comparable  to that  experienced  in the first six  months of the  fiscal  year.
Service  gross profit as a percentage  of service  revenues was 43% in the three
and six month periods ended April 1, 2000, respectively, compared to 39% in each
of the  comparable  periods in the prior year.  The  increase  in service  gross
profit is primarily  attributable  to the growth in service  revenues  without a
proportionate   increase  in  service   expenses.   This  has  principally  been
accomplished by improving the efficiency in the delivery of support  services by
centralizing the software support function,  leveraging  web-based  self-service
offerings  and,  as  customers  have  upgraded  to current  versions  of Kronos'
product,  reducing the number of versions requiring support. In addition, Kronos
has also focused on enhancing the billing for  professional  services which also
improves  service gross  profit.  Kronos  intends to invest in its  professional
service  organization over the remainder of the fiscal year. The timing of those
investments  will  affect  service  gross  margin and,  accordingly,  management
believes  service gross margin over the remainder of the fiscal year may be less
than that experienced in the first six months.

       Expenses.  Expenses as a percentage  of revenues were 55% and 53% for the
three and six month  periods ended April 1, 2000,  respectively,  as compared to
53% for the  comparable  periods in the prior year.  The increase in expenses in
the second quarter of fiscal 2000 as compared to the prior year is  attributable
to  increased  product  development  efforts as well as  increased  program  and
infrastructure  costs  incurred  to support  anticipated  increases  in business
volume.  As a result  of the  increased  spending  and  lower  than  anticipated
revenues, expenses as a percentage of revenues were unusually high in the second
quarter of fiscal  2000.  Management  anticipates  expenses as a  percentage  of
revenues to be less than 53% over the remainder of the fiscal year.

       Sales and marketing expenses as a percentage of revenues were 36% and 35%
in the  three  and six month  periods  ended  April 1,  2000,  respectively,  as
compared  to 35% for the  comparable  periods  in the prior  year.  Engineering,
research and  development  expenses as a percentage  of revenues were 12% in the
three and six month  periods ended April 1, 2000,  respectively,  as compared to
11% in each of the comparable periods in the prior year. Engineering expenses of
$7.6  million  and $6.6  million in the second  quarter of fiscal 2000 and 1999,
respectively,  are net of capitalized software development costs of $2.5 million
and $2.2 million, respectively.  Engineering expenses of $14.6 million and $12.6
million in the first six months of fiscal 2000 and 1999,  respectively,  are net
of  capitalized  software  development  costs of $4.8 million and $4.2  million,
respectively.  The growth in  engineering,  research  and  development  expenses
resulted  principally  from the continuing  development  and  integration of new
products  and  acquired  technologies.  Management  anticipates  that  over  the
remainder of fiscal 2000  engineering,  research and  development  expenses as a
percentage of revenues will be in the 10% to12% range.

       General and  administrative  expenses as a percentage of revenues were 7%
in the three and six month  periods ended April 1, 2000 as compared to 6% in the
comparable  periods of the prior year. Other (income)  expense,  net amounted to
less than 1% of revenues for all periods presented.  Other (income) expense, net
is composed primarily of interest income earned on Kronos' investments offset by
amortization of intangible assets related to acquisitions made by Kronos. In the
second  quarter of fiscal 1999,  other  (income)  expense,  net also included an
immaterial  charge resulting from Kronos' sale of its South African  subsidiary.
This charge related to the write off of the cumulative  equity  adjustment  from
the translation of the subsidiary's financial statements.

       Income  Taxes.  The  provision for income taxes as a percentage of pretax
income  was 37% in the  three  and six  month  periods  ended  April 1,  2000 as
compared  to 33% and 35% for the  comparable  periods  in the  prior  year.  The
effective income tax rate experienced in fiscal 1999 was primarily  attributable
to tax benefits  resulting from Kronos' sale of its South African  subsidiary as
well as substantial utilization of foreign net operating loss carryforwards.

Liquidity and Capital Resources

         Working  capital  as of April 1,  2000,  amounted  to $7.9  million  as
compared  with $21.1  million at  September  30,  1999.  The decrease in working
capital is principally attributable to Kronos' investment in property, plant and
equipment (including the construction of its corporate  headquarters  facility),
the repurchase of common shares under Kronos' Stock  Repurchase  Program as well
as  acquisitions of businesses.  Cash and equivalents and marketable  securities
amounted to $51.5  million as of April 1, 2000 and $62.4 million as of September
30, 1999.

         Cash generated from  operations  amounted to $22.5 million in the first
six months of fiscal 2000 as  compared to $22.6  million in the first six months
of fiscal 1999. Cash used for property,  plant and equipment  increased to $14.2
million  in the first  six  months of  fiscal  2000  from $4.0  million  for the
comparable period in the prior year. The increase in the investment in property,
plant and equipment was due to costs related to the  construction of Kronos' new
corporate  headquarters  facility as well as investments in information  systems
and  infrastructure to improve and support expanding  operations.  Over the next
three months Kronos anticipates it will use approximately  $11.0 million in cash
for the construction of its headquarters facility and for payments due under the
terms of various acquisition agreements.

         Under Kronos' stock  repurchase  program,  Kronos  repurchased  328,500
common shares in the first six months of fiscal 2000 at a cost of $15.6 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 expects to
fund its  investments  in property,  plant and equipment,  software  development
costs,   cash  payments   related  to  acquisitions  and  any  additional  stock
repurchases   over  the  remainder  of  fiscal  2000  with  available  cash  and
investments and operating cash flow.

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  pressures,  potential effects of the century change,  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, 1999,
which factors 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.

         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.  The number of competitors is also increasing as  applications  and
systems  providers in related  industries,  such as human resources  management,
payroll  processing and enterprise  resource  planning (ERP),  enter the market.
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.

         Year 2000.  During the second  quarter of fiscal 2000 Kronos  disbanded
its executive  level  steering  committee  which had been  previously  formed to
identify and resolve Year 2000 issues  associated with Kronos'  internal systems
(both  information  technology  ("IT") and  non-IT),  Kronos' own  products  and
services,  the  status  of third  party  products  distributed  by Kronos to its
customers,  as well as the Year 2000  readiness of Kronos'  suppliers.  Prior to
January 1, 2000, Kronos completed testing of its principal  internal  enterprise
resource  planning  (ERP)  system  for year  2000  compliance.  This ERP  system
includes order entry, material resource planning,  master production scheduling,
purchasing,  shipping and financial systems.  Kronos identified Year 2000 issues
in other less significant IT systems, and resolved those issues, by replacements
and/or  upgrades.  Kronos also  completed  an  assessment  and  remediation,  as
necessary,  of certain  non-IT  prior to January  1, 2000.  Kronos has  replaced
certain   stand  alone  shop  floor  test   equipment   that  was  found  to  be
non-compliant.  Kronos  did not  assess  specifically  its  facility  management
systems,  or the  external  forces such as utility or  transportation  Year 2000
compliance  failures  that might have  generally  affect  industry and commerce.
Kronos  is not  currently  aware of any  material  operational  issues  or costs
associated  with preparing its internal IT and non-IT systems for the Year 2000,
nor is Kronos aware of any unanticipated problems caused by undetected errors or
defects in these internal systems as a result of the year 2000.

         The Company tested the most recent versions of its current  products to
determine whether they met Kronos' definition of "Year 2000 Compliant".  Testing
of these products was completed  prior to January 1, 2000.  Kronos has warranted
to certain  customers  that its products  will continue to perform in accordance
with  applicable  published  specifications  in the Year 2000 and beyond.  Where
products were identified as needing  upgrades/new  versions to address Year 2000
issues,  Kronos made those  upgrades/new  versions  available to  customers  for
purchase or under maintenance  agreements.  Some of Kronos' customers were using
products  and/or  product  versions  that  Kronos had not  tested,  and does not
support, for Year 2000 compliance.  Kronos encouraged these customers to migrate
to current  products/versions that meet Kronos' Year 2000 compliance definition.
Kronos  did  not  test  any  of its  custom  software  products  for  Year  2000
compliance.

         For third party  products  that Kronos  distributes  with its products,
Kronos sought information and assurances from the manufacturers concerning those
products' Year 2000 compliance status.  Kronos completed its assessment of those
third party  products prior to January 1, 2000. As a result,  Kronos  identified
certain third party products that required an upgrade to be Year 2000 compliant,
notified the affected customers and encouraged them to upgrade.

         In addition,  Kronos had previously  identified  February 29, 2000 as a
critical date and had identified potential problems surrounding that date in one
of its  products.  All known  customers  using this  product  were  notified and
offered a free product upgrade.

         To date,  no January 1, 2000 or  February  29,  2000  related  software
problems have been detected in Kronos'  standard  products,  other than problems
that had been detected and addressed prior to the critical date.

         Notwithstanding  Kronos'  testing of its own  products  and  efforts to
obtain  assurances  concerning  third party products,  errors or defects in such
products  could  result in delay or loss of revenue,  diversion  of  development
resources,  damage to Kronos'  reputation,  or  increased  service and  warranty
costs,  any of which  could  materially  affect  Kronos'  business,  results  of
operations,  or financial  condition.  In addition,  the unprecedented nature of
potential  litigation  regarding Year 2000 compliance  issues makes it uncertain
whether Kronos will be affected by such litigation,  although no such litigation
relating to Kronos' products has been filed so far.

         The costs  associated with Kronos' Year 2000 plan have been funded from
operating  cash flows and have been charged to operations.  To date,  Kronos has
incurred approximately $1.2 million of incremental costs to address its internal
IT and non-IT  systems and to address Year 2000  compliance  problems in its own
products  and in third party  products  distributed  with its  products.  Kronos
believes  that  substantially  all of the costs to be incurred  associated  with
Kronos' Year 2000 plan have been  recognized.  Kronos does not separately  track
the  internal  costs  associated  with its Year 2000 plan,  which are  primarily
payroll  costs for its  information  systems  employees,  support and  technical
personnel and the Year 2000 steering committee.  The costs described herein, and
the costs to accomplish the other  elements of Kronos' Year 2000 plan,  have not
been and are not expected to be material to Kronos' financial position,  results
of operations or cash flows.
<PAGE>

PART II.          OTHER INFORMATION

Item 2.  Changes in Securities and of Proceeds.

         See Note D to the condensed consolidated financial statements,
          dated April 1, 2000.

Item 4.  Submission of Matters to a Vote of Security Holders.

(a)  The 2000 Annual Meeting of Stockholders of Kronos  Incorporated was held on
     February 3, 2000.

(b)  At the Annual  Meeting,  Messrs.  Mark S. Ain and W.  Patrick  Decker  were
     elected as Class II Directors  for  three-year  terms  expiring in 2003. In
     addition,  the Directors  whose terms of office  continue after the meeting
     are two Class I  Directors:  Messrs.  D.  Bradley  McWilliams  and Lawrence
     Portner and two Class III Directors:  Messrs.  Richard J. Dumler and Samuel
     Rubinovitz. The tabulation was as follows:
                                          FOR                   WITHHELD
                                          ---                   --------
         Mark S. Ain                   11,074,197                373,758
         W. Patrick Decker             11,074,318                373,637

(c)  An amendment to the Company's Restated Articles of Organization, increasing
     the  number  of  authorized  shares  of the  Company's  common  stock  from
     20,000,000 to 50,000,000, was approved as follows:

             FOR                         AGAINST                 ABSTAIN
             ---                         -------                ---------
         10,220,719                     1,213,385                 13,021

(d)  An amendment to the Company's 1992 Employee Stock Purchase Plan, increasing
     the number of shares available under the Plan from 618,750 to 918,750,  was
     approved as follows:

             FOR                         AGAINST                 ABSTAIN
             ---                         -------                ---------
         11,046,545                      214,886                 186,524

(e)  The other  item  voted  upon at the  meeting  was the  ratification  of the
     selection of Ernst & Young LLP.

             FOR                         AGAINST                 ABSTAIN
             ---                         -------                ---------
         11,434,132                        2,285                  11,538
<PAGE>


Item 5.  Other Information
         None

Item 6.  Exhibits and Reports on Form 8-K
         (a)   Exhibits

            10  Third Amendment dated February 17, 2000, to Software License and
                Support and Hardware Purchase Agreement dated April 2, 1993,
                between ADP, Inc. and the Registrant.

            27  Financial Data Schedule

         (b)   Reports on Form 8-K

               There were no reports on Form 8-K filed  during the
               fiscal quarter ended April 1, 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)




May 12, 2000
<PAGE>




                                  EXHIBIT INDEX

  Exhibit
  Number         Description

    10         Third Amendment dated February 17, 2000, to Software License and
               Support and Hardware Purchase Agreement dated April 2,1993,
               between ADP, Inc. and the Registrant.

    27         Financial Data Schedule