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 January 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.)

                       400 Fifth Avenue, Waltham, MA 02451
                       -----------------------------------
               (Address of principal executive offices) (Zip Code)

                                 (781) 890-3232
                                 --------------
              (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 29, 2000, 12,530,761 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 January 1, 2000 and January 2, 1999                1

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

         Condensed Consolidated Statements of Cash Flows for the
          Three Months Ended January 1, 2000 and January 2, 1999          3

         Notes to Condensed Consolidated Financial Statements             4

 Item 2. Management's Discussion and Analysis of Financial
         Condition and Results of Operations                              6


      PART II.        OTHER INFORMATION

      Item 5.         Other Information

      Item 6.         Exhibits and Reports on Form 8-K

      Signatures

      Exhibit Index
<PAGE>

PART I.  FINANCIAL INFORMATION

Item 1.     Condensed Consolidated Financial Statements (Unaudited)
<TABLE>

                                          KRONOS INCORPORATED
                              CONDENSED CONSOLIDATED STATEMENTS OF INCOME

                          (In thousands, except share and per share amounts)
                                               UNAUDITED
<CAPTION>

                                                                  Three Months Ended
                                                               -----------------------
                                                               January 1,   January 2,
                                                                  2000         1999
                                                              ----------   ----------
<S>                                                           <C>          <C>
   Net revenues:
         Product ..........................................   $   36,152   $   33,180
         Service ..........................................       28,456       19,935
                                                              ----------   ----------
                                                                  64,608       53,115
                                                              ----------   ----------
   Cost of sales:
         Product ..........................................        8,291        7,840
         Service ..........................................       16,255       12,112
                                                              ----------   ----------
                                                                  24,546       19,952
                                                              ----------   ----------
              Gross profit ................................       40,062       33,163
   Expenses:
         Sales and marketing ..............................       21,931       18,688
         Engineering, research and development ............        7,016        6,003
         General and administrative .......................        4,154        3,374
         Other (income) expense, net ......................          216          (95)
                                                              ----------   ----------
                                                                  33,317       27,970
                                                              ----------   ----------
              Income before income taxes ..................        6,745        5,193
   Provision for income taxes .............................        2,496        1,984
                                                              ----------   ----------
              Net income ..................................   $    4,249   $    3,209
                                                              ==========   ==========


   Net income per common share:

              Basic .......................................   $     0.34   $     0.26
                                                              ==========   ==========
              Diluted .....................................   $     0.32   $     0.25
                                                              ==========   ==========

   Average common and common equivalent shares outstanding:

              Basic .......................................   12,462,471   12,487,508
                                                              ==========   ==========
              Diluted .....................................   13,152,909   12,969,665
                                                              ==========   ==========
</TABLE>

           See accompanying notes to condensed consolidated financial
                                  statements.


<PAGE>
<TABLE>

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

                                                                                January 1,  September 30,
                                                                                   2000        1999
                                                                                ----------   ----------
                                     ASSETS
<S>                                                                               <C>          <C>
   Current assets:
      Cash and equivalents ....................................................   $  16,602    $  20,148
      Marketable securities ...................................................      24,349       20,893
      Accounts receivable, less allowances  of $7,155
         at January 1, 2000 and $6,791 at September 30, 1999 ..................      58,258       66,817
      Deferred income taxes ...................................................       5,869        5,414
      Other current assets ....................................................      13,028       11,872
                                                                                  ---------    ---------
             Total current assets .............................................     118,106      125,144

   Property, plant and equipment, net .........................................      29,133       23,981
   Marketable securities ......................................................      18,900       21,400
   Excess of cost over net assets of businesses acquired, net .................      29,049       29,946
   Deferred software development costs, net ...................................      12,901       12,218
   Other assets ...............................................................      14,861       15,554
                                                                                  ---------    ---------
             Total assets .....................................................   $ 222,950    $ 228,243
                                                                                  =========    =========

                         LIABILITIES AND SHAREHOLDERS' EQUITY

   Current liabilities:
      Accounts payable ........................................................   $   8,141    $   8,503
      Accrued compensation ....................................................      14,994       21,106
      Accrued expenses and other current liabilities ..........................      33,867       32,753
      Deferred maintenance revenues ...........................................      42,988       41,636
                                                                                  ---------    ---------
             Total current liabilities ........................................      99,990      103,998
   Deferred maintenance revenues ..............................................      18,127       18,818
   Other liabilities ..........................................................       1,202        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 20,000,000 shares,
        12,634,728 shares and 12,634,728 shares issued at January 1, 2000 and
         September 30, 1999, respectively .....................................         126          126
      Additional paid-in capital ..............................................      23,494       31,087
      Retained earnings .......................................................      86,393       82,143
      Equity adjustment from translation ......................................        (337)        (337)
      Cost of Treasury Stock  (125,491 shares and 192,165
         shares at January 1, 2000 and September 30, 1999, respectively) ......      (6,045)      (8,761)
                                                                                  ---------    ---------
             Total shareholders' equity .......................................     103,631      104,258
                                                                                  ---------    ---------
             Total liabilities and shareholders' equity .......................   $ 222,950    $ 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>

                                                                                               Three Months Ended
                                                                                            -----------------------
                                                                                            January 1,    January 2
                                                                                               2000         1999
                                                                                            -----------   ----------

<S>                                                                                           <C>         <C>
   Operating activities:
        Net income ........................................................................   $  4,249    $  3,209
        Adjustments to reconcile net income to net cash and equivalents
            provided by operating activities:
                Depreciation ..............................................................      1,873       1,916
                Amoritzation of excess of cost over net assets of businesses acquired .....      1,551       1,010
                Amortization of deferred software development costs .......................      1,643       1,318
                Provision for deferred income taxes .......................................       (895)       --
                Changes in certain operating assets and liabilities:
                    Accounts receivable, net ..............................................      8,591       1,453
                    Deferred maintenance revenue ..........................................        467       3,434
                    Accounts payable, accrued compensation
                        and other liabilities .............................................     (5,878)     (6,466)
                    Other .................................................................        (16)       (538)
                                                                                              --------    --------
                        Net cash and equivalents provided by operating activities .........     11,585       5,336

   Investing activities:
        Purchase of property, plant and equipment .........................................     (7,024)     (1,672)
        Capitalization of software development costs ......................................     (2,326)     (2,002)
        (Increase) decrease in marketable securities ......................................       (956)      3,505
        Acquisitions of businesses ........................................................       (514)       (582)
                                                                                              --------    --------
                        Net cash and equivalents used in investing activities .............    (10,820)       (751)

   Financing activities:
        Net proceeds from exercise of stock option and employee stock
            purchase plans ................................................................      3,844       1,845
        Purchase of treasury stock ........................................................     (8,160)       (175)
                                                                                              --------    --------
                        Net cash and equivalents (used in) provided by financing activities     (4,316)      1,670

   Effect of exchange rate changes on cash and equivalents ................................          5         (10)
                                                                                              --------    --------
   Increase (decrease) in cash and equivalents ............................................     (3,546)      6,245
   Cash and equivalents at the beginning of the period ....................................     20,148      29,888
                                                                                              --------    --------
   Cash and equivalents at the end of the period ..........................................   $ 16,602    $ 36,133
                                                                                              ========    ========
</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  months  ended  January  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):

                                                 January 1,     September 30,
                                                    2000           1999
                                                 ----------     ----------
   Deferred professional service revenue ....... $   15,346     $   17,262
   Accrued acquisition payments ................      6,208          6,461
   Federal and state taxes payable .............      4,685          2,522
   Accrued other ...............................      7,628          6,508
                                                 ----------     ----------
                                                 $   33,867     $   32,753
                                                 ==========     ==========





<PAGE>



NOTE D - Comprehensive Income

For the three  months  ended  January 1, 2000 and January 2, 1999  comprehensive
income consisted of the following (in thousands):

                                                     Three Months Ended
                                                 -------------------------
                                                 January 1,     January 2,
                                                    2000           1999
                                                 ----------     ----------
   Comprehensive income:
       Net income ..........................     $    4,249     $    3,209
       Cumulative translation adjustment ...           --               99
                                                 ----------     ----------
   Total comprehensive income ..............     $    4,249     $    3,308
                                                 ==========     ==========


NOTE E - Earnings Per Share

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

                                                Three Months Ended
                                            --------------------------
                                             January 1,     January 2,
                                                2000           1999
                                            -----------    -----------

   Net income (in thousands) .............. $     4,249    $     3,209
                                            ===========    ===========


   Weighted-average shares ................  12,462,471     12,487,508

   Effect of dilutive securities:
      Employee stock options ..............     690,438        482,157
                                            -----------    -----------

   Adjusted weighted-average shares
      and assumed conversions .............  13,152,909     12,969,665
                                            ===========    ===========

   Basic earnings per share ............... $      0.34    $      0.26
                                            ===========    ===========

   Diluted earnings per share ............. $      0.32    $      0.25
                                            ===========    ===========
<PAGE>


                                       11

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 2000 amounted to $64.6
million as compared  with $53.1 million for the first quarter of the prior year.
Revenue  growth  amounted to 22% and 19% in the first quarter of fiscal 2000 and
1999,  respectively.  Product  revenues  for the quarter  increased  9% to $36.2
million  from $33.2  million  in the same  period of fiscal  1998.  In the first
quarter of fiscal 1999,  product revenues  increased 12% over the same period in
fiscal  1998.  Product  revenue  growth in the first  quarter of fiscal 2000 was
principally  driven by sales of Kronos'  products  to new  customers  as well as
sales into Kronos' existing customer base. While product revenues increased over
the comparable period of the prior year, the growth rate was negatively impacted
as a result  of the  postponement  of  customer  orders  due to their  Year 2000
compliance  efforts.  Although  management  anticipates that the product revenue
growth  rate  for  the  remainder  of the  year  to be  above  the  growth  rate
experienced  in the first quarter of fiscal 2000,  the growth rate in the second
quarter  may  continue to be impacted  as  customers  transition  from Year 2000
compliance  efforts.  Service  revenues  for the first  quarter  of fiscal  2000
increased  43% to $28.5  million from $19.9 million in the same period of fiscal
1999. In the first quarter of fiscal 1999,  service revenues  increased 35% over
the same  period in fiscal  1998.  The growth in service  revenues  in the first
quarter of fiscal 2000 and 1999 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 the Company's  acquisition of the
New York-New Jersey territory from a dealer in June 1999.

       Gross  Profit.  Gross profit as a  percentage  of revenues was 62% in the
first  quarter of fiscal 2000 and 1999.  Product gross profit as a percentage of
product  revenues was 77% and 76% in the first  quarter of fiscal 2000 and 1999,
respectively.   The   improvement   in  product  gross  profit  is   principally
attributable  to an  increased  proportion  of  product  revenues  generated  by
software, which typically generates higher gross profit than other products. The
software  component of product sales was 47% in the first quarter of fiscal 2000
as compared to 45% for the  comparable  period of the prior year.  Service gross
profit as a percentage of service revenues increased to 43% in the first quarter
of fiscal 2000 from 39% in the first quarter of 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.

       Expenses.  Expenses as a percentage  of revenues  were 52% and 53% in the
first  quarter  of fiscal  2000 and  1999,  respectively.  Sales  and  marketing
expenses as a  percentage  of revenues  were 34% in the first  quarter of fiscal
2000 as  compared  to 35% in the  first  quarter  of the prior  year.  Sales and
marketing  expenses as a percentage  of revenues were lower in the first quarter
of fiscal 2000 principally due to lower incentive  related expenses  relative to
revenues.  Engineering,  research and  development  expenses as a percentage  of
revenues were 11% in the first quarter of fiscal 2000 and 1999. Expenses of $7.0
million  and $6.0  million  in the  first  quarter  of  fiscal  2000  and  1999,
respectively,  are net of capitalized software development costs of $2.3 million
and  $2.0  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%-11% range.

       General and  administrative  expenses as a percentage of revenues were 6%
in the first  quarter  of fiscal  2000 and 1999.  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.

       Income  Taxes.  The  provision for income taxes as a percentage of pretax
income  was  37%  and  38% in  the  first  quarter  of  fiscal  1999  and  1998,
respectively. Kronos' effective income tax rate may fluctuate between periods as
a result of various factors,  none of which is material,  either individually or
in the aggregate, to the consolidated results of operations.

Liquidity and Capital Resources

         Working  capital as of January 1, 2000,  amounted  to $18.1  million as
compared with $21.1  million at September 30, 1999. As of those dates,  cash and
equivalents, marketable securities and investments amounted to $59.9 million and
$62.4 million,  respectively.  Cash generated from operations increased to $11.6
million  in the first  quarter  of fiscal  2000 from $5.3  million  in the first
quarter of the prior  year,  principally  due to an  increase  in  earnings  and
collection of accounts receivable from trade customers.  Cash used for property,
plant and  equipment  increased to $7.0  million in the first  quarter of fiscal
2000 from $1.7 million in the first quarter of fiscal 1999.  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 six months Kronos  anticipates it will use
approximately  $13.0 million in cash for the  construction  of its  headquarters
facility and for payments due under the terms of various acquisition agreements.
The Company is also  assessing  several  acquisition  opportunities  that may be
completed  over the  remainder  of the  fiscal  year,  although  there can be no
assurance that these acquisitions will be completed.

         Under Kronos' stock  repurchase  program,  Kronos  repurchased  168,500
common shares in the first quarter of fiscal 2000 at a cost of $8.2 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 in
the first quarter of fiscal 2000 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 timing of the  introduction  of new  products  and product  enhancements  by
Kronos and its competitors,  market acceptance of new products,  mix of products
sold, the purchasing patterns of its customers, 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.  The Company  continues  to  maintain  its  executive  level
steering committee which had been previously formed to identify and resolve Year
2000 issues  associated with the Company's  internal  systems (both  information
technology  ("IT") and non-IT),  the Company's  own products and  services,  the
status of third party products  distributed by the Company to its customers,  as
well as the Year 2000 readiness of the Company's suppliers.  Prior to January 1,
2000,  the  Company  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.  The Company  identified Year 2000
issues in other less  significant  IT systems,  and resolved  those  issues,  by
replacements  and/or  upgrades.  The Company also  completed an  assessment  and
remediation,  as necessary, of certain non-IT prior to the end of December 1999.
The Company has replaced  certain stand alone shop floor test equipment that was
found to be non-compliant.  The Company 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.  The Company 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 the Company  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 the Company's  definition of "Year 2000  Compliant".
Testing of these products was completed by the end of December 1999. The Company
has  warranted,  and may in the future  warrant to  certain  customers  that its
products will work in the Year 2000 and beyond.  Where products were  identified
as needing  upgrades/new  versions to address Year 2000 issues, the Company made
those  upgrades/new  versions  available  to  customers  for  purchase  or under
maintenance  agreements.  Some of the Company's  customers  were using  products
and/or product  versions that the Company had not tested,  and does not support,
for Year 2000 compliance.  The Company  encouraged these customers to migrate to
current   products/versions   that  meet  the  Company's  Year  2000  compliance
definition.  The Company did not test any of its custom  software  products  for
Year 2000 compliance.

         For  third  party  products  that  the  Company  distributes  with  its
products,  the Company sought  information and assurances from the manufacturers
concerning those products' Year 2000 compliance  status.  The Company  completed
its  assessment of those third party  products by the end of December 1999. As a
result,  the Company  identified  certain third party  products that required an
upgrade to be Year 2000 compliant notified the affected customers and encouraged
them to upgrade.

         To date, no Year 2000 related  software  problems have been detected in
the Company's standard products,  other than problems that had been detected and
addressed  prior to the end of 1999. A critical date still to be  experienced is
February 29, 2000. Some known problems  surrounding that date were identified in
one product prior to the end of 1999, and all known customers using this product
were notified and offered a free upgrade. In addition,  even if customers do not
upgrade, workarounds for the problem are available.

         Notwithstanding  the Company's  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 the Company's reputation, or increased service and warranty
costs, any of which could materially affect the Company's  business,  results of
operations,  or financial  condition.  In addition,  the unprecedented nature of
potential  litigation  regarding Year 2000 compliance  issues makes it uncertain
whether  the  Company  will be  affected  by such  litigation,  although no such
litigation relating to the Company's products has been filed so far.

         The costs associated with the Company's Year 2000 plan have been funded
from  operating  cash flows and have been charged to  operations.  To date,  the
Company 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.
The  Company  believes  that  substantially  all of  the  costs  to be  incurred
associated with the Company's Year 2000 plan have been  recognized.  The Company
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 the
Company's  Year 2000 plan,  have not been and are not expected to be material to
the Company's financial position, results of operations or cash flows.
<PAGE>

PART II.    OTHER INFORMATION

Item 5.     Other Information

              None

Item 6.     Exhibits and Reports on Form 8-K

              (a)          Exhibits

                           27   Financial Data Schedule

              (b)          Reports on Form 8-K

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





February 14,  2000

<PAGE>


                                                   EXHIBIT INDEX

     Exhibit

     Number         Description

      27          Financial Data Schedule