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VERITY EXPECTS SUBSTANTIAL Q1 LOSS

Following major upheaval within the company, search and retrival outfit Verity Inc says it expects first-quarter revenues to be down almost 40% from the year-ago quarter and 52% from the previous quarter. As a result of the poor revenue, which is estimated to be $5.3m, down from $8.8m last year, the company expects to report a net loss for the three months to August 31 that exceeds significantly its $6.0m fourth-quarter loss. First Call was only expecting a loss of $0.04, or roughly $440,000, for the quarter. The loss for last year’s first quarter was $1.3m. Verity reported year-end losses of $17.9m as a result of several acquisitions in June, and since then has had to deal with a series of internal squabbles and substantial employee turnover including the departure of the company’s president and chief executive officer Philippe Courtot, who was ousted by the Verity board because the company was not profitable enough. In the meantime, Gary Sbona, chief executive of Regent Pacific Management Corp, a turnaround management firm based in Cupertino, California and New York, has been given the reins at the company for an unspecified time period. Verity plans to announce its actual results on September 23.

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