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6/24/2003
08:54 PM
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Verity Has Another Profitable Year

Verity reports its fifth consecutive year of profitability and its best all-around quarter since mid-2001.

A persistent bright spot in a dismal software market, knowledge management and information retrieval vendor Verity Inc. Tuesday reported its fifth consecutive year of profitability and its best all-around quarter since mid-2001. Revenue and profit rose each quarter during the year.

Verity executives said during a conference call with analysts that the company has overcome a challenging economy and shrinking IT spending in recent months by riding an updated release of its flagship K2 platform, and by beginning its expansion into the market for smaller corporate search deployments made possible by its acquisition last year of Inktomi's Ultraseek enterprise search technology. Verity is currently wrapping up development of a new version of Ultraseek that will be interoperable with K2 and should hit the market next month.

Calling the current economic environment "the most difficult time any [Verity execs] can remember," chairman Gary Sbona said during the conference call that he expects Verity's guidance of 20% to 24% revenue growth for the coming year, and a return to the profitability levels of fiscal 2001, "will be met, and hopefully exceeded." Verity averaged more than $35 million in quarterly revenue and $8 million in quarterly profit during fiscal 2001.

For the fourth quarter ended May 31, Verity posted a profit of $4.2 million, or 12 cents per share, on revenue of $29.2 million, compared with a profit of $3.5 million, 10 cents, on revenue of $26.1 million a year earlier. For the fiscal year, Verity posted a profit of $11.6 million, 33 cents per share, on revenue of $102.0 million, compared with a profit of $1.4 million, 4 cents, on revenue of $93.8 million the previous year.

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