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Verity turmoil reflected in Q1 report

Management turmoil at Verity took its toll on the software company's first-quarter performance as it posted a widening loss and fell far short of analysts' expectations.

    Management turmoil at Verity (VRTY) took its toll on the software company's first-quarter performance as it posted a widening loss and fell far short of analysts' expectations.

    Verity today reported that revenue for the quarter ended August 31 was $5.3 million, a 39 percent drop from $8.8 million in revenues for the same period last year. Revenues fell off even more sharply compared to the previous quarter, when Verity booked $11.1 million in revenue.

    Verity also reported a net loss of $9.8 million, or 89 cents per share, compared with a loss of $1.3 million, or 12 cents, a year ago. Its first-quarter performance was far worse than the 46 cents per share Wall Street analysts had expected, according to First Call.

    Last month Verity replaced chief executive Phillippe Courtot with Gary Sbona. Courtot also left Verity's board, as did Dominique Trempont, former chief operating officer at Next Software.

    Sbona's firm, Regent Pacific Management, had been hired July 31 to address what the company called "disruption and substantial employee turnover."

    Verity said it is concerned that its cash and investments have declined from $25.2 million on May 31 to $19.4 million on August 31 and that it will decline again this quarter because of low revenues. Sbona said in a statement that Verity will seek to refocus its business, boost revenues, and get expenses in line with revenue expectations.