- The Washington Times - Monday, December 15, 2003

Group 1 Software yesterday said it was awarded two patents for technologies to be used in expanding the company’s data-integration business.

The Lanham-based software developer said it received government approval to move forward creating methods to help companies use their databases more efficiently.

Shares fell 84 cents yesterday to close at $16.86 on the Nasdaq Stock Market. Like many stocks that surged early yesterday in response to the capture of Iraq’s Saddam Hussein, shares of Group 1 experienced most of the day’s loss in the last hour of trading. Shares have risen nearly 28 percent this year.

Group 1 said the new patents will be used as part of the company’s Sagent Data Flow system, which allows businesses to easily read and analyze large amounts of data.

“We certainly think we have a strong offering,” said Group 1 spokesman Dave Peikin. “I think it strengthens our competitiveness.”

The applications for the patents were filed in May 2000 by Sagent Technology, a company Group 1 acquired in September for about $17 million cash and debt. Group 1 gained control of all of Sagent’s previous patents in the acquisition, and expanded its customer base to more than 3,000 businesses. It also opened up business in Japan, China and South Africa.

Major Group 1 customers include Geico, L.L. Bean, MapQuest, QVC and Wal-Mart. In October, it agreed to help the Texas Comptroller of Public Accounts match tax information with address records. It also recently made changes to its Centrus software suite, which allows organizations to match data, such as census information, with addresses.

Fortune Magazine named Group 1 one of the 200 best small companies in America.

Group 1 last month also announced it partnered with Microsoft, the world’s largest maker of software, in developing data-management solutions for small and medium-sized businesses.

Group 1 reported net income of $2.55 million, or 16 cents per share, for the second quarter, which ended on Sept. 30. During the comparable period last year, the company reported net income of $1.97 million, or 14 cents per share. Revenue rose to $25.23 million from $25.02 million during the same period. Most of the revenue growth came from maintenance and services work.

Percentage-wise, the company’s shares increased in 2002 more than any other company specializing in packaged information technology software, Group 1 said.

As a result of the share growth, Group 1 declared a two-for-one stock split in November of 2002 in an effort to raise cash, and it appears to have worked. Even after the Sagent purchase, Group 1 has more than $57 million in available cash, putting the company in good position to continue acquiring other firms, Mr. Peikin said.

“We’re always looking at acquisitions,” he said. “We’ll continue to look for complementary core technologies.”

Group 1 management has said it expects a 31 percent to 33 percent growth in revenue by March 2004, and net earnings growth between 5 percent and 10 percent.

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