SAN JOSE, Calif., March 24, 2006 (PRIMEZONE) -- CoSine Communications, Inc. (Pink Sheets:COSN), a provider of customer support services for managed, network-based IP and broadband service providers, today announced revenues of $934,000 and a net income of $325,000, or $0.03 per share for the three months ended December 31, 2005, as compared to revenues of $1,564,000 and a net loss of $5.6 million or $0.53 loss per share for the three months ended December 31, 2004. For the year ended December 31, 2005, CoSine reported revenues of $3.3 million and a net loss of $1.2 million or $0.12 loss per share as compared to revenues of $9.7 million and a net loss of $37.3 million or $3.70 loss per share for the year ended December 31, 2004.
About Cosine Communications
CoSine Communications was founded in 1998 as a global telecommunications equipment supplier to empower service providers to deliver a compelling portfolio of managed, network-based IP and broadband services to consumers and business customers. CoSine's strategic plan is to redeploy its existing resources to identify and acquire new business operations, while continuing to provide support to CoSine's existing customers. CoSine's redeployment strategy will involve the acquisition of one or more operating businesses with existing or prospective taxable earnings. This strategy may allow CoSine to realize future cash flow benefits from its net operating loss carry-forwards ("NOLs"). As of this date, no candidates have been identified, and no assurance can be given that CoSine will find suitable candidates, and if it does, that it will be able to utilize its existing NOLs.
Currently, CoSine's business consists primarily of a customer service capability operated under contract by a third party.
Safe Harbor Warning
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: This release contains forward-looking statements, which include, among others, statements concerning CoSine's expected financial performance, exploration of strategic alternatives, and business outlook, expected performance and developments. The company uses words such as "anticipate," "believe," "plan," "expect," "future," "intend" and similar expressions to identify forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements.
Factors that might cause such a difference include, but are not limited to, Cosine's ability to identify and effectuate desirable strategic acquisitions, the time and costs required to explore and investigate possible transactions and other corporate actions, management and board interest in and distraction due to exploring and investigating strategic alternatives, the reactions, either positive or negative, of investors, competitors, customers, employees and others to CoSine exploring and executing possible strategic acquisitions. A detailed discussion of these factors and other risks that affect CoSine's business is contained in its SEC filings, including its most recent reports on Form 10-K and Form 10-Q, particularly under the heading "Risk Factors." Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's opinions only as of the date hereof. CoSine undertakes no obligation to revise or publicly release the results of any revision to these forward-looking statements.
CoSine Communications Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Twelve months ended Twelve months ended
Dec 31, Dec 31,
2005 2004 2005 2004
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Revenue:
Product $ -- $ 935 $ 216 $ 6,924
Service 934 629 3,099 2,751
-------- -------- -------- --------
Total revenue 934 1,564 3,315 9,675
Cost of revenue 504 (287) 2,049 7,086
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Gross profit 430 1,851 1,266 2,589
Operating expenses:
Research and development -- 1,762 103 15,078
Sales and marketing -- 458 105 10,052
General and administrative 402 1,438 3,227 6,064
Restructuring and impairment
charges (credits) -- 3,695 (91) 8,909
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Total operating expenses 402 7,353 3,344 40,103
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Income (Loss) from
operations 28 (5,502) (2,078) (37,514)
Interest income and expense and
other, net 162 (94) 632 210
------------------- ------------------
Income (Loss) before income tax
(benefit) provision 190 (5,596) (1,446) (37,304)
Income tax (benefit)
provision (135) 31 (228) 33
------------------ ------------------
Net Income (Loss) $ 325 $ (5,627) $ (1,218) $(37,337)
================== ==================
Basic net income (loss) per
share $ 0.03 $ (0.53) $ (0.12) $ (3.70)
Shares used in computing basic
net loss per share 10,091 10,600 10,094 10,082
CoSine Communications, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31, December 31,
2005(a) 2004(a)
----------------------
ASSETS
Current assets:
Cash and cash equivalents $ 12,417 $ 9,203
Short-term investments 10,749 15,710
Accounts receivable, trade 96 1,328
Other receivables 209 483
Prepaid expenses and other current assets 119 949
----------------------
Total current assets 23,590 27,673
Long-term deposits 250 150
----------------------
$ 23,840 $ 27,823
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 237 $ 252
Accrued warranty liability -- 157
Other accrued liabilities 874 3,129
Accrued compensation -- 412
Deferred revenue 126 509
----------------------
Total current liabilities 1,237 4,459
----------------------
Total liabilities 1,237 4,459
======================
Stockholders' equity:
Common stock 1 1
Additional paid-in capital 538,947 540,028
Notes receivable from stockholders -- (1,520)
Accumulated other comprehensive income 632 614
Accumulated deficit (516,977) (515,759)
----------------------
Total stockholders' equity 22,603 23,364
======================
$ 23,840 $ 27,823
======================
(a) Amounts are derived from the December 31, 2005 and 2004 audited
financial statements.