SAN JOSE, Calif., Aug. 2, 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 $520,000 and net income of $205,000, or $0.02 per share for the three months ended June 30, 2006, as compared to revenues of $699,000 and a net loss of $633,000 or $0.06 loss per share for the three months ended June 30, 2005. Revenues for the six months ended June 30, 2006 were $1,099,000 and net income was $79,000 or $0.01 per share, as compared to revenues of $1,596,000 and a net loss of $1,511,000 or $0.15 loss per share for the six months ended June 30, 2005.
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 the Company 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. Readers are advised to refer to risk factors, all as may be discussed in more detail on pages 4 through 8 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2005. 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)
Three months Six months
ended ended
June 30, June 30,
2006 2005 2006 2005
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Revenue:
Product $ -- $ -- $ -- $ 216
Service 520 699 1,099 1,380
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Total revenue 520 699 1,099 1,596
Cost of revenue 533 389 1,103 843
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Gross profit (loss) (13) 310 (4) 753
Operating expenses:
Research and development -- -- -- 103
Sales and marketing -- -- -- 105
General and administrative 234 1,098 611 2,403
Restructuring and
impairment charges -- -- -- (91)
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Total operating
expenses 234 1,098 611 2,520
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Loss from operations (247) (788) (615) (1,767)
Interest income and other 452 166 694 279
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Income (Loss) before
taxes 205 (622) 79 (1,488)
Income tax provision -- 11 -- 23
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Net income (loss) $ 205 $ (633) $ 79 $(1,511)
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Basic and diluted net
income (loss) per share $ 0.02 $(0.06) $ 0.01 $(0.15)
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Shares used in computing
basic and diluted net
income (loss) per share 10,090 10,091 10,090 10,097
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CoSine Communications, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30,
2006 December 31,
(Unaudited) 2005 (a)
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ASSETS
Current assets:
Cash and cash equivalents $ 19,180 $ 12,417
Short-term investments 3,922 10,749
Accounts receivable, trade 207 96
Other receivables 65 209
Prepaid expenses and other
current assets 87 119
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Total current assets 23,461 23,590
Long-term deposits 150 250
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$ 23,611 $ 23,840
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 249 $ 237
Other accrued liabilities 486 874
Deferred revenue 153 126
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Total current liabilities 888 1,237
Stockholders' equity:
Common stock 1 1
Additional paid-in capital 538,968 538,947
Accumulated other comprehensive income 652 632
Accumulated deficit (516,898) (516,977)
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Total stockholders' equity 22,723 22,603
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$ 23,611 $ 23,840
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(a) Amounts are derived from the December 31, 2005 audited financial
statements.