EX-99.1 2 v022766_ex99-1.htm

COSINE COMMUNICATIONS ANNOUNCES SECOND QUARTER FISCAL 2005 FINANCIAL RESULTS
 

SAN JOSE, CALIF., August 1, 2005 -- CoSine Communications, Inc. (COSN.PK), a provider of customer support services for managed, network-based IP and broadband service providers, today announced revenue for the quarter ended June 30, 2005 of $699,000 and a net loss of $633,000 or $0.06 loss per share, as compared to revenue of $2.6 million and a net loss of $ 9.7 million or $0.96 loss per share for the quarter ended June 30, 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. 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 acquire new business operations while continuing to provide support to CoSine’s existing customers and continuing to offer CoSine’s intellectual property for license or sale and the reactions, either positive or negative, of investors, competitors, customers, and others to CoSine’s strategic direction and to any specific strategic alternative or opportunity selected by CoSine, all as may be discussed in more detail on pages 30 through 36 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2004 and our Form 10 - Q filings. 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.

For additional information contact:

Terry Gibson                         
(408) 236-7518
E-mail: Terry.Gibson@Cosinecom.com
 
 
 
CoSince Communications, Inc.
CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share data)


   
Three months ended
  
Six months ended
  
   
 June 30,
  
June 30,
  
   
2005
  
2004
  
2005
  
2004
  
                   
Revenue:
  
 
  
 
  
 
  
 
  
Product
  
$
-
  
$
1,819
  
$
216
  
$
5,537
  
Service
    
699
   
749
   
1,380
   
1,486
 
Total revenue
    
699
   
2,568
   
1,596
   
7,023
 
Cost of revenue
   
389
   
1,435
   
843
   
2,932
 
                           
Gross profit
    
310
   
1,133
   
753
   
4,091
 
                           
Operating expenses:
                          
Research and development
    
-
   
4,352
   
103
   
9,607
 
Sales and marketing
    
-
   
3,155
   
105
   
6,538
 
General and administrative
   
1,098
   
1,197
   
2,403
   
2,905
 
Restructuring and impairment charges
    
-
   
2,308
   
(91
)
  
2,343
 
Total operating expenses
    
1,098
   
11,012
   
2,520
   
21,393
 
                           
Loss from operations
    
(788
)
  
(9,879
)
  
(1,767
)
  
(17,302
)
                           
Interest income and expense and other, net
    
166
   
141
   
279
   
222
 
                           
Loss before income tax (benefits) provision
    
(622
)
  
(9,738
)
  
(1,488
)
  
(17,080
)
                           
Income tax (benefits) provision
    
11
   
(32
)
  
23
   
11
 
                           
Net loss
  
$
(633
)
$
(9,706
)
$
(1,511
)
$
(17,091
)
                           
Basic and diluted net loss per share
  
$
(0.06
)
$
(0.96
)
$
(0.15
)
$
(1.70
)
                           
Shares used in computing basic and diluted net loss per share
    
10,091
   
10,062
   
10,097
   
10,035
 
                           
 
 
 
 
CoSince Communications, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
   
June 30, 2005
 (Unaudited)
  
December 31,
2004 (1)
  
           
ASSETS
          
Current assets:
            
Cash and cash equivalents
  
$
12,749
  
$
9,203
  
Short-term investments
    
10,342
   
15,710
 
Accounts receivable, trade
    
220
   
1,328
 
Other receivables
    
94
   
483
 
Prepaid expenses and other current assets
    
530
   
949
 
Total current assets
    
23,935
   
27,673
 
Long-term deposits
    
370
   
150
 
   
$
24,305
  
$
27,823
  
               
LIABILITIES AND STOCKHOLDERS' EQUITY
              
Current liabilities:
              
Accounts payable
  
$
203
  
$
252
  
Accrued warranty liability
    
100
   
157
 
Other accrued liabilities
    
1,368
   
3,129
 
Accrued compensation
    
-
   
412
 
Deferred revenue
    
332
   
509
 
Total current liabilities
    
2,003
   
4,459
 
Total liabilities
    
2,003
   
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
   
624
   
614
 
Accumulated deficit
    
(517,270
)
  
(515,759
)
Total stockholders' equity
    
22,302
   
23,364
 
   
$
24,305
  
$
27,823
  
               
               
 
(1) Amounts are derived from the December 31, 2004 audited financial statements.