EXHIBIT 99.1
COSINE COMMUNICATIONS ANNOUNCES
FOURTH QUARTER AND FISCAL 2004 FINANCIAL RESULTS
SAN JOSE, CALIF., March 31, 2005 —CoSine Communications, Inc. (Nasdaq: COSN), a provider of customer support services for managed, network-based IP and broadband services, today announced revenue for the quarter ended December 31, 2004, of $1.6 million and a net loss of $5.6 million, or $0.53 per share, as compared to revenue of $2.4 million and a net loss of $10.2 million or $1.03 per share for the quarter ended December 31, 2003. Revenue for the year ended December 31, 2004 was $9.7 million and the net loss was $37.3 million, or $3.70 per share as compared to revenue of $14.6 million and a net loss of $34.9 million or $3.57 per share for the year ended December 31, 2003.
During the quarter ended December 31, 2004, CoSine completed the restructuring activities announced in September 2004 and now operates a customer service and support business for its existing customers, supported by a third party contractor. Activities during the quarter ended December 31, 2004, included the lay-off of substantially all remaining employees, termination of leases, disposal of most of the company’s tangible assets and termination of supplier agreements. The net loss in the quarter ended December 31, 2004 includes restructuring charges of $3.7 million related to those activities.
Merger Agreement
On January 7, 2005, CoSine entered into a definitive Agreement and Plan of Merger with Tut Systems, Inc. (Nasdaq: TUTS). The terms and conditions of this agreement are more fully described in the filing made with the Securities and Exchange Commission on Form 8-K on January 7, 2005.
Additional Information about the Proposed Merger
In connection with the proposed merger, Tut Systems and CoSine will be filing a proxy statement/prospectus with the Securities and Exchange Commission (the “SEC”), including a proxy statement that will be distributed to stockholders of CoSine. Investors and security holders of CoSine are urged to read the proxy statement/prospectus carefully when it becomes available and any other relevant documents filed with the SEC, because they will contain important information about the proposed merger. Investors will be able to obtain a copy of the proxy statement/prospectus (when available), as well as other filings of Tut Systems and CoSine, free of charge on the SEC’s Internet site (http://www.sec.gov). In addition, documents filed by Tut Systems with the SEC can be obtained, without charge, by directing a request to Tut Systems, Inc., Jeff Schline, 6000 SW Meadows Road, Lake Oswego, Oregon, 97035, 917-217-0364, and documents filed with the SEC by CoSine will be available free of charge by contacting CoSine Communications, Inc., Attn. Terry Gibson, Chief Financial Officer, 560 South Winchester Blvd. San Jose, California 95128, 408-236-7518. Investors should read the proxy statement/prospectus carefully when it becomes available before making any voting or investment decision.
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 effectuate desirable strategic alternatives, 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 possible strategic alternatives and opportunities and to any specific strategic alternative or opportunity selected by CoSine and the continued downturn in the telecommunications industry and slow development of the market for network-based IP services, all as may be discussed in more detail on pages 29 through 35 of our Annual Report on Form 10-K for the fiscal year ending December 31, 2003 and on pages 13 and 14 and pages 24 through 29 of our Quarterly Report on Form 10-Q for the quarter ending September 30, 2004. 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
