[COSINE LOGO] EXHIBIT 99.1
PRESS RELEASE
For additional information contact:
Steve Goggiano CoSine Communications
President & CEO 1200 Bridge Parkway
(650) 637-4777 Redwood City, CA 94065
Web Site: www.cosinecom.com
Terry Gibson Phone: 650.637.4777
Executive Vice President Fax: 650.628.4200
and CFO E-mail:
650.637.4777 investorrelations@cosinecom.com
COSINE COMMUNICATIONS ANNOUNCES FIRST QUARTER RESULTS
REDWOOD CITY, CALIF., APRIL 22, 2003 -- CoSine Communications, Inc. (Nasdaq:
COSN - News), a leading provider of managed, network-based IP service delivery
platforms, today announced revenue for the quarter ended March 31, 2003 of $2.2
million, and a GAAP net loss of $8.9 million or $ 0.91 per share. The company
ended the quarter with $ 84.3 million in cash and short-term investments.
"Our Q1 revenue reflects the on-going difficulties with the telecom market
environment and a delay in receiving expansion orders from two of our major
customers, both of whom are committed to growing their network-based IP service
businesses on the CoSine platform. We have already booked one of the orders and
I expect to book the second order in Q2 2003," said Steve Goggiano, CoSine's
president and CEO.
"Our premier customer base continues to be one of our strongest assets,"
continued Goggiano. "Several of the world's largest carriers use the CoSine
product set to deliver strategic service offerings to major enterprises on a
global basis. The enterprise demand for these managed IP services is continuing
to grow - fueled by the cost-savings associated with a network-based approach.
The alternative would require an IT manager to purchase and deploy cumbersome
pieces of equipment at each of the company's locations - a solution that is
difficult to manage and expensive to maintain. With enterprise demand on the
rise around the globe, we expect the market for network-based IP services to
grow exponentially over the next 12 to 18 months."
CoSine has continued to expand their customer base through repeat business and
new customer acquisition. Customer highlights for the quarter include the
following:
- Equant, a member of the France Telecom Group and one of
CoSine's most significant customers, again chose CoSine to
support its expansion of its VPN features set with a new
option for secure corporate access to the public Internet.
Equant's Network Based Internet Gateway has already been made
available to customers in 110 countries - is now being used by
four major enterprises, including the world's largest
automotive manufacturing company.
- CoSine also recently became the IP Service Delivery Platform
of choice for the top three service providers in South Korea
when both Korea Telecom and Hanaro Telecom, South Korea's
second largest high-speed Internet service provider purchased
CoSine IPSX units. Hanaro Telecom selected and deployed
CoSine's IPSX(TM) 9500 to serve as the foundation of its
advanced service offering integrating IPSec VPN and managed
firewall service with its existing MPLS infrastructure. KT
(formerly Korea Telecom) made a repeat purchase of the IPSX
9500 to deliver next-generation IP VPN service that included
an integrated MPLS VPN and Firewall solution.
CoSine's major customers include NTT, Sprint, KT Corporation (formerly Korea
Telecom), Equant and Cable & Wireless.
WEBCAST
There will be a live webcast of the CoSine Q1 2003 Earnings Conference Call
(today, April 22, 2003, at 2pm PST / 5pm EST). An archived webcast will also be
available several hours after the live call.
ABOUT COSINE COMMUNICATIONS
CoSine Communications (NASDAQ: COSN) is a global telecommunications equipment
supplier founded in 1998 to empower Service Providers to deliver a compelling
portfolio of network-based managed IP services to business customers. From the
edge of the network, several of the world's largest carriers use the CoSine
platform to deliver customized network-based VPN and security services to
enterprises on a global basis. These enterprises use the CoSine-powered service
because of the cost-savings associated with delivering services from within the
carrier's network as opposed to deploying multiple pieces of equipment at each
company location. As a result, enterprises more cost-effectively manage total IT
resources. For more information about CoSine Communications, visit the company's
Web site at: www.cosinecom.com.
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"Safe Harbor" Statement Under the Private Securities Litigation Reform Act of
1995: Except for historical information contained herein, the matters discussed
in this release are forward-looking statements that involve risks and
uncertainties. The company may use words such as "anticipate," "believe,"
"plan," "expect," "future," "intend" and similar expressions to identify
forward-looking statements. Our actual results may vary significantly based on a
number of factors including, but not limited to, product development,
commercialization and technology difficulties, manufacturing costs, the
impact of competitive products, pricing, changing customer requirements, timely
availability and acceptance of new products, and changes in economic conditions
in the various markets CoSine serves. We refer you to the Risk Factors section
and other information contained in the Company's filings with the Securities and
Exchange Commission.
CoSine Communications, Inc.
CONSOLIDATED STATEMENT OF OPERATIONS
(In conformity with generally accepted accounting principles)
(in thousands, except per share data)
Three months ended
March 31,
2003 2002
(unaudited) (unaudited)
----------- -----------
Revenue $ 2,206 $ 7,093
Cost of sales 715 3,367
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Gross profit 1,491 3,726
Operating expenses:
Research and development 5,257 12,831
Sales and marketing 3,347 10,879
General and administrative 1,737 3,850
Restructuring and impairment charges 270 --
-------- --------
Total operating expenses 10,611 27,560
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Loss from operations (9,120) (23,834)
Interest income and expense and other, net 298 1,040
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Loss before income tax provision (8,822) (22,794)
Income tax provision 42 161
-------- --------
Net loss $ (8,864) $(22,955)
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Basic and diluted net loss per common share $ (0.91) $ (2.31)
Shares used in computing basic and diluted net loss
per common share 9,721 9,920
CoSine Communications, Inc.
CONSOLIDATED STATEMENT OF OPERATIONS
(In conformity with generally accepted accounting principles)
(in thousands, except per share data)
March 31, 2003 December 31,
(unaudited) 2002(1)
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ASSETS
Current assets:
Cash, cash equivalents and short-term investments $ 84,256 $101,467
Accounts receivable, trade 2,960 6,373
Accounts receivable, other 322 679
Inventory 4,263 3,175
Prepaid expenses and other current assets 4,390 4,054
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Total current assets 96,191 115,748
Property and equipment, net 2,420 2,816
Other assets 747 997
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$ 99,358 $119,561
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 8,933 $ 18,666
Deferred revenue 1,131 1,444
Current portion of long-term debt 2,430 3,770
-------- --------
Total current liabilities 12,494 23,880
Equipment and working capital loans, capital
lease obligations and accrued rent 2,077 2,200
Stockholders' equity 84,787 93,481
-------- --------
$ 99,358 $119,561
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(1) Amounts are derived from the December 31, 2002 audited financial
statements.