Exhibit 99.1
[COSINE COMMUNICATIONS LOGO]
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 SECOND QUARTER
FINANCIAL RESULTS
COMPANY REPORTS REVENUE GROWTH DRIVEN BY EXPANSION BUSINESS FROM
PREMIER CUSTOMER BASE
REDWOOD CITY, CALIF., JULY 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 June 30, 2003 of $6.0
million, and a net loss of $7.7 million or $0.79 per share as compared to
revenue of $2.2 million and a net loss of $8.9 million or $0.91 per share in the
quarter ended March 31, 2003. The company ended the quarter with $76.3 million
in cash and short-term investments.
"We are pleased to report a return to revenue growth this quarter," said Steve
Goggiano, President and CEO. "Our premier customer base continues to be one of
our strongest assets. With some of the world's largest carriers using the CoSine
product solution to build and grow a strategic IP service offering, we believe
in our ability to be the leading profitable supplier of network-based IP
services."
"Based on my discussions with our carrier customers, I am convinced that the
market for IP services has a strong future," said Goggiano. "Enterprise demand
for IP services is continuing to grow each quarter as many of the world's
leading companies look to reduce their communications and data networking costs
by using reliable, secure, network-based IP solutions. Our Tier 1 carrier
customers have addressed this significant market opportunity using
CoSine-powered network-based IP solutions. Several other carriers have seen the
demonstrated success of this opportunity and are considering a network-based
approach."
WEBCAST
There will be a live webcast of the CoSine Q2 2003 Earnings Conference Call
(today, July 22, 2003, at 2 p.m. PT / 5 p.m. ET). An archived webcast will also
be available several hours after the live call. The replay will be available
until August 5, 2003 and can be accessed from the company's website or by
calling 888-286-8010 or 617-801-6888 and entering passcode 56562596.
ABOUT COSINE COMMUNICATIONS
Founded in 1998 and based in Redwood City, Calif., CoSine delivers carrier-class
systems for the network edge that solve the fundamental problem of profitably
customizing managed services such as IP VPNs, Managed Routers, Firewalls, MPLS,
Denial of Service (DoS) protection and more for the unique needs of individual
customers. Specifically, the company's intelligent, fully distributed,
virtualized architecture infuses service provider networks with an unmatched
capability to integrate, customize and effectively deliver managed services to
hundreds of thousands of users. For more information about CoSine
Communications, visit the company's Web site at: www.cosinecom.com.
###
"Safe Harbor" Statement Under the Private Securities Litigation Reform Act of
1995: This release may contain 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. Readers are cautioned not to place undue reliance on
these forward-looking statements, which reflect management's opinions only as of
the date of this release. Our actual results may vary significantly from those
reflected in these forward-looking statements. Factors that might cause such a
difference include, but are not limited to, the continued downturn in the
telecommunications industry, failure to achieve revenue growth and
profitability, 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. A description of some of these factors is contained on pages 30 through
35 of our Annual Report on Form 10-K, filed with the Securities and Exchange
Commission for the fiscal year ending December 31, 2002 and on pages 19 through
25 of our Quarterly Report on Form 10-Q for the quarter ending March 31, 2003.
CoSine Communications, Inc.
CONSOLIDATED STATEMENT OF OPERATIONS
(In conformity with generally accepted accounting principles)
(in thousands, except per share data)
Three months ended Six months ended
June 30, June 30,
2003 2002 2003 2002
(unaudited) (unaudited) (unaudited) (unaudited)
---------------------------- ----------------------------
Revenue $ 6,014 $ 6,066 $ 8,220 $ 13,159
Cost of sales 2,822 5,988 3,537 9,355
---------------------------- ----------------------------
Gross profit 3,192 78 4,683 3,804
Operating expenses:
Research and development 5,178 10,304 10,435 23,135
Sales and marketing 3,772 7,749 7,119 18,628
General and administrative 2,089 3,210 3,826 7,060
Restructuring and impairment charges 67 24,046 337 24,046
--------------------------------------------------------------
Total operating expenses 1 1,106 45,309 21,717 72,869
--------------------------------------------------------------
Loss from operations ( 7,914) (45,231) (17,034) (69,065)
Interest income and expense and other, net 227 621 525 1,661
---------------------------- ----------------------------
Loss before income tax provision ( 7,687) (44,610) (16,509) (67,404)
Income tax provision 29 138 71 299
---------------------------- ----------------------------
Net loss $ ( 7,716) $ (44,748) $ (16,580) $ (67,703)
============================ ============================
Basic and diluted net loss per common share $ (0.79) $ (4.63) $ (1.70) $ (7.02)
Shares used in computing basic and diluted net loss
per common share 9,748 9,673 9,733 9,647
CoSine Communications, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In conformity with generally accepted accounting principles)
(in thousands)
June 30, 2003 December 31,
(unaudited) 2002(1)
----------------------------
ASSETS
Current assets:
Cash, cash equivalents and short-term investments $ 76,347 $ 101,467
Accounts receivable, trade 3,270 6,373
Accounts receivable, other 700 679
Inventory 3,599 3,175
Prepaid expenses and other current assets 3,038 4,054
----------------------------
Total current assets 86,954 115,748
Property and equipment, net 2,287 2,816
Other assets 747 997
----------------------------
$ 89,988 $ 119,561
============================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 8,081 $ 18,666
Deferred revenue 1,359 1,444
Current portion of long-term debt 1,018 3,770
----------------------------
Total current liabilities 10,458 23,880
Equipment and working capital loans, capital
lease obligations and accrued rent 2,062 2,200
Stockholders' equity 77,468 93,481
----------------------------
$ 89,988 $ 119,561
============================
(1) Amounts are derived from the December 31, 2002 audited financial statements.