Exhibit 99.1
[COSINE 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 Fourth Quarter and Fiscal Year
2003 Financial Results
REDWOOD CITY, CALIF., FEBRUARY 17, 2004 -- CoSine Communications, Inc. (NASDAQ:
COSN - News), a leading provider of managed, network-based IP and Broadband
Services Delivery Platforms, today announced revenue for the quarter ended
December 31, 2003 of $2.4 million, and a net loss of $10.2 million or $1.03 per
share as compared to revenue of $4.0 million and a net loss of $8.2 million or
$0.84 per share in the quarter ended September 30, 2003. Revenue for the year
ended December 31, 2003 was $14.6 million, with a net loss of $34.9 million, or
$3.57 per share. The company ended the year with $57.8 million in cash and
short-term investments.
"We see a number of major carriers moving toward a network-based approach to IP
services delivery in 2004," said Steve Goggiano, CoSine's president and CEO.
"Our products were designed specifically to allow carriers to deliver
network-based IP services in a cost-effective manner. And, our products have
been proven in major carrier networks worldwide. Our task is to convert carrier
interest into sustainable revenue growth. Our focus is on winning repeat
business, capturing new customers, expanding our addressable market and
developing strategic relationships."
"In January, we announced two important new services offerings," continued
Goggiano. "Driven by feedback from carriers and their enterprise customers, we
have developed a set of services-centric B-RAS and Multicast features for our
IPSX(TM) Service Processing Switch family. These features enable service
providers to compete with the cable operators for bundled consumer services. We
are excited about this opportunity because of the tremendous amount of growth in
the broadband sector and the opportunity to provide CoSine's network-based IP
and Broadband consumer services to enterprises whether they are using DSL, fiber
to the porch, Wi-Fi, wireless or cable."
WEBCAST
There will be a live webcast of the CoSine Q4 2003 Earnings Conference Call
(today, February 17, 2004, at 2 p.m. PT / 5 p.m. ET) at www.cosinecom.com. An
archived webcast will also be available several hours after the live call. A
replay of the conference call will be available until March 2, 2004. It can be
accessed from the company's website or by calling (888) 286-8010 or (617)
801-6888 and entering passcode 87650050.
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 managed, network-based IP and Broadband services to consumers and
business customers. From the edge of the network, several of the world's largest
carriers use the CoSine platform to deliver customized and profitable
network-based services to consumers and enterprises. 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. 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, the continued downturn in the telecommunications
industry and slow development of the market for network-based IP services,
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, all as may be discussed in more detail on
pages 30 through 35 of our Annual Report on Form 10-K for the fiscal year ending
December 31, 2002 and on pages 23 through 28 of our Quarterly Report on Form
10-Q for the quarter ending September 30, 2003. Readers are cautioned not to
place undue reliance on these forward-looking statements, which reflect
management's opinions only as of the date hereof. We undertake 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 conformity with generally accepted accounting principles)
(in thousands, except per share data)
Three months ended Year ended
December 31, December 31,
2003 2002 2003
(unaudited) (unaudited) (unaudited) 2002
------------------ ----------- ------------- ---------
Revenue $ 2,377 $ 5,228 $ 14,621 $ 23,632
Cost of sales 1,430 2,221 6,765 13,807
--------- --------- --------- ---------
Gross profit 947 3,007 7,856 9,825
Operating expenses:
Research and development 5,836 5,211 21,756 32,396
Sales and marketing 3,498 3,922 13,808 28,271
General and administrative 1,583 1,554 7,226 10,959
Restructuring and impairment charges (15) 9,799 336 34,538
--------- --------- --------- ---------
Total operating expenses 10,902 20,486 43,126 106,164
--------- --------- --------- ---------
Loss from operations (9,955) (17,479) (35,270) (96,339)
Interest income, (expense) and other, net (12) 358 625 2,882
--------- --------- --------- ---------
Loss before income tax provision (9,967) (17,121) (34,645) (93,457)
Income tax provision 201 128 287 509
--------- --------- --------- ---------
Net loss $ (10,168) $ (17,249) $ (34,932) $ (93,966)
========= ========= ========= =========
Basic and diluted net loss per common share $ (1.03) $ (1.78) $ (3.57) $ (9.72)
Shares used in computing basic and diluted net loss
per common share 9,900 9,688 9,791 9,670
CoSine Communications, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In conformity with generally accepted accounting principles)
(in thousands)
December 31,
2003 December 31,
(unaudited) 2002(1)
------------ ------------
ASSETS
Current assets:
Cash, cash equivalents and short-term investments $ 57,752 $101,467
Accounts receivable, trade 4,962 6,373
Accounts receivable, other 494 679
Inventory 4,003 3,175
Prepaid expenses and other current assets 2,668 4,054
-------- --------
Total current assets 69,879 115,748
Property and equipment, net 2,900 2,816
Other assets 647 997
-------- --------
$ 73,426 $119,561
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 6,502 $ 18,666
Deferred revenue 3,543 1,444
Current portion of long-term debt 129 3,770
-------- --------
Total current liabilities 10,174 23,880
Accrued rent and long-term debt 2,078 2,200
Stockholders' equity 61,174 93,481
-------- --------
$ 73,426 $119,561
======== ========
(1) Amounts are derived from the December 31, 2002 audited financial statements.