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 First Quarter Fiscal 2004
Financial Results
REDWOOD CITY, CALIF., APRIL 29, 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 March
31, 2004 of $4.5 million and a net loss of $7.4 million, or $0.74 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 and 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 $50.2 million in cash and short-term
investments and no long-term debt.
"We are pleased to report a significant increase in quarterly revenue, driven
mainly by our customers' expansion activities in North America and Europe.
Looking forward, we see a number of major carriers moving toward a network-based
approach to IP services and we see opportunities to expand our product reach
into higher volume DSL-driven applications, particularly in Asia," said Steve
Goggiano, CoSine's president and CEO. "Our focus is on winning repeat business,
capturing new customers, expanding our addressable market and developing
strategic relationships."
Addressing the increasing need for more visibility into managed IP services,
CoSine announced in April the latest version of its InGage(TM) Customer Network
Management (CNM) system. InGage CNM enables service providers, for the first
time, to easily analyze and report on a per-customer basis virtually every
aspect of each of their customer's enterprise-wide managed IP services. InGage's
powerful new capabilities enable service providers to differentiate their
managed IP service offerings, create new pricing plans, reduce customer churn,
and attract more conservative customers previously hesitant to transition from
Frame Relay or private solutions due to a perceived lack of visibility into
managed IP service offerings.
"Enterprises are requiring increased visibility into their wide area networks at
the same time the industry is experiencing a rising adoption in network-based IP
services. This has moved advanced per-customer reporting for managed IP services
to the forefront of service provider deployment plans," added Goggiano. "The new
InGage directly addresses this demand by delivering an operationally efficient
and scalable solution for service providers that offers their enterprise
customers a breadth and depth of reporting previously unattainable from a single
vendor. CoSine has taken the lead once again by arming its service provider
customers with a strategic tool unavailable with other network-based service
architectures."
WEBCAST
There will be a live webcast of the CoSine Q1 2004 Earnings Conference Call
(today, April 29, 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 May 13, 2004. It can be
accessed from the company's website or by calling (888) 286-8010 and entering
passcode 241228888.
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 29 through 35 of our Annual Report on Form 10-K for the fiscal year ending
December 31, 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.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN CONFORMITY WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES)
(IN THOUSANDS)
March 31, 2004 December 31,
(unaudited) 2003(1)
-------------- ------------
ASSETS
Current assets:
Cash, cash equivalents and short-term investments $ 50,170 $ 57,752
Accounts receivable, trade 4,026 4,962
Accounts receivable, other 540 494
Inventory 3,668 4,003
Prepaid expenses and other current assets 3,061 2,668
-------------- ------------
Total current assets 61,465 69,879
Property and equipment, net 3,074 2,900
Long-term deposits 587 647
-------------- ------------
$ 65,126 $ 73,426
============== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 6,997 $ 6,502
Deferred revenue 2,503 3,543
Current portion of long-term debt - 129
-------------- ------------
Total current liabilities 9,500 10,174
Accrued rent 2,072 2,078
Stockholders' equity 53,554 61,174
-------------- ------------
$ 65,126 $ 73,426
============== ============
(1) Amounts are derived from the December 31, 2003 audited financial statements.
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,
2004 2003
(unaudited) (unaudited)
----------- -----------
Revenue $ 4,455 $ 2,206
Cost of sales 1,497 715
----------- -----------
Gross profit 2,958 1,491
Operating expenses:
Research and development 5,255 5,257
Sales and marketing 3,383 3,347
General and administrative 1,708 1,737
Restructuring and impairment charges 35 270
----------- -----------
Total operating expenses 10,381 10,611
----------- -----------
Loss from operations (7,423) (9,120)
Interest income and expense and other, net 81 298
----------- -----------
Loss before income tax provision (7,342) (8,822)
Income tax provision 43 42
----------- -----------
Net loss $ (7,385) $ (8,864)
=========== ===========
Basic and diluted net loss per share $ (0.74) $ (0.91)
Shares used in computing basic and diluted net loss per share 10,010 9,721