EXHIBIT 99.1
CITY NETWORK, INC. ANNOUNCES FINANCIAL RESULTS FOR THE FISCAL YEAR ENDED
DECEMBER 31, 2005, GOING CONCERN QUALIFICATION, AND RESIGNATION OF MR. TIAO-TSAN
LAI
TAIPEI, Taiwan, April 24, 2006 /PRNewswire-FirstCall/ -- City Network, Inc.
(Amex: CSN), a company that designs, manufactures, and markets a comprehensive
line of broadband and wireless Internet access solutions and consumer electronic
products, announced financial results for the year end December 31, 2005. Net
sales for the year ended December 31, 2005 totaled $14,320,409, compared to
$15,674,613 for ten months ended December 31, 2004. The decrease in revenues for
the year ended December 31, 2005 was due to a decline in the amount of sales of
certain merchandise.
Net loss after tax was $1,057,476 or $0.038 per share for the year ended
December 31, 2005, compared to net loss after tax of $964,660 or $0.035 per
share for the ten months ended December 31, 2004.
Furthermore, cost of revenue for the year ended December 31, 2005 totaled
$12,881,717, compared to $14,924,938 for the ten months ended December 31, 2004.
The decrease in cost of revenues was due to a decrease in sales.
The Company also announced that gross profit increased due to the higher
margin of certain merchandise and their decline in cost but not their sales
price for the year ended December 31, 2005.
The Company reported that its independent registered public accounting firm
included an explanatory paragraph in their opinion in connection with the 2005
audit, relating to the Company's ability to continue as a going concern.
In addition, Mr. Tiao-Tsan "Andy" Lai announced that he will resign from
his positions as the Company's Chairman, President and Chief Executive Officer
and will be replaced by Ms. Alice Chen, who currently serves as a member of the
board of directors of the Company and who will assume the responsibilities of
Mr. Lai's positions immediately.
ABOUT CITY NETWORK INC.
For more information about City Network, Inc., please visit
http://www.citynetwork.com.tw.
SAFE HARBOR UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995:
The statements which are not historical facts contained in this press
release are forward-looking statements that involve certain risks and
uncertainties including but not limited to risks associated with the uncertainty
of future financial results, regulatory approval processes, the impact of
competitive products or pricing, technological changes, the effect of economic
conditions and other uncertainties as may be detailed in City Network's filings
with the Securities and Exchange Commission. Nothing in this press release shall
be construed as an offer to buy or sell any securities herein.
- - FINANCIAL TABLE FOLLOWS -
CITY NETWORK, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FISCAL YEAR ENDED DECEMBER 31, 2005 AND TEN MONTHS ENDED DECEMBER 31, 2004
December 31, 2005 December 31, 2004
----------------- -----------------
Sales, net $ 14,320,409 $ 15,674,613
Cost of sales 12,881,717 14,924,938
------------ ------------
Gross Profit 1,438,692 749,675
General and administrative expenses 1,535,808 1,395,388
------------ ------------
Income (loss) from operations (97,116) (645,713)
------------ ------------
Other (Income) Expense
Interest income (8,985) (3,785)
Rental income (187,020) (17,858)
Commission income (3,846) (281)
(Gain) loss on currency exchange 9,721 (10,720)
Other income (expense) 24,518 (32,120)
Reserve for bad debt 848,517 185,858
Equity in earnings of investee 38,167 (58,330)
Miscellaneous 12,791 1,303
Loss on sale of fixed assets 78,247 32,068
Interest expense 147,914 112,922
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Total Other (Income) Expense 960,024 209,057
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Income (loss) before income taxes (1,057,140) (854,770)
Provision for income taxes 336 109,890
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Net income (loss) $ (1,057,476) $ (964,660)
============ ============
Net income (loss) per share (basic and diluted)
Basic $ (0.038) $ (0.035)
Diluted $ (0.038) $ (0.035)
Weighted average number of shares
Basic 27,925,720 27,500,000
Diluted 27,925,720 27,500,000