CoSine Communications (COSN) Reports 22% Revenue Growth.
CoSine Communications reports 22% revenue growth for
third quarter of fiscal 2001 Company implements cost reductions and prepares
for release of new technology
REDWOOD CITY, Calif., Oct 26, 2001 (M2 PRESSWIRE via COMTEX) -- CoSine
Communications, Inc. (Nasdaq:COSN), a leading provider of managed, network-based
IP service delivery platforms, today announced proforma revenue (revenue before
deduction of amortised receipts for equity issued in connection with sales) for
the quarter ended September 30, 2001 of $10.3 million, and a proforma net loss
(excluding non-cash equity-related items and restructuring charges) of $28.0
million or $0.29 per share. The company recognised a one-time charge of $7.0
million or $0.07 per share related to previously announced restructuring plans.
In addition, the company has written down $6.6 million of obsolete inventories
and assets related to transitioning technologies to its new SHARC architecture.
Excluding this write-down, the proforma loss was $21.4 million or $0.22 per
share.
For the quarter ended September 30, 2001, revenue was $9.8 million. Including
non-cash equity-related adjustments and aforementioned restructuring charges,
the net loss for the third quarter of 2001 was $41.9 million or $0.43 per share.
The company used $22.8 million of cash during the quarter and ended the period
with $193.5 million in cash and short-term investments.
"We believe that the results of the third quarter demonstrate CoSine's progress
toward expanding the market for carrier-class IP service platforms, despite the
continued weakness in both telecommunications spending and the economy in
general," said Dean Hamilton, Chairman and CEO. "We met our revenue growth
target, announced Cable and Wireless as a customer, (Cable & Wireless Purchases
CoSine IP Service Delivery Platform For New French Cable & Wireless VPN
Multiservices* Offering, 18 September 2001), received orders from seven new
customers and received expansion orders from two previously announced customers.
At the same time, we have taken additional steps to ensure the long-term
viability of the company by lowering our operating expenses. By Q1 of 2002, we
anticipate this will result in a 25% reduction in operating expenses when
compared to Q2 of 2001, as well as a notable reduction in cash burn. Finally,
these cost control steps were not taken at the expense of our R&D efforts. Our
tier-one carrier customer base expects continued technical innovation and
expansion of our product offerings. We are confident that we will continue to
deliver on both fronts."
Mr. Hamilton continued, "We are pleased with the excitement that our SHARC
technology is generating with our tier-one customers, and we anticipate that a
significant portion of Q4 revenues will come from sales of the new SHARC
technology. Since most of our customers require time to complete their routine
acceptance tests of our production shipments before we recognise revenue, we do
not, at this time, have sufficient visibility to provide guidance concerning the
fourth quarter. We are committed to providing an update regarding guidance as
soon as our visibility improves."
Mr. Hamilton concluded, "Our outlook for 2002 and the long term opportunity for
CoSine remains optimistic based on the continued progress with our trial
customers, our technological leadership and the strengthening of our competitive
position. Of course all of our optimism must be tempered by the ongoing general
weakness in the telecommunications marketplace, which continues to weigh on our
industry. Nevertheless, we believe that CoSine is well-positioned to continue
moving forward, both in the current environment, and with increasing momentum as
the market improves."
About CoSine Communications Inc.
Founded in 1998 and based in Redwood City, Calif., CoSine is the leading
provider of a new class of infrastructure equipment for Service Providers,
allowing them to offer value-added, secure Internet and data services that
increase market share, reduce churn and grow profitability in a fiercely
competitive market. 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:
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.
CONTACT: Naomi Byrne, BissLancaster Tel: +44 (0)20 7539 2691 e-mail:
naomi.byrne@bisslancaster.com Heidi Taylor, CoSine Commnications Tel: +44 (0)20
8848 6067 e-mail: htaylor@cosinecom.com
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