COSINE COMMUNICATIONS, INC. LOS GATOS, Calif., Dec. 3, 2015 /PRNewswire/ -- CoSine Communications, Inc. ("CoSine") (Other OTC: COSN), today announced a net loss of $(943,000), or $(0.04) per basic and diluted common share, for the quarter ended September 30, 2015, as compared to a net loss of $(267,000), or $(0.03) per basic and diluted common share, for the quarter ended September 30, 2014. The results for the quarter ended September 30, 2015 include net sales of $43,495,000 and operating income of $636,000 from the previously announced acquisition of API Group Plc ("API").
For the nine months ended September 30, 2015, CoSine had a net loss of $(2,447,000), or $(0.12) per basic and diluted common share, as compared to a net loss of $(575,000), or $(0.06) per basic and diluted common share, for the nine months ended September 30, 2014. The results for the nine months ended September 30, 2015 include net sales of $70,291,000 and an operating loss of $(98,000) from the acquisition of API for the period of April 17, 2015 (date of effective control) to September 30, 2015. In addition to the inclusion of the operating results of API, results for the nine months ended September 30, 2015 include the transactional expenses incurred in connection with the tender offer for API and related transactions, as well as gains totaling $1,844,000 from the sale of CoSine's holdings in the common stock of Nathan's Famous, Inc.
Acquisition of API Group Plc and Related Transactions
As previously reported, on January 20, 2015, CoSine entered into a contribution agreement with Steel Partners Holdings L.P. ("SPH") pursuant to which CoSine issued to a wholly owned subsidiary of SPH 16,500,000 newly issued shares of CoSine's common stock as well as 12,761 shares of CoSine's newly designated and issued 7.5% Series B Non-Voting Cumulative Preferred Stock with a face value of $12,761,000 in exchange for (i) 24,807,203 ordinary shares of API representing approximately 32.3% of the entire existing issued share capital in API, and (ii) 445,456 shares of common stock of Nathan's Famous, Inc. (the "Contribution"). As a result of the Contribution, SPH, through its wholly owned subsidiaries, now controls approximately 80.3% of CoSine's issued and outstanding common stock.
Also as previously reported, on January 22, 2015, Cedar 2015 Limited, a wholly-owned subsidiary of CoSine incorporated in England and Wales ("Cedar Bidco"), then commenced a cash tender offer to acquire all of the remaining issued and to be issued shares in API not already owned by CoSine or Cedar Bidco (the "Offer"). At March 19, 2015, Cedar Bidco's holdings, when combined with tendered API shares, exceeded a total of over 97% of the entire existing issued share capital in API. Having received acceptances of the Offer in excess of 90% of the API shares to which the Offer related, including the respective voting rights thereof, Cedar Bidco then exercised its rights in accordance with applicable UK law to acquire compulsorily any remaining API shares to which the Offer related on the same terms as the Offer. As of May 11, 2015, the API board was reconstituted pursuant to which CoSine now has indirect control of the API board. As of May 15, 2015, Cedar Bidco had acquired legal or beneficial ownership of 100% of the existing issued share capital in API.
About CoSine Communications
CoSine's primary operating subsidiary, API, is a leading manufacturer and distributor of foils, films and laminates used to enhance the visual appeal of products and packaging and to help its customers communicate brand values and authenticity. API's global operations, headquartered in Poynton, Cheshire, England, employ more than 500 people in 12 locations, dedicated to providing high quality, innovative materials and solutions for use in a vast range of applications, including consumer packaging, printed media and secure documents. CoSine's Certificate of Incorporation limits the ability of any group or person to acquire 5% or more of CoSine's common stock (subject to certain exceptions as provided in the Certificate of Incorporation). CoSine has also adopted a Rights Agreement to deter acquisitions of 5% or more of CoSine's common stock (subject to certain exceptions) by any group or person. CoSine's common stock is currently traded on the OTC Pink(®) marketplace under the symbol COSN and its website is www.cosinecom.com.
Cautionary note regarding forward-looking statements
This press release contains certain forward-looking statements with respect to the financial condition, results of operations and business of CoSine. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "will", "may", "should", "would", "could" or other words of similar meaning. These statements are based on assumptions and assessments made by the board of directors of CoSine in light of its experience and its perception of historical trends, current conditions, expected future developments and other factors it believes appropriate. By their nature, forward-looking statements involve risk and uncertainty, and the factors described in the context of such forward-looking statements in this press release could cause actual results and developments to differ materially from those expressed in or implied by such forward-looking statements. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this press release. CoSine assumes no obligation to update or correct the information contained in this press release, whether as a result of new information, future events or otherwise, except to the extent legally required.
The statements contained in this press release are made as at the date of this press release, unless some other time is specified in relation to them, and issuance of this press release shall not give rise to any implication that there has been no change in the facts set out in this press release since such date. Nothing contained in this press release shall be deemed to be a forecast, projection or estimate of the future financial performance of CoSine except where expressly stated.
For additional information contact:
Terry Gibson
(408) 399-6494
E-mail: Terry.Gibson@spcorpservices.com
CoSine Communications, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per share)
Three months ended Nine months ended
September 30, September 30,
------------- -------------
2015 2014 2015 2014
---- ---- ---- ----
Net sales $43,495 $ - $70,291 $ -
Cost of goods sold 35,276 - 57,970 -
------ --- ------ ---
Gross profit 8,219 - 12,321 -
Impairment loss on
available for sale
investment - - 5,597 -
Selling, general and
administrative
expenses 8,437 268 15,128 575
----- --- ------ ---
Loss from operations (218) (268) (8,404) (575)
---- ---- ------ ----
Dividend income - - 5,554 -
Interest (expense)
income, net (842) 1 (1,738) 1
Gain on sale of
available for sale
securities - - 1,844 -
Gain on foreign
currency
remeasurement 127 - 723 -
Loss before provision
for income taxes (933) (267) (2,021) (574)
---- ---- ------ ----
Tax provision 10 - 426 1
Net loss $(943) $(267) $(2,447) $(575)
===== ===== ======= =====
Net loss less
preferred stock
dividends $(1,182) $(267) $(3,117) $(575)
======= ===== ======= =====
Basic net loss per
common share $(0.04) $(0.03) $(0.12) $(0.06)
====== ====== ====== ======
Diluted net loss per
common share $(0.04) $(0.03) $(0.12) $(0.06)
====== ====== ====== ======
Shares used in computing basic and diluted net
loss per common share:
Basic 26,418 9,890 25,191 9,874
====== ===== ====== =====
Diluted 26,418 9,890 25,191 9,874
====== ===== ====== =====
CoSine Communications, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
September 30, 2015 December 31, 2014
(unaudited)
----------
ASSETS
Current assets:
Cash and cash equivalents $40,826 $17,710
Trade and other receivables,
net 27,325 -
Inventories 21,460 -
Prepaid expenses and other
current assets 3,815 5
Total current assets 93,426 17,715
Investment in joint venture
interest 1,340 -
Property, plant and
equipment, net 43,506 -
Goodwill 20,124 -
Other intangibles, net 22,415 -
Other non-current assets 45 3
Total assets $180,856 $17,718
======== =======
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Trade payables $24,455 $281
Accrued liabilities 7,018 343
Short-term debt 834 -
Current portion of long-
term debt 452 -
Total current liabilities 32,759 624
Long-term debt 60,057 -
Accrued pension liability 21,094 -
Deferred income tax
liabilities 286 -
--- ---
Total liabilities 114,196 624
Preferred stock 12,761 -
Stockholders' equity:
Common stock 3 1
Additional paid-in capital 580,174 538,674
Accumulated other
comprehensive loss (1,581) -
Accumulated deficit (524,697) (521,581)
Total stockholders' equity 53,899 17,094
------ ------
Total liabilities and
stockholders' equity $180,856 $17,718
======== =======
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SOURCE CoSine Communications, Inc.
