SAN JOSE, Calif. -- CoSine Communications, Inc. (Nasdaq: COSN - News), a provider of customer support services for managed, network-based IP and broadband services, today announced revenue for the quarter ended December 31, 2004 of $1.6 million and a net loss of $5.6 million, or $0.53 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. Revenue for the year ended December 31, 2004 was $9.7 million and the net loss was $37.3 million, or $3.70 per share as compared to revenue of $14.6 million and a net loss of $34.9 million or $3.57 per share for the year ended December 31, 2003.

During the quarter ended December 31, 2004, CoSine completed the restructuring activities announced in September 2004 and now operates a customer service and support business for its existing customers, supported by a third party contractor. Activities during the quarter ended December 31, 2004, included the lay-off of substantially all remaining employees, termination of leases, disposal of most of the company's tangible assets and termination of supplier agreements. The net loss in the quarter ended December 31, 2004 includes restructuring charges of $3.7 million related to those activities.

Merger Agreement

On January 7, 2005, CoSine entered into a definitive Agreement and Plan of Merger with Tut Systems, Inc. (Nasdaq: TUTS - News). The terms and conditions of this agreement are more fully described in the filing made with the Securities and Exchange Commission on Form 8-K on January 7, 2005.

CoSine Communications Inc.