CGN Cognitronics Corp

Cognitronics Corporation (AMEX:CGN) today reported a loss from continuing operations of $1.4 million, or $.20 per share on a diluted basis, for the quarter ended September 30, 2006 compared to a loss from continuing operations of $1.1 million, or $.19 per share on a diluted basis, for the third quarter of 2005. Revenues from continuing operations for the third quarter were $1.9 million in 2006 and $1 million in 2005. The company said that the $.9 million increase in 2006 third quarter revenues over the comparable 2005 quarter was attributable to the revenues of ThinkEngine Networks, Inc., which was acquired in November 2005 and increased sales volume of CX Media Servers to a cable operator. Further, the loss from continuing operations was negatively impacted by non-recurring severance expense of $.6 million and $.4 million attributable to the expensing of stock options. �We continue to capitalize on our success in the conferencing and voice applications marketplace,� said Michael Mitchell, president and chief executive officer of Cognitronics. �I am pleased with the progressive revenue growth in the quarter for the ThinkEngine VSR product.� In the 2005 third quarter, the Company reported a loss from discontinued operations of $.3 million, or $.05 per share on a diluted basis, and an impairment charge to goodwill of $.3 million, or $.06 per share on a diluted basis, related to the discontinued operations. The net loss for the three months ended September 30, 2006 was $1.4 million, or $.20 per share on a diluted basis, compared to $1.7 million, or $.29 per share on a diluted basis in the comparable 2005 quarter. For the nine months ended September 30, 2006, the loss from continuing operations was $4.7 million, or $.67 per share on a diluted basis, on revenues of $6.9 million compared to a loss from continuing operations of $2.8 million, or $.50 per share on a diluted basis, on revenues of $3.8 million in the comparable 2005 period. Additionally, in the 2006 period, the cumulative effect of a change in accounting principle resulted in income of $36,000, or $.01 per share on a diluted basis. The 2005 nine-month period included a loss from discontinued operations of $1 million, or $.17 per share on a diluted basis and an impairment charge of $.3 million, or $.06 per share on a diluted basis. The net loss was $4.7 million, or $.67 per share on a diluted basis, in 2006 and $4.1 million, or $.72 per share on a diluted basis, in the 2005 nine-month period. Cognitronics is a leading supplier of media server solutions to the telecommunications industry. The CX Network Media Servers (CX Series) and VSR1000 are a cost-effective and highly scalable family of carrier class media server platforms, delivering advanced network media solutions in VoIP networks as well as in traditional AIN and TDM circuit switched environments. For more information, visit the company�s website at www.cognitronics.com. Statements contained herein which are not historical facts are forward-looking statements. The forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve a number of risks and uncertainties including, but not limited to, the continuance of reduced capital expenditures throughout the telecommunications market, variability of sales volume from quarter to quarter, product demand, market acceptance, litigation, risk of dependence on significant customers, third party suppliers and intellectual property rights, risks in product and technology development and other risk factors detailed in the company�s most recent annual report on Form 10-K and other Securities and Exchange Commission filing COGNITRONICS CORPORATION SUMMARY OF RESULTS � Three Months Ended September 30, 2006� 2005� Net revenues $1,899,000� $986,000� Loss from continuing operations ($1,393,000) ($1,065,000) Loss from discontinued operations ($266,000) Impairment of goodwill ($319,000) Net loss ($1,393,000) ($1,650,000) Loss per basic and diluted share: Continuing operations ($.20) ($.19) Discontinued operations ($.05) Impairment of goodwill ($.06) Net loss ($.20) ($.29) Weighted average number of basic and diluted shares outstanding 6,805,277� 5,685,997� � Nine Months Ended September 30, 2006� 2005� Net revenues $6,940,000� $3,761,000� Loss from continuing operations ($4,715,000) ($2,804,000) Income/Loss from discontinued operations ($977,000) Impairment of goodwill ($319,000) Cumulative effect of change in accounting principle, net of tax $36,000� Net loss ($4,679,000) ($4,100,000) Income/Loss per basic and diluted share: Continuing operations ($.67) ($.50) Discontinued operations ($.17) Impairment of goodwill ($.06) Cumulative effect of change in accounting principle, net of tax $.01� Net loss ($.67) ($.72) Weighted average number of basic and diluted shares outstanding 6,991,153� 5,657,993� ��SUMMARY OF FINANCIAL POSITION � September 30, 2006 December 31, 2005 Cash, cash equivalents and marketable securities $4,194,000� $8,120,000� Working capital $3,775,000� $7,251,000� Total assets $12,687,000� $21,205,000� Total stockholders� equity $8,010,000� $14,015,000� Cognitronics Corporation (AMEX:CGN) today reported a loss from continuing operations of $1.4 million, or $.20 per share on a diluted basis, for the quarter ended September 30, 2006 compared to a loss from continuing operations of $1.1 million, or $.19 per share on a diluted basis, for the third quarter of 2005. Revenues from continuing operations for the third quarter were $1.9 million in 2006 and $1 million in 2005. The company said that the $.9 million increase in 2006 third quarter revenues over the comparable 2005 quarter was attributable to the revenues of ThinkEngine Networks, Inc., which was acquired in November 2005 and increased sales volume of CX Media Servers to a cable operator. Further, the loss from continuing operations was negatively impacted by non-recurring severance expense of $.6 million and $.4 million attributable to the expensing of stock options. "We continue to capitalize on our success in the conferencing and voice applications marketplace," said Michael Mitchell, president and chief executive officer of Cognitronics. "I am pleased with the progressive revenue growth in the quarter for the ThinkEngine VSR product." In the 2005 third quarter, the Company reported a loss from discontinued operations of $.3 million, or $.05 per share on a diluted basis, and an impairment charge to goodwill of $.3 million, or $.06 per share on a diluted basis, related to the discontinued operations. The net loss for the three months ended September 30, 2006 was $1.4 million, or $.20 per share on a diluted basis, compared to $1.7 million, or $.29 per share on a diluted basis in the comparable 2005 quarter. For the nine months ended September 30, 2006, the loss from continuing operations was $4.7 million, or $.67 per share on a diluted basis, on revenues of $6.9 million compared to a loss from continuing operations of $2.8 million, or $.50 per share on a diluted basis, on revenues of $3.8 million in the comparable 2005 period. Additionally, in the 2006 period, the cumulative effect of a change in accounting principle resulted in income of $36,000, or $.01 per share on a diluted basis. The 2005 nine-month period included a loss from discontinued operations of $1 million, or $.17 per share on a diluted basis and an impairment charge of $.3 million, or $.06 per share on a diluted basis. The net loss was $4.7 million, or $.67 per share on a diluted basis, in 2006 and $4.1 million, or $.72 per share on a diluted basis, in the 2005 nine-month period. Cognitronics is a leading supplier of media server solutions to the telecommunications industry. The CX Network Media Servers (CX Series) and VSR1000 are a cost-effective and highly scalable family of carrier class media server platforms, delivering advanced network media solutions in VoIP networks as well as in traditional AIN and TDM circuit switched environments. For more information, visit the company's website at www.cognitronics.com. Statements contained herein which are not historical facts are forward-looking statements. The forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve a number of risks and uncertainties including, but not limited to, the continuance of reduced capital expenditures throughout the telecommunications market, variability of sales volume from quarter to quarter, product demand, market acceptance, litigation, risk of dependence on significant customers, third party suppliers and intellectual property rights, risks in product and technology development and other risk factors detailed in the company's most recent annual report on Form 10-K and other Securities and Exchange Commission filing -0- *T COGNITRONICS CORPORATION SUMMARY OF RESULTS Three Months Ended September 30, ------------------------- 2006 2005 ------------ ------------ Net revenues $1,899,000 $986,000 Loss from continuing operations ($1,393,000) ($1,065,000) Loss from discontinued operations ($266,000) Impairment of goodwill ($319,000) Net loss ($1,393,000) ($1,650,000) Loss per basic and diluted share: Continuing operations ($.20) ($.19) Discontinued operations ($.05) Impairment of goodwill ($.06) Net loss ($.20) ($.29) Weighted average number of basic and diluted shares outstanding 6,805,277 5,685,997 Nine Months Ended September 30, ------------------------- 2006 2005 ------------ ------------ Net revenues $6,940,000 $3,761,000 Loss from continuing operations ($4,715,000) ($2,804,000) Income/Loss from discontinued operations ($977,000) Impairment of goodwill ($319,000) Cumulative effect of change in accounting principle, net of tax $36,000 Net loss ($4,679,000) ($4,100,000) Income/Loss per basic and diluted share: Continuing operations ($.67) ($.50) Discontinued operations ($.17) Impairment of goodwill ($.06) Cumulative effect of change in accounting principle, net of tax $.01 Net loss ($.67) ($.72) Weighted average number of basic and diluted shares outstanding 6,991,153 5,657,993 *T -0- *T SUMMARY OF FINANCIAL POSITION September 30, December 31, 2006 2005 -------------- ------------ Cash, cash equivalents and marketable securities $4,194,000 $8,120,000 Working capital $3,775,000 $7,251,000 Total assets $12,687,000 $21,205,000 Total stockholders' equity $8,010,000 $14,015,000 *T