NEWS SOURCE: City Network Inc.

TAIPEI, Taiwan – April 24 (SEND2PRESS NEWSWIRE) — 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 $.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. “Andy” Lai Tiao-Tsan 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

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.

CONSOLIDATED STATEMENTS OF INCOME
“FISCAL YEAR ENDED DECEMBER 31, 2005 AND TEN MONTHS ENDED DECEMBER 31, 2004” 


                                                31-Dec-05      31-Dec-04
 
   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
 
     Total Other (Income) Expense                   960,024        209,057
 
   Income (loss) before income taxes             -1,057,140       -854,770
 
   Provision for income taxes                           336        109,890
 
        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

News issued by: City Network Inc.

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Original Story ID: (1572) :: 2006-04-0424-003

Original Keywords: City Network Inc., Amex: CSN, Taiwan, designs, manufactures, and markets a comprehensive line of broadband and wireless Internet access solutions and consumer electronic products City Network Inc.

NEWS SOURCE: City Network Inc. | Published: 2006-04-24 20:24:00


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