8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

February 19, 2009

Date of Report (Date of earliest event reported)

SYCAMORE NETWORKS, INC.

(Exact name of registrant as specified in its charter)

Delaware	000-27273	04-3410558
(State or other jurisdiction of incorporation)	(Commission file number)	(IRS Employer Identification No.)

220 Mill Road

Chelmsford, MA 01824

(Address of principal executive offices)

(Zip code)

Registrant’s telephone number, including area code: (978) 250-2900

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02: Results of Operations and Financial Condition.

On February 19, 2009, the Registrant reported its results for the second quarter ended January 24, 2009.

A copy of the press release issued by the Registrant with respect to the foregoing is attached as Exhibit 99.1 to this Current Report on Form 8-K and incorporated by reference herein.

The Registrant provides non-GAAP financial data in addition to providing financial results in accordance with generally accepted accounting principles (“GAAP”). These measures are not in accordance with, or an alternative for GAAP, and may be different from non-GAAP measures used by other companies. The reconciliation between the GAAP basis and the non-GAAP basis financial data is provided in a table immediately following the Unaudited Consolidated Statements of Operations included with Exhibit 99.1. The Registrant believes that the items excluded from the non-GAAP results have one or more of the following characteristics: their magnitude and timing is largely outside of the Registrant’s control; they are unrelated to the ongoing operation of the business in the ordinary course; they are unusual, and the Registrant does not expect them to occur in the ordinary course of business; or they are non-operational, non-cash expenses involving stock option grants.

The non-GAAP financial data is provided to enhance the reader’s overall understanding of the Registrant’s current financial performance and its prospects for the future. Specifically, the Registrant believes the non-GAAP results provide useful information to both management and investors by excluding certain expense and income items that the Registrant believes are not indicative of the Registrant’s core operating results. In addition, since the Registrant has historically reported non-GAAP results to the investment community, the Registrant believes the inclusion of non-GAAP numbers provides consistency in its financial reporting. Further, these non-GAAP results are one of the primary indicators management uses for planning and forecasting in future periods. The non-GAAP financial data should be considered in addition to, not as a substitute for or a more appropriate indicator of, operating results, cash flows, or other measures of financial performance prepared in accordance with GAAP.

The information contained herein and in the accompanying Exhibit 99.1 shall not be incorporated by reference into any filing of the Registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference into such filing. The information in this report, including Exhibit 99.1 hereto, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended.

Item 9.01: Financial Statements and Exhibits.

(d) Exhibits

Exhibit Number	Description
99.1	Press Release of the Registrant, dated February 19, 2009

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Sycamore Networks, Inc.

/s/ Paul F. Brauneis

Paul F. Brauneis

Chief Financial Officer

Vice President, Finance and Administration and Treasurer

(Duly Authorized Officer and Principal

Financial and Accounting Officer)

Dated: February 19, 2009

EX-99.1

Exhibit 99.1

CONTACT
Robert Travis	Scott Larson
Investor Relations	Press Inquiries
Sycamore Networks, Inc.	Sycamore Networks, Inc.
978-250-3432	978-250-3433
bob.travis@sycamorenet.com	scott.larson@sycamorenet.com

SYCAMORE NETWORKS, INC. REPORTS SECOND QUARTER FISCAL

YEAR 2009 FINANCIAL RESULTS

CHELMSFORD, Mass., February 19, 2009 – Sycamore Networks, Inc. (NASDAQ: SCMR), a leader in intelligent bandwidth management solutions for fixed line and mobile network operators worldwide, today reported its results for the second quarter ended January 24, 2009. Revenue for the second quarter of fiscal 2009 was $11.7 million, compared with $41.5 million for the second quarter of fiscal 2008.

Net loss for the second quarter of fiscal 2009, on a generally accepted accounting principles (“GAAP”) basis, was $10.1 million, or $0.04 per share, compared with net income of $9.7 million, or $0.03 per fully diluted share for the second quarter of fiscal 2008. Non-GAAP net loss for the second quarter of fiscal 2009 was $8.3 million, or $0.03 per share, compared with non-GAAP net income of $11.5 million, or $0.04 per fully diluted share for the second quarter of fiscal 2008. The reconciliation between net income (loss) on a GAAP basis and net income (loss) on a non-GAAP basis is provided in a table immediately following the Unaudited Non-GAAP Consolidated Statements of Operations included with this release.

Net loss for the first six months of fiscal 2009, on a GAAP basis, was $15.9 million or $0.06 per share, compared with net income of $16.7 million or $0.06 per fully diluted share for the first six months of fiscal 2008. Non-GAAP net loss for the first six months of fiscal 2009 was $11.7 million, or $0.04 per share, compared with non-GAAP net income of $22.0 million, or $0.08 per fully diluted share for the first six months of fiscal 2008. The reconciliation between net income (loss) on a GAAP basis and net income (loss) on a non-GAAP basis is provided in a table immediately following the Unaudited Non-GAAP Consolidated Statements of Operations included with this release.

“Our second quarter results reflect a continuation of challenging market conditions, and the resulting impact of reduced capital spending in both our domestic and international customer base,” said Daniel E. Smith, president and chief executive officer. “We remain focused on managing expenses in all areas of the company while meeting critical customer needs.”

About Sycamore Networks

Sycamore Networks, Inc. (NASDAQ: SCMR) is a leading provider of intelligent bandwidth management solutions for fixed line and mobile network operators worldwide. From multiservice access networks to the optical core, Sycamore products enable network operators to lower overall network costs, increase operational efficiencies, and rapidly deploy new revenue-generating services. Sycamore’s global customer base includes Tier 1 service providers, government agencies, and utility companies. For more information, please visit www.sycamorenet.com.

Use of Non-GAAP Financial Measures

The Company provides non-GAAP financial data in addition to providing financial results in accordance with generally accepted accounting principles (GAAP). These measures are not in accordance with, or an alternative for GAAP, and may be different from non-GAAP measures used by other companies. The Company believes that the items excluded from the non-GAAP results have one or more of the following characteristics: their magnitude and timing is largely outside of the Company’s control; they are unrelated to the ongoing operation of the business in the ordinary course; they are unusual, and the Company does not expect them to occur in the ordinary course of business; or they are non-operational, non-cash expenses involving equity grants.

The non-GAAP financial data is provided to enhance the reader’s overall understanding of the Company’s current financial performance and its prospects for the future. Specifically, the Company believes the non-GAAP results provide useful information to both management and investors by excluding certain expense and income items that the Company believes are not indicative of the Company’s core operating results. In addition, since the Company has historically reported non-GAAP results to the investment community, the Company believes the inclusion of non-GAAP numbers provides consistency in its financial reporting. Further, these non-GAAP results are one of the primary indicators management uses for planning and forecasting in future periods. The non-GAAP financial data should be considered in addition to, not as a substitute for or a more appropriate indicator of, operating results, cash flows, or other measures of financial performance prepared in accordance with GAAP.

We wish to caution you that certain matters discussed in this news release constitute forward-looking statements regarding future events that involve risks and uncertainties. Readers are cautioned that actual results or events could differ materially from those stated or implied in the forward-looking statements. Other risks and uncertainties include, but are not limited to, actions, inquiries and findings that may result from certain stock option matters, including the restatement of previously issued financial statements and certain purported shareholder derivative actions filed against the Company and certain of its current and former officers and directors; the Company’s reliance on a limited number of customers; variation in the Company’s quarterly results; industry pricing pressures and the high cost of product development required to remain competitive and keep pace with evolving features and technologies desired by customers; the consolidation of both suppliers and customers in the telecommunications marketplace and general economic conditions. Certain additional risks are set forth in more detail in the section entitled “Risk Factors” in the Company’s most recent Quarterly Report on Form 10-Q and Annual Report on Form 10-K filed by the Company with the Securities and Exchange Commission. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future results or otherwise.

Sycamore Networks, Inc.

Unaudited Condensed Consolidated Balance Sheets

(in thousands)

	Jan 24, 2009			July 31, 2008
Assets
Current assets:
Cash and cash equivalents	$	347,253		$	499,922
Short-term investments		443,964			321,173
Accounts receivable, net		11,454			8,779
Inventories		22,152			23,750
Prepaids and other current assets		3,415			2,847
Total current assets		828,238			856,471
Property and equipment, net		19,095			20,437
Long-term investments		144,393			120,739
Purchased intangibles, net		3,354			4,000
Goodwill		20,334			20,334
Other assets		452			482
Total Assets	$	1,015,866		$	1,022,463
Liabilities and Stockholders’ Equity
Current liabilities:
Deferred revenue	$	17,677		$	14,300
Other current liabilities		13,674			14,043
Total current liabilities		31,351			28,343
Long term deferred revenue		5,014			4,841
Long term liability		1,973			1,904
Total liabilities		38,338			35,088
Common stock		284			284
Additional paid-in capital		2,037,239			2,034,818
Accumulated deficit		(1,063,693	)		(1,047,783	)
Other equity		3,698			56
Total stockholders' equity		977,528			987,375
Total Liabilities and Stockholders’ Equity	$	1,015,866		$	1,022,463

Sycamore Networks, Inc.

Unaudited Consolidated Statements of Operations

(in thousands, except per share data)

	Three Months Ended						Six Months Ended
	Jan 24, 2009			Jan 26, 2008			Jan 24, 2009			Jan 26, 2008
Revenue	$	11,698		$	41,451		$	27,129		$	79,437
Cost of revenue		8,504			21,297			17,862			40,377
Gross profit		3,194			20,154			9,267			39,060
Operating expenses:
Research and development		12,912			11,490			24,367			22,254
Sales and marketing		3,644			5,266			7,718			10,509
General and administrative		1,518			4,473			3,253			9,466
Restructuring & related impairment		189			(78	)		817			1,897
Total operating expenses		18,263			21,151			36,155			44,126
Loss from operations		(15,069	)		(997	)		(26,888	)		(5,066	)
Interest and other income, net		5,026			10,883			11,020			22,294
Income (loss) before income taxes		(10,043	)		9,886			(15,868	)		17,228
Income tax expense		88			190			42			521
Net income (loss)	$	(10,131	)	$	9,696		$	(15,910	)	$	16,707
Net income (loss) per share:
Basic	$	(0.04	)	$	0.03		$	(0.06	)	$	0.06
Diluted	$	(0.04	)	$	0.03		$	(0.06	)	$	0.06
Weighted average shares outstanding:
Basic		283,515			282,782			283,480			281,713
Diluted		283,515			284,855			283,480			284,230

Sycamore Networks, Inc.

Unaudited Non-GAAP Consolidated Statements of Operations

(in thousands, except per share data)

	Three Months Ended					Six Months Ended
	Jan 24, 2009			Jan 26, 2008		Jan 24, 2009			Jan 26, 2008
Revenue	$	11,698		$	41,451	$	27,129		$	79,437
Cost of revenue		8,215			21,128		17,234			40,103
Gross profit		3,483			20,323		9,895			39,334
Operating expenses:
Research and development		12,409			11,009		23,359			21,483
Sales and marketing		3,349			4,968		7,067			9,995
General and administrative		929			3,479		2,174			7,529
Total operating expenses		16,687			19,456		32,600			39,007
Income/Loss from operations		(13,204	)		867		(22,705	)		327
Interest and other income, net		5,026			10,883		11,020			22,294
Income (loss) before income taxes		(8,178	)		11,750		(11,685	)		22,621
Income tax expense		88			212		42			669
Net income (loss)	$	(8,266	)	$	11,538	$	(11,727	)	$	21,952
Net income (loss) per share:
Basic	$	(0.03	)	$	0.04	$	(0.04	)	$	0.08
Diluted	$	(0.03	)	$	0.04	$	(0.04	)	$	0.08
Weighted average shares outstanding:
Basic		283,515			282,782		283,480			281,713
Diluted		283,515			284,855		283,480			284,230

Sycamore Networks, Inc.

Reconciliation of GAAP to Non-GAAP Net Income

(in thousands, except per share data)

	Three Months Ended						Six Months Ended
	Jan 24, 2009			Jan 26, 2008			Jan 24, 2009			Jan 26, 2008
GAAP net income (loss)	$	(10,131	)	$	9,696		$	(15,910	)	$	16,707
Stock-based compensation expense:
Cost of revenue		141			169			312			274
Research and development		503			481			1,008			771
Sales and marketing		295			298			651			514
General and administrative		256			267			432			467
Total stock based compensation expense		1,195			1,215			2,403			2,026
Amortization of purchased intangible assets		333			727			647			1,470
Restructuring and other asset impairments:
Operating expense		189			(78	)		817			1,897
Cost of revenue		148			—			316			—
Tax effect		—			(22	)		—			(148	)
Non-GAAP net income (loss)	$	(8,266	)	$	11,538		$	(11,727	)	$	21,952