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

September 14, 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 September 14, 2009, the Registrant reported its financial results for the year ended July 31, 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 equity 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 September 14, 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: September 14, 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 FOURTH QUARTER AND FISCAL YEAR 2009 FINANCIAL RESULTS

CHELMSFORD, Mass., September 14, 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 fourth quarter and fiscal year ended July 31, 2009. Revenue for the fourth quarter of fiscal 2009 was $17.2 million, compared with $15.1 million for the fourth quarter of fiscal 2008. Revenue for fiscal 2009 was $67.4 million compared with $115.5 million for fiscal 2008.

Net loss for the fourth quarter of fiscal 2009, on a generally accepted accounting principles (“GAAP”) basis, was $34.9 million, or $0.12 per share, compared with a GAAP net loss of $14.1 million, or $0.05 per share for the fourth quarter of fiscal 2008. Net loss for fiscal 2009, on a GAAP basis, was $53.6 million or $0.19 per share, compared with a GAAP net loss of $0.1 million or $0.00 per share for fiscal 2008. GAAP results include non-cash charges for asset impairments, stock-based compensation and amortization of intangible assets as well as cash-based restructuring costs.

The impairment charge included in the GAAP net loss for the fourth quarter and fiscal 2009 periods is $24.2 million, of which $23.1 million relates to the total book value of goodwill and other intangible assets and $1.1 million to certain fixed assets. The charge results from an impairment assessment and valuation taking into consideration several market and economic factors. The charge has no impact on the Company’s business operations or on its current or future cash flows.

Non-GAAP net loss for the fourth quarter of fiscal 2009 was $6.5 million, or $0.02 per share, compared with non-GAAP net loss of $7.8 million, or $0.03 per share for the fourth quarter of fiscal 2008. Non-GAAP net loss for fiscal 2009 was $19.5 million, or $0.07 per share, compared with non-GAAP net income of $13.8 million, or $0.05 per fully diluted share for fiscal 2008. A reconciliation between net income (loss) on a GAAP basis and non-GAAP basis is provided in a table immediately following the Unaudited Non-GAAP Consolidated Statements of Operations included with this release.

“Our Q4 and full year results reflect the impact of reduced capital spending by service providers, occurring within the backdrop of a challenging business environment,” said Daniel E. Smith, president and chief executive officer. “We will continue to exercise disciplined expense control, while ensuring our resources are effectively aligned to meet our customer commitments, and continue to demonstrate leadership in customer service and support.”

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 stock option 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)

	July 31, 2009			July 31, 2008
Assets
Current assets:
Cash and cash equivalents	$	347,696		$	499,922
Short-term investments		273,387			321,173
Accounts receivable, net		12,860			8,779
Inventories		16,058			23,750
Prepaids and other current assets		2,388			2,847
Total current assets		652,389			856,471
Property and equipment, net		13,342			20,437
Long-term investments		305,725			120,739
Purchased intangibles, net		—			4,000
Goodwill		—			20,334
Other assets		357			482
Total Assets	$	971,813		$	1,022,463
Liabilities and Stockholders’ Equity
Current liabilities:
Deferred revenue	$	11,003		$	14,300
Other current liabilities		14,034			14,043
Total current liabilities		25,037			28,343
Long term deferred revenue		4,530			4,841
Long term liability		1,821			1,904
Total liabilities		31,388			35,088
Common stock		284			284
Additional paid-in capital		2,040,061			2,034,818
Accumulated deficit		(1,101,355	)		(1,047,783	)
Other equity		1,435			56
Total stockholders’ equity		940,425			987,375
Total Liabilities and Stockholders’ Equity	$	971,813		$	1,022,463

Sycamore Networks, Inc.

Unaudited Consolidated Statements of Operations

(in thousands, except per share data)

	Three Months Ended						Year Ended
	July 31, 2009			July 31, 2008			July 31, 2009			July 31, 2008
Revenue	$	17,245		$	15,093		$	67,357		$	115,496
Cost of revenue		10,194			10,940			38,469			62,565
Gross profit		7,051			4,153			28,888			52,931
Operating expenses:
Research and development		12,725			12,911			50,134			47,397
Sales and marketing		3,185			5,552			14,551			21,041
General and administrative		2,625			3,613			8,198			15,980
Restructuring expense		2,783			—			3,600			2,368
Asset impairment		24,209			4,446			24,209			4,446
Total operating expenses		45,527			26,522			100,692			91,232
Loss from operations		(38,476	)		(22,369	)		(71,804	)		(38,301	)
Interest and other income, net		3,149			7,876			18,000			38,784
Income (loss) before income taxes		(35,327	)		(14,493	)		(53,804	)		483
Income tax expense (benefit)		(397	)		(415	)		(232	)		597
Net loss	$	(34,930	)	$	(14,078	)	$	(53,572	)	$	(114	)
Net loss per share:
Basic	$	(0.12	)	$	(0.05	)	$	(0.19	)	$	(0.00	)
Diluted	$	(0.12	)	$	(0.05	)	$	(0.19	)	$	(0.00	)
Weighted average shares outstanding:
Basic		283,796			283,346			283,589			282,484
Diluted		283,796			283,346			283,589			282,484

Sycamore Networks, Inc.

Unaudited Non-GAAP Consolidated Statements of Operations

(in thousands, except per share data)

	Three Months Ended						Year Ended
	July 31, 2009			July 31, 2008			July 31, 2009			July 31, 2008
Revenue	$	17,245		$	15,093		$	67,357		$	115,496
Cost of revenue		9,982			10,760			37,489			61,940
Gross profit		7,263			4,333			29,868			53,556
Operating expenses:
Research and development		12,235			12,396			48,127			45,630
Sales and marketing		2,919			5,239			13,362			19,917
General and administrative		2,182			2,583			6,113			12,041
Total operating expenses		17,336			20,218			67,602			77,588
Loss from operations		(10,073	)		(15,885	)		(37,734	)		(24,032	)
Interest and other income, net		3,149			7,876			18,000			38,784
Income (loss) before income taxes		(6,924	)		(8,009	)		(19,734	)		14,752
Income tax expense (benefit)		(397	)		(217	)		(232	)		970
Net income (loss)	$	(6,527	)	$	(7,792	)	$	(19,502	)	$	13,782
Net income (loss) per share:
Basic	$	(0.02	)	$	(0.03	)	$	(0.07	)	$	0.05
Diluted	$	(0.02	)	$	(0.03	)	$	(0.07	)	$	0.05
Weighted average shares outstanding:
Basic		283,796			283,346			283,589			282,484
Diluted		283,796			283,346			283,589			284,214

Sycamore Networks, Inc.

Reconciliation of GAAP to Non-GAAP Net Income

(in thousands, except per share data)

	Three Months Ended						Year Ended
	July 31, 2009			July 31, 2008			July 31, 2009			July 31, 2008
GAAP net loss	$	(34,930	)	$	(14,078	)	$	(53,572	)	$	(114	)
Stock-based compensation expense:
Cost of revenue		142			180			594			625
Research and development		490			515			2,007			1,767
Sales and marketing		266			313			1,189			1,124
General and administrative		239			263			902			975
Total stock based compensation expense		1,137			1,271			4,692			4,491
Asset impairment charge:
Operating expense		24,209			4,446			24,209			4,446
Amortization of purchased intangible assets		204			767			1,183			2,964
Restructuring:
Operating expense		2,783			—			3,600			2,368
Cost of revenue		70			—			386			—
Tax effect		—			(198	)		—			(373	)
Non-GAAP net income (loss)	$	(6,527	)	$	(7,792	)	$	(19,502	)	$	13,782