EX-99.1 2 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

LOGO

 

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 2010 FINANCIAL RESULTS

CHELMSFORD, Mass., February 25, 2010 – 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 23, 2010. Revenue for the second quarter of fiscal 2010 was $16.2 million, compared with $11.7 million for the second quarter of fiscal 2009.

Net loss for the second quarter of fiscal 2010, on a generally accepted accounting principles (“GAAP”) basis, was $1.2 million, or $0.04 per share, compared with net loss of $10.1 million, or $0.36 per share for the second quarter of fiscal 2009. Non-GAAP net loss for the second quarter of fiscal 2010 was $0.5 million, or $0.02 per share, compared with non-GAAP net loss of $8.3 million, or $0.29 per share for the second quarter of fiscal 2009. The reconciliation between net loss on a GAAP basis and net 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 2010, on a GAAP basis, was $11.6 million or $0.41 per share, compared with net loss of $15.9 million or $0.56 per share for the first six months of fiscal 2009. Non-GAAP net loss for the first six months of fiscal 2010 was $3.6 million, or $0.13 per share, compared with non-GAAP net loss of $11.7 million, or $0.41 per share for the first six months of fiscal 2009. The reconciliation between net loss on a GAAP basis and net 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.

Per share data for all periods presented have been adjusted to give effect to the December 21, 2009 1 for 10 reverse stock split.

“Our second quarter operating results reflect the benefits of our recent cost reduction actions, which resulted in significantly lower operating expenses and contributed to strong gross margin performance,” said Daniel E. Smith, president and chief executive officer. “We will continue to invest in the current needs of our customers, as well as new product initiatives focused on emerging market opportunities.”


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; 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 23, 2010     July 31, 2009  

Assets

    

Current assets:

    

Cash and cash equivalents

   $ 64,853      $ 347,696   

Short-term investments

     378,514        273,387   

Accounts receivable, net

     16,716        12,860   

Inventories

     13,620        16,058   

Prepaids and other current assets

     3,765        2,388   
                

Total current assets

     477,468        652,389   

Property and equipment, net

     8,513        13,342   

Long-term investments

     189,313        305,725   

Other assets

     330        357   
                

Total Assets

   $ 675,624      $ 971,813   
                

Liabilities and Stockholders’ Equity

    

Current liabilities:

    

Deferred revenue

   $ 12,071      $ 11,003   

Other current liabilities

     11,047        14,034   
                

Total current liabilities

     23,118        25,037   

Long term deferred revenue

     4,799        4,530   

Long term liability

     1,708        1,821   
                

Total liabilities

     29,625        31,388   
                

Common stock

     28        28   

Additional paid-in capital

     1,757,906        2,040,317   

Accumulated deficit

     (1,112,960     (1,101,355

Other equity

     1,025        1,435   
                

Total stockholders’ equity

     645,999        940,425   
                

Total Liabilities and Stockholders’ Equity

   $ 675,624      $ 971,813   
                


Sycamore Networks, Inc.

Unaudited Consolidated Statements of Operations

(in thousands, except per share data)

 

     Three Months Ended     Six Months Ended  
     Jan 23,
2010
    Jan 24,
2009
    Jan 23,
2010
    Jan 24,
2009
 

Revenue

   $ 16,174      $ 11,698      $ 31,798      $ 27,129   

Cost of revenue

     6,879        8,504        14,726        17,862   
                                

Gross profit

     9,295        3,194        17,072        9,267   

Operating expenses:

        

Research and development

     7,761        12,912        16,433        24,367   

Sales and marketing

     2,759        3,644        5,344        7,718   

General and administrative

     2,444        1,518        4,752        3,253   

Restructuring & related impairment

     (88     189        6,216        817   
                                

Total operating expenses

     12,876        18,263        32,745        36,155   
                                

Loss from operations

     (3,581     (15,069     (15,673     (26,888

Interest and other income, net

     1,641        5,026        3,461        11,020   
                                

Loss before income taxes

     (1,940     (10,043     (12,212     (15,868

Income tax expense (benefit)

     (727     88        (607     42   
                                

Net loss

   $ (1,213   $ (10,131   $ (11,605   $ (15,910
                                

Net loss per share:

        

Basic

   $ (0.04   $ (0.36   $ (0.41   $ (0.56

Diluted

   $ (0.04   $ (0.36   $ (0.41   $ (0.56

Weighted average shares outstanding:

        

Basic

     28,420        28,352        28,418        28,348   

Diluted

     28,420        28,352        28,418        28,348   

Common share and per share data for all periods presented have been adjusted to give effect to the December 21, 2009 1 for 10 reverse stock split.


Sycamore Networks, Inc.

Unaudited Non-GAAP Consolidated Statements of Operations

(in thousands, except per share data)

 

     Three Months Ended     Six Months Ended  
     Jan 23,
2010
    Jan 24,
2009
    Jan 23,
2010
    Jan 24,
2009
 

Revenue

   $ 16,174      $ 11,698      $ 31,798      $ 27,129   

Cost of revenue

     6,762        8,215        14,407        17,234   
                                

Gross profit

     9,412        3,483        17,391        9,895   

Operating expenses:

        

Research and development

     7,496        12,409        15,844        23,359   

Sales and marketing

     2,517        3,349        4,890        7,067   

General and administrative

     2,235        929        4,374        2,174   
                                

Total operating expenses

     12,248        16,687        25,108        32,600   
                                

Loss from operations

     (2,836     (13,204     (7,717     (22,705

Interest and other income, net

     1,641        5,026        3,461        11,020   
                                

Loss before income taxes

     (1,195     (8,178     (4,256     (11,685

Income tax expense (benefit)

     (727     88        (607     42   
                                

Net loss

   $ (468   $ (8,266   $ (3,649   $ (11,727
                                

Net loss per share:

        

Basic

   $ (0.02   $ (0.29   $ (0.13   $ (0.41

Diluted

   $ (0.02   $ (0.29   $ (0.13   $ (0.41

Weighted average shares outstanding:

        

Basic

     28,420        28,352        28,418        28,348   

Diluted

     28,420        28,352        28,418        28,348   

Common share and per share data for all periods presented have been adjusted to give effect to the December 21, 2009 1 for 10 reverse stock split.


Sycamore Networks, Inc.

Reconciliation of GAAP to Non-GAAP Net Income

(in thousands, except per share data)

 

     Three Months Ended     Six Months Ended  
     Jan 23,
2010
    Jan 24,
2009
    Jan 23,
2010
    Jan 24,
2009
 

GAAP net loss

   $ (1,213   $ (10,131   $ (11,605   $ (15,910
                                

Stock-based compensation expense:

        

Cost of revenue

     130        141        255        312   

Research and development

     265        503        589        1,008   

Sales and marketing

     242        295        454        651   

General and administrative

     209        256        378        432   
                                

Total stock based compensation expense

     846        1,195        1,676        2,403   

Amortization of purchased intangible assets

     —          333        —          647   

Restructuring and other asset impairments:

        

Operating expense

     (88     189        6,216        817   

Cost of revenue

     (13     148        64        316   

Tax effect

     —          —          —          —     
                                

Non-GAAP net loss

   $ (468   $ (8,266   $ (3,649   $ (11,727