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 7, 2011

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 7, 2011, the Registrant reported its financial results for the year ended July 31, 2011.

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 are 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 7, 2011

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 7, 2011

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 2011 FINANCIAL RESULTS

CHELMSFORD, Mass., September 7, 2011 – Sycamore Networks, Inc. (NASDAQ: SCMR), today reported its results for the fourth quarter and fiscal year ended July 31, 2011. Revenue for the fourth quarter of fiscal 2011 was $13.0 million, compared with $22.2 million for the fourth quarter of fiscal 2010. Revenue for fiscal 2011 was $48.7 million, compared with $68.6 million in fiscal 2010.

Net loss for the fourth quarter of fiscal 2011, on a generally accepted accounting principles (“GAAP”) basis, was $3.6 million, or $0.13 per share, compared with a GAAP net income of $0.5 million, or $0.02 per share for the fourth quarter of fiscal 2010. Non-GAAP net loss for the fourth quarter of fiscal 2011 was $2.5 million, or $0.09 per share, compared with non-GAAP net income of $1.3 million, or $0.05 per share for the fourth quarter of fiscal 2010. 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 fiscal 2011, on a GAAP basis, was $17.8 million or $0.62 per share, compared with GAAP net loss of $14.8 million or $0.52 per share for fiscal 2010. Non-GAAP net loss for fiscal 2011 was $14.7 million, or $0.51 per share, compared with non-GAAP net loss of $4.8 million, or $0.17 per share for fiscal 2010. 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.

“Sycamore’s fourth quarter results continue to reflect the ongoing state of the bandwidth management market. Our Intelligent Bandwidth Management solutions play an important role in carrier networks around the world and they continue to contribute positively to Sycamore’s overall operating results,” said Daniel E. Smith, president and chief executive officer. “We are pleased with the progress we are making in our IQstream trials and continue to receive strong interest from mobile operators. In today’s environment where capital dollars are scarce and demand for mobile data continues to grow, we believe our unique approach to mobile broadband optimization can help operators cost-effectively manage capacity constraints in the backhaul.”

About Sycamore Networks

Sycamore Networks, Inc. (NASDAQ: SCMR) develops and markets intelligent bandwidth management solutions for fixed line and mobile network operators worldwide. We also develop and market a mobile broadband solution designed to help mobile operators reduce congestion in mobile access networks. Sycamore products enable network operators to efficiently and cost-effectively provision and manage network capacity to support a wide range of converged services such as voice, video and data. Our 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 are 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 may constitute forward-looking statements regarding future events that involve risks and uncertainties. Risks and uncertainties in the Company’s business include, but are not limited to, reliance on a limited number of customers; industry pricing pressures; the Company’s decision to focus future development efforts on mobile broadband opportunities; the high cost of product development and keeping pace with evolving features and technologies desired by customers; unexpected difficulties in developing and marketing new mobile broadband products and the inability of new products to achieve market acceptance or to function as expected; 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 reports filed on Forms 10-Q and 10-K 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, 2011			July 31, 2010
Assets
Current assets:
Cash and cash equivalents	$	60,765		$	104,416
Short-term investments		335,847			450,722
Accounts receivable, net		8,764			14,168
Inventories		11,537			11,175
Prepaids and other current assets		1,770			1,873
Total current assets		418,683			582,354
Property and equipment, net		5,978			6,569
Long-term investments		44,786			81,739
Other assets		290			358
Total Assets	$	469,737		$	671,020
Liabilities and Stockholders’ Equity
Current liabilities:
Deferred revenue	$	9,141		$	10,930
Other current liabilities		8,325			10,455
Total current liabilities		17,466			21,385
Long term deferred revenue		1,812			3,918
Long term liabilities		1,702			1,714
Total liabilities		20,980			27,017
Common stock		29			28
Additional paid-in capital		1,583,124			1,759,520
Accumulated deficit		(1,133,958	)		(1,116,160	)
Other equity		(438	)		615
Total stockholders’ equity		448,757			644,003
Total Liabilities and Stockholders’ Equity	$	469,737		$	671,020

Sycamore Networks, Inc.

Unaudited Consolidated Statements of Operations

(in thousands, except per share data)

	Three Months Ended						Year Ended
	July 31, 2011			July 31, 2010			July 31, 2011			July 31, 2010
Revenue	$	12,959		$	22,232		$	48,688		$	68,617
Cost of revenue		5,627			10,171			22,510			30,954
Gross profit		7,332			12,061			26,178			37,663
Operating expenses:
Research and development		6,635			7,469			26,619			31,685
Sales and marketing		2,614			2,869			10,755			10,942
General and administrative		1,932			2,125			8,194			9,098
Restructuring expense		—			(25	)		—			5,625
Asset impairment		—			—			—			1,076
Total operating expenses		11,181			12,438			45,568			58,426
Loss from operations		(3,849	)		(377	)		(19,390	)		(20,763	)
Interest and other income, net		312			1,023			1,950			5,592
Income (loss) before income taxes		(3,537	)		646			(17,440	)		(15,171	)
Income tax expense (benefit)		81			125			358			(366	)
Net income (loss)	$	(3,618	)	$	521		$	(17,798	)	$	(14,805	)
Net income (loss) per share:
Basic	$	(0.13	)	$	0.02		$	(0.62	)	$	(0.52	)
Diluted	$	(0.13	)	$	0.02		$	(0.62	)	$	(0.52	)
Weighted average shares outstanding:
Basic		28,692			28,427			28,567			28,422
Diluted		28,692			28,427			28,567			28,422

Sycamore Networks, Inc.

Unaudited Non-GAAP Consolidated Statements of Operations

(in thousands, except per share data)

	Three Months Ended					Year Ended
	July 31, 2011			July 31, 2010		July 31, 2011			July 31, 2010
Revenue	$	12,959		$	22,232	$	48,688		$	68,617
Cost of revenue		5,457			10,043		21,705			30,386
Gross profit		7,502			12,189		26,983			38,231
Operating expenses:
Research and development		6,249			7,206		25,771			30,593
Sales and marketing		2,358			2,626		10,036			10,018
General and administrative		1,673			1,925		7,476			8,333
Total operating expenses		10,280			11,757		43,283			48,944
Income (loss) from operations		(2,778	)		432		(16,300	)		(10,713	)
Interest and other income, net		312			1,023		1,950			5,592
Income (loss) before income taxes		(2,466	)		1,455		(14,350	)		(5,121	)
Income tax expense (benefit)		81			125		358			(366	)
Net income (loss)	$	(2,547	)	$	1,330	$	(14,708	)	$	(4,755	)
Net Income (loss) per share:
Basic	$	(0.09	)	$	0.05	$	(0.51	)	$	(0.17	)
Diluted	$	(0.09	)	$	0.05	$	(0.51	)	$	(0.17	)
Weighted average shares outstanding:
Basic		28,692			28,427		28,567			28,422
Diluted		28,692			28,427		28,567			28,422

Sycamore Networks, Inc.

Reconciliation of GAAP to Non-GAAP Net Loss

(in thousands, except per share data)

	Three Months Ended						Year Ended
	July 31, 2011			July 31, 2010			July 31, 2011			July 31, 2010
GAAP net income (loss)	$	(3,618	)	$	521		$	(17,798	)	$	(14,805	)
Stock-based compensation expense:
Cost of revenue		170			128			466			509
Research and development		386			263			848			1,092
Sales and marketing		256			243			719			924
General and administrative		259			200			718			765
Total stock based compensation expense		1,071			834			2,751			3,290
Asset impairment charge:
Operating expense		—			—			—			1,076
Restructuring and other asset impairments:
Operating expense		—			(25	)		—			5,625
Cost of revenue		—			—			339			59
Non-GAAP net income (loss)	$	(2,547	)	$	1,330		$	(14,708	)	$	(4,755	)