Sycamore Networks, Inc. Reports Third Quarter Fiscal Year 2011 Financial Results

Sycamore Networks, Inc. (NASDAQ: SCMR), today reported its results for the third quarter ended April 30, 2011. Revenue for the third quarter of fiscal 2011 was $11.9 million, compared with $14.6 million for the third quarter of fiscal 2010. Revenue for the first nine months of fiscal 2011 was $35.7 million, compared with $46.4 million for the first nine months of fiscal 2010.

Net loss for the third quarter of fiscal 2011, on a generally accepted accounting principles (“GAAP”) basis, was $4.1 million, or $0.14 per share, compared with a GAAP net loss of $3.7 million, or $0.13 per share for the third quarter of fiscal 2010. Non-GAAP net loss for the third quarter of fiscal 2011 was $3.4 million, or $0.12 per share, compared with non-GAAP net loss of $2.4 million, or $0.09 per share for the third 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 the first nine months of fiscal 2011, on a GAAP basis, was $14.2 million or $0.50 per share, compared with GAAP net loss of $15.3 million or $0.54 per share for the first nine months of fiscal 2010. Non-GAAP net loss for the first nine months of fiscal 2011 was $12.2 million, or $0.43 per share, compared with non-GAAP net loss of $6.1 million, or $0.21 per share for the first nine months 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.

“Our Q3 revenue reflects market conditions in our bandwidth management business,” said Daniel E. Smith, president and chief executive officer. "During the quarter we made IQstream generally available, as expected. We continue to make progress with our trials and remain excited about the opportunities for our solution in the mobile broadband optimization market space. Operator interest in our solution remains high, and we are actively pursuing opportunities in additional market regions through our business development efforts and customer initiatives."

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)

April 30, 2011

July 31, 2010

Assets
Current assets:
Cash and cash equivalents $ 101,727 $ 104,416
Short-term investments 306,041 450,722
Accounts receivable, net 6,873 14,168
Inventories 11,661 11,175
Prepaids and other current assets 1,9111,873
Total current assets 428,213 582,354
Property and equipment, net 5,658 6,569
Long-term investments 34,731 81,739
Other assets 373358
Total Assets$468,975$671,020
Liabilities and Stockholders' Equity
Current liabilities:
Deferred revenue $ 7,403 $ 10,930
Other current liabilities 7,24510,455
Total current liabilities 14,648 21,385
Long term deferred revenue 2,410 3,918
Long term liability 1,6891,714
Total liabilities 18,74727,017
Common stock 29 28
Additional paid-in capital 1,580,747 1,759,520
Accumulated deficit (1,130,340 ) (1,116,160 )
Other equity (208)615
Total stockholders' equity 450,228644,003
Total Liabilities and Stockholders' Equity$468,975$671,020
Sycamore Networks, Inc.
Unaudited Consolidated Statements of Operations
(in thousands, except per share data)
Three Months EndedNine Months Ended

Apr 30,
2011

Apr 24,
2010

Apr 30,
2011

Apr 24,
2010

Revenue $ 11,863 $ 14,587 $ 35,729 $ 46,385
Cost of revenue 4,8816,05716,88320,783
Gross profit 6,982 8,530 18,846 25,602
Operating expenses:
Research and development 6,434 7,783 19,984 24,216
Sales and marketing 2,898 2,729 8,141 8,073
General and administrative 2,106 2,221 6,262 6,973
Restructuring expense -- 510 -- 5,650
Asset impairment ------1,076
Total operating expenses 11,43813,24334,38745,988
Loss from operations (4,456 ) (4,713 ) (15,541 ) (20,386 )
Interest and other income, net 4001,1081,6384,569
Loss before income taxes (4,056 ) (3,605 ) (13,903 ) (15,817 )
Income tax expense (benefit) 80116277(491)
Net loss $(4,136)$(3,721)$(14,180)$(15,326)
Net loss per share:
Basic $ (0.14 ) $ (0.13 ) $ (0.50 ) $ (0.54 )
Diluted $ (0.14 ) $ (0.13 ) $ (0.50 ) $ (0.54 )
Weighted average shares outstanding:
Basic 28,593 28,424 28,525 28,420
Diluted 28,593 28,424 28,525 28,420
Sycamore Networks, Inc.
Unaudited Non-GAAP Consolidated Statements of Operations
(in thousands, except per share data)
Three Months EndedNine Months Ended

Apr 30,
2011

Apr 24,
2010

Apr 30,
2011

Apr 24,
2010

Revenue $ 11,863 $ 14,587 $ 35,729 $ 46,385
Cost of revenue 4,7665,93616,24820,343
Gross profit 7,097 8,651 19,481 26,042
Operating expenses:
Research and development 6,179 7,543 19,522 23,387
Sales and marketing 2,713 2,502 7,678 7,392
General and administrative 1,9032,0345,8036,408
Total operating expenses 10,79512,07933,00337,187
Loss from operations (3,698 ) (3,428 ) (13,522 ) (11,145 )
Interest and other income, net 4001,1081,6384,569
Loss before income taxes (3,298 ) (2,320 ) (11,884 ) (6,576 )
Income tax expense (benefit) 80116277(491)
Net loss $(3,378)$(2,436)$(12,161)$(6,085)
Net loss per share:
Basic $ (0.12 ) $ (0.09 ) $ (0.43 ) $ (0.21 )
Diluted $ (0.12 ) $ (0.09 ) $ (0.43 ) $ (0.21 )
Weighted average shares outstanding:
Basic 28,593 28,424 28,525 28,420
Diluted 28,593 28,424 28,525 28,420
Sycamore Networks, Inc.
Reconciliation of GAAP to Non-GAAP Net Loss
(in thousands, except per share data)
Three Months EndedNine Months Ended

Apr 30,
2011

Apr 24,
2010

Apr 30,
2011

Apr 24,
2010

GAAP net loss $(4,136)$(3,721)$(14,180)$(15,326)
Stock-based compensation expense:
Cost of revenue 115 126 296 381
Research and development 255 240 462 829
Sales and marketing 185 227 463 681
General and administrative 203187459565
Total stock based compensation expense 758 780 1,680 2,456
Asset impairment charge:
Operating expense -- -- -- 1,076
Restructuring and other asset impairments:
Operating expense -- 510 -- 5,650
Cost of revenue --(5)33959
Non-GAAP net loss $(3,378)$(2,436)$(12,161)$(6,085)

Contacts:

Sycamore Networks, Inc.
Robert Travis, 978-250-3432
Investor Relations
bob.travis@sycamorenet.com
or
Sycamore Networks, Inc.
Scott Larson, 978-250-3433
Press Inquiries
scott.larson@sycamorenet.com
Related Stocks:
Stock Market XML and JSON Data API provided by FinancialContent Services, Inc.
Nasdaq quotes delayed at least 15 minutes, all others at least 20 minutes.
Markets are closed on certain holidays. Stock Market Holiday List
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.
Press Release Service provided by PRConnect.
Stock quotes supplied by Six Financial
Postage Rates Bots go here