Sycamore Networks (SCMR) 8-K Financial statements and exhibits

FOR IMMEDIATE RELEASE

CONTACT:
Press Inquiries	Investor Inquiries
Lucia Graziano	Andrew Kramer
Public Relations	Investor Relations
Sycamore Networks, Inc.	Sycamore Networks, Inc.
978-250-3447	978-367-7368
lucia.graziano@sycamorenet.com	andy.kramer@sycamorenet.com

SYCAMORE NETWORKS, INC. REPORTS THIRD QUARTER FISCAL YEAR 2003 FINANCIAL RESULTS

CHELMSFORD, Mass., May 13, 2003 – Sycamore Networks, Inc. (NASDAQ: SCMR), a leader in intelligent optical networking, today reported its third quarter results for the period ended April 26, 2003.

Revenue for the third quarter of fiscal 2003 was $10.6 million, compared with $13.6 million for the third quarter of fiscal 2002.

Net loss for the third quarter of fiscal 2003, on a generally accepted accounting principles (GAAP) basis, was $11.9 million or $(0.04) per share, compared with a net loss of $22.8 million, or $(0.09) per share for the third quarter of fiscal 2002. Pro forma net loss for the third quarter was $12.1 million, or $(0.05) per share, compared with a pro forma net loss of $26.3 million, or $(0.10) per share for the third quarter of fiscal 2002. The reconciliation between net loss on a GAAP basis and pro forma net loss is provided in a table immediately following the Unaudited Pro Forma Consolidated Statements of Operations.

Revenue for the first nine months of fiscal 2003 was $27.4 million, compared with $56.6 million for the first nine months of fiscal 2002.

Net loss for the first nine months of fiscal 2003, on a GAAP basis, was $45.4 million or $(0.17) per share, compared with a net loss of $306.1 million, or $(1.21) per share for the first nine months of fiscal 2002. Pro forma net loss for the first nine months of fiscal 2003 was $41.1 million, or $(0.16) per share, compared with a pro forma net loss of $93.3 million, or $(0.37) per share for the first nine months of fiscal 2002.

“During the quarter, Sycamore continued to drive improved operating results and demonstrate sound cash management,” stated Daniel E. Smith, Sycamore’s president and chief executive officer. “While the market conditions remain challenging, Sycamore continues to focus on technology innovation and customer relationships. As we navigate current market conditions, we have implemented a range of initiatives aimed at enhancing our products, improving operational efficiencies and maintaining our balance sheet strength.”

In addition, Sycamore announced today that it has entered into an agreement with Plexus Corp. (Nasdaq: PLXS) under which Plexus will become one of Sycamore’s contract manufacturing partners and will provide manufacturing services to Sycamore for its intelligent optical switching products.

Conference Call Webcast
Sycamore plans to review its third-quarter results and discuss its business outlook during a conference call today beginning at 4:30 p.m. EDT. A Webcast of the conference call, along with GAAP reconciliation information, is available to all interested parties on the Sycamore web site located atwww.sycamorenet.comunder the Investor Relations section. Interested investors are encouraged to log onto the broadcast at least 15 minutes prior to the call. Participating in the call will be Sycamore’s president and chief executive officer, Daniel E. Smith and chief financial officer, Frances M. Jewels.

About Sycamore Networks
Sycamore Networks, Inc. (NASDAQ: SCMR) develops and markets intelligent optical networking products for the telecommunications industry. Sycamore’s optical switching products are forming the network foundation for some of the world’s most respected and innovative service providers. The software intelligence common to all Sycamore products empowers rapid deployment and delivery of services, from the edge to the core of the network. Contact Sycamore Networks atwww.sycamorenet.com.

Except for the historical information contained herein, we wish to caution you that certain matters discussed in this news release constitute forward-looking statements that involve risks and uncertainties. Actual results or events could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to the rate of product purchases by current and prospective customers; the commercial success of the Company’s line of intelligent optical networking products; the Company’s reliance on a limited number of customers; new product introductions and enhancements by the Company and its competitors; the length and variability of the sales cycles for the Company’s products; competition; manufacturing and sourcing risks; variations in the Company’s quarterly results; general economic conditions including stock market volatility and capital market conditions as well as conditions specific to the telecommunications, Internet and related industries; and the other factors discussed in the Company’s most recently filed Quarterly Report on Form 10-Q and the other reports filed by the Company from time to time 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.

The Company provides pro forma financial data in addition to providing financial results in accordance with GAAP. These measures are not in accordance with, or an alternative for, GAAP and may be different from pro forma measures used by other companies. The Company believes that this presentation of pro forma financial data provides useful information to management and investors regarding certain additional financial and business trends relating to its financial condition and results of operations. In addition, the Company’s management uses these measures for reviewing the Company’s financial results and for budget-planning purposes.

Sycamore Networks, Inc.
Unaudited Condensed Consolidated Balance Sheets
(in thousands)

	April 26, 2003		July 31, 2002
Assets
Current assets:
Cash and cash equivalents	$	237,444		$	172,658
Short-term investments		320,762			509,350
Accounts receivable, net		11,275			18,187
Inventories		6,928			12,940
Prepaids and other current assets		4,567			3,447
Total current assets		580,976			716,582
Property and equipment, net		17,025			32,696
Long-term investments		446,791			361,537
Other assets		3,331			7,760
Total Assets	$	1,048,123		$	1,118,575
Liabilities and Stockholders' Equity
Deferred revenue	$	3,988		$	4,978
Other current liabilities		18,140			26,907
Restructuring liabilities		24,905			48,167
Total current liabilities		47,033			80,052
Common stock		272			274
Additional paid-in capital		1,733,768			1,732,846
Accumulated deficit		(726,459)			(681,086)
Other equity		(6,491)			(13,511)
Total stockholders' equity		1,001,090			1,038,523
Total Liabilities and Stockholders' Equity	$	1,048,123		$	1,118,575

Sycamore Networks, Inc.
Unaudited Consolidated Statements of Operations
(in thousands, except per share data)

	Three Months Ended						Nine Months Ended
	April 26, 2003			April 27, 2002			April 26, 2003			April 27, 2002
Revenue	$	10,601		$	13,582		$	27,364		$	56,625
Cost of revenue		8,702			3,050			26,432			145,064
Stock-based compensation		341			441			1,054			1,393
Gross profit (loss)		1,558			10,091			(122	)		(89,832	)
Operating expenses:
Research and development		12,678			25,541			40,027			88,035
Sales and marketing		4,883			8,870			14,891			33,948
General and administrative		1,852			2,183			5,260			7,987
Stock-based compensation		1,656			5,101			5,420			18,009
Payroll tax on stock option exercises		2			4			17			19
Restructuring charges and related asset
impairments		(2,193	)		--			(2,193	)		77,306
Total operating expenses		18,878			41,699			63,422			225,304
Loss from operations		(17,320	)		(31,608	)		(63,544	)		(315,136	)
Losses on investments		--			--			--			(22,737	)
Interest and other income, net		5,426			8,765			18,171			31,746
Net loss	$	(11,894	)	$	(22,843	)	$	(45,373	)	$	(306,127	)
Diluted net loss per share	$	(0.04	)	$	(0.09	)	$	(0.17	)	$	(1.21	)
Weighted average shares used in computing
diluted net loss per share		266,638			256,468			264,640			252,877

Sycamore Networks, Inc.
Unaudited Pro Forma Consolidated Statements of Operations
See pro forma adjustments listed in table below
(in thousands, except per share data)

	Three Months Ended						Nine Months Ended
	April 26, 2003			April 27, 2002			April 26, 2003			April 27, 2002
Revenue	$	10,601		$	13,582		$	27,364		$	56,625
Cost of revenue		8,702			12,088			26,432			51,670
Gross profit		1,899			1,494			932			4,955
Operating expenses:
Research and development		12,678			25,541			40,027			88,035
Sales and marketing		4,883			8,870			14,891			33,948
General and administrative		1,852			2,183			5,260			7,987
Total operating expenses		19,413			36,594			60,178			129,970
Loss from operations		(17,514	)		(35,100	)		(59,246	)		(125,015	)
Interest and other income, net		5,426			8,765			18,171			31,746
Net loss	$	(12,088	)	$	(26,335	)	$	(41,075	)	$	(93,269	)
Diluted net loss per share	$	(0.05	)	$	(0.10	)	$	(0.16	)	$	(0.37	)
Weighted average shares used in computing
diluted net loss per share		266,638			256,468			264,640			252,877
The results above are pro forma and have been
adjusted to exclude the following items:
Stock-based compensation included in gross
profit	$	341		$	441		$	1,054		$	1,393
Stock-based compensation included in
operating expenses		1,656			5,101			5,420			18,009
Payroll tax on stock option exercises		2			4			17			19
Restructuring charges and related asset
impairments (benefit)		(2,193	)		--			(2,193	)		77,306
Excess inventory charge (benefit)		--			(9,038	)		--			93,394
Losses on investments		--			--			--			22,737
	$	(194	)	$	(3,492	)	$	4,298		$	212,858