Exhibit 99.1 |
FOR IMMEDIATE RELEASE |
CONTACT: |
Press Inquiries Scott Larson Public Relations Sycamore Networks, Inc. 978-250-3433 scott.larson@sycamorenet.com | Investor Inquiries Terry Adams Investor Relations Sycamore Networks, Inc. 978-250-3460 investor.info@sycamorenet.com |
SYCAMORE NETWORKS, INC. REPORTS FOURTH QUARTER AND FISCAL YEAR |
CHELMSFORD, Mass., August 19, 2004 – Sycamore Networks, Inc. (NASDAQ: SCMR), a leader in optical networking, today reported its fourth quarter and fiscal year-end results for the period ended July 31, 2004. |
Revenue for the fourth quarter of fiscal 2004 was $14.5 million, compared with $10.9 million for the fourth quarter of fiscal 2003. |
Net loss for the fourth quarter of fiscal 2004, on a generally accepted accounting principles (GAAP) basis, was $9.2 million or $(0.03) per share, compared with a net loss of $9.7 million, or $(0.04) per share for the fourth quarter of fiscal 2003. Non-GAAP net loss for the fourth quarter of fiscal 2004, which excludes stock-based compensation and payroll taxes on stock option exercises, was $8.1 million, or $(0.03) per share, compared with a non-GAAP net loss for the fourth quarter of fiscal 2003, which excludes stock-based compensation, payroll taxes on stock option exercises, and a benefit from excess inventory charges and restructuring charges and related asset impairments, was $10.9 million, or $(0.04) per share. 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 Consolidated Statements of Operations included with this release. |
Revenue for fiscal 2004 was $44.5 million, compared with $38.3 million for fiscal 2003. |
Net loss for fiscal 2004, on a GAAP basis, was $44.9 million or $(0.17) per share, compared with a net loss of $55.1 million or $(0.21) per share for fiscal 2003. Non-GAAP net loss for fiscal 2004, which excludes stock-based compensation and payroll taxes on stock option exercises, was $39.1 million, or $(0.14) per share, compared with a non-GAAP net loss for fiscal 2003, which excludes stock-based compensation, payroll taxes on stock option exercises, and a benefit from excess inventory charges and restructuring charges and related asset impairments, was $52.0 million, or $(0.20) per share. 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 Consolidated Statements of Operations included with this release. |
“While we are pleased with our fiscal year 2004 revenue growth, our business continues to be impacted by industry related conditions,” stated Daniel E. Smith, Sycamore’s president and chief executive officer. “In light of these circumstances, we engaged Morgan Stanley to work with us on a review of our strategic and financial alternatives aimed at maximizing shareholder value.” |
Conference Call Webcast Sycamore plans to review its fourth quarter and fiscal year 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 optical networking products for telecommunications service providers worldwide. The Company’s products enable service providers to easily and cost-effectively transition their existing fiber optic network into an infrastructure that can provision, manage and deliver economic, high-bandwidth services to their customers. For more information, please visitwww.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: unfavorable conditions in the telecommunications industry and economy in general; the pursuit of strategic opportunities; the commercial success of the Company’s line of optical networking products; significant cost structure required to support the Company’s strategy; competition; the Company’s reliance on a limited number of customers; the Company’s ability to sell through distribution channels; variation in the Company’s quarterly results; manufacturing and sourcing risks; product performance; conducting business internationally; current and potential litigation; intellectual property rights and disputes; stock market volatility and capital market conditions; and the other factors discussed in the Company’s most recently filed Form 10-Q and the other reports filed by the Company from time to time with the Securities and Exchange Commission. There can be no assurance that any transaction or other corporate action will result from the Company’s review of strategic and financial alternatives. Further, there can be no assurance concerning the type, form, structure, nature, results, timing, or terms and conditions of any such potential transaction, even if such an action does result from this review. 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. |
Use of Non-GAAP Financial Measures |
The Company provides non-GAAP 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 non-GAAP measures used by other companies. The items excluded from 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 primarily in connection with the Company’s initial public offering and acquisitions. |
The non-GAAP financial data is provided to enhance the user’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 because such charges are associated with past events and are not related to current operations. 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 as being superior to, operating losses, cash flows, or other measures of financial performance prepared in accordance with GAAP. |
Sycamore Networks, Inc. |
July 31, 2004 | July 31, 2003 | |||||||
---|---|---|---|---|---|---|---|---|
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 152,754 | $ | 250,595 | ||||
Short-term investments | 482,274 | 421,784 | ||||||
Accounts receivable, net | 10,605 | 10,769 | ||||||
Inventories | 4,294 | 5,117 | ||||||
Prepaids and other current assets | 3,611 | 3,680 | ||||||
Total current assets | 653,538 | 691,945 | ||||||
Property and equipment, net | 9,419 | 14,589 | ||||||
Long-term investments | 326,297 | 323,204 | ||||||
Other assets | 1,664 | 2,890 | ||||||
Total Assets | $ | 990,918 | $ | 1,032,628 | ||||
Liabilities and Stockholders' Equity | ||||||||
Deferred revenue | $ | 7,226 | $ | 2,677 | ||||
Other current liabilities | 15,321 | 18,350 | ||||||
Restructuring liabilities | 12,005 | 19,086 | ||||||
Total current liabilities | 34,552 | 40,113 | ||||||
Deferred revenue | 926 | -- | ||||||
Total liabilities | 35,478 | 40,113 | ||||||
Common stock | 274 | 272 | ||||||
Additional paid-in capital | 1,740,293 | 1,733,476 | ||||||
Accumulated deficit | (781,104 | ) | (736,192 | ) | ||||
Other equity | (4,023 | ) | (5,041 | ) | ||||
Total stockholders' equity | 955,440 | 992,515 | ||||||
Total Liabilities and Stockholders' Equity | $ | 990,918 | $ | 1,032,628 | ||||
Sycamore Networks, Inc. |
Three Months Ended | Year Ended | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
July 31, 2004 | July 31, 2003 | July 31, 2004 | July 31, 2003 | |||||||||||
Revenue | $ | 14,513 | $ | 10,912 | $ | 44,547 | $ | 38,276 | ||||||
Cost of revenue | 8,715 | 7,260 | 28,397 | 33,692 | ||||||||||
Stock-based compensation and payroll | ||||||||||||||
tax on stock option exercises | 167 | 358 | 711 | 1,412 | ||||||||||
Gross profit | 5,631 | 3,294 | 15,439 | 3,172 | ||||||||||
Operating expenses: | ||||||||||||||
Research and development | 11,383 | 12,399 | 45,681 | 52,426 | ||||||||||
Sales and marketing | 4,456 | 4,865 | 18,101 | 19,756 | ||||||||||
General and administrative | 2,273 | 1,977 | 7,365 | 7,237 | ||||||||||
Stock-based compensation and payroll tax | ||||||||||||||
on stock option exercises: | ||||||||||||||
Research and development | 441 | 460 | 2,759 | 3,033 | ||||||||||
Sales and marketing | 204 | 145 | 1,001 | 1,703 | ||||||||||
General and administrative | 279 | 606 | 1,334 | 1,912 | ||||||||||
Restructuring charges and related asset | ||||||||||||||
impairments | -- | (2,254 | ) | -- | (4,447 | ) | ||||||||
Total operating expenses | 19,036 | 18,198 | 76,241 | 81,620 | ||||||||||
Loss from operations | (13,405 | ) | (14,904 | ) | (60,802 | ) | (78,448 | ) | ||||||
Interest and other income, net | 4,242 | 5,171 | 15,890 | 23,342 | ||||||||||
Net loss | $ | (9,163 | ) | $ | (9,733 | ) | $ | (44,912 | ) | $ | (55,106 | ) | ||
Diluted net loss per share | $ | (0.03 | ) | $ | (0.04 | ) | $ | (0.17 | ) | $ | (0.21 | ) | ||
Weighted average shares used in computing | ||||||||||||||
diluted net loss per share | 273,564 | 268,890 | 272,123 | 265,702 |
Sycamore Networks, Inc. |
Three Months Ended July 31, 2004 | Three Months Ended July 31, 2003 | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
GAAP Results | Adjustments | Non-GAAP Results(a) | GAAP Results | Adjustments | Non-GAAP Results (a) | |||||||||||||||
Revenue | $ | 14,513 | $ | -- | $ | 14,513 | $ | 10,912 | $ | -- | $ | 10,912 | ||||||||
Cost of revenue | 8,715 | -- | 8,715 | 7,260 | 531 | 7,791 | ||||||||||||||
Stock-based compensation and | ||||||||||||||||||||
payroll tax on stock option | ||||||||||||||||||||
exercises | 167 | (167 | ) | -- | 358 | (358 | ) | -- | ||||||||||||
Gross profit | 5,631 | 167 | 5,798 | 3,294 | (173 | ) | 3,121 | |||||||||||||
Operating expenses: | ||||||||||||||||||||
Research and development | 11,383 | -- | 11,383 | 12,399 | -- | 12,399 | ||||||||||||||
Sales and marketing | 4,456 | -- | 4,456 | 4,865 | -- | 4,865 | ||||||||||||||
General and administrative | 2,273 | -- | 2,273 | 1,977 | -- | 1,977 | ||||||||||||||
Stock-based compensation and | ||||||||||||||||||||
payroll tax on stock option | ||||||||||||||||||||
exercises: | ||||||||||||||||||||
Research and development | 441 | (441 | ) | -- | 460 | (460 | ) | -- | ||||||||||||
Sales and marketing | 204 | (204 | ) | -- | 145 | (145 | ) | -- | ||||||||||||
General and administrative | 279 | (279 | ) | -- | 606 | (606 | ) | -- | ||||||||||||
Restructuring charges and related | ||||||||||||||||||||
asset impairments | -- | -- | -- | (2,254 | ) | 2,254 | -- | |||||||||||||
Total operating expenses | 19,036 | (924 | ) | 18,112 | 18,198 | 1,043 | 19,241 | |||||||||||||
Loss from operations | (13,405 | ) | 1,091 | (12,314 | ) | (14,904 | ) | (1,216 | ) | (16,120 | ) | |||||||||
Interest and other income, net | 4,242 | -- | 4,242 | 5,171 | -- | 5,171 | ||||||||||||||
Net loss | $ | (9,163 | ) | $ | 1,091 | $ | (8,072 | ) | $ | (9,733 | ) | $ | (1,216 | ) | $ | (10,949 | ) | |||
Diluted net loss per share | $ | (0.03 | ) | $ | (0.03 | ) | $ | (0.04 | ) | $ | (0.04 | ) | ||||||||
Weighted average shares used in | ||||||||||||||||||||
computing diluted net loss | ||||||||||||||||||||
per share | 273,564 | 273,564 | 268,890 | 268,890 |
(a) These Unaudited non-GAAP Consolidated Statements of Operations are for informational purposes only and are not presented in accordance with GAAP. The adjustments necessary to provide a direct reconciliation of the non-GAAP to the GAAP basis consolidated statements of operations exclude stock-based compensation, payroll taxes on stock option exercises, and a benefit from excess inventory charges and restructuring charges and related asset impairments. |
Sycamore Networks, Inc. |
Year Ended July 31, 2004 | Year Ended July 31, 2003 | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
GAAP Results | Adjustments | Non-GAAP Results(a) | GAAP Results | Adjustments | Non-GAAP Results (a) | |||||||||||||||
Revenue | $ | 44,547 | $ | -- | $ | 44,547 | $ | 38,276 | $ | -- | $ | 38,276 | ||||||||
Cost of revenue | 28,397 | -- | 28,397 | 33,692 | 531 | 34,223 | ||||||||||||||
Stock-based compensation and | ||||||||||||||||||||
payroll tax on stock option | ||||||||||||||||||||
exercises | 711 | (711 | ) | -- | 1,412 | (1,412 | ) | -- | ||||||||||||
Gross profit | 15,439 | 711 | 16,150 | 3,172 | 881 | 4,053 | ||||||||||||||
Operating expenses: | ||||||||||||||||||||
Research and development | 45,681 | -- | 45,681 | 52,426 | -- | 52,426 | ||||||||||||||
Sales and marketing | 18,101 | -- | 18,101 | 19,756 | -- | 19,756 | ||||||||||||||
General and administrative | 7,365 | -- | 7,365 | 7,237 | -- | 7,237 | ||||||||||||||
Stock-based compensation and | ||||||||||||||||||||
payroll tax on stock option | ||||||||||||||||||||
exercises: | ||||||||||||||||||||
Research and development | 2,759 | (2,759 | ) | -- | 3,033 | (3,033 | ) | -- | ||||||||||||
Sales and marketing | 1,001 | (1,001 | ) | -- | 1,703 | (1,703 | ) | -- | ||||||||||||
General and administrative | 1,334 | (1,334 | ) | -- | 1,912 | (1,912 | ) | -- | ||||||||||||
Restructuring charges and related | ||||||||||||||||||||
asset impairments | -- | -- | -- | (4,447 | ) | 4,447 | -- | |||||||||||||
Total operating expenses | 76,241 | (5,094 | ) | 71,147 | 81,620 | (2,201 | ) | 79,419 | ||||||||||||
Loss from operations | (60,802 | ) | 5,805 | (54,997 | ) | (78,448 | ) | 3,082 | (75,366 | ) | ||||||||||
Interest and other income, net | 15,890 | -- | 15,890 | 23,342 | -- | 23,342 | ||||||||||||||
Net loss | $ | (44,912 | ) | $ | 5,805 | $ | (39,107 | ) | $ | (55,106 | ) | $ | 3,082 | $ | (52,024 | ) | ||||
Diluted net loss per share | $ | (0.17 | ) | $ | (0.14 | ) | $ | (0.21 | ) | $ | (0.20 | ) | ||||||||
Weighted average shares used in | ||||||||||||||||||||
computing diluted net loss | ||||||||||||||||||||
per share | 272,123 | 272,123 | 265,702 | 265,702 |
(a) These Unaudited non-GAAP Consolidated Statements of Operations are for informational purposes only and are not presented in accordance with GAAP. The adjustments necessary to provide a direct reconciliation of the non-GAAP to the GAAP basis consolidated statements of operations exclude stock-based compensation, payroll taxes on stock option exercises, and a benefit from excess inventory charges and restructuring charges and related asset impairments. |