FOR IMMEDIATE RELEASE |
CONTACT: | |||
Press Inquiries | Investor Inquiries | ||
Scott Larson | Terry Adams/Tom Nealon | ||
Public Relations | Investor Relations | ||
Sycamore Networks, Inc. | Sycamore Networks, Inc. | ||
978-250-3433 | 978-250-3460 | ||
scott.larson@sycamorenet.com | investor.info@sycamorenet.com |
SYCAMORE NETWORKS, INC. REPORTS SECOND QUARTER FISCAL YEAR 2005 |
CHELMSFORD, Mass., February 22, 2005 – Sycamore Networks, Inc. (NASDAQ: SCMR), a leader in optical networking, today reported its second quarter results for the period ended January 29, 2005. |
Revenue for the second quarter of fiscal 2005 was $14.9 million, compared with $6.9 million for the second quarter of fiscal 2004. |
Net loss for the second quarter of fiscal 2005, on a generally accepted accounting principles (GAAP) basis, was $5.3 million or $(0.02) per share, compared with a net loss of $13.0 million, or $(0.05) per share for the second quarter of fiscal 2004. Non-GAAP net loss for the second quarter of fiscal 2005, which excludes stock-based compensation and payroll taxes on stock option exercises, was $5.0 million, or $(0.02) per share, compared with a non-GAAP net loss of $11.0 million, or $(0.04) per share for the second quarter of fiscal 2004. 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 the first six months of fiscal 2005 was $29.1 million, compared with $15.3 million for the first six months of fiscal 2004. |
Net loss for the first six months of fiscal 2005, on a GAAP basis, was $13.1 million or $(0.05) per share, compared with a net loss of $25.2 million, or $(0.09) per share for the first six months of fiscal 2004. Non-GAAP net loss for the first six months of fiscal 2005, which excludes stock-based compensation and payroll taxes on stock option exercises, was $12.2 million, or $(0.04) per share, compared with a non-GAAP net loss of $21.7 million, or $(0.08) per share for the first six months of fiscal 2004. 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 saw improvements in our second quarter financial results, we remain cautious about the optical networking environment,” stated Daniel E. Smith, Sycamore’s president and chief executive officer. “We continue to work diligently with Morgan Stanley reviewing our strategic and financial alternatives to determine which may be in the best interest of our shareholders.” |
Conference Call Webcast Sycamore plans to review its second quarter results and discuss its business outlook during a conference call today beginning at 9:00 a.m. ET. 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.com under 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, Richard J. Gaynor. |
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 cost-effectively and easily transition their existing fiber optic network into a network 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 and financial alternatives; the commercial success of the Company’s line of optical networking products; the 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 success, 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. |
January 29, 2005 | July 31, 2004 | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 373,172 | $ | 45,430 | |||||||
Short-term investments | 396,187 | 482,274 | |||||||||
Accounts receivable, net | 10,074 | 10,605 | |||||||||
Inventories | 4,148 | 4,294 | |||||||||
Prepaids and other current assets | 4,686 | 3,611 | |||||||||
Total current assets | 788,267 | 546,214 | |||||||||
Property and equipment, net | 8,412 | 9,419 | |||||||||
Long-term investments | 179,613 | 433,621 | |||||||||
Other assets | 1,585 | 1,664 | |||||||||
Total Assets | $ | 977,877 | $ | 990,918 | |||||||
Liabilities and Stockholders' Equity | |||||||||||
Deferred revenue | $ | 3,721 | $ | 7,226 | |||||||
Other current liabilities | 15,717 | 15,321 | |||||||||
Restructuring liabilities | 10,276 | 12,005 | |||||||||
Total current liabilities | 29,714 | 34,552 | |||||||||
Deferred revenue | 1,427 | 926 | |||||||||
Total liabilities | 31,141 | 35,478 | |||||||||
Common stock | 275 | 274 | |||||||||
Additional paid-in capital | 1,744,327 | 1,740,293 | |||||||||
Accumulated deficit | (794,207 | ) | (781,104 | ) | |||||||
Other equity | (3,659 | ) | (4,023 | ) | |||||||
Total stockholders' equity | 946,736 | 955,440 | |||||||||
Total Liabilities and Stockholders' Equity | $ | 977,877 | $ | 990,918 | |||||||
Sycamore Networks, Inc. |
Three Months Ended | Six Months Ended | ||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
January 29, | January 24, | January 29, | January 24, | ||||||||||||||
2005 | 2004 | 2005 | 2004 | ||||||||||||||
Revenue | $ | 14,892 | $ | 6,875 | $ | 29,107 | $ | 15,316 | |||||||||
Cost of revenue | 8,402 | 4,240 | 16,942 | 9,959 | |||||||||||||
Stock-based compensation and payroll | |||||||||||||||||
tax on stock option exercises | 47 | 183 | 140 | 368 | |||||||||||||
Gross profit | 6,443 | 2,452 | 12,025 | 4,989 | |||||||||||||
Operating expenses: | |||||||||||||||||
Research and development | 11,216 | 11,745 | 22,886 | 23,042 | |||||||||||||
Sales and marketing | 3,008 | 4,341 | 6,152 | 8,751 | |||||||||||||
General and administrative | 1,931 | 1,482 | 4,176 | 3,450 | |||||||||||||
Stock-based compensation and payroll | |||||||||||||||||
tax on stock option exercises: | |||||||||||||||||
Research and development | 213 | 1,112 | 485 | 1,797 | |||||||||||||
Sales and marketing | 26 | 267 | 64 | 542 | |||||||||||||
General and administrative | 32 | 399 | 235 | 746 | |||||||||||||
Total operating expenses | 16,426 | 19,346 | 33,998 | 38,328 | |||||||||||||
Loss from operations | (9,983 | ) | (16,894 | ) | (21,973 | ) | (33,339 | ) | |||||||||
Interest and other income, net | 4,672 | 3,895 | 8,870 | 8,163 | |||||||||||||
Net loss | $ | (5,311 | ) | $ | (12,999 | ) | $ | (13,103 | ) | $ | (25,176) | ||||||
Diluted net loss per share | $ | (0.02 | ) | $ | (0.05 | ) | $ | (0.05 | ) | $ | (0.09 | ) | |||||
Weighted average shares used in computing | |||||||||||||||||
diluted net loss per share | 274,963 | 271,801 | 274,497 | 271,138 |
Sycamore Networks, Inc. |
Three Months Ended January 29, 2005 | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
GAAP Results | Adjustments | Non-GAAP Results (a) | |||||||||
Revenue | $ | 14,892 | $ | -- | $ | 14,892 | |||||
Cost of revenue | 8,402 | -- | 8,402 | ||||||||
Stock-based compensation and payroll tax on stock option exercises | 47 | (47 | ) | -- | |||||||
Gross profit | 6,443 | 47 | 6,490 | ||||||||
Operating expenses: | |||||||||||
Research and development | 11,216 | -- | 11,216 | ||||||||
Sales and marketing | 3,008 | -- | 3,008 | ||||||||
General and administrative | 1,931 | -- | 1,931 | ||||||||
Stock-based compensation and payroll tax on stock option exercises: | |||||||||||
Research and development | 213 | (213 | ) | -- | |||||||
Sales and marketing | 26 | (26 | ) | -- | |||||||
General and administrative | 32 | (32 | ) | -- | |||||||
Total operating expenses | 16,426 | (271 | ) | 16,155 | |||||||
Loss from operations | (9,983 | ) | 318 | (9,665 | ) | ||||||
Interest and other income, net | 4,672 | -- | 4,672 | ||||||||
Net loss | $ | (5,311 | ) | $ | 318 | $ | (4,993 | ) | |||
Diluted net loss per share | $ | (0.02 | ) | $ | (0.02 | ) | |||||
Weighted average shares used in computing diluted net loss per share | 274,963 | 274,963 |
Sycamore Networks, Inc. |
Three Months Ended January 24, 2004 | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
GAAP Results | Adjustments | Non-GAAP Results (a) | |||||||||
Revenue | $ | 6,875 | $ | -- | $ | 6,875 | |||||
Cost of revenue | 4,240 | -- | 4,240 | ||||||||
Stock-based compensation and payroll tax on stock option exercises | 183 | (183 | ) | -- | |||||||
Gross profit | 2,452 | 183 | 2,635 | ||||||||
Operating expenses: | |||||||||||
Research and development | 11,745 | -- | 11,745 | ||||||||
Sales and marketing | 4,341 | -- | 4,341 | ||||||||
General and administrative | 1,482 | -- | 1,482 | ||||||||
Stock-based compensation and payroll tax on stock option exercises: | |||||||||||
Research and development | 1,112 | (1,112 | ) | -- | |||||||
Sales and marketing | 267 | (267 | ) | -- | |||||||
General and administrative | 399 | (399 | ) | -- | |||||||
Total operating expenses | 19,346 | (1,778 | ) | 17,568 | |||||||
Loss from operations | (16,894 | ) | 1,961 | (14,933 | ) | ||||||
Interest and other income, net | 3,895 | -- | 3,895 | ||||||||
Net loss | $ | (12,999 | ) | $ | 1,961 | $ | (11,038 | ) | |||
Diluted net loss per share | $ | (0.05 | ) | $ | (0.04 | ) | |||||
Weighted average shares used in computing diluted net loss per share | 271,801 | 271,801 |
(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 and payroll taxes on stock option exercises. |
Sycamore Networks, Inc. |
Six Months Ended January 29, 2005 | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
GAAP Results | Adjustments | Non-GAAP Results (a) | |||||||||||||
Revenue | $ | 29,107 | $ | -- | $ | 29,107 | |||||||||
Cost of revenue | 16,942 | -- | 16,942 | ||||||||||||
Stock-based compensation and payroll tax on stock option exercises | 140 | (140 | ) | -- | |||||||||||
Gross profit | 12,025 | 140 | 12,165 | ||||||||||||
Operating expenses: | |||||||||||||||
Research and development | 22,886 | -- | 22,886 | ||||||||||||
Sales and marketing | 6,152 | -- | 6,152 | ||||||||||||
General and administrative | 4,176 | -- | 4,176 | ||||||||||||
Stock-based compensation and payroll tax on stock option exercises: | |||||||||||||||
Research and development | 485 | (485 | ) | -- | |||||||||||
Sales and marketing | 64 | (64 | ) | -- | |||||||||||
General and administrative | 235 | (235 | ) | -- | |||||||||||
Total operating expenses | 33,998 | (784 | ) | 33,214 | |||||||||||
Loss from operations | (21,973 | ) | 924 | (21,049 | ) | ||||||||||
Interest and other income, net | 8,870 | -- | 8,870 | ||||||||||||
Net loss | $ | (13,103 | ) | $ | 924 | $ | (12,179 | ) | |||||||
Diluted net loss per share | $ | (0.05 | ) | $ | (0.04 | ) | |||||||||
Weighted average shares used in computing diluted net loss per share | 274,497 | 274,497 |
Sycamore Networks, Inc. |
Six Months Ended January 24, 2004 | |||||||||||
GAAP Results | Adjustments | Non-GAAP Results (a) | |||||||||
Revenue | $ | 15,316 | $ | -- | $ | 15,316 | |||||
Cost of revenue | 9,959 | -- | 9,959 | ||||||||
Stock-based compensation and payroll | |||||||||||
tax on stock option exercises | 368 | (368 | ) | -- | |||||||
Gross profit | 4,989 | 368 | 5,357 | ||||||||
Operating expenses: | |||||||||||
Research and development | 23,042 | -- | 23,042 | ||||||||
Sales and marketing | 8,751 | -- | 8,751 | ||||||||
General and administrative | 3,450 | -- | 3,450 | ||||||||
Stock-based compensation and payroll | |||||||||||
tax on stock option exercises: | |||||||||||
Research and development | 1,797 | (1,797 | ) | -- | |||||||
Sales and marketing | 542 | (542 | ) | -- | |||||||
General and administrative | 746 | (746 | ) | -- | |||||||
Total operating expenses | 38,328 | (3,085 | ) | 35,243 | |||||||
Loss from operations | (33,339 | ) | 3,453 | (29,886 | ) | ||||||
Interest and other income, net | 8,163 | -- | 8,163 | ||||||||
Net loss | $ | (25,176 | ) | $ | 3,453 | $ | (21,723 | ) | |||
Diluted net loss per share | $ | (0.09 | ) | $ | (0.08 | ) | |||||
Weighted average shares used in computing diluted net loss per share | 271,138 | 271,138 |
(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 and payroll taxes on stock option exercises. |