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 SECOND QUARTER FISCAL
YEAR 2011 FINANCIAL RESULTS
CHELMSFORD, Mass., February 24, 2011 – Sycamore Networks, Inc. (NASDAQ: SCMR), today reported its results for the second quarter ended January 29, 2011. Revenue for the second quarter of fiscal 2011 was $12.2 million, compared with $16.2 million for the second quarter of fiscal 2010.
Net loss for the second quarter of fiscal 2011, on a generally accepted accounting principles (“GAAP”) basis, was $3.5 million, or $0.12 per share, compared with a GAAP net loss of $1.2 million, or $0.04 per share for the second quarter of fiscal 2010. Non-GAAP net loss for the second quarter of fiscal 2011 was $3.1 million, or $0.11 per share, compared with non-GAAP net loss of $0.5 million, or $0.02 per share for the second 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 six months of fiscal 2011, on a GAAP basis, was $10.0 million or $0.35 per share, compared with net loss of $11.6 million or $0.41 per share for the first six months of fiscal 2010. Non-GAAP net loss for the first six months of fiscal 2011 was $8.8 million, or $0.31 per share, compared with non-GAAP net loss of $3.6 million, or $0.13 per share for the first six 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 second quarter results reflect the continuing market challenges in our bandwidth management business,” said Daniel E. Smith, president and chief executive officer. “The level of engagement and interest from potential customers for our IQstream mobile broadband optimization solution remains high and we are excited about the opportunities we are pursuing.”
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 lower overall network costs, increase operational efficiencies, and rapidly deploy new revenue-generating services. Sycamore’s global customer base includes Tier 1 service providers, government agencies, and utility companies. For more information, please visitwww.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)
| Jan 29, 2011 | July 31, 2010 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 215,029 | $ | 104,416 | ||||
Short-term investments | 217,855 | 450,722 | ||||||
Accounts receivable, net | 10,488 | 14,168 | ||||||
Inventories | 11,288 | 11,175 | ||||||
Prepaids and other current assets | 1,920 | 1,873 | ||||||
Total current assets | 456,580 | 582,354 | ||||||
Property and equipment, net | 5,876 | 6,569 | ||||||
Long-term investments | 12,082 | 81,739 | ||||||
Other assets | 369 | 358 | ||||||
Total Assets | $ | 474,907 | $ | 671,020 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Current liabilities: | ||||||||
Deferred revenue | $ | 10,187 | $ | 10,930 | ||||
Other current liabilities | 8,903 | 10,455 | ||||||
Total current liabilities | 19,090 | 21,385 | ||||||
Long term deferred revenue | 2,757 | 3,918 | ||||||
Long term liability | 1,700 | 1,714 | ||||||
Total liabilities | 23,547 | 27,017 | ||||||
Common stock | 29 | 28 | ||||||
Additional paid-in capital | 1,577,611 | 1,759,520 | ||||||
Accumulated deficit | (1,126,204 | ) | (1,116,160 | ) | ||||
Other equity | (76 | ) | 615 | |||||
Total stockholders’ equity | 451,360 | 644,003 | ||||||
Total Liabilities and Stockholders’ Equity | $ | 474,907 | $ | 671,020 | ||||
Sycamore Networks, Inc.
Unaudited Consolidated Statements of Operations
(in thousands, except per share data)
| Three Months Ended | Six Months Ended | |||||||||||||||
| Jan 29, 2011 | Jan 23, 2010 | Jan 29, 2011 | Jan 23, 2010 | |||||||||||||
Revenue | $ | 12,157 | $ | 16,174 | $ | 23,866 | $ | 31,798 | ||||||||
Cost of revenue | 5,117 | 6,879 | 12,002 | 14,726 | ||||||||||||
Gross profit | 7,040 | 9,295 | 11,864 | 17,072 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 6,239 | 7,761 | 13,550 | 16,433 | ||||||||||||
Sales and marketing | 2,643 | 2,759 | 5,243 | 5,344 | ||||||||||||
General and administrative | 2,030 | 2,444 | 4,156 | 4,752 | ||||||||||||
Restructuring Expense | — | (88 | ) | — | 5,140 | |||||||||||
Asset impairment | — | — | — | 1,076 | ||||||||||||
Total operating expenses | 10,912 | 12,876 | 22,949 | 32,745 | ||||||||||||
Loss from operations | (3,872 | ) | (3,581 | ) | (11,085 | ) | (15,673 | ) | ||||||||
Interest and other income, net | 470 | 1,641 | 1,238 | 3,461 | ||||||||||||
Loss before income taxes | (3,402 | ) | (1,940 | ) | (9,847 | ) | (12,212 | ) | ||||||||
Income tax expense (benefit) | 103 | (727 | ) | 197 | (607 | ) | ||||||||||
Net loss | $ | (3,505 | ) | $ | (1,213 | ) | $ | (10,044 | ) | $ | (11,605 | ) | ||||
Net loss per share: | ||||||||||||||||
Basic | $ | (0.12 | ) | $ | (0.04 | ) | $ | (0.35 | ) | $ | (0.41 | ) | ||||
Diluted | $ | (0.12 | ) | $ | (0.04 | ) | $ | (0.35 | ) | $ | (0.41 | ) | ||||
Weighted average shares outstanding: | ||||||||||||||||
Basic | 28,531 | 28,420 | 28,491 | 28,418 | ||||||||||||
Diluted | 28,531 | 28,420 | 28,491 | 28,418 | ||||||||||||
Sycamore Networks, Inc.
Unaudited Non-GAAP Consolidated Statements of Operations
(in thousands, except per share data)
| Three Months Ended | Six Months Ended | |||||||||||||||
| Jan 29, 2011 | Jan 23, 2010 | Jan 29, 2011 | Jan 23, 2010 | |||||||||||||
Revenue | $ | 12,157 | $ | 16,174 | $ | 23,866 | $ | 31,798 | ||||||||
Cost of revenue | 5,016 | 6,762 | 11,482 | 14,407 | ||||||||||||
Gross profit | 7,141 | 9,412 | 12,384 | 17,391 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 6,179 | 7,496 | 13,343 | 15,844 | ||||||||||||
Sales and marketing | 2,534 | 2,517 | 4,965 | 4,890 | ||||||||||||
General and administrative | 1,922 | 2,235 | 3,900 | 4,374 | ||||||||||||
Total operating expenses | 10,635 | 12,248 | 22,208 | 25,108 | ||||||||||||
Loss from operations | (3,494 | ) | (2,836 | ) | (9,824 | ) | (7,717 | ) | ||||||||
Interest and other income, net | 470 | 1,641 | 1,238 | 3,461 | ||||||||||||
Loss before income taxes | (3,024 | ) | (1,195 | ) | (8,586 | ) | (4,256 | ) | ||||||||
Income tax expense (benefit) | 103 | (727 | ) | (197 | ) | (607 | ) | |||||||||
Net loss | $ | (3,127 | ) | $ | (468 | ) | $ | (8,783 | ) | $ | (3,649 | ) | ||||
Net loss per share: | ||||||||||||||||
Basic | $ | (0.11 | ) | $ | (0.02 | ) | $ | (0.31 | ) | $ | (0.13 | ) | ||||
Diluted | $ | (0.11 | ) | $ | (0.02 | ) | $ | (0.31 | ) | $ | (0.13 | ) | ||||
Weighted average shares outstanding: | ||||||||||||||||
Basic | 28,531 | 28,420 | 28,491 | 28,418 | ||||||||||||
Diluted | 28,531 | 28,420 | 28,491 | 28,418 | ||||||||||||
Sycamore Networks, Inc.
Reconciliation of GAAP to Non-GAAP Net Loss
(in thousands, except per share data)
| Three Months Ended | Six Months Ended | |||||||||||||||
| Jan 29, 2011 | Jan 23, 2010 | Jan 29, 2011 | Jan 23, 2010 | |||||||||||||
GAAP net loss | $ | (3,505 | ) | $ | (1,213 | ) | $ | (10,044 | ) | $ | (11,605 | ) | ||||
Stock-based compensation expense: | ||||||||||||||||
Cost of revenue | 101 | 130 | 181 | 255 | ||||||||||||
Research and development | 60 | 265 | 207 | 589 | ||||||||||||
Sales and marketing | 109 | 242 | 278 | 454 | ||||||||||||
General and administrative | 108 | 209 | 256 | 378 | ||||||||||||
Total stock based compensation expense | 378 | 846 | 922 | 1,676 | ||||||||||||
Asset impairment charge: | ||||||||||||||||
Operating expense | — | — | — | 1,076 | ||||||||||||
Restructuring and other asset impairments: | ||||||||||||||||
Operating expense | — | (88 | ) | — | 5,140 | |||||||||||
Cost of revenue | — | (13 | ) | 339 | 64 | |||||||||||
Non-GAAP net loss | $ | (3,127 | ) | $ | (468 | ) | $ | (8,783 | ) | $ | (3,649 | ) | ||||