EX-99.1
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SYCAMORE
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NETWORKS
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
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SYCAMORE NETWORKS, INC. TO FOCUS BUSINESS ON OPTICAL SWITCHING; COMPANY
PROVIDES UPDATE ON EXPECTED FOURTH QUARTER RESULTS
CHELMSFORD, Mass., June 19, 2002 - Sycamore Networks, Inc. (NASDAQ: SCMR)
today announced plans to focus its business on the intelligent optical
switching market with its SN 3000 and SN 16000 product lines. As a result
of this strategic initiative, the Company will halt the development of its
standalone transport systems, including the SN 8000 and the SN 10000. The
Company will leverage its expertise in transport technology to develop
advanced optical switching platforms with integrated transport
functionality.
"Sycamore has taken the decisive action we believe necessary to
successfully navigate though the current downturn in the telecommunications
industry," stated Dan Smith, Sycamore's president and CEO. "By
concentrating Sycamore's business plan on a growing market segment in which
we have proven technological differentiation, Sycamore moves forward as a
more focused optical switching competitor. These strategic initiatives will
allow Sycamore to preserve cash and better align the cost structure with
current market opportunities."
As a result of these actions, Sycamore will consolidate its engineering
organization and implement a restructuring of its operations. In the fourth
quarter, the Company expects to record restructuring and other charges in
the range of $45 to $55 million. These charges comprise the following:
o A $9 to $10 million charge related to workforce reductions of
approximately 235 employees;
o A $13 to $16 million charge for the consolidation of facilities and
certain other costs;
o A $22 to $27 million charge primarily related to the write-down of
transport related fixed assets; and
o A $1 to $2 million charge for the write-down of strategic equity
investments.
These actions are expected to result in quarterly cost savings of
approximately $15 to $18 million, which will be fully realized in the first
quarter of fiscal 2003. Sycamore currently anticipates fourth quarter
revenues for fiscal 2002 to be in the range of $5 million to $10 million.
The Company currently expects to record a fourth quarter pro forma net
loss, which excludes amortization of stock compensation, payroll tax on
stock option exercises and restructuring and other charges, in the range of
$19.5 million to $26.0 million, or $(0.08) to $(0.10) per share.
In a separate press release today, Sycamore announced the establishment of
a strategic alliance with Siemens Information and Communications Networks,
one of the world's largest telecommunications equipment providers. Under
this agreement, Siemens will resell Sycamore's optical switches on a global
basis and the two companies will work together on product and network
management integration activities.
Conference Call Webcast
Sycamore plans to review the items contained in this press release during a
conference call today beginning at 5:00 p.m. EDT. To participate
telephonically, please dial (212) 896-6099 at least 15 minutes prior to the
start of the call. The call also will be broadcast live over the Internet.
To listen to the Webcast, visit the investor relations section of
Sycamore's Web site, located at www.sycamorenet.com. Interested investors
are encouraged to log onto the Webcast at least 15 minutes prior to call.
Participating in the call will be Sycamore's president and chief executive
officer Daniel E. Smith and chief financial officer Frances M. Jewels. A
rebroadcast of the call will be available through audio archiving on
Sycamore's Web site. In addition, a telephone replay will be available for
48 hours, beginning at 8:00 p.m. EDT on June 19, 2002, and continuing until
8:00 p.m. EDT on June 21, 2002. To listen to the telephonic replay, dial
(800) 633-8284 (domestically) or (858) 812-6440 (internationally), and
designate reservation number 20685089.
About Sycamore Networks
Sycamore Networks (NASDAQ: SCMR) develops and markets intelligent optical
networking products for the telecommunications industry. An ISO 9001:2000
registered company, 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 at
www.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. The
Company's actual results 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; general economic conditions, including stock market volatility
and capital market conditions; conditions specific to the
telecommunications, Internet and related industries; 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 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.