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| [November 19, 2009] |
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Sycamore Networks, Inc. Reports First Quarter Fiscal Year 2010 Financial Results
CHELMSFORD, Mass. --(Business Wire)--
Sycamore Networks (News - Alert), Inc. (NASDAQ: SCMR), a leader in intelligent bandwidth management solutions for fixed line and mobile network operators worldwide, today reported its results for the first quarter of fiscal 2010 ended October 24, 2009. Revenue for the first quarter of fiscal 2010 was $15.6 million, compared with $15.4 million for the first quarter of fiscal 2009.
Net loss for the first quarter of fiscal 2010, on a generally accepted accounting principles ("GAAP") basis, was $10.4 million, or $0.04 per share, compared with a GAAP net loss of $5.8 million, or $0.02 per share for the first quarter of fiscal 2009. Non-GAAP net loss for the first quarter of fiscal 2010 was $3.2 million, or $0.01 per share, compared with non-GAAP net loss of $3.5 million, or $0.01 per share for the first quarter of fiscal 2009. A reconciliation between net loss on a GAAP basis and non-GAAP basis is provided in a table immediately following the Unaudited Non-GAAP Consolidated Statements of Operations included with this release.
On November 18, 2009 the Board of Directors of Sycamore Networks, Inc. approved a cash distribution of $1.00 per share of common stock. The cash distribution will be paid on December 15, 2009 to stockholders of record as of November 30, 2009.
In addition to the cash distribution, the Board of Directors also approved on November 18, 2009 a one-for-ten reverse stock split of the Company's common stock and corresponding amendment to the Company's Amended and Restated Certificate of Incorporation, which will be effective after the close of business on December 21, 2009.
"Sycamore's first quarter results demonstrate the positive effect of the cost reduction actions implemented over the past several months which contributed to significantly lower operating expenses and improved gross margins," said Daniel E. Smith, president and chief executive officer. "We have also taken important actions concerning the capital structure of the Company which we believe will provide near-term value to our stockholders. The Company retains a strong balance sheet with sufficient financial resources to fund our current business operations and to pursue strategic alternatives."
About Sycamore Networks
Sycamore Networks, Inc. (NASDAQ: SCMR) is a leading provider of intelligent bandwidth management solutions for fixed line and mobile network operators worldwide. From multiservice access networks to the optical core, 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 visit www.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 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.
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 constitute forward-looking statements regarding future events that involve risks and uncertainties. Readers are cautioned that actual results or events could differ materially from those stated or implied in the forward-looking statements. Other risks and uncertainties include, but are not limited to, actions, inquiries and findings that may result from certain stock option matters, including the restatement of previously issued financial statements; the Company's reliance on a limited number of customers; variation in the Company's quarterly results; industry pricing pressures and the high cost of product development required to remain competitive and keep pace with evolving features and technologies desired by customers; 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 most recent Quarterly Report on Form 10-Q and Annual Report on Form 10-K filed by the Company 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)
October 24,
July 31,
2009
2009
Assets
Current assets:
Cash and cash equivalents
$
350,362
$
347,696
Short-term investments
293,524
273,387
Accounts receivable, net
13,618
12,860
Inventories
13,998
16,058
Prepaids and other current assets
1,682
2,388
Total current assets
673,184
652,389
Property and equipment, net
10,013
13,342
Long-term investments
276,415
305,725
Other assets
363
357
Total Assets
$
959,975
$
971,813
Liabilities and Stockholders' Equity
Current liabilities:
Deferred revenue
$
8,846
$
11,003
Other current liabilities
13,563
14,034
Total current liabilities
22,409
25,037
Long term deferred revenue
5,069
4,530
Long term liability
1,707
1,821
Total liabilities
29,185
31,388
Common stock
284
284
Additional paid-in capital
2,041,124
2,040,061
Accumulated deficit
(1,111,747)
(1,101,355)
Other equity
1,129
1,435
Total stockholders' equity
930,790
940,425
Total Liabilities and Stockholders' Equity
$
959,975
$
971,813
Sycamore Networks, Inc.
Unaudited Consolidated Statements of Operations
(in thousands, except per share data)
Three Months Ended
October 24,2009
October 25,2008
Revenue
$
15,624
$
15,431
Cost of revenue
7,847
9,358
Gross profit
7,777
6,073
Operating expenses:
Research and development
8,672
11,455
Sales and marketing
2,585
4,074
General and administrative
2,308
1,735
Restructuring and related asset impairment
6,304
628
Total operating expenses
19,869
17,892
Loss from operations
(12,092)
(11,819)
Interest and other income, net
1,820
5,994
Loss before income taxes
(10,272)
(5,825)
Income tax expense (benefit)
120
(46)
Net loss
$
(10,392)
$
(5,779)
Net loss per share:
Basic
$
(0.04)
$
(0.02)
Diluted
$
(0.04)
$
(0.02)
Weighted average shares outstanding:
Basic
284,168
283,444
Diluted
284,168
283,444
Sycamore Networks, Inc.
Unaudited Non-GAAP Consolidated Statements of Operations
(in thousands, except per share data)
Three Months Ended
October 24,2009
October 25,2008
Revenue
$
15,624
$
15,431
Cost of revenue
7,645
9,019
Gross profit
7,979
6,412
Operating expenses:
Research and development
8,348
10,950
Sales and marketing
2,373
3,718
General and administrative
2,139
1,245
Total operating expenses
12,860
15,913
Loss from operations
(4,881)
(9,501)
Interest and other income, net
1,820
5,994
Loss before income taxes
(3,061)
(3,507)
Income tax expense (benefit)
120
(46)
Net loss
$
(3,181)
$
(3,461)
Net loss per share:
Basic
$
(0.01)
$
(0.01)
Diluted
$
(0.01)
$
(0.01)
Weighted average shares outstanding:
Basic
284,168
283,444
Diluted
284,168
283,444
Sycamore Networks, Inc.
Reconciliation of GAAP to Non-GAAP Net Loss
(in thousands, except per share data)
Three Months Ended
October 24,2009
October 25,2008
GAAP net loss
$
(10,392)
$
(5,779)
Stock-based compensation expense:
Cost of revenue
125
171
Research and development
324
505
Sales and marketing
212
356
General and administrative
169
176
Total stock based compensation expense
830
1,208
Amortization of purchased intangible assets
--
314
Restructuring and related asset impairment:
Operating expense
6,304
628
Cost of revenue
77
168
Non-GAAP net loss
$
(3,181)
$
(3,461)
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