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,      October 25,
                                            2009             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,        October 25,
                                      2009               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,      October 25,
                                             2009             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)

SOURCE: Sycamore Networks, Inc.

Sycamore Networks, Inc. 
Robert Travis, 978-250-3432 
Investor Relations 
bob.travis@sycamorenet.com 
or 
Scott Larson, 978-250-3433 
Press Inquiries 
scott.larson@sycamorenet.com

Participating in the call will be Daniel E. Smith, Sycamore's president and chief executive officer and Paul F. Brauneis, Sycamore's chief financial officer.

((Comments on this story may be sent to newsdesk@closeupmedia.com))

Expected next investor conference call information:
Conference Call Date: 11/19/2009
Conference Call Time (ET): 8:30 AM
Conference Call URL: http://ir.sycamorenet.com/phoenix.zhtml?c=94677&p=irol-irhome

Expected next investor conference call information:
Conference Call Date: 11/19/2009
Conference Call Time (ET): 8:30 AM
Conference Call URL: http://ir.sycamorenet.com/phoenix.zhtml?c=94677&p=irol-irhome