CHELMSFORD, Mass. -- Sycamore Networks, Inc. (NASDAQ: SCMRE) today announced that its previously announced internal investigation into the accounting for certain stock options, which was conducted under the direction of the Audit Committee of its Board of Directors, and the review of resulting accounting implications, if any, is nearing completion. While there can be no assurance as to the final results or timing of the completion of the remaining work, the Company expects that the outcome of the investigation will not result in any material adjustment being required to be made to the Company's historical revenues, non-stock option related expenses or cash positions.

The Company also announced that it is now able to provide certain preliminary results for the fiscal quarter ended April 30, 2005. The Company reported estimated revenue for the quarter and nine months ended April 30, 2005 of $17.8 million and $47.0 million, respectively, compared to $14.7 million and $30.0 million, respectively, for the quarter and nine months ended April 24, 2004. The Company reported estimated cash, cash equivalents and investments at April 30, 2005 of $948.9 million, a decrease of $0.1 million from the prior quarter.

The preliminary financial results announced by the Company may be subject to change pending the completion of the investigation and the determination of the appropriate accounting treatments, if any, in light of the investigation findings, as well as completion of the Company's Report on Form 10-Q for the period ended April 30, 2005. The Company reported that it is currently unable to estimate when it will be able to file its Form 10-Q for the period ended April 30, 2005, but that it intends to do so as soon as practicable.

The investigation relates to the accounting for certain stock options granted during the period from 1999 to 2001, including whether additional stock compensation expenses should have been recorded in connection with these grants.

Sycamore Networks Inc.