UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

February 21, 2012

Date of Report (Date of earliest event reported)

SONUS NETWORKS, INC.

(Exact Name of Registrant as Specified in its Charter)

4 TECHNOLOGY PARK DRIVE, WESTFORD, MASSACHUSETTS 01886

(Address of Principal Executive Offices) (Zip Code)

(978) 614-8100

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

The information in this Current Report on Form 8-K and the exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), otherwise subject to the liabilities of that Section or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 2.02. Results of Operations and Financial Condition.

On February 21, 2012, Sonus Networks, Inc. (the “Company”) issued a press release reporting financial results for the quarter ended December 31, 2011.  A copy of the press release is furnished as Exhibit 99.1 hereto.

Item 9.01. Financial Statements and Exhibits.

(d)                                 Exhibits

The following exhibit relating to Item 2.02 shall be deemed to be furnished, and not filed:

99.1                           Press release of Sonus Networks, Inc. dated February 21, 2012 reporting its financial results for the quarter ended December 31, 2011.

2

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

3

Exhibit Index

99.1                           Press release of Sonus Networks, Inc. dated February 21, 2012 reporting its financial results for the quarter ended December 31, 2011.

4

Exhibit 99.1

SONUS NETWORKS REPORTS 2011 FOURTH QUARTER AND FULL YEAR RESULTS

Reports Strong Session Border Controller Growth in 2011

Westford, MA, February 21, 2012 — Sonus Networks, Inc. (Nasdaq: SONS), a market leader in next-generation IP-based network solutions, today announced results for the quarter and year ended December 31, 2011 and provided its outlook for the quarter ending Friday, March 30, 2012 and the year ending December 31, 2012.

Fourth Quarter 2011 Highlights

·                  Total revenue was $74.3 million

·                  SBC total revenue, including maintenance and services, was $22.5 million, compared to $13.9 million in the third quarter of fiscal 2011 and $12.2 million in the fourth quarter of fiscal 2010

·                  SBC product revenue was $17.5 million, compared to $10.4 million in the third quarter of fiscal 2011 and $8.7 million in the fourth quarter of fiscal 2010

·                  Sonus added 12 new customers in the quarter, 11 of whom purchased SBC products and services

Full Year 2011 Highlights

·                  Total revenue was $259.7 million

·                  SBC total revenue, including maintenance and services, grew 46%, to $52.0 million, up from $35.6 million in fiscal 2010

·                  SBC product revenue grew 56%, to $37.9 million, up from $24.3 million in fiscal 2010

“We have made significant progress over the past year repositioning Sonus for growth,” said Ray Dolan, President and Chief Executive Officer.  “We will remain focused on high growth areas of

1

opportunity such as the Session Border Controller market and I believe we are well positioned to again outpace SBC industry growth expectations in 2012.”

Revenue for the fourth quarter of fiscal 2011 was $74.3 million, compared to $66.4 million in the third quarter of fiscal 2011 and $83.0 million in the fourth quarter of fiscal 2010.  GAAP net income for the fourth quarter of fiscal 2011 was $3.7 million, or $0.01 per diluted share, compared to net income of $1.9 million, or $0.01 per diluted share, in the third quarter of fiscal 2011 and net income of $11.4 million, or $0.04 per diluted share, in the fourth quarter of fiscal 2010.  Non-GAAP net income for the fourth quarter of fiscal 2011 was $5.4 million, or $0.02 per diluted share, compared to non-GAAP net income of $4.1 million, or $0.01 per diluted share, for the third quarter of fiscal 2011 and non-GAAP net income of $15.0 million, or $0.05 per diluted share, for the fourth quarter of fiscal 2010.

Revenue for fiscal 2011 was $259.7 million, compared to $249.3 million in fiscal 2010.  GAAP net loss in fiscal 2011 was $12.7 million, or $0.05 per share, compared to a net loss of $10.7 million, or $0.04 per share, in fiscal 2010.  Non-GAAP net loss in 2011 was $4.4 million, or $0.02 per share, compared to non-GAAP net income of $6.8 million, or $0.02 per diluted share, in fiscal 2010.

2012 First Quarter and Fiscal 2012 Outlook

The Company’s outlook is based on current indications for its business, which may change during the current quarter.  A reconciliation of the GAAP to non-GAAP outlook and a statement on the use of non-GAAP financial measures are included at the end of this press release.

For the first quarter of 2012, management provides the following outlook on a non-GAAP basis:

·                  Total revenue of $57 million to $59 million

·                  SBC total revenue, including maintenance and services, of $10 million to $11 million

·                  SBC product revenue of $7 million to $8 million

·                  Gross margins between 62% and 63%

·                  Operating expenses of $43 million to $44 million

·                  Loss per share between $0.02 and $0.03

·                  Cash and investments of approximately $375 million

2

·                  Basic and diluted shares of 280 million

Management provides the following outlook on a non-GAAP basis for the year ending December 31, 2012:

·                  Total revenue of $270 million to $280 million

·                  Full year overall revenue growth includes expected media gateway product revenue decline of approximately 10%, offset by strong SBC growth

·                  Total SBC revenue, including maintenance and services, between $75 million and $80 million, up 44% to 54%

·                  SBC product revenue between $60 million and $65 million, up 58% to 72%

·                  Gross margins between 59% and 61%

·                  Operating expenses between $165 million and $170 million

·                  Loss per share of $0.01 to $0.02

·                  Basic and diluted shares of 282 million

“Our outlook reflects seasonality typical for the first quarter as well as conservative spending expectations from our carrier customers in the first half of the year,” said Moe Castonguay, Senior Vice President and Chief Financial Officer. “We are providing a quarterly outlook, and will continue to do so over the course of the year in an effort to provide greater transparency into our business.”

Earnings Conference Call Details:

Sonus Networks will host a conference call to discuss its fourth quarter and full year 2011 financial results, business outlook and outlook for 2012 financial performance today at 4:45 p.m. ET.

To listen live via telephone:

Dial-in number: 800-954-0654

International Callers: +1 212- 231-2900

3

To listen via internet:

Sonus Networks will host a live audio webcast of the conference call.  To access the webcast, visit www.sonusnet.com, About Us, Investor Relations.

Replay information

A telephone playback of the conference call will be available shortly after the conclusion of the live event and can be accessed by calling 800-633-8284, or for international callers, +1 402-977-9140.  The reservation number for the replay is 21573853 and will be available until March 6, 2012.

Non-GAAP Financial Measures

Sonus Networks presents its financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”).  Many of our investors have requested that we disclose non-GAAP information because it is useful in understanding our ongoing performance and comparing it to our historical results, as our non-GAAP financial measures exclude certain non-cash and one-time charges or benefits.  Likewise, we use non-GAAP measures that exclude certain expenses, such as stock-based compensation expense, amortization of intangible assets and restructuring charges, in analyzing and assessing the overall performance of our business, making operating decisions, planning and forecasting future periods, and determining payments under compensation programs.  We exclude stock-based compensation expense and amortization of intangible assets because these charges are non-cash in nature.  We exclude restructuring charges because they are one-time events.  No adjustment to income taxes for non-GAAP items was required, as we were unable to recognize a tax benefit on domestic losses incurred in any of the periods presented.  We believe that non-GAAP financial measures, including gross profit, gross margin, operating expenses, net income (loss) and earnings (loss) per share, are useful when evaluating our ongoing operations and comparing them to our historical results, including our liquidity.

Whenever we use a non-GAAP financial measure, we provide a reconciliation of the non-GAAP financial measure to the most closely applicable GAAP financial measure.  Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measure.

4

Our non-GAAP financial measures are not presented in accordance with, nor are they intended to be a substitute for, GAAP financial measures.  In addition, our presentations of these measures may not be comparable to similarly titled measures used by other companies.  Our non-GAAP financial measures should not be considered alternatives for, or in isolation from, the financial information prepared and presented in accordance with GAAP.  Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as analytical tools.  In particular, many of the adjustments to our GAAP financial measures reflect the exclusion of items that are recurring and will be reflected in our financial results for the foreseeable future.

###

About Sonus Networks

Sonus Networks, Inc. is a leader in IP networking with proven expertise in delivering secure, reliable and scalable next generation infrastructure and subscriber solutions.  With customers in over 50 countries across the globe and over a decade of experience in transforming networks to IP, Sonus has enabled service providers and enterprises to capture and retain users and generate significant ROI.  Sonus products include media and signaling gateways, policy & routing servers, session border controllers and subscriber feature servers.  Sonus products are supported by a global services team with experience in design, deployment and maintenance of some of the world’s largest and most complex IP networks. For more information, visit http://www.sonusnet.com and the Sonus in Session blog.

Cautionary Note Regarding Forward-Looking Statements

This release contains “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 regarding future events that involve risks and uncertainties.  All statements other than statements of historical facts contained in this release, including statements regarding our future results of operations and financial position, performance, customer growth, business strategy, plans and objectives of management for future operations are forward-looking statements.  Without limiting the foregoing, the words “anticipates,” “believes”, “estimates”, “expects”, “intends”, “plans”, “believes”, “outlook,” and other similar language, whether in the negative or affirmative, are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.  Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions.  Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict.

Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including, but not limited to, the timing of our recognition of revenues; our ability to recruit and retain key personnel; difficulties supporting our new strategic focus on channel sales; difficulties expanding our customer base; difficulties leveraging market opportunities; difficulties providing solutions that meet the needs of customers; market acceptance of our products and services; rapid technological and market change; our ability to protect our intellectual property rights; our ability to maintain partner, reseller, distribution and vendor support and supply relationships; higher risks in international operations and markets; the impact of increased competition; currency fluctuations; litigation; changes in the market price of our common stock; actions taken by significant stockholders; and/or failure or circumvention of our controls and procedures.  These statements involve known and

5

unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

We therefore caution you against relying on any of these forward-looking statements.  Important factors that could cause actual results to differ materially from those in these forward-looking statements are discussed by reference to the factors described in Item 1A, “Risk Factors” of Part I and Items 7 and 7A, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Quantitative and Qualitative Disclosures about Market Risk”, respectively, of Part II in the Company’s most recent Annual Report on Form 10-K, and in the Company’s quarterly reports filed thereafter in Part I, Items 2 and 3 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Quantitative and Qualitative Disclosures About Market Risk”, and Part II, Item 1A, “Risk Factors”.

Any forward-looking statement made by the Company in this release speaks only as of the date on which it is made.  Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for Sonus to predict all of them.  Sonus undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

Sonus is a registered trademark of Sonus Networks, Inc.  All other company and product names may be trademarks of the respective companies with which they are associated.

For more information, please contact:

6

SONUS NETWORKS, INC.

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

(unaudited)

SONUS NETWORKS, INC.

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

(unaudited)

SONUS NETWORKS, INC.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

SONUS NETWORKS, INC.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

SONUS NETWORKS, INC.

Supplemental Information

(In thousands)

(unaudited)

The following tables provide the details of stock-based compensation and amortization of intangible assets included in the Company’s Condensed Consolidated Statements of Operations (unaudited) and the line items in which these amounts are reported.  Additional information regarding these items is available in the Investor Relations section of our website at http://www.sonusnet.com.  The information contained on our website or that can be accessed through our website should not be considered to be part of, or incorporated into, this press release.

SONUS NETWORKS, INC.

Reconciliation Between GAAP and Non-GAAP Financial Measures

(In thousands, except percentages and per share amounts)

(unaudited)

The tables below include non-GAAP financial measures derived from our Condensed Consolidated Statements of Operations (unaudited).  These non-GAAP financial measures of Gross profit, Gross margin, Operating expenses, Net income (loss) and Earnings (loss) per share are not presented in accordance with, nor are they intended to be a substitute for, accounting principles generally accepted in the United States of America (“GAAP”).  In addition, our presentations of these measures may not be comparable to similarly titled measures used by other companies.  The non-GAAP financial measures described below should not be considered alternatives for, or in isolation from, the financial information prepared and presented in accordance with GAAP.

We use a number of different financial measures, both GAAP and non-GAAP, in analyzing and assessing the overall performance of our business, in making operating decisions, planning and forecasting future periods and determining payments under compensation programs.  We consider the use of these non-GAAP financial measures helpful in assessing the core performance of our continuing operations and liquidity, and when planning and forecasting future periods.  These items for the periods presented are Stock-based compensation expense, Amortization of intangible assets and Restructuring.

Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool.  In particular, many of the adjustments to the Company’s GAAP financial measures reflect the exclusion of items that are recurring and will be reflected in the Company’s financial results for the foreseeable future.                                                                                                                   

*  In periods of net income, diluted earnings per share is presented.

SONUS NETWORKS, INC.

Reconciliation Between GAAP and Non-GAAP Financial Measures

(In thousands, except percentages and per share amounts)

(unaudited)

* In periods of net income, diluted earnings per share is presented.

SONUS NETWORKS, INC.

Reconciliation Between GAAP and Non-GAAP Financial Measures

(In millions, except percentages and per share amounts)

(unaudited)