Table of ~~December 31, 2017, the Company had outstanding off-balance sheet third-party manufacturing, component purchase, and other general and administrative commitments of $192.3 million.~~Contents

Other Guarantees and Obligations

In the ordinary course of business, the Company may provide indemnifications of varying scope and terms to customers, vendors, lessors, business partners, purchasers of assets or subsidiaries and other parties with respect to certain matters, including, but not limited to, losses arising out of the Company's breach of agreements or representations and warranties made by the Company, services to be provided by the Company, intellectual property infringement claims made by third parties or, with respect to the sale of assets of a subsidiary, matters related to the Company's conduct of business and tax matters prior to the sale. From time to time, the Company indemnifies customers against combinations of loss, expense, or liability arising from various triggering events relating to the sale and use of its products and services.

In addition, the Company also provides indemnification to customers against claims related to undiscovered liabilities, additional product liability, or environmental obligations. The Company has also entered into indemnification agreements with its directors, officers, and certain other personnel that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers of the Company or certain of its affiliated entities. The Company maintains director and officer liability insurance, which may cover certain liabilities arising from its obligation to indemnify its directors, officers, and certain other personnel in certain circumstances. It is not possible to determine the aggregate maximum potential loss under these agreements due to the limited history of prior claims and the unique facts and circumstances involved in each particular claim. Such indemnification obligations might not be subject to maximum loss clauses. Historically, the Company has not incurred material costs as a result of obligations under these agreements and it has not accrued any liabilities related to such indemnification obligations in the condensed consolidated financial statements.

Claims and Litigation

On ~~October 12, 2012, GN Netcom,~~January 23, 2018, FullView, Inc. ~~("GN") sued the Company~~filed a complaint in the United States District Court of the Northern District of California against Polycom, Inc. alleging infringement of two patents and thereafter filed a similar complaint in connection with the same patents in Canada. Polycom thereafter filed an inter partes reexamination ("IPR") of one of the patents, which was then appealed to Federal Circuit Court. Litigation in both matters in the United States and Canada, respectively, were stayed pending the results of that appeal. Polycom also filed an IPR of the second patent and the U.S." Patent Trial and Appeal Board (“PTAB”) denied institution of the IPR petition. FullView also initiated arbitration proceedings under a terminated license agreement with Polycom alleging that Polycom had failed to pay certain royalties due under that agreement. The arbitration panel awarded an immaterial amount to FullView. FullView filed a First and Second Amended Complaint and Polycom filed a motion to dismiss. The Court granted Polycom's partial motion to dismiss without prejudice and invalidated one of the patents in suit. Litigation on the remaining patent is ongoing.

On June 21, 2018, directPacket Research Inc. filed a complaint alleging patent infringement by Polycom, Inc. in the United States District Court for the Eastern District of ~~Delaware (“Court”), alleging violations~~Virginia, Norfolk Division. The Court granted Polycom’s Motion to Transfer Venue to the Northern District of California. Polycom filed petitions for IPR of the ~~Sherman Act,~~asserted patents which were granted by the ~~Clayton Act,~~PTAB. The District Court matter was stayed pending resolution of the IPRs. After oral argument held in October 2020, on January 11, 2021, the PTAB issued final written decisions invalidating two of the asserted patents. The remaining claims of the third patent were unasserted against the Company. On February 12, 2021, directPacket filed a notice of appeal to the United States Court of Appeals for the Federal Circuit with respect to the PTAB’s final written decision regarding the ’588 patent. On March 15, 2021, Polycom filed a notice of appeal to the United States Court of Appeals for the Federal Circuit with respect to the PTAB’s final written decision regarding the ’978 patent. On December 13, 2021, the Court issued an affirmance of the decision regarding the invalidity of all asserted claims of the ‘978 patent. On January 27, 2022, the Court vacated the PTAB’s finding that certain claims were invalid as obvious and ~~Delaware common law. In its~~remanded the case for further proceedings at the PTAB. Litigation is ongoing.

On November 15, 2019, Felice Bassuk, individually and on behalf of others similarly situated, filed a complaint ~~GN specifically alleged four causes of action: monopolization, attempted monopolization, concerted action in restraint of trade, and tortious interference with business relations. GN claimed that~~against the Company, ~~dominates~~its former CEO, Joseph Burton, its CFO, Charles Boynton, and its former CFO, Pamela Strayer, alleging various securities law violations. The Company disputes the ~~market for headsets sold into contact centers in~~allegations. The Court appointed lead plaintiff and lead counsel and renamed the ~~U.S.~~action “In re Plantronics, Inc. Securities Litigation” on February 13, 2020. Plaintiffs filed the amended complaint on June 5, 2020 and ~~that a critical channel for sales of headsets to contact centers is through a limited network of specialized independent distributors (“SIDs”). GN asserted that~~ the Company ~~attracts SIDs through exclusive distributor agreements~~filed a Motion to Dismiss the Amended Complaint on August 7, 2020. Plaintiffs filed their opposition on October 2, 2020 and ~~alleged that~~ the ~~use~~Company replied on November 16, 2020. The hearing scheduled for January 13, 2021 was vacated and on March 29, 2021, the Court issued its order granting the Company’s motion to dismiss, but allowing the Plaintiffs leave to amend their complaint. On April 13, 2021, pursuant to the parties’ mutual agreement, the Court issued its order granting a stipulation and scheduling order which provides the plaintiffs until June 15, 2021 (subsequently extended to June 22, 2021) to consider whether or not to file a second amended complaint, and if filed, allowing defendants until August 16, 2021 to file a motion to dismiss, with plaintiffs’ opposition to such motion due on or before September 30, 2021, and with

Table of ~~these agreements~~Contents

defendants’ reply to be filed on or before November 1, 2021. The Plaintiff filed its second amended complaint on June 22, 2021 and the Company filed its Motion to Dismiss on September 7, 2021. The court is ~~illegal. GN sought injunctive relief, total damages~~expected to rule based on the briefs without a hearing and the parties are awaiting the court's ruling.

On December 17, 2019, Cisco Systems, Inc. filed a First Amended Complaint for Trade Secret Misappropriation against Plantronics, Inc. and certain individuals which amends a previously filed complaint against certain other individuals. The Company disputes the allegations. The Company filed a Motion to Dismiss and the Court granted the Motion with leave to amend as to defendants He, Chung and Williams, granted the Motion to Compel Arbitration for defendant Williams and granted in part and denied in part the Motion to Dismiss by defendants Puorro and the Company. Cisco filed an ~~unspecified amount, plus attorneys’ fees~~Amended Complaint and ~~costs, as well as unspecified legal and equitable relief.~~

~~The case was tried~~the defendants moved to ~~a jury in October, 2017, resulting in a verdict in favor~~dismiss or strike portions of the ~~Company. GN~~Amended Complaint. The Court granted in part and denied in part the Motion to Dismiss. On September 10, 2020, the Company filed a Motion for Protective Order and a Motion to Strike and Challenge the Sufficiency of Cisco’s Trade Secret Disclosure. On December 21, 2020, the Court granted in part and denied in part such Motions. On December 30, 2020, Cisco filed a motion for ~~new trial in November, 2017,~~leave to file a Motion for Reconsideration. On January 11, 2021 the Company filed its opposition. The Court issued its Case Management and ~~that motion~~Pretrial order setting a settlement conference which occurred on April 1, 2021. During such mediation conference, the parties were unable to reach settlement. The Texas arbitration proceeding between Mr. Williams and Cisco was ~~denied~~settled pursuant to an agreement by the parties, and Mr. Williams was dismissed with prejudice from both that proceeding and from the district court action. On August 13, 2021, Mr. He settled with Cisco pursuant to which he will be permanently enjoined and forever prohibited from receiving, using, and/or distributing Cisco Confidential Business Information except in limited circumstances. Discovery is ongoing.

On July 22, 2020, Koss Corporation filed a complaint alleging patent infringement by the Company and Polycom, Inc. in the United States District Court ~~in January, 2018.~~for the Western District of Texas, Waco Division. The Company answered the Complaint on October 1, 2020 disputing the claims. On December 18, 2020, the Company filed a ~~motion for attorneys’ fees in~~Motion to Transfer Venue to the Northern District of California. On January 29, 2021, the plaintiff amended its infringement contentions to add new accused products. On February 12, 2021, the plaintiff filed its opposition to the Motion to Transfer. On May 20, 2021, the judge granted the Company’s Motion to Transfer Venue to the Northern District of California. On November ~~2017 and that motion was denied by~~1, 2021, the ~~Court in January, 2018. The~~ Company filed a ~~motion for certain recoverable costs,~~Motion to Dismiss the suit with the District Court on the grounds of non-patentable subject matter. The Court will rule based on the briefs without a hearing and the parties ~~stipulated to an immaterial amount, which GN will pay~~are awaiting the ~~Company. If the jury verdict were to be overturned on appeal, the Company would have to repay that amount to GN. GN has not indicated whether it plans to file an appeal of the jury’s verdict.~~Court's ruling.

In a letter dated May 1, 2017, the Company received a Notice of Proposed Debarment from the General Services Administration ("GSA") informing the Company that the GSA has proposed that the Company be debarred from participation in Federal procurement and non-procurement programs based on the above spoliation order issued in the GN litigation matter. The Company submitted a response to the GSA demonstrating that it is a responsible contractor and that a suspension or debarment is neither necessary to protect the government nor warranted. The GSA found “no cause” for debarment of Plantronics and terminated the proceeding against the Company in August 2017.

In addition to the specific ~~matter~~matters discussed above, the Company is involved in various legal proceedings and investigations arising in the normal course of conducting business. ~~For such legal proceedings, where~~Where applicable, in relation to the matters described above, the Company has accrued an amount that reflects the aggregate liability deemed probable and estimable, but this amount is not material to the Company's financial condition, results of operations, or cash flows. ~~With respect to proceedings for which no accrual has been made, the~~The Company is not able to estimate an amount or range of any reasonably possible ~~additional losses~~loss, including in excess of any amount accrued, because of the preliminary nature of many of these proceedings, the difficulty in ascertaining the applicable facts relating to many of these proceedings, the variable treatment of claims made in many of these proceedings, and the difficulty of predicting the settlement value of many of these proceedings.

However, based upon the Company's historical experience, the resolution of these proceedings is not expected to have a material effect on the Company's financial condition, results of operations or cash flows. The Company may incur substantial legal fees, which are expensed as incurred, in defending against these legal proceedings.

7. DEBT

~~5.50%~~The carrying value of the Company's outstanding debt as of January 1, 2022 and April 3, 2021 was as follows:


(in thousands)	January 1, 2022		April 3, 2021
4.75% Senior Notes	$	494,549	$	493,985
5.50% Senior Notes	—		478,807
Term loan facility	1,004,679		1,002,079

As of January 1, 2022 and April 3, 2021, the net unamortized discount, premium, and debt issuance costs on the Company's outstanding debt were $17.6 millionand $22.6 million, respectively.

4.75% Senior Notes

~~In May 2015,~~On March 4, 2021, the Company issued $500.0 million aggregate principal amount of ~~5.50% senior notes (the “5.50%~~4.75% Senior ~~Notes”).~~Notes. The ~~5.50%~~4.75% Senior Notes mature on ~~May 31, 2023,~~March 1, 2029 and bear interest at a rate of ~~5.50%~~4.75% per annum, payable semi-annually on ~~May~~ March 1 and

15 ~~and November 15,~~

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September 1 of each year, commencing on ~~November 15, 2015.~~September 1, 2021. The Company received ~~net~~ proceeds of ~~$488.4~~$493.9 million from ~~the~~ issuance of the ~~5.50%~~4.75% Senior Notes, net of issuance costs of ~~$11.6~~$6.1 million, which are presented in the condensed consolidated balance sheets as a reduction to the outstanding amount payable and are being amortized to interest expense using the straight-line method, which approximates the effective interest method for this debt, over the term of the ~~5.50%~~4.75% Senior ~~Notes using the effective interest method.~~Notes. A portion of the proceeds was used to repay ~~all then-outstanding amounts under our revolving line of credit agreement with Wells Fargo Bank and~~ the ~~remaining proceeds were used primarily for share repurchases.~~

~~The fair value~~outstanding principal of the 5.50% Senior Notes ~~was determined based~~ on inputs that were observable in the market, including the trading price of the 5.50% Senior Notes when available (Level 2). The estimated fair value and carrying value of the 5.50% Senior Notes were as follows:May 17, 2021.

March 31, 2017 December 31, 2017
(in thousands) Fair Value Carrying Value Fair Value Carrying Value
5.50% Senior Notes $ 505,150
$ 491,059
$ 520,425
$ 492,146

The Company may redeem all or a part of the ~~5.50%~~4.75% Senior Notes, upon not less than 30a 15-day or more than a ~~60 day notice;~~60-day notice, however, the applicable redemption price will be determined as follows:

Redemption Period Requiring Payment of:

Redemption Up To ~~35%~~40% Using Cash Proceeds From An Equity Offering⁽³⁾:

Make-Whole⁽¹⁾

Premium⁽²⁾

Date

~~Specified~~Specific Price

~~5.50%~~4.75% Senior Notes

Prior to ~~May 15, 2018~~March 1, 2024

On or after ~~May 15, 2018~~March 1, 2024

Prior to ~~May 15, 2018~~March 1, 2024

~~105.500%~~104.75%

⁽¹⁾If the Company redeems the notes prior to the applicable date, the ~~redemption~~ price is principal plus a make-whole premium, ~~equal to~~which means, the greater of (i) 1.0% of the principal or (ii) the excess of the present value of the ~~remaining scheduled~~redemption price at March 1, 2024 plus interest ~~payments as described in~~through March 1, 2024 over the ~~applicable indenture, together with accrued and unpaid interest.~~principal amount.

⁽²⁾If the Company redeems the notes on or after the applicable date, the price is principal plus a premium which declines over time, as specified in the applicable indenture, together with accrued and unpaid interest.

⁽³⁾If the Company redeems the notes prior to the applicable date with net cash proceeds of one or more equity offerings, the price is equal to the amount specified above, together with accrued and unpaid interest, subject to a maximum redemption of ~~35%~~40% of the aggregate principal amount of the respective note being ~~redeemed.~~redeemed and at least 50% of the aggregate principal amount remains outstanding immediately after any such redemption (unless the notes are redeemed or repurchased substantially concurrently).

In addition, upon the occurrence of certain change of control triggering events, the Company may be required to repurchase the ~~5.50%~~4.75% Senior Notes, at a price equal to 101% of their principal amount, plus accrued and unpaid interest to the date of repurchase. The ~~5.50%~~4.75% Senior Notes contain restrictive covenants that, among other things, limit the ~~Company's~~ ability ~~to create certain liens~~of the Company and ~~enter into sale and leaseback transactions; create, assume,~~its restricted subsidiaries to incur or guarantee additional indebtedness, make certain investments and other restricted payments, transfer and sell assets, create liens, enter into transactions with affiliates, and engage in mergers, consolidations, or sales of ~~its subsidiaries without such subsidiary guaranteeing~~assets.

5.50% Senior Notes

In May 2015, the Company issued $500.0 million aggregate principal amount of 5.50% Senior Notes. The 5.50% Senior Notes mature on May 31, 2023, and bear interest at a rate of 5.50% per annum, payable semi-annually on May 15 and November 15 of each year, commencing on November 15, 2015. The Company received net proceeds of $488.4 million from issuance of the 5.50% Senior Notes, ~~on an unsecured unsubordinated basis; and consolidate or merge with, or convey, transfer or lease all or substantially all~~net of issuance costs of $11.6 million, which are being amortized to interest expense over the term of the ~~assets~~5.50% Senior Notes using the straight-line method, which approximates the effective interest method for this debt. A portion of the ~~Company and its subsidiaries~~proceeds was used to ~~another person. As~~repay all then-outstanding amounts under the Company's revolving line of ~~December 31, 2017, the Company was in compliance with all covenants.~~

~~Revolving Credit Agreement~~

~~On May 9, 2011, the Company entered into a~~ credit agreement with Wells Fargo Bank and the remaining proceeds were used primarily for share repurchases.

On May 17, 2021, the Company used a portion of the proceeds from the 4.75% Senior Notes to redeem the outstanding principal and accrued interest of the 5.50% Senior Notes of $493.9 million.

Term Loan Facility

In connection with the acquisition of Polycom completed on July 2, 2018, the Company entered into a Credit Agreement with Wells Fargo Bank, National Association, ("as administrative agent, and the ~~Bank"~~lenders party thereto (the “Credit Agreement.”), The Credit Agreement replaced the Company’s prior revolving credit facility in its entirety. The Credit Agreement provides for (i) a revolving credit facility with an initial maximum aggregate amount of availability of $100 million that matures in July 2023 and (ii) a $1.275 billion term loan facility priced at LIBOR plus 2.50% due in quarterly principal installments commencing on the last business day of March, June, September and December beginning with the first full fiscal quarter ending after the closing date under the Credit Agreement for the aggregate principal amount funded on the closing date under the Credit Agreement multiplied by 0.25% (subject to prepayments outlined in the Credit Agreement) and all remaining outstanding principal due at maturity in July 2025. The Company has paid the full amount of term debt principal due prior to maturity. The Company borrowed the full amount available under the term loan facility of $1.245 billion, net of approximately $30 million of discounts and issuance costs which ~~was most recently amended on April 28, 2017 (as amended, the "Amended Credit Agreement")~~are being amortized to ~~extend~~interest expense over the term of the Credit Agreement ~~by one year~~using the straight-line method, which approximates the effective interest method for this debt. The proceeds from the initial borrowing under the Credit Agreement were used to ~~May 9, 2020,~~finance the acquisition of Polycom, to refinance certain debt of Polycom, and to ~~amend~~pay related

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fees, commissions and transaction costs. The Company has additional borrowing capacity under the Credit Agreement through the revolving credit facility, which could be used to provide ongoing working capital and capital for other general corporate purposes of the Company and its subsidiaries. The Company’s obligations under the Credit Agreement are currently guaranteed by Polycom and will from time to time be guaranteed by, subject to certain exceptions, any domestic subsidiaries that may become material in the future. Subject to certain exceptions, the Credit Agreement is secured by first-priority perfected lien on, and security interests in, substantially all of the personal property of the Company and each subsidiary guarantor and will from time to time also be secured by certain material real property that the Company or any subsidiary guarantor may acquire. Borrowings under the Credit Agreement bear interest due on a quarterly basis at a variable rate equal to (i) LIBOR plus a specified margin, or (ii) the base rate (which is the highest of (a) the prime rate publicly announced from time to time by Wells Fargo Bank, National Association, (b) the federal funds rate plus 0.50% or (c) the sum of 1% plus one-month LIBOR) plus a specified margin. The Company must also pay (i) an unused commitment fee ranging from 0.200% to 0.300% per annum of the average daily unused portion of the aggregate revolving credit commitments under the Credit Agreement, and (ii) a per annum fee equal to (a) for each performance standby letter of credit outstanding under the Credit Agreement with respect to non-financial contractual obligations, 50% of the applicable margin over LIBOR under the revolving credit facility in effect from time to time multiplied by the daily amount available to be drawn under such letter of credit, and (b) for each other letter of credit outstanding under the Credit Agreement, the applicable margin over LIBOR under the revolving credit facility in effect from time to time multiplied by the daily amount available to be drawn under such letter of credit.

On December 29, 2021, the Company entered into Amendment No. 3 to Credit Agreement (“Amendment No. 3”) by and among the Company, the financial institutions party thereto as lenders, and Wells Fargo Bank, National Association, as administrative agent. Amendment No. 3 amended the Credit Agreement, as previously amended, to (i) increase the maximum Secured Net Leverage Ratio (as defined in the Credit Agreement) permitted to 3.75 to 1.00 as of the end of any fiscal quarter ending during the period beginning on January 2, 2022 through December 31, 2022 and to 3.00 to 1.00 as of the end of any fiscal quarter ending thereafter, except that the maximum Secured Net Leverage Ratio shall be deemed to be 3.00 to 1.00 at all times for purposes of determining pro forma compliance with each Specified Pro Forma Financial Covenant Test (as defined in the Credit Agreement).

Additionally, Amendment No. 3 modified the calculation of the Secured Net Leverage Ratio solely for purposes of determining compliance with Section 7.11(a) of the Credit Agreement for any fiscal quarter ending between January 2, 2022 through December 31, 2022 by amending the definition of Consolidated EBITDA to (a) limit the aggregate amount added back pursuant to clause (vii) thereof (relating to certain acquisition expenses) to the greater of $30,000,000 and 10% of Consolidated EBITDA for such Measurement Period (as defined in the Credit Agreement) (calculated before giving effect to any such expenses to be added back pursuant to such clause (vii) for such Measurement Period), (b) limit the aggregate amount added back pursuant to clause (vii) thereof in respect of integration expenses related to the Polycom Acquisition (as defined in the Credit Agreement) to $30,000,000, and (c) limit the aggregate amount added back pursuant to clause (viii) thereof (relating to certain non-recurring or unusual items reducing consolidated net income) to the greater of $30,000,000 and 10% of Consolidated EBITDA for such Measurement Period (calculated before giving effect to any such items to be added back pursuant to such clause (viii) for such Measurement Period).

The financial covenants under the Credit Agreement, as amended, are for the benefit of the revolving credit lenders only and do not apply to any other debt of the Company. The Credit Agreement also contains various other restrictions and covenants, some of which have become more stringent over time, including restrictions on our, and certain of our subsidiaries, ability to consolidate or merge, create liens, incur additional indebtedness, dispose of assets, consummate acquisitions, make investments, and pay dividends and other distributions. The Company has the unilateral ability to terminate the revolving line of credit such that the financial covenants ~~which~~described above are ~~defined below.~~

no longer applicable. The ~~Amended~~ Credit Agreement ~~provides for~~also contains customary events of default. If an event of default under the Credit Agreement occurs and is continuing, then the lenders may declare any outstanding obligations under the Credit Agreement to be immediately due and payable; provided, however, that the occurrence of an event of default as a ~~$100.0 million unsecured~~result of a breach of a financial covenant under the Credit Agreement does not constitute a default or event of default with respect to any term facility under the Credit Agreement unless and until the required revolving lenders shall have terminated their revolving commitments and declared all amounts outstanding under the revolving credit ~~facility. Revolving loans~~facility to be due and payable. In addition, if the Company, any subsidiary guarantor or, with certain exceptions, any other subsidiary becomes the subject of voluntary or involuntary proceedings under any bankruptcy, insolvency or similar law, then any outstanding obligations under the Credit Agreement will automatically become immediately due and payable. Loans outstanding under the Credit Agreement will bear interest at ~~the Company’s election, at (i) the Bank’s announced prime~~a rate ~~less 1.20%~~of 2.00% per annum in excess of the otherwise applicable rate (i) while a payment or bankruptcy event of default exists or (ii) ~~a daily one-month LIBOR rate plus 1.40% per annum. Interest is payable quarterly~~upon the lenders’ request, during the continuance of any other event of default. As of January 1, 2022, the Company was in ~~arrears on the first day of each of April, July, October and January. Principal, together~~compliance with all ~~accrued and unpaid interest, on the revolving loans is due and payable on May 9, 2020. The Company is also obligated to pay a commitment fee~~financial covenants.

Table of ~~0.37% per annum on the average daily unused amount of the revolving line of credit, which fee shall be payable quarterly in arrears on the first day of each of April, July, October and January.~~Contents

The Company may prepay the loans and terminate the commitments under the Credit Agreement at any time without ~~premium or penalty,~~penalty. Additionally, the Company is subject to mandatory debt repayments five business days after the ~~reimbursement~~filing of ~~certain costs. During~~its consolidated financial statements for any annual period in which the Company generates Excess Cash (as defined in the Credit Agreement). In accordance with the terms of the Credit Agreement, the Company did not generate Excess Cash during the fiscal year ended April 3, 2021 and therefore is not required to make any debt repayments in the fiscal year ended April 2, 2022. During the three and nine months ended ~~December 31, 2017~~January 1, 2022, the ~~Company borrowed and repaid $8 million from our line~~Company did not prepay any aggregate principal amount of ~~credit, and as~~the term loan facility. As of ~~March 31, 2017 and December 31, 2017,~~January 1, 2022, the Company had no5 letters of credit outstanding ~~borrowings on the line of credit.~~

The Amended Credit Agreement contains customary affirmative and negative covenants, including, among other things, covenants limiting the ability of the Company to incur debt, make capital expenditures, grant liens, merge or consolidate, and make investments. The Amended Credit Agreement also requires the Company to comply with certain financial covenants, including (i) a maximum ratio of funded debt to EBITDA of 3.25:1 (previously 3:1) and (ii) a minimum EBITDA coverage ratio, in each case, tested as of each fiscal quarter and determined on a rolling four-quarter basis. In addition, the Company and its subsidiaries are required to maintain unrestricted cash, cash equivalents and marketable securities plus availability under the ~~Amended Credit Agreement at the end~~revolving credit facility for a total of ~~each fiscal quarter of at least $300.0~~$2.9 million. The Amended Credit Agreement contains customary events of default that include, among other things, payment defaults, covenant defaults, cross-defaults with certain other indebtedness, bankruptcy and insolvency defaults, and judgment defaults. The occurrence of an event of default could result in the acceleration of the obligations under the Amended Credit Agreement. As of March 31, 2017 and December 31, 2017, the Company was in compliance with all covenants.

8. RESTRUCTURING AND OTHER RELATED CHARGES ~~(CREDITS)~~

Summary of Restructuring Plans

Fiscal Year 2022 Restructuring Plan

During the ~~first~~ nine months ended January 1, 2022, the Company committed to actions to reduce expenses to enable strategic investments in revenue growth. The costs incurred to date under this plan include severance benefits related to headcount reductions in the Company's global workforce and facility related charges due to the closure or consolidation of offices.

Fiscal Year ~~2018 and as part of its ongoing effort~~2021 Restructuring Plan

During Fiscal Year 2021, the Company committed to additional actions to reduce expenses and align its overall cost structure better with projected revenue levels, as well as reorganize its executive management to align to its new Chief Executive Officer's management structure. The costs ~~improve profitability,~~incurred to date under this plan include severance benefits related to headcount reductions in the Company's global workforce and ~~focus on its key strategic initiatives,~~facility related charges due to the ~~Company executed an asset sale agreement to dispose~~closure or consolidation of substantially all assets of its Clarity division, primarily inventories and tooling fixed assets, for an immaterial sales price. The buyer in this arrangement was a former employee of the Company, who acted as Clarity's President but who was not an executive officer or director of the Company. As part of the buyer's separation from Plantronics, the Company accelerated vesting on his outstanding restricted stock, resulting in an immaterial stock-compensation modification charge.leased offices.

Legacy Restructuring Plans

In connection with the ~~sale,~~Polycom acquisition, in Fiscal Years 2019 and 2020 the Company ~~is leasing the facility it owns in Chattanooga, Tennessee,~~initiated actions to the buyer for a period of twelve months. The Company also entered into a transition services agreement with the buyer to provide customer support services on a cost-recovery basis, which are not expected to be material, for a period of one year. The Company also recorded immaterial impairment charges on assets previously used in Clarity operations that have no further value to the Company.

In addition to the sale of the Clarity division and the related restructuring actions, the Company reduced headcount in certain divisions and terminated a lease in the Netherlands before the end of its contractual term, resulting in a charge equal to the present value of the remaining future minimum lease payments. In connection with this exit, the Company wrote off certain fixed assets that will no longer be used. Finally, the Company reorganized its Brazilianrationalize post-acquisition operations and ~~as a result, wrote off an unrecoverable indirect tax asset.~~realign its cost structure. These actions included streamlining the global workforce, closure or consolidation of leased offices and distribution centers, consumer product portfolio optimization efforts, and legal entity rationalization.

~~As of December 31, 2017,~~The following table summarizes the ~~remaining obligation related to severance amounts due is immaterial and will be settled within 12 months.~~

~~During the quarter ended December 31, 2017, we recorded an immaterial adjustment to~~ restructuring and other related charges ~~(credits) resulting from a change~~recognized in ~~estimate from amounts previously recorded.~~the Company's condensed consolidated statements of operations:


	Three Months Ended				Nine Months Ended
(in thousands)	January 1, 2022		December 26, 2020		January 1, 2022		December 26, 2020
Severance	$	191	$	3,969	$	19,592	$	27,161
Facility	—		1,658		(503)		3,300
Other (1)	374		1,107		5,285		3,416
Total cash charges	565		6,734		24,374		33,877
Non-cash charges (2)	1,833		7,243		9,603		15,600
Total restructuring and other related charges	$	2,398	$	13,977	$	33,977	$	49,477

(1) Other costs primarily represent associated legal and advisory services.

(2) Non-cash charges primarily represent accelerated depreciation due to the closure or consolidation of facilities.

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The ~~associated~~Company's restructuring liabilities as of January 1, 2022 are as follows:


(in thousands)	As of April 3, 2021		Accruals (1)		Cash Payments		As of January 1, 2022
Fiscal Year 2022 Plan
Severance	$	—	$	20,281	$	(15,577)	$	4,704
Facility	—		—		—		—
Other	—		5,313		(5,228)		85
Total Fiscal Year 2022 Plan	$	—	$	25,594	$	(20,805)	$	4,789

Fiscal Year 2021 Plans
Severance	$	6,039	$	(720)	$	(3,475)	$	1,844
Facility	913		83		(465)		531
Other	186		(28)		(158)		—
Total Fiscal Year 2021 Plans	$	7,138	$	(665)	$	(4,098)	$	2,375

Legacy Plans
Severance	$	1,222	$	31	$	(813)	$	440
Facility	3,281		(586)		(1,799)		896
Other	—		—		—		—
Total Legacy Plans	$	4,503	$	(555)	$	(2,612)	$	1,336

Total
Severance	$	7,261	$	19,592	$	(19,865)	$	6,988
Facility	4,194		(503)		(2,264)		1,427
Other	186		5,285		(5,386)		85
Grand Total	$	11,641	$	24,374	$	(27,515)	$	8,500

(1)Excludes non-cash charges ~~for the nine months ended December 31, 2017 are~~of $9.6 million recorded in restructuring and other related charges ~~(credits), cost of revenues, and selling, general, and administrative expense~~ in the condensed consolidated statements of operations ~~as follows:~~

Nine months ended December 31, 2017
(in millions) Total Charges Restructuring and Other Related Charges (Credits) Cost of Revenues Selling, General, and Administrative
Severance benefits from reduction-in-force $ 1.3
$ 1.3
$ —
$ —
Lease exit charge and asset impairments in Netherlands 0.7
0.7
—
—
Write-off of unrecoverable indirect tax asset in Brazil 0.7
—
0.7
—
Asset impairments related to previous Clarity operations 0.4
0.4
—
—
Loss on Clarity asset sale 0.9
—
0.9
—
Accelerated vesting of restricted stock 0.2
—
—
0.2
Totals $ 4.2
$ 2.4
$ 1.6
$ 0.2

~~9. STOCK-BASED COMPENSATION~~

~~The Company recognizes the grant-date fair value of stock-based compensation as compensation expense using the straight-line attribution approach over the service period~~ for ~~which the stock-based compensation is expected to vest. The following table summarizes the amount of stock-based compensation included in the condensed consolidated statements of operations:~~

Three Months Ended December 31, Nine Months Ended
December 31,
(in thousands) 2016 2017 2016 2017
Cost of revenues $ 794
$ 917
$ 2,414
$ 2,709

Research, development, and engineering 1,771
2,049
6,663
6,158
Selling, general, and administrative 6,124
5,063
15,928
17,180
Stock-based compensation included in operating expenses 7,895
7,112
22,591
23,338
Total stock-based compensation 8,689
8,029
25,005
26,047
Income tax expense (benefit) (2,986 ) 2,039
(8,635 ) (5,650 )
Total stock-based compensation, net of tax $ 5,703
$ 10,068
$ 16,370
$ 20,397

~~10. COMMON STOCK REPURCHASES~~

From time to time, the Company's Board of Directors (the "Board") has authorized programs under which the Company may repurchase shares of its common stock, depending on market conditions, in the open market or through privately negotiated transactions. Repurchased shares are held as treasury stock until they are retired or re-issued. Repurchases by the Company pursuant to Board-authorized programs during the nine months ended ~~December 31, 2016 and 2017 are discussed below. As of~~ ~~December 31, 2017~~, there remained 730,932 shares authorized for repurchase under the repurchase program approved by the Board on July 27, 2017. There were no remaining shares authorized under previously approved programs.January 1, 2022.

In the nine months ended December 31, 2016 and 2017, the Company repurchased 764,176 shares and 1,138,903 shares, respectively, of its common stock in the open market for a total cost of $34.2 million and $52.9 million, respectively, and at an average price per share of $44.80 and $46.46, respectively. In addition, the Company withheld shares valued at $9.4 million and $11.2 million in the nine months ended December 31, 2016 and 2017, respectively, in satisfaction of employee tax withholding obligations upon the vesting of restricted stock granted under the Company's stock plans. The amounts withheld were equivalent to the employees' minimum statutory tax withholding requirements and are reflected as a financing activity within the Company's condensed consolidated statements of cash flows. These share withholdings have the same effect as share repurchases by the Company as they reduce the number of shares that would have otherwise been issued in connection with the vesting of shares subject to the restricted stock grants.

~~11.~~9. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The components of accumulated other comprehensive income ~~("AOCI")~~(loss), net of ~~immaterial~~ tax, ~~effects,~~ are as follows:


(in thousands)	January 1, 2022		April 3, 2021
Accumulated unrealized gain (loss) on cash flow hedges	$	6,839	$	(7,836)
Accumulated foreign currency translation adjustments	4,615		4,615

Accumulated other comprehensive income (loss)	$	11,454	$	(3,221)

10. DERIVATIVES

(in thousands) March 31, 2017 December 31, 2017
Accumulated unrealized gain (loss) on cash flow hedges⁽¹⁾
$ 529
$ (2,200 )
Accumulated foreign currency translation adjustments 4,428
4,685
Accumulated unrealized gain (loss) on investments (263 ) (580 )
Accumulated other comprehensive income $ 4,694
$ 1,905

⁽¹⁾~~Refer to Note 12,~~ Foreign Currency Derivatives ~~which discloses the nature of the Company's derivative assets and liabilities as of March 31, 2017and December 31, 2017.~~

~~12. FOREIGN CURRENCY DERIVATIVES~~

The Company's foreign currency derivatives consist primarily of foreign currency forward ~~exchange contracts,~~and option ~~contracts, and cross-currency swaps.~~contracts. The Company does not purchase derivative financial instruments for speculative trading purposes. The derivatives expose the Company to credit risk to the extent the counterparties may be unable to meet the terms of the derivative instrument. The Company's maximum exposure to loss ~~that it would incur due to~~as a result of credit risk ~~if parties to derivative contracts failed completely to perform according to the terms of the contracts~~ was equal to the carrying value of the Company's derivative assets as of ~~December 31, 2017~~.January 1, 2022 and April 3, 2021. The Company seeks to mitigate such risk by limiting its counterparties to large financial institutions. In addition, the Company monitors the potential risk of loss with any one counterparty resulting from this type of credit risk on an ongoing basis.

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The Company enters into master netting arrangements with counterparties ~~when possible~~ to mitigate credit risk in derivative ~~transactions.~~transactions, when possible. A master netting arrangement may allow each counterparty to net settle amounts owed between the Company and the counterparty as a result of multiple, separate derivative transactions. As of ~~December 31, 2017~~,January 1, 2022, the Company had International Swaps and Derivatives Association ~~(ISDA)~~("ISDA") agreements with ~~four~~5 applicable banks and financial institutions which contained netting provisions. ~~Plantronics~~The Company has elected to present the fair value of derivative assets and liabilities onwithin the Company's condensed consolidated balance ~~sheet~~sheets on a gross basis even when derivative transactions are subject to master netting arrangements and may otherwise qualify for net presentation. ~~For each counterparty, if netted, the Company would offset the asset and liability balances of all derivatives at the end of the reporting period.~~ Derivatives not subject to master netting agreements are not eligible for net presentation. As of ~~March 31, 2017~~January 1, 2022 and ~~December 31, 2017,~~April 3, 2021, no cash collateral had been received or pledged related to these derivative instruments.

Offsetting of Financial Assets/Liabilities under Master Netting Agreements with Derivative Counterparties

As of January 1, 2022


	Gross Amount of Derivative Assets Presented in the Condensed Consolidated Balance Sheets		Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet that are Subject to Master Netting Agreements
(in thousands)			Gross Amount of Eligible Offsetting Recognized Derivative Liabilities		Cash Collateral Received		Net Amount of Derivative Assets
Derivatives subject to master netting agreements	$	10,572	$	(4,915)	$	—	$	5,657
Derivatives not subject to master netting agreements	—						—
Total	$	10,572					$	5,657


	Gross Amount of Derivative Liabilities Presented in the Condensed Consolidated Balance Sheets		Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet that are Subject to Master Netting Agreements
(in thousands)			Gross Amount of Eligible Offsetting Recognized Derivative Assets		Cash Collateral Received		Net Amount of Derivative Liabilities
Derivatives subject to master netting agreements	$	(4,915)	$	4,915	$	—	$	—
Derivatives not subject to master netting agreements	—						—
Total	$	(4,915)					$	—

As of April 3, 2021


	Gross Amount of Derivative Assets Presented in the Condensed Consolidated Balance Sheets		Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet that are Subject to Master Netting Agreements
(in thousands)			Gross Amount of Eligible Offsetting Recognized Derivative Liabilities		Cash Collateral Received		Net Amount of Derivative Assets
Derivatives subject to master netting agreements	$	5,106	$	(5,106)	$	—	$	—
Derivatives not subject to master netting agreements	—						—
Total	$	5,106					$	—

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	Gross Amount of Derivative Liabilities Presented in the Condensed Consolidated Balance Sheets		Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet that are Subject to Master Netting Agreements
(in thousands)			Gross Amount of Eligible Offsetting Recognized Derivative Assets		Cash Collateral Received		Net Amount of Derivative Liabilities
Derivatives subject to master netting agreements	$	(11,700)	$	5,106	$	—	$	(6,594)
Derivatives not subject to master netting agreements	—						—
Total	$	(11,700)					$	(6,594)

The gross fair value of the Company's outstanding derivative contracts at ~~the end of each period~~January 1, 2022 and April 3, 2021 was as follows:


(in thousands)	January 1, 2022		April 3, 2021
Derivative assets(1)
Non-designated hedges	$	317	$	2,864
Cash flow hedges	2,803		2,242
Interest rate swaps	7,452		—
Total derivative assets	$	10,572	$	5,106

Derivative liabilities(2)
Non-designated hedges	$	1,134	$	18
Cash flow hedges	477		1,819
Interest rate swaps	3,304		9,863
Accrued interest	22		102
Total derivative liabilities	$	4,937	$	11,802

(in thousands) March 31, 2017 December 31, 2017
Derivative Assets⁽¹⁾

Non-designated hedges $ 86
$ 19
Cash flow hedges 2,034
332
Total Derivative Assets $ 2,120
$ 351

Derivative Liabilities⁽²⁾

Non-designated hedges $ 286
$ 1,155
Cash flow hedges 1,109
3,345
Total Derivative Liabilities $ 1,395
$ 4,500

⁽¹⁾Short-term derivative assets are recorded in ~~"other~~other current ~~assets"~~assets and long-term derivative assets are recorded in ~~"deferred tax and~~ other ~~assets".~~non-current assets on the condensed consolidated balance sheets. As of ~~December 31, 2017~~January 1, 2022, the portion of derivative assets classified as long-term was ~~immaterial.~~$6.9 million. As of April 3, 2021, the portion of derivative assets classified as long-term was $0.1 million.

(2) Short-term derivative liabilities are recorded in ~~"accrued liabilities"~~accrued liabilities and long-term derivative liabilities are recorded in ~~"other long-term liabilities".~~other non-current liabilities on the condensed consolidated balance sheets. As of ~~December 31, 2017~~January 1, 2022, the portion of derivative liabilities classified as long-term was ~~immaterial.~~$0.1 million. As of April 3, 2021, the portion of derivative liabilities classified as long-term was $2.0 million.

Non-Designated Hedges

As of ~~December 31, 2017,~~January 1, 2022, the Company had foreign currency forward contracts denominated in ~~Euros~~Euro ("EUR")~~, British~~ and Great Britain Pound Sterling ("~~GBP"~~GBP.")~~, Australian Dollars ("AUD"), and Canadian Dollars ("CAD").~~ The Company does not elect to obtain hedge accounting for these forward contracts. These forward contracts hedge against a portion of the Company’s foreign currency-denominated cash balances, accounts receivables, and accounts payables. The following table summarizes the notional value of the Company’s outstanding foreign exchange currency contracts and approximate ~~U.S. Dollar ("USD")~~USD equivalent at ~~December 31, 2017~~:January 1, 2022:


(in thousands)	Local Currency		USD Equivalent		Position	Maturity
EUR	€	25,000	$	28,335	Sell EUR	1 month
GBP	£	10,400	$	14,040	Sell GBP	1 month

(in thousands) Local Currency USD Equivalent Position Maturity
EUR € 38,700
$ 46,560
Sell EUR 1 month
GBP £ 5,100
$ 6,899
Sell GBP 1 month
AUD A$ 14,200
$ 11,092
Sell AUD 1 month
CAD C$ 2,900
$ 2,315
Sell CAD 1 month

Effect of Non-Designated Derivative Contracts on the Condensed Consolidated Statements of Operations

The effect of non-designated derivative contracts on results of operations recognized in other non-operating income, ~~and (expense),~~ net in the condensed consolidated statements of operations was as follows:


	Three Months Ended				Nine Months Ended
(in thousands)	January 1, 2022		December 26, 2020		January 1, 2022		December 26, 2020
Gain (loss) on foreign exchange contracts	$	651	$	(4,440)	$	1,841	$	(7,173)

Three Months Ended December 31, Nine Months Ended
December 31,
(in thousands) 2016 2017 2016 2017
Gain (loss) on foreign exchange contracts $ 3,801
$ 848
$ 5,551
$ 6,083

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Cash Flow Hedges

Costless Collars

The Company hedges a portion of the ~~forecasted~~forecasted EUR and GBP denominated revenues with costless collars. On a monthly basis, the Company enters into option contracts with a six to ~~eleven month~~twelve-month term. Collar contracts are scheduled to mature at the beginning of each fiscal quarter, at which time the instruments convert to forward contracts. The Company also enters into cash flow forwards with a ~~three month~~three-month term. Once the hedged revenues are recognized, the forward contracts become non-designated hedges to protect the resulting foreign monetary asset position for the Company.

The notional value of the Company's outstanding EUR and GBP option and forward contracts at the end of each period was as follows:

~~March 31, 2017~~January 1, 2022

~~December 31, 2017~~April 3, 2021

(in millions)

EUR

GBP

EUR

GBP

Option contracts

€~~73.5~~77.4

£~~23.9~~15.7

€~~75.8~~91.4

£~~22.9~~18.1

Forward contracts

€~~11.2~~75.0

£~~3.3~~14.0

€~~13.0~~76.0

£~~4.1~~15.6

The Company will reclassify all related amounts in accumulated in other comprehensive income into earnings within the next twelve months.

Cross-currency Swaps

The Company hedges a portion of the forecasted Mexican Peso (“MXN”) denominated expenditures with a cross-currency swap. As of ~~March 31, 2017~~January 1, 2022, and ~~December 31, 2017,~~April 3, 2021, the Company had foreign currency swap contracts of approximately MXN ~~287.2~~415.9 million ~~and~~and MXN ~~76.3~~564.3 million, respectively.

The following table summarizes the notional value of the ~~Company’s~~Company's outstanding MXN ~~cross-currency~~currency swaps and approximate USD Equivalent at ~~December~~January 1, 2022:

(in thousands)

Local Currency

USD Equivalent

Position

Maturity

MXN

415,938

19,860

Buy MXN

Monthly over a nine month period

The Company will reclassify all related amounts in accumulated other comprehensive income into earnings within the next twelve months.

Interest Rate Swaps

On June 15, 2021, the Company entered into a three-year amortizing interest rate swap agreement with Bank of America, N.A. The swap has an initial notional amount of $680 million and matures on July 31, ~~2017~~:2024. The swap involves the receipt of floating-rate interest payments for fixed interest rate payments at a rate of 0.39% over the life of the agreement. Additionally, on July 30, 2018, the Company entered into a four-year amortizing interest rate swap agreement with Bank of America, N.A. The swap has an initial notional amount of $831 million and matures on July 31, 2022. The swap involves the receipt of floating-rate interest payments for fixed interest rate payments at a rate of 2.78% over the life of the agreement.

The Company has designated the interest rate swaps as cash flow hedges. The purpose of the interest rate swaps is to hedge against changes in cash flows (interest payments) attributable to fluctuations in the Company's variable rate debt. The swaps are valued based on prevailing LIBOR rate curves on the date of measurement. The Company also evaluates counterparty credit risk when it calculates the fair value of the interest rate swaps. Changes in the fair value of the interest rate swaps are recorded to other comprehensive income and are reclassified to interest expense over the life of the underlying debt as interest is accrued. During the nine months ended January 1, 2022, the Company reclassified into interest expense $7.6 million and had a $4.1 million unrealized gain on its interest rate swaps derivatives designated as cash flow hedges.

The Company will reclassify approximately $2.7 million in accumulated other comprehensive income into earnings within the next twelve months.

(in thousands) Local Currency USD Equivalent Position Maturity
MXN $ 76,340
$ 3,935
Buy MXN Monthly over 6 months

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Effect of Designated Derivative Contracts on ~~AOCI~~Accumulated Other Comprehensive Income (Loss) and Condensed Consolidated Statements of Operations

The following table presents the pre-tax effects of derivative instruments designated as cash flow hedges on accumulated other comprehensive income and the condensed consolidated statements of operations for the three and nine months ended January 1, 2022 and December ~~31, 2016 and 2017:~~26, 2020:


	Three Months Ended				Nine Months Ended
(in thousands)	January 1, 2022		December 26, 2020		January 1, 2022		December 26, 2020
Loss included in accumulated other comprehensive income (loss), as of beginning of period	$	(3,252)	$	(16,747)	$	(10,062)	$	(20,156)

Gain (loss) recognized in other comprehensive income (loss)	7,846		(3,754)		8,520		(8,339)

Amount of (gain) loss reclassified from accumulated other comprehensive income (loss) into net revenues	(1,804)		1,054		(671)		1,797
Amount of gain reclassified from accumulated other comprehensive income (loss) into cost of revenues	(10)		—		(489)		—
Amount of loss reclassified from accumulated other comprehensive income (loss) into interest expense	2,100		3,039		7,582		10,290
Total amount of loss reclassified from accumulated other comprehensive income to the condensed consolidated statements of operations	286		4,093		6,422		12,087



Gain (loss) included in accumulated other comprehensive income (loss), as of end of period	$	4,880	$	(16,408)	$	4,880	$	(16,408)

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Three Months Ended December 31, Nine Months Ended
December 31,
(in thousands) 2016 2017 2016 2017
Gain (loss) included in AOCI as of beginning of period $ (471 ) $ (3,089 ) $ (1,106 ) $ 541

Amount of gain (loss) recognized in other comprehensive income (“OCI”)
(effective portion)
2,090
(446 ) 2,394
(5,093 )

Amount of gain (loss) reclassified from OCI into net revenues (effective portion) 2,178
1,357
3,163
2,506
Amount of gain (loss) reclassified from OCI into cost of revenues (effective portion) (756 ) (61 ) (2,072 ) (193 )
Total amount of gain (loss) reclassified from AOCI to income (loss) (effective portion) 1,422
1,296
1,091
2,313

Gain (loss) included in AOCI as of end of period $ 197
$ (2,239 ) $ 197
$ (2,239 )
11. FAIR VALUE MEASUREMENTS

~~During~~Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The authoritative guidance establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are from sources independent of the Company. Unobservable inputs reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability developed based upon the best information available in the circumstances. The categorization of financial assets and liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. In determining fair value, we use various valuation approaches. The hierarchy of those valuation approaches is in three levels based on the reliability of inputs. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The following is a summary of the hierarchy levels:

•Level 1: Inputs are quoted prices in active markets for identical assets or liabilities.

•Level 2: Inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly.

•Level 3: Inputs are unobservable for the asset or liability.


	Carrying Value at January 1, 2022		Fair Value at January 1, 2022 Using Inputs Considered as:
(in thousands)			Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	182,700	$	182,700	$	—	$	—
Short-term investments	17,017		17,017		—		—
Derivative instruments	10,572		—		10,572		—

Liabilities:
Derivative instruments	$	4,937	$	—	$	4,937	$	—
Long-term debt	1,499,228		—		1,474,436		—


	Carrying Value at April 3, 2021		Fair Value at April 3, 2021 Using Inputs Considered as:
(in thousands)			Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	202,560	$	202,560	$	—	$	—
Restricted cash	493,908		493,908		—		—
Short-term investments	14,559		14,559		—		—
Derivative instruments	5,106		—		5,106		—

Liabilities:
Derivative instruments	$	11,802	$	—	$	11,802	$	—
Current portion of long-term debt	478,807		—		482,669		—
Long-term debt	1,496,064		—		1,497,323		—

Valuation Techniques

•Cash and cash equivalents, short-term investments, and restricted cash are classified within Level 1 of the fair value hierarchy. Financial instruments classified as Level 1 are based on quoted market prices in active markets. The types of financial instruments the Company classifies within Level 1 include bank deposits, money market securities, and publicly traded mutual funds. Restricted cash represents the cash held in trust and restricted for use to redeem the 5.50% Senior Notes. Refer to Note 7, Debt.

•The Company estimates the fair value of derivatives using pricing models that use observable market inputs. The significant Level 2 inputs used in the valuation of derivatives include spot rates and forward rates. These inputs were obtained from pricing services, broker quotes, and other sources.

•The fair value of long-term debt was determined based on inputs that were observable in the market, including the trading price, when available.

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The Company did not incur any material realized or unrealized gains or losses in the three and nine months ended January 1, 2022 or December ~~31, 2016~~26, 2020.

There were no transfers between fair value hierarchy levels during the three and 2017 the Company recognized an immaterial gain and immaterial loss on the ineffective portion of its cash flow hedges, respectively, which is reported in other non-operating income and (expense), net in the condensed consolidated statements of operations.nine months ended January 1, 2022 or December 26, 2020.

~~13.~~12. INCOME TAXES

The Company and its subsidiaries are subject to taxation in the U.S. and in various foreign and state jurisdictions. The Company's income tax benefit is determined using an estimated annual effective tax rate, adjusted for discrete items arising during the period. The effective tax rates for the three and nine months ended ~~December 31, 2016~~January 1, 2022 were 46.2% and ~~2017 were 11.0% and 255.1%~~172.2%, respectively. The effective tax rates for the three and nine months ended December ~~31, 2016~~26, 2020 were (53.9)% and ~~2017 were 18.4% and 114.6%~~9.6%, respectively.

~~On December 22, 2017,~~Income tax benefit for the ~~Tax Cuts~~three and ~~Jobs Act (H.R. 1) (the “Act”)~~nine months ended January 1, 2022 was ~~signed into law in the United States. The Act includes several changes to existing~~$(9.6) million and $(116.4) million, respectively. Income tax ~~law, including, among other things, a permanent reduction in the corporate income tax rate from 35% to 21% and the move from a worldwide to a territorial tax system.~~

The move to a territorial tax system was accompanied by federal taxation of a one-time deemed repatriation of accumulated unremitted earnings (hereafter, the "toll charge"), which the Company will elect to pay over an eight-year period as permitted

under the Act. The Company recorded a $69.3 million toll charge as part of income tax expense in the quarter ended December 31, 2017, representing a provisional estimate based on a 15.5% tax applied to foreign unremitted cash and cash equivalents and an 8% tax applied to permanently reinvested foreign assets. The provisional toll charge increased our effective tax rate by 217.2% and 94.1%benefit for the three and nine months ended December ~~30, 2017,~~26, 2020 was $(7.0) million and $(7.2) million, respectively. ~~As part~~During the three months ended October 2, 2021, the Company transferred certain non-Americas intellectual property (“IP”) rights between our wholly-owned subsidiaries ("IP transfer") to align with our evolving business operations, resulting in the derecognition of a deferred tax asset of $91.1 million and the recognition of a new deferred tax asset of $204.3 million, which represents the book and tax basis difference in the IP and was based on the fair value of the ~~Act,~~IP, in the ~~Company also completed its remeasurement~~respective subsidiaries. This results in a net discrete deferred tax benefit of $113.2 million. The impact of the IP transfer to net cash flows on the condensed consolidated statements of cash flows during the nine months ended January 1, 2022 was not material.

The difference between the effective tax rate and the U.S. federal statutory rate primarily relates to the changes in uncertain tax positions, U.S. and foreign income mix, and the valuation allowance on the U.S. federal and state deferred tax assets (DTAs) that continues to be maintained as of ~~December 31, 2017~~January 1, 2022.

A significant portion of the Company's DTAs relate to the ~~new~~IP transfer between wholly-owned subsidiaries. At this time, based on evidence currently available, the Company considers it more likely than not that it will have sufficient taxable income in the future ~~federal~~that will allow the Company to realize the DTAs; however, failure to generate sufficient future taxable income could result in some or all DTAs not being utilized in the future. If the Company is unable to generate sufficient future taxable income, a substantial valuation allowance to reduce the Company's DTAs may be required.

The Company is subject to the examination of its income tax ~~rate~~returns by the Internal Revenue Service and other tax authorities.Significant judgment is required in evaluating our uncertain tax positions and determining the Company's provision for income taxes. During the three months ended January 1, 2022, the amount of ~~21%, thereby reducing~~gross unrecognized tax benefits decreased by $3.6 million. As of January 1, 2022, the ~~Company’s deferred~~Company has $17.9 million of unrecognized tax ~~assets by $2.1 million. The rate change resulted~~benefits, all of which could result in ~~an overall increase to~~a reduction of the Company’s effective tax rate by 6.6% and 2.9% for the three and nine months ended December 31, 2017, respectively. In addition, prior to its third quarter of Fiscal Year 2018, the Company did not recognize a deferred tax liability related to unremitted foreign earnings because its plans did not require the Company to repatriate earnings from foreign operations to fund U.S. operations. if recognized.The Company expects to fund payment of the toll charge by repatriating a portion of its foreign earnings and as such, has recorded a deferred tax liability of $5.0 million related to state income taxes and foreign withholding taxes that will become due as the Company repatriates foreign earnings. This increased the Company’s effective tax rate by 15.6% and 6.8% for the three and nine months ended December 31, 2017, respectively. Finally, the Company files its federal tax return on a fiscal year-end and is therefore required to pro-rate the new and old tax rates during Fiscal Year 2018. The blended, annualized tax rate applied to Fiscal Year 2018 income is 31.56%. This reduction in ~~the federal tax rate reduced the Company’s global tax rate by 2.3% and 1.0% for the three and nine months ended December 31, 2017, respectively.~~

The provisional estimate for the toll charge will be finalized when the Company completes its substantive review of unremitted foreign earnings through examination of statutory filings and tax returns of the Company's foreign subsidiaries and fiscal branches that span a 30-year period. The Company must also analyze the impact of foreign exchange rates and inflation on the historical information to support foreign tax credits available to offset the toll charge. In addition, the Company's estimate of the toll charge obligation may change due to legislative technical corrections, the IRS' promulgation of regulations to interpret the Act, and changes in accounting standards for income taxes or related interpretations in response to the Act. This review and finalization of the toll charge provisional estimate will be completed within a twelve month measurement period from the date of enactment.

The Company recorded a correction to the geographic mix of income during the three months ended June 30, 2017 related to Fiscal Year 2017, which reduced income in a high tax jurisdiction and increased income in a low tax jurisdiction. This correction resulted in a reduction to the Company’s effective tax rate by 3.5 percentage points for the nine months ended December 31, 2017 as compared to the prior year period and had no impact on the three months ended December 31, 2017. For additional details regarding this correction refer to Note 1, ~~Basis of Presentation~~.

The Company adopted new stock-based compensation accounting guidance effective the beginning of Fiscal Year 2018. Excess tax benefits associated with employee equity plans were previously recorded in additional paid-in capital and the adoption of this guidance had an immaterial impact on the Company's effective tax rate for the three months ended December 31, 2017, but resulted in a reduction to the Company's effective tax rate by 2.6 percentage points for the nine months ended December 31, 2017. The amount of excess tax benefits or deficiencies will fluctuate from period-to-period based on the price of the Company’s stock, the volume of share-based instruments settled or vested, and the value assigned to employee equity awards under U.S. GAAP.

~~Included in long-term income taxes payable in the condensed consolidated balance sheets as of March 31, 2017 and December 31, 2017 were~~gross unrecognized tax benefits is primarily attributable to the lapse of $12.9 million and $12.3 million, respectively, which would favorably impact the effective tax rate in future periods if recognized. The Company’s continuing practice is to recognize interest and/or penalties related to income tax matters in income tax expense in the condensed consolidated statementsapplicable statute of ~~operations. The accrued interest related to unrecognized tax benefits was $1.7 million and $1.4 million as~~limitations.

Table of ~~March 31, 2017 and December 31, 2017, respectively. No penalties have been accrued.~~Contents

The Company and its subsidiaries are subject to taxation in the U.S. federal and various foreign and state jurisdictions. The Company’s Fiscal Year 2016 federal income tax return is currently under examination by the Internal Revenue Service. Foreign income tax matters for material tax jurisdictions have been concluded for tax years prior to Fiscal Year 2012.

The Company believes that an adequate provision has been made for any adjustments that may result from tax examinations; however, the outcome of such examinations cannot be predicted with certainty. If any issues addressed in the tax examinations are resolved in a manner inconsistent with the Company's expectations, the Company could be required to adjust its provision for income tax in the period such resolution occurs. The timing of any resolution and/or closure of tax examinations is not certain.

~~14.~~13. COMPUTATION OF (LOSS) EARNINGS ~~(LOSS)~~ PER COMMON SHARE

Basic (loss) earnings ~~(loss)~~ per share is calculated by dividing net (loss) income ~~associated with common shareholders~~ by the weighted-average number of common shares outstanding during the period. Diluted (loss) earnings ~~(loss)~~ per share assumes the issuance of additional shares of common stock by the Company upon exercise of all outstanding stock options and vesting of restricted stock, if the effect is dilutive, in accordance with the treasury stock ~~method or two-class method (whichever is more dilutive). Refer to Note 1,~~ ~~Basis~~method. The potentially dilutive effect of ~~Presentation, for additional information regarding~~outstanding stock options and restricted stock has been excluded from the ~~Company's~~ computation of ~~earnings (loss)~~diluted loss per ~~common share.~~share in periods where the Company had a net loss, as their effect is anti-dilutive.

The following table sets forth the computation of basic and diluted (loss) earnings ~~(loss)~~ per common share for the three and nine months ended January 1, 2022 and December ~~31, 2016 and 2017:~~26, 2020:


	Three Months Ended				Nine Months Ended
(in thousands, except per share data)	January 1, 2022		December 26, 2020		January 1, 2022		December 26, 2020
Numerator:
Net (loss) income	$	(11,164)	$	20,113	$	48,810	$	(68,307)

Denominator:
Weighted-average basic shares outstanding	42,745		41,252		42,450		40,894
Weighted-average diluted shares outstanding	42,745		42,184		43,811		40,894

Basic (loss) earnings per common share	$	(0.26)	$	0.49	$	1.15	$	(1.67)
Diluted (loss) earnings per common share	$	(0.26)	$	0.48	$	1.11	$	(1.67)

Potentially dilutive securities excluded from diluted (loss) earnings per common share because their effect is anti-dilutive	383		988		210		1,248

Three Months Ended December 31, Nine Months Ended
December 31,
(in thousands, except per share data) 2016 2017 2016 2017
Basic earnings (loss) per common share:
Numerator:
Net income (loss) $ 22,221
$ (49,504 ) $ 63,082
$ (10,723 )

Denominator:
Weighted average common shares, basic 32,242
32,075
32,260
32,384
Dilutive effect of employee equity incentive plans 584
—
635
—
Weighted average common shares-diluted 32,826
32,075
32,895
32,384

Basic earnings (loss) per common share $ 0.69
$ (1.54 ) $ 1.96
$ (0.33 )
Diluted earnings (loss) per common share $ 0.68
$ (1.54 ) $ 1.92
$ (0.33 )

Potentially dilutive securities excluded from diluted earnings (loss) per common share because their effect is anti-dilutive 473
968
573
1,107

~~15.~~14. REVENUE AND MAJOR CUSTOMERS

The Company designs, ~~manufactures,~~builds, and markets collaboration solutions which combine legendary audio expertise and ~~sells headsets~~powerful video and conferencing capabilities to create endpoints that power meaningful human connections and provide solutions that make life easier when they work together and with our partners' services.

The Company’s major product categories are Headsets, Video, Voice, and Services. Headsets include wired and wireless communication headsets; Voice includes open SIP and native ecosystem desktop phones as well as conference room phones; Video includes video conferencing solutions and peripherals, such as cameras, speakers, and microphones. The broad portfolio of Services include video interoperability, hardware and support for ~~business~~our solutions and ~~consumer applications. With respect~~hardware devices, as well as professional, hosted, and managed services that are grounded in our deep expertise aimed at helping customers achieve their goals for collaboration. The Company's cloud management and analytics software enables IT administrators to ~~headsets,~~configure and update firmware, monitor device usage, troubleshoot, and gain a deep understanding of user behavior. All of the ~~Company makes products for use~~Company's solutions are designed to integrate seamlessly with the platform and services of our customers choice in a wide range of Unified Communications & Collaboration ("UC&C"), Unified Communication as a Service ("UCaaS"), and Video as a Service ("VaaS") environments. The Company's RealPresence collaboration solutions range from infrastructure to endpoints and allow people to connect and collaborate globally, naturally, and seamlessly.

Product revenue is largely comprised of sales of hardware devices, peripherals, and platform software licenses used in communication and collaboration in offices and contact centers, ~~and,~~ with mobile devices, cordless phones, ~~computers,~~ and ~~gaming consoles.~~ computers. Services revenue primarily includes support on hardware devices, professional, hosted and managed services, and solutions to the Company's customers.

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The following table ~~presents net~~disaggregates revenues by major product ~~group~~category for the three and nine months ended January 1, 2022 and December ~~31, 2016 and 2017:~~26, 2020:


	Three Months Ended				Nine Months Ended
(in thousands)	January 1, 2022		December 26, 2020		January 1, 2022		December 26, 2020
Net revenues
Headsets	$	195,479	$	240,908	$	553,452	$	618,498
Voice	53,156		67,076		174,159		156,682
Video	105,387		112,727		358,996		284,666
Services	55,544		63,974		173,155		191,529
Total net revenues	$	409,566	$	484,685	$	1,259,762	$	1,251,375

Three Months Ended December 31, Nine Months Ended
December 31,
(in thousands) 2016 2017 2016 2017
Net revenues from unaffiliated customers:
Enterprise $ 157,345
$ 167,640
$ 467,784
$ 485,152
Consumer 75,588
58,894
204,438
155,608
Total net revenues $ 232,933
$ 226,534
$ 672,222
$ 640,760

For reporting purposes, revenue is attributed to each geographic region based on the location of the customer. Other than the U.S., no country accounted for 10% or more of the Company's total net revenues for the three and nine months ended January 1, 2022 and December ~~31, 2016 and 2017.~~26, 2020. The following table presents total net revenues by geography:


	Three Months Ended				Nine Months Ended
(in thousands)	January 1, 2022		December 26, 2020		January 1, 2022		December 26, 2020
Net product revenues
U.S.	$	160,731	$	169,812	$	522,770	$	473,633

Europe, Middle East, and Africa	119,067		164,896		327,868		357,389
Asia Pacific	46,273		57,481		161,836		155,460
Americas, excluding U.S.	27,951		28,522		74,133		73,364
Total international net product revenues	193,291		250,899		563,837		586,213

Total net product revenues	$	354,022	$	420,711	$	1,086,607	$	1,059,846

Net service revenues
U.S.	$	21,498	$	23,601	$	66,347	$	71,839

Europe, Middle East, and Africa	14,117		16,533		43,199		48,545
Asia Pacific	16,140		19,342		51,643		57,196
Americas, excluding U.S.	3,789		4,498		11,966		13,949
Total international net service revenues	34,046		40,373		106,808		119,690

Total net service revenues	$	55,544	$	63,974	$	173,155	$	191,529

Total net revenues	$	409,566	$	484,685	$	1,259,762	$	1,251,375

Deferred revenue is primarily comprised of non-cancelable maintenance support performance obligations on hardware devices which are typically billed in advance and recognized ratably over the contract term as the services are delivered. As of January 1, 2022 and April 3, 2021, the Company's deferred revenue balance was $199.2 million and $213.8 million, respectively. During the three months ended January 1, 2022, the Company recognized $46.2 million in total net revenues that were recorded in deferred revenue at the beginning of the period.

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Three Months Ended December 31, Nine Months Ended
December 31,
(in thousands) 2016 2017 2016 2017
Net revenues from unaffiliated customers:
U.S. $ 123,719
$ 106,455
$ 371,019
$ 326,360

Europe and Africa 63,233
73,620
168,722
184,761
Asia Pacific 27,164
27,553
81,979
75,664
Americas, excluding U.S. 18,817
18,906
50,502
53,975
Total international net revenues 109,214
120,079
301,203
314,400
Total net revenues $ 232,933
$ 226,534
$ 672,222
$ 640,760
The table below represents aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied (or partially unsatisfied) as of January 1, 2022:


(in thousands)	Current		Non-Current		Total
Unsatisfied (or partially unsatisfied) performance obligations	$	132,498	$	66,695	$	199,193

~~One~~

Sales, value add, and other taxes collected concurrently with revenue producing activities are excluded from revenue.

The Company's indirect channel model includes both a two-tiered distribution structure, where the Company sells to distributors that subsequently sell to resellers, and a one-tiered structure where the Company sells directly to resellers. For these arrangements, transfer of control begins at the time access to the Company's services is made available to the end customer ~~Ingram Micro Group, accounted~~and entitlements have been contractually established, provided all other criteria for ~~10.5%~~revenue recognition are met.

Commercial distributors and ~~10.6%~~retailers represent the Company's largest sources of net revenues. Sales through its distribution and retail channels are made primarily under agreements allowing for rights of return and include various sales incentive programs, such as back end rebates, discounts, marketing development funds, price protection, and other sales incentives. The Company has an established sales history for these arrangements and the Company records the estimated reserves at the inception of the contract as a reflection of the reduced transaction price. Customer sales returns are estimated based on historical data, relevant current data, and the monitoring of inventory build-up in the distribution channel. Revenue reserves represent a reasonable estimation made by management and are subject to significant judgment. Estimated reserves may differ from actual returns or incentives provided due to unforeseen customer return or claim patterns or changes in circumstances. For certain customer contracts which have historically demonstrated variability, the Company has considered the likelihood of being under-reserved and has considered a constraint accordingly. Provisions for sales returns are presented within accrued liabilities in the condensed consolidated balance sheets. Provisions for promotions, rebates, and other sales incentives are presented as a reduction of accounts receivable unless there is no identifiable right to offset, in which case they are presented within accrued liabilities on the condensed consolidated balance sheets. See Note 4, Details of Certain Balance Sheet Accounts.

For certain arrangements, the Company pays commissions, bonuses and taxes associated with obtaining the contracts. The Company capitalizes such costs if they are deemed to be incremental and recoverable. The Company has elected to use the practical expedient to record the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less. Determining the amortization period of costs related to obtaining a contract involves judgment. Capitalized commissions and related expenses on hardware sales and services recognized at a point in time generally have an amortization period of less than one year. Maintenance-related performance obligations generally have an amortization period greater than one year when considering renewals. Capitalized commissions are amortized to selling, general, and administrative expense on a straight-line basis. The capitalized amount of incremental and recoverable costs of obtaining contracts and related amortization was not material as of and for the three and nine months ended January 1, 2022.

15. SEGMENT REPORTING AND GEOGRAPHIC INFORMATION

The Company's Chief Executive Officer is identified as its Chief Operating Decision Maker ("CODM.") The CODM has organized the Company, manages resource allocations, and measures performance among its 2 operating segments: Products and Services.

The Products reportable segment includes the Headsets, Voice and Video product lines. The Services reportable segment includes maintenance support on hardware devices as well as professional, managed and cloud services and solutions.

In managing the 2 operating segments the CODM uses information about their revenue and gross margin after adjustments to exclude certain non-cash transactions and activities that are not reflective of the Company's ongoing or core operations as further described below. The CODM does not review asset information by segment.

Purchase accounting amortization: Represents the amortization of purchased intangible assets recorded in connection with the acquisition of Polycom.

Deferred revenue purchase accounting: Represents the impact of fair value purchase accounting adjustments related to deferred revenue recorded in connection with the Acquisition of Polycom. The Company's deferred revenue primarily relates to service revenue associated with non-cancelable maintenance support on hardware devices which are typically billed in advance and recognized ratably over the contract term as those services are delivered. This adjustment represents

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the amount of additional revenue that would have been recognized during the period absent the write-down to fair value required under purchase accounting guidelines.

Stock compensation expense: Represents the non-cash expense associated with the Company's grant of stock-based awards to employees and non-employee directors.

The following table presents segment results for revenue and gross margin, as reviewed by the CODM, and the related reconciliation to the Company's condensed consolidated GAAP results:


	Three Months Ended				Nine Months Ended
(in thousands)	January 1, 2022		December 26, 2020		January 1, 2022		December 26, 2020
Segment revenues, as reviewed by CODM
Products	$	354,149	$	420,976	$	1,087,058	$	1,060,733
Services	56,324		66,998		175,925		203,250
Total segment revenues, as reviewed by CODM	$	410,473	$	487,974	$	1,262,983	$	1,263,983

Segment gross profit, as reviewed by CODM
Products	$	144,630	$	201,392	$	456,937	$	492,262
Services	37,939		45,812		117,591		138,329
Total segment gross profit, as reviewed by CODM	$	182,569	$	247,204	$	574,528	$	630,591


	Three Months Ended				Nine Months Ended
(in thousands)	January 1, 2022		December 26, 2020		January 1, 2022		December 26, 2020
Total segment revenues, as reviewed by CODM	$	410,473	$	487,974	$	1,262,983	$	1,263,983
Deferred revenue purchase accounting	(907)		(3,289)		(3,221)		(12,608)
GAAP net revenues	$	409,566	$	484,685	$	1,259,762	$	1,251,375

Total segment gross profit, as reviewed by CODM (1)	$	182,569	$	247,204	$	574,528	$	630,591
Purchase accounting amortization	(16,238)		(16,459)		(48,714)		(51,873)
Deferred revenue purchase accounting	(907)		(3,289)		(3,221)		(12,608)
Stock-based compensation	(1,238)		(799)		(3,525)		(2,374)
GAAP gross profit	$	164,186	$	226,657	$	519,068	$	563,736

(1) Includes depreciation expense of $3.4 million and $3.7 million for the three months ended January 1, 2022 and December 26, 2020, respectively. Includes depreciation expense of $11 million and $10.7 million for the nine months ended January 1, 2022 and December 26, 2020, respectively.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

CERTAIN FORWARD-LOOKING INFORMATION

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements relating to our intentions, beliefs, projections, outlook, analyses or current expectations that are subject to many risks and uncertainties. Such forward-looking statements and the associated risks and uncertainties include, but are not limited to: (i) our beliefs with respect to the length and severity of the COVID-19 (coronavirus) outbreak, and its impact across our businesses, our operations and global supply chain, including, our expectations that the virus has caused, and will continue to cause, a shift to a hybrid work environment and that the elevated demand we have experienced in certain product lines, including our Video and Voice devices, will continue over the long term; (ii) risks related to global supply chain disruptions, including continued uncertainty and potential impact on future quarters relating to a shortage of adequate component supply, including integrated circuits and manufacturing capacity, long lead times for raw materials and components, increased costs to us and increased pass-through costs to our customers, increased purchase commitments and a delay in our ability to fulfill orders, which has had, and may continue to have, an adverse impact on our business and operating results and which could continue to negatively affect our profitability and/or market share; (iii) expectations related to our ability to manage profitability and maintain margins in light of supply chain challenges, including our efforts to implement productivity improvements in our Tijuana manufacturing facility, while making investments for long-term growth, including investments in strategic alliances and/or acquisitions, in light of the supply chain challenges; (iv) our expectations regarding growth objectives related to our strategic initiatives designed to expand our product and service offerings, including our expectations related to increased demand for our solutions to facilitate hybrid working in and out of offices for our enterprise customers, as well as our expectations related to building strategic alliances and key partnerships with providers of collaboration tools and platforms to drive revenue growth and market share, including expectations related to our expansion of our presence in China; (v) our belief that we will continue to experience increased customer and partner demand in collaboration endpoints, and that we will be able to design new product offerings to meet changes in demand due to a global hybrid work environment; (vi) expectations related to our ability to fulfill the backlog generated by supply constraints and to timely supply the number of products to fulfill current and future customer demand in a timely manner to satisfy perishable demand; (vii) risks associated with our dependence on manufacturing operations conducted in our own facility in Tijuana, Mexico and through contract manufacturers, original design manufacturers, and suppliers to manufacture our products, to timely obtain sufficient quantities of materials and/or finished products of acceptable quality, at acceptable prices, and in the quantities necessary for us to meet critical schedules for the delivery of our own products and services and fulfill our anticipated customer demand; (viii) risks associated with our ability to secure critical components from sole source suppliers or identify alternative suppliers and/or buy component parts on the open market or completed goods in quantities sufficient to meet our requirements on a timely basis, affecting our ability to deliver products and services to our customers; (ix) risks related to increased cost of goods sold, including increased freight and other costs associated with expediting shipment and delivery of high-demand products to key markets in order to meet customer demand; (x) risks associated with passing on increased costs through price increases to customers; (xi) the impact if global or regional economic conditions deteriorate further, on our customers and/or partners, including increased demand for pricing accommodations, delayed payments, delayed deployment plans, insolvency or other issues which may increase credit losses; (xii) risks associated with significant and/or abrupt changes in product demand which increases the complexity of management’s evaluation of potential excess or obsolete inventory; (xiii) expectations related to our Services reportable segment revenues, particularly as we introduce next-generation, less complex, product solutions, or as companies shift from on premises to work from home options for their workforce, which have resulted and may continue to result in decreased demand for our professional, installation and/or managed service offerings; (xiv) expectations related to our efforts to drive sales and sustainable profitable revenue growth, to improve our profitability and cash flow, and accelerate debt reduction and de-levering; (xv) risks associated with forecasting sales and procurement demands, which are inherently difficult, particularly with continuing uncertainty in regional and global economic conditions; (xvi) our expectations regarding our ability to control costs, streamline operations and successfully implement our various cost-reduction activities and realize anticipated cost savings under such cost-reduction initiatives; (xvii) expectations relating to our earnings guidance, particularly as economic uncertainty, including, without limitation, uncertainty related to the continued impact of COVID-19, the current constraints in our ability to source key components for our products, continued uncertainty in the macro-economic climate and other external factors, puts further pressure on management judgments used to develop forward-looking financial guidance and other prospective financial information; (xviii) expectations related to GAAP and non-GAAP financial results for the full Fiscal Year 2022, including net revenues, adjusted earnings before interest, tax, depreciation, and amortization (EBITDA), tax rates, intangibles amortization, diluted weighted average shares outstanding and diluted earnings per share (EPS); (xix) our forecast and estimates with respect to tax matters, including expectations with respect to the valuation of our intellectual property or expectations regarding utilization of our deferred tax assets; and (xx) our expectations regarding pending and potential future litigation, in addition to other matters discussed in this Quarterly Report on Form 10-Q that are not purely historical data. Such forward-looking

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statements are based on current expectations and assumptions and are subject to risks and uncertainties that may cause actual results to differ materially from the forward-looking statements.Factors that could cause actual results and events to differ materially from such forward-looking statements are included, but not limited to, those discussed in this Quarterly Report on Form 10-Q; in Part I, "Item 1A. Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended April 3, 2021, filed with the Securities and Exchange Commission ("SEC") on May 18, 2021; and other documents we have filed with the SEC. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by applicable law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

OVERVIEW

Plantronics, Inc. (“Poly,” “Company,” “we,” “our,” or “us”) is a leading global communications technology company that designs, manufactures, and markets integrated communications and collaboration solutions for professionals. We offer premium audio and video products designed to work in an era where work is no longer a place and enterprise work forces are increasingly distributed. Our products and services are designed and engineered to connect people with high fidelity and incredible clarity. They are professional-grade, easy to use, and work seamlessly with major video and audio-conferencing platforms.

Our major product categories are Headsets, Video, Voice, and Services. Headsets include wired and wireless communication headsets; Voice includes open Session Initiation Protocol ("SIP") and native ecosystem desktop phones, as well as conference room phones; Video includes conferencing solutions and peripherals, such as cameras, speakers, and microphones.All of our solutions are designed to integrate seamlessly with the platform and services of our customers’ choice in a wide range of Unified Communications & Collaboration (“UC&C”), Unified Communication as a Service (“UCaaS”), and Video as a Service (“VaaS”) environments.

Additionally, our cloud management and analytics software enables Information Technology administrators to configure and update firmware, monitor device usage, troubleshoot, and gain a deep understanding of user behavior. We offer a broad portfolio of services including video interoperability, support for our solutions and hardware devices, as well as professional, hosted, and managed services that are grounded in our deep expertise aimed at helping our customers achieve their goals for collaboration.

We sell our products through a well-developed global network of distributors and channel partners, including value-added resellers, integrators, direct marketing resellers, and service providers, as well as through both traditional and online retailers, office supply distributors, and e-commerce channels. We have well-established distribution channels in the Americas, Europe, Middle East, Africa, and Asia Pacific, where use of our products is widespread.

Our fiscal year ends on the Saturday closest to the last day of March. The year ended April 2, 2022 ("Fiscal Year 2022") has 52 weeks, while the year ended April 3, 2021 ("Fiscal Year 2021") had 53 weeks. The three months ended January 1, 2022 ("third quarter Fiscal Year 2022") and December 26, 2020 ("third quarter Fiscal Year 2021") each had 13 weeks. The nine months ended January 1, 2022 and December 26, 2020 each had 39 weeks.

Impact of the Current Environment, Supply Chain Disruptions, and COVID-19 on Our Business

We have experienced and continue to monitor limited supply and longer lead times for certain key components, such as semiconductor chips, necessary to complete production and meet customer demand, including fulfillment of our backlog. We do not manufacture these component parts and currently purchase certain parts, including semiconductor chips and sub-assemblies that require semiconductor chips, from single or limited sources. Additionally, constrained supply has resulted in price inflation for certain components, including semiconductor chips, on the spot market, increased transportation costs, inefficiencies at our owned manufacturing facility in Tijuana, Mexico, and inability to fulfill backlog for certain products timely. We continue to monitor our supply chain and are taking action against limited supply and increasing lead times, including increased spot market purchases, outreach to critical suppliers, and entering into contractual obligations that provide for increased costs, and multi-year commitments, to secure supply. Additionally, to the extent we pass through increased costs to our customers, this may result in reduced demand. These factors, among others, are affecting and are expected to continue to affect total net revenue and gross margin rates.

In addition, COVID-19 has continued to spread globally and continues to add uncertainty and influence global economic activity, the global supply chain, and financial markets. The impact of the pandemic on our operations has varied by local conditions, government mandates, and business limitations, including travel bans, remote work, and other restrictions.

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The COVID-19 pandemic led to a massive increase in remote work. As a result, during Fiscal Year 2021 we experienced elevated demand for certain enterprise Headsets and Video devices and a decline in demand for our Voice products and associated Services, as companies shifted from in-office to work-from-home arrangements for many of their office workers. Beginning in the fourth quarter of Fiscal Year 2021 and continuing through the third quarter of Fiscal Year 2022, we experienced elevated demand for certain Video and Voice devices as companies began to shift from work-from-home arrangements to hybrid work models.

However, the impact of COVID-19 is fluid and uncertain, and it has caused, and may continue to cause, various negative effects as we continue to experience constraints in our supply chain, specifically the sourcing of certain components and raw materials, and increased logistics costs to meet customer demand, which, in turn, adversely impacts our gross margins. As a result, the impact of COVID-19 to date has had mixed effects on our results of operations.

The full extent and duration of the impact of the COVID-19 pandemic on our business continues to be uncertain and difficult to predict and will depend on many factors outside of our control, including the extent and duration of the pandemic, mutations, and variants of the virus, the development and availability of effective treatments, including the availability of vaccines for our global workforce, mandates of protective public safety measures, and the impact of the pandemic on the global economy, global supply chains, and demand for our products. It is not possible at this time to foresee whether or when the outbreak of COVID-19 or other events beyond our control will be effectively contained, nor can we estimate the entirety of the impact that COVID-19 or such other pandemics or natural or man-made disaster will have on the global economy, our business, customers, suppliers, or other business partners. As such, impacts from such events on Poly are highly uncertain and we will continue to assess the impact from such events on our condensed consolidated financial statements.

In responding to this pandemic, employee safety continues to be a critical concern for Poly and we have taken measures to protect our employees globally by adherence to public safety and shelter in place directives, physical distancing protocols within offices and manufacturing facilities, providing personal protective equipment, including face masks and hand sanitizers, conducting routine sanitation of facilities, requiring health monitoring before entry into Poly facilities and restricting the number of visitors to our sites. The safety protocols implemented globally meet or exceed current regulations; however, we continue to monitor employees’ safety and evolving regulatory requirements. Although our manufacturing facility remains open and certain office employees may utilize our offices when necessary, the majority of all non-factory employees continue to work from home, using headsets and other Poly-issued equipment. We provided COVID-19 vaccines to our employees and their immediate families, as well as other workers, at our manufacturing facility on a voluntary basis free of charge.

Third Quarter Fiscal Year 2022 Highlights

Total net revenues for the third quarter of Fiscal Year 2022 were $409.6 million, a decrease of $75.1 million or (15.5)%, compared to the third quarter of Fiscal Year 2021, primarily driven by decreased sales in our Headset, Voice, Services and Video product categories.

Products gross margin rate for the third quarter of Fiscal Year 2022 decreased from 43.7% in the third quarter of Fiscal Year 2021 to 35.9%, primarily driven by increased component costs, unfavorable product mix, and increased transportation costs.

During the third quarter of Fiscal Year 2022, we announced the partnership with Appspace, a leading provider of workspace experience software, to deliver dynamic digital signage on Poly video OS devices to enhance the Return to Office experience for employees and visitors. The digital signage was available on Poly Studio X Series (including Poly Studio X30, X50, X70) and G7500 video conference devices with an Appspace subscription. We also announced the updated Poly Room Solutions for Microsoft Teams Rooms on Windows. The new lineup of Poly Studio Kits offers premium audio and video for focus, small, medium, and large rooms, and feature Poly's Director AI technology. These products were available during the third quarter of Fiscal Year 2022 and did not have a material impact on total net revenues.

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RESULTS OF OPERATIONS

The Company’s reportable segments are Products and Services. Our Products reportable segment includes the Headsets, Voice, and Video product lines. Our Services reportable segment includes maintenance support on hardware devices, as well as professional, managed, and cloud services and solutions.

Total Net Revenues

The following table sets forth total net revenues by reportable segment for the three and nine months ended January 1, 2022 and December 26, 2020:


	Three Months Ended								Nine Months Ended
(in thousands, except percentages)	January 1, 2022		December 26, 2020		Change				January 1, 2022		December 26, 2020		Change
Products	$	354,022	$	420,711	$	(66,689)	(15.9)	%	$	1,086,607	$	1,059,846	$	26,761	2.5	%
Services	55,544		63,974		(8,430)		(13.2)	%	173,155		191,529		(18,374)		(9.6)	%
Total net revenues	$	409,566	$	484,685	$	(75,119)	(15.5)	%	$	1,259,762	$	1,251,375	$	8,387	0.7	%

Products

Total product net revenues decreased in the third quarter of Fiscal Year 2022 compared to the third quarter of Fiscal Year 2021, primarily due to the following:

•Headset, Voice, and Video product categories net revenues decreased primarily due to constrained supply of certain components, such as semiconductor chips.

Total product net revenues increased in the nine months ended January 1, 2022 compared to the nine months ended December 26, 2020, primarily due to the following:

•Video product category net revenues increased, driven by the shift to hybrid work arrangements and the need for office workers to be able to effectively communicate and collaborate regardless of location.

•Voice product category net revenues also increased as companies returned or made plans to return to the office.

•Headsets product category net revenues decreased primarily due to constrained supply of certain components, such as semiconductor chips.

Services

Total services net revenues decreased in the third quarter of Fiscal Year 2022 compared to the third quarter of Fiscal Year 2021 and in the nine months ended January 1, 2022 compared to the nine months ended December 26, 2020, primarily due to the Video product mix shift from legacy Platform and Telepresence to recently launched Studio video bars, which are less complex, easier to install and operate, and carry optional service contracts. The decrease was partially offset by the impact of the deferred revenue fair value adjustment resulting from the Polycom acquisition.

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Geographic Region

The following table sets forth total net revenues by geographic region for the three and nine months ended January 1, 2022 and December 26, 2020:


	Three Months Ended								Nine Months Ended
(in thousands, except percentages)	January 1, 2022		December 26, 2020		Change				January 1, 2022		December 26, 2020		Change
United States	$	182,229	$	193,413	$	(11,184)	(5.8)	%	$	589,117	$	545,472	$	43,645	8.0	%

International net revenues:
Europe, Middle East, and Africa	133,184		181,429		(48,245)		(26.6)	%	371,067		405,933		(34,866)		(8.6)	%
Asia Pacific	62,413		76,823		(14,410)		(18.8)	%	213,479		212,657		822		0.4	%
Americas, excluding United States	31,740		33,020		(1,280)		(3.9)	%	86,099		87,313		(1,214)		(1.4)	%
Total international net revenues	227,337		291,272		(63,935)		(22.0)	%	670,645		705,903		(35,258)		(5.0)	%

Total net revenues	$	409,566	$	484,685	$	(75,119)	(15.5)	%	$	1,259,762	$	1,251,375	$	8,387	0.7	%

United States (U.S.)

U.S. total net revenues decreased in the third quarter of Fiscal Year 2022 compared to the third quarter of Fiscal Year 2021, primarily due to decreased net sales in the Voice product category. U.S. Video, Headsets and Services total net revenues were materially unchanged in the third quarter of Fiscal Year 2022 compared to the third quarter of Fiscal Year 2021.

U.S. total net revenues increased in the nine months ended January 1, 2022 compared to the nine months ended December 26, 2020, primarily due to increased net sales in the Video and Voice product categories, partially offset by decreased net sales in the Services category. U.S. Headsets total net revenues were materially unchanged during the nine months ended January 1, 2022 compared to the nine months ended December 26, 2020.

International

International total net revenues decreased in the third quarter of Fiscal Year 2022 compared to the third quarter of Fiscal Year 2021, primarily due to decreased net sales in the Headsets, Video, Services, and Voice product categories.

International total net revenues decreased in the nine months ended January 1, 2022 compared to the nine months ended December 26, 2020, primarily due to decreased net sales in the Headsets and Services product categories, partially offset increased net sales in the Video product category. International Voice total net revenues were materially unchanged during the nine months ended January 1, 2022 compared to the nine months ended December 26, 2020.

During the third quarter of Fiscal Year 2022, changes in foreign exchange rates favorably impacted total net revenues by $1.6 million, net of the effects of hedging, compared to a $8.4 million favorable impact on revenue in the third quarter of fiscal year 2021. During the nine months ended January 1, 2022, changes in foreign exchange rates favorably impacted total net revenues by $16.6 million, net of the effects of hedging, compared to a $5.8 million favorable impact on revenue in the prior year period.

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Cost of Revenues and Gross Profit

Cost of revenues consists primarily of direct and contract manufacturing costs, amortization of acquired technology, freight, warranty, charges for excess and obsolete inventory, depreciation, duties, royalties, and overhead expenses.


(in thousands, except percentages)	Three Months Ended										Nine Months Ended
	January 1, 2022			December 26, 2020			Change				January 1, 2022			December 26, 2020			Change
Products:
Net revenues	$	354,022		$	420,711		$	(66,689)	(15.9)	%	$	1,086,607		$	1,059,846		$	26,761	2.5	%
Cost of revenues	226,994			236,842			(9,848)		(4.2)	%	682,360			622,718			59,642		9.6	%
Gross profit	$	127,028		$	183,869		$	(56,841)	(30.9)	%	$	404,247		$	437,128		$	(32,881)	(7.5)	%
Gross profit %	35.9		%	43.7		%					37.2		%	41.2		%
Services:
Net revenues	$	55,544		$	63,974		$	(8,430)	(13.2)	%	$	173,155		$	191,529		$	(18,374)	(9.6)	%
Cost of revenues	18,386			21,186			(2,800)		(13.2)	%	58,334			64,921			(6,587)		(10.1)	%
Gross profit	$	37,158		$	42,788		$	(5,630)	(13.2)	%	$	114,821		$	126,608		$	(11,787)	(9.3)	%
Gross profit %	66.9		%	66.9		%					66.3		%	66.1		%
Total:
Net revenues	$	409,566		$	484,685		$	(75,119)	(15.5)	%	$	1,259,762		$	1,251,375		$	8,387	0.7	%
Cost of revenues	245,380			258,028			(12,648)		(4.9)	%	740,694			687,639			53,055		7.7	%
Gross profit	$	164,186		$	226,657		$	(62,471)	(27.6)	%	$	519,068		$	563,736		$	(44,668)	(7.9)	%
Gross profit %	40.1		%	46.8		%					41.2		%	45.0		%

Products

Gross profit as a percentage of total product net revenues decreased in the third quarter of Fiscal Year 2022 compared to the third quarter of Fiscal Year 2021 and in the nine months ended January 1, 2022 compared to the nine months ended December 26, 2020, primarily due to increased component costs, unfavorable product mix, and increased transportation costs. The increase in component costs was primarily driven by increased spot market purchases of certain key components, such as semiconductor chips, due to global supply shortages. Transportation costs increased as a result of high global demand and limited capacity of air freight carriers and increased air freight usage to mitigate longer component lead times to meet our commitments to customers.

Services

Gross profit as a percentage of total services net revenues was materially unchanged during the third quarter of Fiscal Year 2022 compared to the third quarter of Fiscal Year 2021 and in the nine months ended January 1, 2022 compared to the nine months ended December 26, 2020.

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Operating Expenses

Operating expenses for the three and nine months ended January 1, 2022 and December 26, 2020 were as follows:


	Three Months Ended										Nine Months Ended
(in thousands, except percentages)	January 1, 2022			December 26, 2020			Change				January 1, 2022			December 26, 2020			Change
Research, development, and engineering	$	46,216		$	54,150		$	(7,934)	(14.7)	%	$	136,090		$	156,327		$	(20,237)	(12.9)	%
% of total net revenues	11.3		%	11.2		%					10.8		%	12.5		%
Selling, general and administrative	121,387			129,641			(8,254)		(6.4)	%	364,417			361,892			2,525		0.7	%
% of total net revenues	29.6		%	26.7		%					28.9		%	28.9		%
Loss, net from litigation settlements	—			—			—		—	%	—			17,561			(17,561)		100.0	%
% of total net revenues	—		%	—		%					—		%	1.4		%
Restructuring and other related charges	2,398			13,977			(11,579)		(82.8)	%	33,977			49,477			(15,500)		(31.3)	%
% of total net revenues	0.6		%	2.9		%					2.7		%	4.0		%
Total operating expenses	$	170,001		$	197,768		$	(27,767)	(14.0)	%	$	534,484		$	585,257		$	(50,773)	(8.7)	%
% of total net revenues	41.5		%	40.8		%					42.4		%	46.8		%

Research, Development, and Engineering

Research, development, and engineering costs are expensed as incurred and consist primarily of compensation costs, outside services, expensed materials, and overhead expenses. Research, development, and engineering expenses decreased during the third quarter of Fiscal Year 2022 compared to the third quarter of Fiscal Year 2021 and in the nine months ended January 1, 2022 compared to the nine months ended December 26, 2020, primarily due to lower compensation expense due to reduction in headcount, cost control efforts, and lower incentive compensation.

Selling, General, and Administrative

Selling, general, and administrative costs are expensed as incurred and consist primarily of compensation costs, marketing costs, travel expenses, professional service fees, and overhead expenses. Selling, general and administrative expenses decreased during the third quarter of Fiscal Year 2022 compared to the third quarter of Fiscal Year 2021, primarily due to lower incentive compensation, partially offset by increased marketing and travel expense. Selling, general and administrative expenses increased during the nine months ended January 1, 2022 compared to the nine months ended December 26, 2020, primarily due to higher sales commissions, marketing, and travel expense, partially offset by lower facilities expenses.

Loss, net from Litigation Settlements

Loss, net from litigation settlements decreased during the nine months ended January 1, 2022 compared to the nine months ended December 26, 2020, due to the recording of one-time litigation charges for settlements during the prior period.

Restructuring and Other Related Charges

Restructuring and other related charges decreased during the third quarter of Fiscal Year 2022 compared to the third quarter of Fiscal Year 2021 and in the nine months ended January 1, 2022 compared to the nine months ended December 26, 2020. During the three and nine months ended January 1, 2022 and December 26, 2020 we recorded restructuring and other related charges to reduce expenses and optimize our cost structure. These actions consisted of headcount reductions and office closures.

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Interest Expense

Interest expense for the three and nine months ended January 1, 2022 and December 26, 2020 was as follows:


	Three Months Ended										Nine Months Ended
(in thousands, except percentages)	January 1, 2022			December 26, 2020			Change				January 1, 2022			December 26, 2020			Change
Interest expense	$	15,948		$	18,417		$	(2,469)	13.4	%	$	53,871		$	58,182		$	(4,311)	7.4	%
% of total net revenues	3.9		%	3.8		%					4.3		%	4.6		%

Interest expense decreased during the third quarter of Fiscal Year 2022 compared to the third quarter of Fiscal Year 2021 and in the nine months ended January 1, 2022 compared to the nine months ended December 26, 2020, primarily due to lower interest expense related to the 2023 Senior Notes and lower outstanding principal balance on the term loan facility, partially offset by the amortization of the remaining debt issuance costs related to the 2023 Senior Notes, which were redeemed during the first quarter of Fiscal Year 2022, and interest expense related to the 2029 Senior Notes, which were issued in the fourth quarter of Fiscal Year 2021.

Other Non-Operating Income, Net

Other non-operating income, net for the three and nine months ended January 1, 2022 and December 26, 2020 was as follows:


	Three Months Ended										Nine Months Ended
(in thousands, except percentages)	January 1, 2022			December 26, 2020			Change				January 1, 2022			December 26, 2020			Change
Other non-operating income, net	$	(995)		$	(2,596)		$	1,601	(61.7)	%	$	(1,664)		$	(4,188)		$	2,524	(60.3)	%
% of total net revenues	(0.2)		%	(0.5)		%					(0.1)		%	(0.3)		%

Other non-operating income, net decreased during the third quarter of Fiscal Year 2022 compared to the third quarter of Fiscal Year 2021, primarily due to immaterial net foreign currency losses compared to immaterial net foreign currency gains in the prior period. Other non-operating income, net decreased in the nine months ended January 1, 2022 compared to the nine months ended December 26, 2020, primarily due to lower immaterial unrealized gains on the deferred compensation plan investments and immaterial net foreign currency losses during the current period compared to immaterial net foreign currency gains in the prior period.

Income Tax Benefit


	Three Months Ended										Nine Months Ended
(in thousands except percentages)	January 1, 2022			December 26, 2020			Change				January 1, 2022			December 26, 2020			Change
(Loss) income before income taxes	$	(20,768)		$	13,068		$	(33,836)	258.9	%	$	(67,623)		$	(75,515)		$	7,892	10.5	%
Income tax benefit	(9,604)			(7,045)			(2,559)		(36.3)	%	(116,433)			(7,208)			(109,225)		(1,515.3)	%
Net (loss) income	$	(11,164)		$	20,113		$	(31,277)	155.5	%	$	48,810		$	(68,307)		$	117,117	171.5	%
Effective tax rate	46.2		%	(53.9)		%					172.2		%	9.6		%

The Company and its subsidiaries are subject to taxation in the U.S. and in various foreign and state jurisdictions. The Company's income tax benefit is determined using an estimated annual effective tax rate, adjusted for discrete items arising during the period. The effective tax rates for the three and nine months ended January 1, 2022 were 46.2% and 172.2%, respectively. The effective tax rates for the three and nine months ended December ~~31, 2016. One customer, Ingram Micro Group, accounted~~26, 2020 were (53.9)% and 9.6%, respectively.

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Income tax benefit for ~~10.7%~~the three and ~~11.6% of net revenues~~nine months ended January 1, 2022 was $(9.6) million and $(116.4) million, respectively. Income tax benefit for the three and nine months ended December ~~31, 2017,~~26, 2020 was $(7.0) million and $(7.2) million, respectively.During the three months ended October 2, 2021, the Company transferred certain non-Americas intellectual property (“IP”) rights between our wholly-owned subsidiaries ("IP transfer") to align with our evolving business operations, resulting in the derecognition of a deferred tax asset of $91.1 million and the recognition of a new deferred tax asset of $204.3 million, which represents the book and tax basis difference in the IP and was based on the fair value of the IP, in the respective subsidiaries. This results in a net discrete deferred tax benefit of $113.2 million. The impact of the IP transfer to net cash flows on the condensed consolidated statements of cash flows during the nine months ended January 1, 2022 was not material.

~~One customer, Ingram Micro Group, accounted~~The difference between the effective tax rate and the U.S. federal statutory rate primarily relates to the changes in uncertain tax positions, U.S. and foreign income mix, and the valuation allowance on the U.S. federal and state deferred tax assets (DTAs) that continues to be maintained as of January 1, 2022.

A significant portion of the Company's DTAs relate to the IP transfer between wholly-owned subsidiaries completed during the three months ended October 2, 2021. At this time, based on evidence currently available, the Company considers it more likely than not that it will have sufficient taxable income in the future that will allow the Company to realize the DTAs; however, failure to generate sufficient future taxable income could result in some or all DTAs not being utilized in the future. If the Company is unable to generate sufficient future taxable income, a substantial valuation allowance to reduce the Company's DTAs may be required.

The Company is subject to the examination of its income tax returns by the Internal Revenue Service and other tax authorities. Significant judgment is required in evaluating our uncertain tax positions and determining the Company's provision for ~~17.6%~~income taxes. During the three months ended January 1, 2022, the amount of ~~total~~gross unrecognized tax benefits decreased by $3.6 million. As of January 1, 2022, the Company has $17.9 million of unrecognized tax benefits, all of which could result in a reduction of the Company’s effective tax rate if recognized. The reduction in gross unrecognized tax benefits is primarily attributable to the lapse of applicable statutes of limitations.

FINANCIAL CONDITION

Liquidity and Capital Resources

The following tables present selected financial information and statistics as of January 1, 2022 and April 3, 2021 and for the nine months ended January 1, 2022 and December 26, 2020 (in thousands):


	January 1, 2022		April 3, 2021
Cash and cash equivalents and short-term investments	$	199,717	$	217,119
Property, plant, and equipment, net	126,973		140,875
Current portion of long-term debt	—		478,807
Long-term debt, net	1,499,228		1,496,064
Working capital	264,784		213,975


	Nine Months Ended
	January 1, 2022		December 26, 2020
Cash (used in) provided by operating activities	$	(52)	$	71,149
Cash used in investing activities	(25,178)		(14,580)
Cash used in financing activities	(487,002)		(44,442)

Our cash and cash equivalents as of January 1, 2022 consisted of bank deposits and money market funds with third-party financial institutions. As of January 1, 2022, of our $199.7 million of cash and cash equivalents and short-term investments, $104.7 million was held domestically while $95.0 million was held by foreign subsidiaries, and approximately 71% was based in USD-denominated instruments. As of January 1, 2022, our short-term investments were composed of mutual funds. An additional source of liquidity is $97.1 million of availability from our revolving credit facility, net of outstanding letters of credit.

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Historically, we use cash provided by operating activities as our primary source of liquidity. We expect that cash provided by operating activities will fluctuate in future periods, including the current quarter as a result of a number of factors, including fluctuations in our revenues, the timing of compensation-related payments, such as our annual bonus/variable compensation plan, interest payments on our long-term debt, product shipments, accounts receivable ~~at March 31, 2017. Two customers, Ingram Micro Group~~collections, inventory and ~~D&H Distributors, accounted~~supply chain management, and the timing and amount of tax and other payments.

During the nine months ended January 1, 2022, cash used in operating activities of $(52) thousand was a result of $(98.4) million of cash used in net working capital, partially offset by $48.8 million of net income and $49.5 million in net non-cash charges. Cash used in investing activities of $(25.2) million consisted primarily of capital expenditures of $(20.7) million and other investing activities of $(4.0) million. Cash used in financing activities of $(487.0) million consisted primarily of $(480.7) million of repayments of long-term debt and $(12.2) million of employees' tax withheld and paid for ~~13.5%~~restricted stock and ~~13.8%, respectively,~~restricted stock units, partially offset by $5.8 million of proceeds from stock compensation plans.

Capital Expenditures

We anticipate our capital expenditures in Fiscal Year 2022 will be approximately $25 million to $35 million, relating primarily to investments in our manufacturing capabilities, including tooling for new products, new information technology investments, and facilities upgrades. We will continue to evaluate new business opportunities and new markets. As a result, our future growth within the existing business or new opportunities and markets may dictate the need for additional facilities and capital expenditures to support that growth.

Debt

In July 2018, in connection with the Polycom acquisition, the Company entered into a Credit Agreement with Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto and borrowed the full amount available under the term loan facility of $1.245 billion, net of approximately $30 million of discounts and issuance costs. During the first nine months of Fiscal Year 2022, we did not repurchase any of our outstanding principal. As of January 1, 2022, we had $1.0 billion of principal outstanding.

On December 29, 2021, the Company entered into an Amendment to the Credit Agreement in order to relax certain financial covenants on the revolving line of credit. The financial covenants under the Credit Agreement are for the benefit of the revolving credit lenders only and do not apply to any other debt of the Company. As of January 1, 2022, the Company has five outstanding letters of credit on the revolving credit facility for a total ~~net accounts receivable at December 31, 2017.~~of $2.9 million and had $97.1 million available under the revolving credit facility. As of January 1, 2022, the Company was in compliance with the financial covenants.

~~16. SUBSEQUENT EVENTS~~

On ~~January~~July 30, 2018, the Company ~~announced that~~entered into a 4-year amortizing interest rate swap agreement with Bank of America, N.A. The swap has an initial notional amount of $831 million and matures on July 31, 2022. On June 15, 2021, the Company entered into a three-year amortizing interest rate swap agreement with Bank of America, N.A. The swap has an initial notional amount of $680 million and matures on July 31, 2024. During the nine months ended January 1, 2022, the Company reclassified into interest expense $7.6 million and recorded a $4.1 million unrealized gain on its ~~Audit Committee had declared~~interest rate swaps derivatives designated as a cash flow hedge.

On March 4, 2021, the Company issued $500.0 million aggregate principal amount of 4.75% Senior Notes. The 4.75% Senior Notes mature on March 1, 2029 and ~~approved~~bear interest at a rate of 4.75% per annum, payable semi-annually on March 1 and September 1 of each year, commencing on September 1, 2021. A portion of the proceeds from the 4.75% Senior Notes was used to redeem the outstanding principal and accrued interest on the 5.50% Senior Notes of $493.9 million. As of January 1, 2022, $500 million of principal was outstanding.

During the first quarter of Fiscal Year 2022, we redeemed the outstanding principal and accrued interest on the 5.50% Senior Notes of $493.9 million.

We may at any time and from time to time, depending on market conditions and prices, continue to retire or purchase our outstanding debt through cash purchases and/or exchanges for equity or debt, in open-market purchases, privately negotiated transactions, or otherwise. Such repurchases or exchanges, if any, will be upon such terms and at such prices as we may determine, and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions, and other factors. In addition, our liquidity, capital resources, and results of operations in any period could be affected by repurchases of our common stock, the payment in the future of cash dividends if the Board determines to reinstate the dividend program, the exercise of outstanding stock options, restricted stock grants under stock plans, and the issuance of common stock under the ESPP. The acquisition of Polycom affected our liquidity and leverage ratios and we are working to reduce our debt leverage

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ratios by prioritizing the repayment of the debt obtained to finance such acquisition. We receive cash from the exercise of outstanding stock options under our stock plan and the issuance of shares under our Employee Stock Purchase Plan. However, the resulting increase in the number of outstanding shares from these equity grants and issuances could affect our earnings per share. We cannot predict the timing or amount of proceeds from the sale or exercise of these securities or whether they will be exercised, forfeited, canceled, or will expire.

Further information regarding the Company’s debt issuances and related hedging activity can be found in Note 7, Debt, and Note 10, Derivatives, of the accompanying notes to the condensed consolidated financial statements within “Part I. Item 1. Financial Statements” of this Quarterly Report on Form 10-Q.

Common Stock Repurchases

From time to time, our Board authorizes programs under which we may repurchase shares of our common stock in the open market or through privately negotiated transactions, including accelerated stock repurchase agreements. On November 28, 2018, the Board approved a ~~dividend~~1.0 million share repurchase program expanding our capacity to repurchase shares to approximately 1.7 million shares. During the nine months ended January 1, 2022, we did not repurchase any shares of ~~$0.15~~ ~~per share~~our common stock. As of January 1, 2022, there remained 1,369,014 shares authorized for repurchase under the existing stock repurchase program.

We believe that our current cash and cash equivalents, short-term investments, cash flow from operations, and availability of additional funds under the Credit Agreement, as amended from time to time, will be sufficient to fund our operations for one year from the date of issuance of these financial statements. However, any projections of future financial needs and sources of working capital are subject to uncertainty on ~~March 9, 2018~~our financial results. Readers are cautioned to ~~holders~~review the risks, uncertainties, and assumptions set forth in this Quarterly Report on Form 10-Q, including the section entitled "Certain Forward-Looking Information" and the risk factors set forth in our Annual Report on Form 10-K for the fiscal year ended April 3, 2021, filed with the SEC on May 18, 2021, and other periodic filings with the SEC, any of ~~record~~which could affect our estimates for future financial needs and sources of working capital.

OFF BALANCE SHEET ARRANGEMENTS AND CONTRACTUAL OBLIGATIONS

We have not entered into any transactions with unconsolidated entities whereby we have financial guarantees, subordinated retained interests, derivative instruments, or other contingent arrangements that expose us to material continuing risks, contingent liabilities, or any other obligation under a variable interest in an unconsolidated entity that provides us with financing and liquidity support, market risk, or credit risk support.

Unconditional Purchase Obligations

We use several contract manufacturers to manufacture raw materials, components, and subassemblies for our products through our supply and demand information that can cover periods up to 78 weeks. The contract manufacturers use this information to acquire components and build products. We also obtain individual components for our products from a wide variety of individual suppliers using a combination of purchase orders, supplier contracts, including annual minimum purchase obligations, and open orders based on ~~February 20, 2018~~projected demand information. As of January 1, 2022, we had outstanding off-balance sheet third-party manufacturing, component purchase, and other general and administrative commitments of $615.5 million, including off-balance sheet consigned inventories of $65.3 million. A substantial portion of the raw materials, components, and subassemblies used in our products are provided by our suppliers on a consignment basis. These consigned inventories are not recorded on our condensed consolidated balance sheets until we take title to the raw materials, components, and subassemblies, which occurs when they are consumed in the production process. Prior to consumption in the production process, our suppliers bear the risk of loss and retain title to the consigned inventory. The agreements allow us to return parts in excess of maximum order quantities to the suppliers at the supplier’s expense. Returns for other reasons are negotiated with the suppliers on a case-by-case basis and to date have been immaterial. If our suppliers were to discontinue financing consigned inventory, it would require us to make cash outlays and we could incur expenses which, if material, could negatively affect our business and financial results. We expect to consume unconditional purchase obligations in the normal course of business, net of an immaterial purchase commitments reserve. In certain instances, these agreements allow us the option to cancel, reschedule, and adjust our requirements based on our business needs in partnering with our suppliers given the current environment.

Except as described above, there have been no material changes in our contractual obligations as described in our Annual Report on Form 10-K for the fiscal year ended April 3, 2021.

~~Quantitative~~

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CRITICAL ACCOUNTING ESTIMATES

For a complete description of what we believe to be the critical accounting estimates used in the preparation of our condensed consolidated financial statements, refer to our Annual Report on Form 10-K for the fiscal year ended April 3, 2021. There have been no material changes to our critical accounting estimates during Fiscal Year 2022.

Recent Accounting Pronouncements

Recent accounting pronouncements issued by the Financial Accounting Standards Board ("FASB") did not and ~~Qualitative Disclosures About Market Risk~~are not expected to have a material impact on the Company's financial position, results of operations, or cash flows.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The discussion of our exposure to market risk related to changes in interest rates and foreign currency exchange rates contains forward-looking statements that are subject to risks and uncertainties. Actual results could vary materially as a result of a number of factors, including those discussed in Part I, "Item 1A. Risk ~~Factors"~~Factors" in our Annual Report on Form 10-K for the fiscal year ended ~~March 31, 2017, filed with the SEC on~~ ~~May 10, 2017~~.April 3, 2021, which could materially affect our business, financial position, or future results of operations.

INTEREST RATE RISK

~~We reported the following balances in cash and cash equivalents, short-term investments, and long-term investments as follows:~~

(in millions) March 31, 2017 December 31, 2017
Cash and cash equivalents $ 302.0
$ 280.3
Short-term investments $ 178.2
$ 218.8
Long-term investments $ 127.2
$ 118.9

~~As of~~ ~~December 31, 2017, our investments were composed of Mutual Funds, US Treasury Notes, Government Agency Securities, Commercial Paper, Corporate Bonds, and Certificates of Deposits ("CDs").~~

~~Our investment policy and strategy are focused on preservation of capital and supporting our liquidity requirements.~~ Our exposure to market risk for changes in interest rates relates primarily to our ~~investment portfolio. Our investment policy generally limits~~floating-rate interest payments under our $1.275 billion term loan facility. Borrowings under the ~~amount~~Credit Agreement bear interest at a variable rate equal to (i) LIBOR plus a specified margin, or (ii) the base rate (which is the highest of ~~credit~~(a) the prime rate publicly announced from time to time by Wells Fargo Bank, National Association, (b) the federal funds rate plus 0.50% or (c) the sum of 1% plus one-month LIBOR plus a specified margin.

On July 30, 2018, we entered into a four-year amortizing interest rate swap agreement, and on June 15, 2021, we entered into a three-year amortizing interest rate swap agreement, both with Bank of America, N.A., as part of our overall strategy to manage our exposure to ~~any one issuer~~market risks associated with fluctuations in interest rates on the $1.275 billion term loan facility. As a matter of policy, we only enter into transactions that we believe will be highly effective at offsetting the underlying risk and requires investments to be high credit quality, primarily rated A or A2 and above, with the objective of minimizing the potential risk of principal loss. All highly liquid investments with initial maturities of three months or less at the date of purchase are classified as cash equivalents. We classify our investments as either short-term or long-term based on each instrument's underlying effective maturity date. All short-term investments have effective maturities of less than 12 months, while all long-term investments have effective maturities greater than 12 months or we do not ~~currently~~use derivatives for trading or speculative purposes. Our objective is to mitigate the impact of interest expense fluctuations on our profitability related to interest rate changes by minimizing movements in future debt payments with these interest rate swaps.

The first swap has an initial notional amount of $831 million and matures on July 31, 2022. The second swap has an initial notional amount of $680 million and matures on July 31, 2024. The swaps involve the receipt of floating-rate interest payments for fixed interest rate payments over the life of the agreement. We have designated these interest rate swaps as cash flow hedges. Changes in the ~~ability~~fair value of the derivatives are recorded to ~~liquidate~~other comprehensive income on the ~~investment. We may sell~~condensed consolidated statements of comprehensive (loss) income and are reclassified to interest expense over the life of the agreements. For additional details, refer to Note 10, Derivatives, of the accompanying notes to the condensed consolidated financial statements within “Part I. Item 1. Financial Statements” of this Quarterly Report on Form 10-Q. During the nine months ended January 1, 2022, we made payments of approximately $7.7 million on our ~~investments prior~~interest rate swaps and recognized $7.6 million within interest expense on the condensed consolidated statement of operations. As of January 1, 2022, we had an immaterial amount of interest accrued within accrued liabilities on the condensed consolidated balance sheet. A hypothetical 10% increase or decrease on market interest rates could result in a corresponding immaterial increase or decrease in annual interest expense due to ~~their stated maturities for strategic purposes, in anticipation of credit deterioration, or for duration management. No material realized or unrealized gains or losses~~the two interest rate swaps.

Interest rates were ~~recognized during~~ lower in the three and nine months ended ~~December 31, 2016 and 2017.~~

~~Interest rates were relatively unchanged in the three and nine months ended December 31, 2017~~January 1, 2022 compared to the same period in the prior year. ~~In the three and nine months ended December 31, 2016 and 2017 we generated interest~~Interest income ~~of $0.9 million and $2.6 million and $1.4 million and $3.4 million, respectively.. We incurred no significant interest expense from our revolving line of credit~~was not material in the three and nine months ended January 1, 2022 and December 31, 2017. The 5.50% Senior Notes are at a fixed interest rate and we have not elected the fair value option for these instruments; accordingly we are not exposed to any economic interest rate risk related to this indebtedness; however, the fair value of this instrument fluctuates as market interest rates change. The increase in interest expense caused by a 10 basis point increase in the interest rates of our variable-rate revolving line of credit indebtedness would not be significant. A hypothetical 10 basis points increase or decrease on market interest rates related to our investment portfolio would have an immaterial impact on our results of operations.26, 2020.

FOREIGN CURRENCY EXCHANGE RATE RISK

We are a net receiver of currencies other than the United States Dollar ("USD.") Accordingly, changes in exchange rates, and in particular a strengthening of the USD, could negatively affect our total net revenues and gross margins, as expressed in USD. There is a risk that we will have to adjust local currency product pricing due to competitive pressures if there is significant volatility in foreign currency exchange rates.

The primary currency fluctuations to which we are exposed are the Euro ("EUR"), ~~British~~Great Britain Pound Sterling ("GBP"), ~~Australian Dollar ("AUD"), Canadian Dollar ("CAD"),~~and Mexican Peso ("~~MXN"~~MXN.")~~, and the Chinese Renminbi ("RMB").~~ We use a hedging strategy to diminish, and make more predictable, the effect of currency fluctuations. All of our hedging activities are entered into with large financial institutions, which we periodically evaluate for credit risks. We hedge our balance sheet exposure by hedging EUR ~~GBP, AUD,~~ and ~~CAD~~GBP denominated cash, accounts receivable, and accounts payable balances, and our economic exposure by hedging a portion of anticipated EUR and GBP denominated sales and our MXN denominated expenditures. We can provide no assurance that our strategy will be successful in the future orand that exchange rate fluctuations will not materially adversely affect our business. We do not hold or issue derivative financial instruments for speculative trading purposes. While our existing hedges cover a certain amount of exposure for the upcoming fiscal year, long-term strengthening of the USD relative to the currencies of other countries in which we sell may have a material adverse impact on our financial results. In addition, our results may be adversely impacted by future changes in foreign currency exchange rates relative to original hedging contracts.

Table of Contents

The impact of changes in foreign currency rates recognized in other non-operating income, ~~and (expense),~~ net was immaterial in both the three and nine months ended ~~December 31, 2016 and 2017.~~January 1, 2022. Although we hedge a portion of our foreign currency exchange exposure, the weakening of certain foreign currencies, particularly the EUR and GBP in comparison to the USD, could result in material foreign exchange losses in future periods.

~~Non-designated~~Non-Designated Hedges

We hedge our EUR ~~GBP, AUD,~~ and ~~CAD~~GBP denominated cash, accounts receivable, and accounts payable balances by entering into foreign exchange forward contracts. The table below presents the impact on the foreign exchange gain (loss) of a hypothetical 10% appreciation and a 10% depreciation of the USD against the forward currency contracts as of ~~December 31, 2017~~January 1, 2022 (in millions):


Currency - forward contracts	Position	USD Notional Value of Net Foreign Exchange Contracts		Foreign Exchange Gain From 10% Appreciation of USD		Foreign Exchange (Loss) From 10% Depreciation of USD
EUR	Sell EUR	$	28.3	$	2.8	$	(2.8)
GBP	Sell GBP	14.0		1.4		(1.4)

Currency - forward contracts Position USD Value of Net Foreign Exchange Contracts Foreign Exchange Gain From 10% Appreciation of USD Foreign Exchange Loss From 10% Depreciation of USD
EUR Sell EUR $ 46.6
$ 4.7
$ (4.7 )
GBP Sell GBP $ 6.9
$ 0.7
$ (0.7 )
AUD Sell AUD $ 11.1
$ 1.1
$ (1.1 )
CAD Sell CAD $ 2.3
$ 0.2
$ (0.2 )

Cash Flow Hedges

In the nine months ended ~~December 31, 2017, 49%~~January 1, 2022, approximately 53% of our total net revenues were derived from sales outside of the U.S. and were denominated primarily in EUR and GBP.

As of ~~December 31, 2017~~,January 1, 2022, we had foreign currency put and call option contracts with notional amounts of approximately ~~€75.8~~€77.4 million and ~~£22.9~~£15.7 million denominated in EUR and GBP, respectively. ~~Collectively,~~Collectively, our option contracts hedge against a portion of our forecasted foreign currency denominated sales. If the USD is subjected to either a 10% appreciation or 10% depreciation versus these net exposed currency positions, we could realize a gain of ~~$7.7~~$8.7 million or incur a loss of ~~$9.5~~$5.0 million,, respectively.

The table below presents the impact on the Black-Scholes valuation of our currency option contracts of a hypothetical 10% appreciation and a 10% depreciation of the USD against the indicated ~~open~~ option contract type for cash flow hedges as of ~~December 31, 2017~~January 1, 2022 (in millions):


Derivative	USD Notional Value of Net Foreign Exchange Contracts		Foreign Exchange Gain From 10% Appreciation of USD		Foreign Exchange (Loss) From 10% Depreciation of USD
Call options	$	116.3	$	0.3	$	(4.7)
Put options	107.5		7.6		(1.1)
Forwards	105.9		(4.9)		(10.4)

Currency - option contracts USD Value of Net Foreign Exchange Contracts Foreign Exchange Gain From 10% Appreciation of USD Foreign Exchange Loss From 10% Depreciation of USD
Call options $ 122.0
$ 4.9
$ (9.2 )
Put options $ 112.6
$ 2.8
$ (0.3 )
Forwards $ 21.0
$ 2.1
$ (2.1 )

Collectively, our swap contracts hedge against a portion of our forecasted MXN denominated expenditures. As of ~~December 31, 2017~~,January 1, 2022, we had cross-currency swap contracts with notional amounts of approximately MXN ~~76.3~~415.9 million.

The table below presents the impact on the valuation of our cross-currency swap contracts of a hypothetical 10% appreciation and a 10% depreciation of the USD as of ~~December 31, 2017~~January 1, 2022 (in millions):


Derivative	USD Notional Value of Cross-Currency Swap Contracts		Foreign Exchange (Loss) From 10% Appreciation of USD		Foreign Exchange Gain From 10% Depreciation of USD
Position: Buy MXN	$	19.9	$	(1.9)	$	1.9

Except as described above, there have been no material changes in our market risk as described in our Annual Report on Form 10-K for the fiscal year ended April 3, 2021.

Currency - cross-currency swap contracts Position USD Value of Net Foreign Exchange Contracts Foreign Exchange Loss From 10% Appreciation of USD Foreign Exchange Gain From 10% Depreciation of USD
MXN Buy MXN $ 3.9
$ (0.3 ) $ 0.4

Table of Contents

ITEM 4. CONTROLS AND PROCEDURES

~~Controls~~(a)Evaluation of disclosure controls and ~~Procedures~~procedures


~~(a)~~	~~Evaluation of disclosure controls and procedures~~

Our management evaluated, with the participation of our Chief Executive Officer and our Chief Financial Officer, the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures are effective as of the end of the period covered by this report to ensure that information we are required to disclose in reports that we file or submit under the Securities Exchange Act of 1934 (i) is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and (ii) is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.


~~(b)~~	~~Changes in internal control over financial reporting~~

(b)Changes in internal control over financial reporting

There have ~~not~~ been ~~any~~no changes in the Company’s internal control over financial reporting during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

PART II --– OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are presently engaged in various legal actions arising in the normal course of business. We believe that it is unlikely that any of these actions will have a material adverse impact on our operating results; however, because of the inherent uncertainties of litigation, the outcome of any of these actions could be unfavorable and could have a material adverse effect on our financial condition, results of operations or cash flows. For additional information about our material legal proceedings, please see Note 6, Commitments and Contingencies, of the accompanying notes to the condensed consolidated financial ~~statements.~~statements within “Part I. Item 1. Financial Statements” of this Quarterly Report on Form 10-Q.

ITEM 1A. RISK FACTORS

You should carefully consider the risk factors discussed in Part I, "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended ~~March 31, 2017, filed with the SEC on May 10, 2017 (the "Form 10-K"),~~April 3, 2021, each of which could materially affect our business, financial position, or future results of operations. ~~Except as described below, there have been no material changes to the risk factors included in the Form 10-K.~~

~~Changes in applicable tax regulations and resolutions of tax disputes could negatively affect our financial results.~~

The Company is subject to taxation in the U.S. and numerous foreign jurisdictions. On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The changes included in the Tax Act are broad and complex. As rule making bodies and new legislation is enacted to interpret the Tax Act, these changes may adjust the estimates provided in this report. The changes may possibly be material, due to, among other things, the Treasury Department’s promulgation of regulations and guidance that interpret the Tax Act, corrective technical legislative amendments that may change the Tax Act, any changes in accounting standards for income taxes or related interpretations in response to the Tax Act, or any updates or changes to estimates the company has utilized to calculate the transition impacts, including impacts from changes to current year earnings estimates and foreign exchange rates of foreign subsidiaries.

In addition, it is uncertain how each country where we do business may react to the Tax Act. Moreover, the evolving global tax landscape accompanying the adoption and guidance associated with the Base Erosion and Profit Shifting reporting requirements (“BEPS") recommended by the G8, G20 and Organization for Economic Cooperation and Development ("OECD") may require us to make adjustments to our financial results. As these and other tax laws and related regulations change, our financial results could be materially impacted. Given the unpredictability of these possible changes, it is difficult to assess whether the overall effect of these potential tax changes would be positive or negative for our earnings and cash flow, but such changes could adversely impact our financial results.

We are also subject to examination by the Internal Revenue Service ("IRS") and other tax authorities, including state revenue agencies and foreign governments. While we regularly assess the likelihood of favorable or unfavorable outcomes resulting from examinations by the IRS and other tax authorities to determine the adequacy of our provision for income taxes, there can be no assurance that the actual outcome resulting from these examinations will not materially adversely affect our financial condition and results of operations.

The risks described ~~here~~within this Quarterly Report on Form 10-Q and in the Annual Report on ~~the~~ Form 10-K for the fiscal year ended April 3, 2021 are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial position, or future results of operations.

Table of Contents

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

~~Share Repurchase Programs~~

During the three months ended January 1, 2022, we did not repurchase any shares of our common stock. As of January 1, 2022, there remained 1,369,014 shares authorized for repurchase under the existing stock repurchase program. The following table presents ~~a month-to-month summary~~information with respect to shares that were tendered to us in satisfaction of employee tax withholding obligations upon the vesting of restricted stock ~~purchase activity in~~grants under our stock plans during the ~~third quarter of fiscal year 2018:~~three months ended January 1, 2022:


	Total Number of Shares Purchased (4)	Average Price Paid per Share (2)	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (3)
October 3, 2021 to October 30, 2021	15,679	N/A	—	1,369,014
October 31, 2021 to November 27, 2021	9,463	N/A	—	1,369,014
November 28, 2021 to January 1, 2022	5,665	N/A	—	1,369,014

Total Number of Shares Purchased ¹

Average Price Paid per Share ²

Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs ¹

Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs⁶
October 1, 2017 to October 28, 2017 212,580
³
$ 45.06
210,370
818,216
October 29, 2017 to November 25, 2017 74,371
⁴
$ 47.82
72,678
745,538
November 26, 2017 to December 30, 2017 18,821
⁵
$ 50.48
14,606
730,932



1		(1)	On ~~July 27, 2017 the~~November 28, 2018, our Board of Directors ~~authorized~~approved a 1.0 million shares repurchase program expanding our capacity to repurchase ~~1,000,000~~ shares ~~of our common stock~~to approximately 1.7 million shares. We may repurchase shares from time to time in ~~the~~open market transactions or inthrough privately negotiated ~~repurchases as determined by management.~~transactions. There is no expiration date associated with the repurchase activity.
(2)
2	"Average Price Paid per Share" reflects open market repurchases of common stock only.
(3)		These shares reflect the available shares authorized for repurchase under the expanded repurchase program approved by the Board on November 28, 2018.
3(4)				~~Includ~~es ~~2,210 shares~~Represents only shares that were tendered to us in satisfaction of employee tax withholding obligations upon the vesting of restricted stock ~~granted~~grants under our stock plans.

4	~~Includes 1,693 shares~~ ~~that were tendered to us in satisfaction of employee tax withholding obligations upon the vesting of restricted stock granted under our stock plans.~~

5	~~Includes 4,215 shares~~ ~~that were tendered to us in satisfaction of employee tax withholding obligations upon the vesting of restricted stock granted under our stock plans.~~

6	~~These shares reflect the available shares authorized for repurchase under the program approved by the Board on July 27, 2017.~~

Table of Contents

ITEM 6. EXHIBITS

We have filed the following documents as Exhibits to this Quarterly Report on Form 10-Q:

EXHIBITS INDEX

Exhibit Number

Incorporation by Reference

Filed Herewith

Exhibit Description

Form

File No.

Exhibit

Filing Date

10.1

Amendment No. 3 to Credit Agreement, dated as of December 29, 2021, by and among Plantronics, Inc., the lenders party thereto, and Wells Fargo Bank, National Association, as administrative agent

8-K

001-12696

10.1

12/29/2021

10.2*

Plantronics, Inc. 2002 Employee Stock Purchase Plan, as amended and restated

31.1

Certification of the President and CEO Pursuant to Rule 13a-14(a)/15d-14(a)

31.2

Certification of Executive Vice President and CFO Pursuant to Rule 13a-14(a)/15d-14(a)

32.1

Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350

101.INS

XBRL Instance Document - the XBRL Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH

Inline XBRL Taxonomy Extension Schema Document

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF

Inline XBRL Taxonomy Definition Linkbase Document

104

Cover Page Interactive Data File, (formatted as Inline XBRL and contained in Exhibit 101)

Indicates a management contract or compensatory plan, contract or arrangement in which any Director or any Executive Officer participates.

~~Exhibit Number~~

~~Incorporation by Reference~~

~~Filed Herewith~~

~~Exhibit Description~~

~~Form~~

~~File No.~~

~~Exhibit~~

~~Filing Date~~

~~31.1~~

~~Certification of the President and CEO Pursuant to Rule 13a-14(a)/15d-14(a).~~

~~31.2~~

~~Certification of Senior Vice President and CFO Pursuant to Rule 13a-14(a)/15d-14(a).~~

~~32.1~~

~~Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350.~~

~~101.INS~~

~~XBRL Instance Document~~

~~101.SCH~~

~~XBRL Taxonomy Extension Schema Document~~

~~101.CAL~~

~~XBRL Taxonomy Extension Calculation Linkbase Document~~

~~101.LAB~~

~~XBRL Taxonomy Extension Label Linkbase Document~~

~~101.PRE~~

~~XBRL Taxonomy Extension Presentation Linkbase Document~~

~~101.DEF~~

~~XBRL Taxonomy Definition Linkbase Document~~

~~Plantronics, Inc.~~

~~FORM 10-Q~~

~~CROSS REFERENCE TABLE~~

Table of Contents

Item Number Page(s)
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements
15
-
34

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
3
-
14

Item 3. Quantitative and Qualitative Disclosures about Market Risk
35
-
37

Item 4. Control and Procedures
37

PART II. OTHER INFORMATION

Item 1. Legal Proceedings
37

Item 1A. Risk Factors
37

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
39

Item 6. Exhibits
40

Signatures
41

SIGNATURES

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 thereunto duly authorized.



		PLANTRONICS, INC.

Date:	~~January 30, 2018~~February 8, 2022	By:	/s/ ~~Pamela Strayer~~Charles D. Boynton
		Name:	~~Pamela Strayer~~Charles D. Boynton
		Title:	~~Senior~~Executive Vice President and Chief Financial Officer (on behalf of the Registrant and as principal financial officer and principal accounting officer)



Delaware			77-0207692
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	POLY	New York Stock Exchange



Large accelerated filerx	☒		Accelerated filero	☐
Non-accelerated filero	☐		Smaller reporting companyo	☐
			Emerging growth companyo
		~~(Do not check if a smaller reporting company)~~	☐


	January 1, 2022		April 3, 2021
ASSETS
Current assets
Cash and cash equivalents	$	182,700	$	202,560
Restricted cash	—		493,908
Short-term investments	17,017		14,559
Accounts receivable, net	275,913		267,464
Inventory, net	216,750		194,405
Other current assets	61,484		65,214
Total current assets	753,864		1,238,110
Non-current assets

Property, plant, and equipment, net	126,973		140,875
Purchased intangibles, net	255,564		341,614
Goodwill	796,216		796,216
Deferred tax assets	211,543		95,800
Other non-current assets	70,332		51,654
Total assets	$	2,214,492	$	2,664,269

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities
Accounts payable	$	160,529	$	151,244
Accrued liabilities	328,551		394,084
Current portion of long-term debt	—		478,807
Total current liabilities	489,080		1,024,135
Non-current liabilities
Long-term debt, net	1,499,228		1,496,064

Long-term income taxes payable	76,095		86,227

Other non-current liabilities	139,469		138,609
Total liabilities	2,203,872		2,745,035
Commitments and contingencies (Note 6)	0		0
Stockholders' equity (deficit)
Common stock	926		912
Additional paid-in capital	1,596,313		1,556,272
Accumulated other comprehensive income (loss)	11,454		(3,221)
Accumulated deficit	(716,423)		(765,233)
Total stockholders' equity before treasury stock	892,270		788,730
Less: Treasury stock, at cost	(881,650)		(869,496)
Total stockholders' equity (deficit)	10,620		(80,766)
Total liabilities and stockholders' equity (deficit)	$	2,214,492	$	2,664,269


	Nine Months Ended
	January 1, 2022		December 26, 2020
Cash flows from operating activities
Net income (loss)	$	48,810	$	(68,307)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities
Depreciation and amortization	112,796		124,881
Amortization of debt issuance costs	5,046		3,962
Stock-based compensation	34,214		31,104
Deferred income taxes	(115,660)		(15,373)
Provision for excess and obsolete inventories	8,160		12,767
Restructuring and other related charges	33,977		49,477
Cash payments for restructuring charges	(27,515)		(28,794)
Other operating activities	(1,526)		(6,000)
Changes in assets and liabilities
Accounts receivable, net	(8,569)		(71,439)
Inventory, net	(24,699)		(39,941)
Current and other assets	(9,129)		(15,246)
Accounts payable	9,170		62,454
Accrued liabilities	(45,502)		47,529
Income taxes	(19,625)		(15,925)
Net cash (used in) provided by operating activities	(52)		71,149

Cash flows from investing activities
Proceeds from sales of short-term investments	264		667

Purchases of short-term investments	(760)		(394)

Capital expenditures	(20,682)		(16,753)
Proceeds from sale of property, plant, and equipment	—		1,900
Other investing activities	(4,000)		—
Net cash used in investing activities	(25,178)		(14,580)

Cash flows from financing activities

Employees' tax withheld and paid for restricted stock and restricted stock units	(12,154)		(3,193)
Proceeds from issuances under stock-based compensation plans	5,841		5,731
Proceeds from revolving line of credit	—		50,000
Repayments of revolving line of credit	—		(50,000)


Repayments of long-term debt	(480,689)		(46,980)

Net cash used in financing activities	(487,002)		(44,442)

Effect of exchange rate changes on cash and cash equivalents and restricted cash	(1,536)		4,059
Net (decrease) increase in cash and cash equivalents and restricted cash	(513,768)		16,186

Cash and cash equivalents and restricted cash at beginning of period	696,468		213,879
Cash and cash equivalents and restricted cash at end of period	$	182,700	$	230,065



x☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



o☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



~~PART I. FINANCIAL INFORMATION~~		Page ~~No.~~
PART I		FINANCIAL INFORMATION
~~Management's Discussion and Analysis of Financial Condition and Results of Operations~~Item 1.		Condensed Consolidated Financial Statements (Unaudited)	3

~~Overview~~Condensed Consolidated Balance Sheets as of January 1, 2022 and April 3, 20 21	3

~~Results of Operations~~	5

~~Financial Condition~~	10

~~Off Balance Sheet Arrangements and Contractual Obligations~~	13

~~Critical Accounting Estimates~~	14

~~Financial Statements (Unaudited):~~	15

~~Condensed Consolidated Balance Sheets as of March 31, 2017 and December 31, 2017~~	15

Condensed Consolidated Statements of Operations for the Three and Nine Months Ended January 1, 2022 and December ~~31, 2016 and 2017~~26, 2020	164

Condensed Consolidated Statements of Comprehensive (Loss)Income ~~(Loss)~~ for the Three and Nine Months Ended January 1, 2022 and December ~~31, 2016 and 2017~~26, 2020	175

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended January 1, 2022 and December ~~31, 2016 and 2017~~26, 2020	186
		Condensed Consolidated Statements of Stockholders' Equity (Deficit) for the Three and Nine Months Ended January 1, 2022 and December 26, 2020	8
		Notes to the Condensed Consolidated Financial Statements	1910
Item 2.		Management's Discussion and Analysis of Financial Condition and Results of Operations	30
		Overview	31
		Results of Operations	33
		Financial Condition	38
		Off Balance Sheet Arrangements and Contractual Obligations	40
		Critical Accounting Estimates	41
Item 3.		Quantitative and Qualitative Disclosures About Market Risk	3542
Item 4.
Controls and Procedures	3744

PART ~~II.~~ II		OTHER INFORMATION

Item 1.		Legal Proceedings	3744
Item 1A.		Risk Factors	44
~~Risk Factors~~Item 2.		37

Unregistered Sales of Equity Securities and Use of Proceeds	3945
Item 6.		Exhibits	46

~~Exhibits~~Signatures		40

~~Cross Reference Table~~	4047

~~Signatures~~	41


	Three Months Ended January 1, 2022
	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Income		Accumulated Deficit		Treasury Stock		Total Stockholders' (Deficit) Equity
	Shares	Amount
Balances at October 2, 2021	42,721	$	926	$	1,584,088	$	3,284	$	(705,259)	$	(880,806)	$	2,233
Net loss	—	—		—		—		(11,164)		—		(11,164)

Net unrealized gains on cash flow hedges, net of tax	—	—		—		8,170		—		—		8,170

Proceeds from issuances under stock-based compensation plans	43	—		—		—		—		—		—



Stock-based compensation	—	—		12,225		—		—		—		12,225


Employees' tax withheld and paid for restricted stock and restricted stock units	—	—		—		—		—		(844)		(844)




Balances at January 1, 2022	42,764	$	926	$	1,596,313	$	11,454	$	(716,423)	$	(881,650)	$	10,620


	Three Months Ended December 26, 2020
	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Treasury Stock		Total Stockholders' Deficit
	Shares	Amount
Balances at September 26, 2020	41,246	$	907	$	1,526,677	$	(9,650)	$	(796,324)	$	(866,615)	$	(145,005)
Net income	—	—		—		—		20,113		—		20,113

Net unrealized gains on cash flow hedges, net of tax	—	—		—		938		—		—		938

Proceeds from issuances under stock-based compensation plans	19	—		—		—		—		—		—


Stock-based compensation	—	—		11,486		—		—		—		11,486


Employees' tax withheld and paid for restricted stock and restricted stock units	(6)	—		—		—		—		(144)		(144)



Other equity changes	—	—		(3)		(409)		3		—		(409)
Balances at December 26, 2020	41,259	$	907	$	1,538,160	$	(9,121)	$	(776,208)	$	(866,759)	$	(113,021)


	Nine Months Ended January 1, 2022
	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive (Loss) Income		Accumulated Deficit		Treasury Stock		Total Stockholders' (Deficit) Equity
	Shares	Amount
Balances at April 3, 2021	41,751	$	912	$	1,556,272	$	(3,221)	$	(765,233)	$	(869,496)	$	(80,766)
Net income	—	—		—		—		48,810		—		48,810

Net unrealized gains on cash flow hedges, net of tax	—	—		—		14,675		—		—		14,675

Proceeds from issuances under stock-based compensation plans	785	11		—		—		—		—		11



Stock-based compensation	—	—		34,214		—		—		—		34,214


Employees' tax withheld and paid for restricted stock and restricted stock units	—	—		—		—		—		(12,154)		(12,154)

Proceeds from Employee Stock Purchase Program	228	3		5,827		—		—		—		5,830


Balances at January 1, 2022	42,764	$	926	$	1,596,313	$	11,454	$	(716,423)	$	(881,650)	$	10,620


	Nine Months Ended December 26, 2020
	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Treasury Stock		Total Stockholders' Deficit
	Shares	Amount
Balances at March 28, 2020	40,406	$	896	$	1,501,340	$	(13,582)	$	(707,904)	$	(863,566)	$	(82,816)
Net loss	—	—		—		—		(68,307)		—		(68,307)

Net unrealized gains on cash flow hedges, net of tax	—	—		—		4,870		—		—		4,870

Proceeds from issuances under stock-based compensation plans	667	6		—		—		—		—		6
Repurchase of restricted common stock	(10)	—		—		—		—		—		—


Stock-based compensation	—	—		31,104		—		—		—		31,104


Employees' tax withheld and paid for restricted stock and restricted stock units	(261)	—		—		—		—		(3,193)		(3,193)

Proceeds from Employee Stock Purchase Program	457	5		5,719		—		—		—		5,724

Other equity changes	—	—		(3)		(409)		3		—		(409)
Balances at December 26, 2020	41,259	$	907	$	1,538,160	$	(9,121)	$	(776,208)	$	(866,759)	$	(113,021)



~~Net Revenues~~ ~~(in millions)~~	~~Operating Income~~ ~~(in millions)~~



	Three Months Ended											Nine Months Ended
	December 31,						Increase					December 31,						Increase
(in thousands, except percentages)	2016			2017			(Decrease)					2016			2017			(Decrease)
Net revenues	$	232,933		$	226,534		$	(6,399	)	(2.7	)%	$	672,222		$	640,760		$	(31,462	)	(4.7	)%
Cost of revenues	122,753			112,409			(10,344		)	(8.4	)%	338,523			315,720			(22,803		)	(6.7	)%
Gross profit	$	110,180		$	114,125		$	3,945		3.6	%	$	333,699		$	325,040		$	(8,659	)	(2.6	)%
Gross profit %	47.3		%	50.4		%						49.6		%	50.7		%


(in thousands)	Amount
2022 (remaining three months)	27,808
2023	111,232
2024	65,936
2025	21,688
2026	12,844
Thereafter	16,056
Total	$	255,564



December 31, 2017	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Cash & Cash Equivalents		Short-term investments (due in 1 year or less)		Long-term investments (due in 1 to 3 years)
Cash	$	272,063	$	—	$	—		$	272,063	$	272,063	$	—	$	—
Level 1:
Mutual Funds	14,298		399		(70		)	14,627		—		14,627		—
US Treasury Notes	71,684		—		(210		)	71,474		4,998		42,348		24,128
Money Market Funds	239		—		—			239		239		—		—
Subtotal	86,221		399		(280		)	86,340		5,237		56,975		24,128
Level 2:
Government Agency Securities	56,667		—		(276		)	56,391		—		31,300		25,091
Commercial Paper	32,944		—		—			32,944		2,993		29,951		—
Corporate Bonds	142,148		45		(375		)	141,818		—		77,175		64,643
Certificates of Deposits ("CDs")	28,383		—		(3		)	28,380		—		23,372		5,008
Subtotal	260,142		45		(654		)	259,533		2,993		161,798		94,742

Total cash, cash equivalents and investments measured at fair value	$	618,426	$	444	$	(934	)	$	617,936	$	280,293	$	218,773	$	118,870



March 31, 2017	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Cash & Cash Equivalents		Short-term investments (due in 1 year or less)		Long-term investments (due in 1 to 3 years)
Cash	$	295,877	$	—	$	—		$	295,877	$	295,877	$	—	$	—
Level 1:
Mutual Funds	12,079		352		(32		)	12,399		—		12,399		—
US Treasury Notes	35,960		—		(68		)	35,892		—		17,560		18,332
Money Market Funds	—		—		—			—		—		—		—
Subtotal	48,039		352		(100		)	48,291		—		29,959		18,332
Level 2:
Government Agency Securities	54,415		20		(164		)	54,271		—		15,309		38,962
Commercial Paper	47,152		—		—			47,152		6,093		41,059		—
Corporate Bonds	141,508		64		(224		)	141,348		—		73,676		67,672
Certificates of Deposits ("CDs")	20,383		3		—			20,386		—		18,176		2,210
Subtotal	263,458		87		(388		)	263,157		6,093		148,220		108,844

Total cash, cash equivalents and investments measured at fair value	$	607,374	$	439	$	(488	)	$	607,325	$	301,970	$	178,179	$	127,176



	March 31,		December 31,
(in thousands)	2017		2017
Raw materials	$	20,260	$	23,485
Work in process	215		243
Finished goods	34,981		40,846
Inventory, net	$	55,456	$	64,574


(in thousands)	Operating Leases(1)
2022 (remaining three months)	$	6,443
2023	14,875
2024	13,419
2025	9,669
2026	8,100
Thereafter	17,244
Total lease payments	69,750
Less: Imputed interest(2)	(7,958)
Present value of lease liabilities	$	61,792



~~Operating Cash Flow~~ ~~(in millions)~~	~~Investing Cash Flow(in millions)~~	~~Financing Cash Flow~~ ~~(in millions)~~



(in millions)	Total		Less than 1 year		1 - 3 years		3 - 5 years		More than 5 years
Toll charge	$	69.3	$	5.5	$	11.0	$	11.2	$	41.6



	March 31, 2017			December 31, 2017
ASSETS
Current assets:
Cash and cash equivalents	$	301,970		$	280,293
Short-term investments	178,179			218,773
Accounts receivable, net	141,177			143,919
Inventory, net	55,456			64,574
Other current assets	22,195			19,460
Total current assets	698,977			727,019
Long-term investments	127,176			118,870
Property, plant, and equipment, net	150,307			144,802
Goodwill and purchased intangibles, net	15,577			15,498
Deferred tax assets	23,242			14,783
Other assets	1,880			1,681
Total assets	$	1,017,159		$	1,022,653

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	42,885		$	45,685
Accrued liabilities	74,285			61,906
Total current liabilities	117,170			107,591
Long term debt, net of issuance costs	491,059			492,146
Long-term income taxes payable	11,729			74,476
Other long-term liabilities	15,045			19,419
Total liabilities	$	635,003		$	693,632
Commitments and contingencies (Note 6)
Stockholders' equity:
Common stock	$	804		$	814
Additional paid-in capital	818,777			858,253
Accumulated other comprehensive income	4,694			1,905
Retained earnings	319,931			294,200
Total stockholders' equity before treasury stock	1,144,206			1,155,172
Less: Treasury stock, at cost	(762,050		)	(826,151		)
Total stockholders' equity	382,156			329,021
Total liabilities and stockholders' equity	$	1,017,159		$	1,022,653



	Three Months Ended December 31,						Nine Months Ended December 31,
	2016			2017			2016			2017
Net revenues	$	232,933		$	226,534		$	672,222		$	640,760
Cost of revenues	122,753			112,409			338,523			315,720
Gross profit	110,180			114,125			333,699			325,040
Operating expenses:
Research, development, and engineering	21,393			21,257			66,116			62,402
Selling, general, and administrative	56,919			56,196			169,581			170,125
(Gain) loss, net from litigation settlements	(103		)	(15		)	4,287			(295		)
Restructuring and other related charges (credits)	113			(84		)	(1,350		)	2,438
Total operating expenses	78,322			77,354			238,634			234,670
Operating income	31,858			36,771			95,065			90,370
Interest expense	(7,322		)	(7,341		)	(21,867		)	(21,904		)
Other non-operating income and (expense), net	427			2,490			4,119			5,230
Income before income taxes	24,963			31,920			77,317			73,696
Income tax expense	2,742			81,424			14,235			84,419
Net income (loss)	$	22,221		$	(49,504	)	$	63,082		$	(10,723	)

Earnings (Loss) per common share:
Basic	$	0.69		$	(1.54	)	$	1.96		$	(0.33	)
Diluted	$	0.68		$	(1.54	)	$	1.92		$	(0.33	)

Shares used in computing earnings (loss) per common share:
Basic	32,242			32,075			32,260			32,384
Diluted	32,826			32,075			32,895			32,384

Cash dividends declared per common share	$	0.15		$	0.15		$	0.45		$	0.45



	Nine months ended December 31, 2017
(in millions)	Total Charges		Restructuring and Other Related Charges (Credits)		Cost of Revenues		Selling, General, and Administrative
Severance benefits from reduction-in-force	$	1.3	$	1.3	$	—	$	—
Lease exit charge and asset impairments in Netherlands	0.7		0.7		—		—
Write-off of unrecoverable indirect tax asset in Brazil	0.7		—		0.7		—
Asset impairments related to previous Clarity operations	0.4		0.4		—		—
Loss on Clarity asset sale	0.9		—		0.9		—
Accelerated vesting of restricted stock	0.2		—		—		0.2
Totals	$	4.2	$	2.4	$	1.6	$	0.2



Currency - forward contracts	Position	USD Value of Net Foreign Exchange Contracts		Foreign Exchange Gain From 10% Appreciation of USD		Foreign Exchange Loss From 10% Depreciation of USD
EUR	Sell EUR	$	46.6	$	4.7	$	(4.7	)
GBP	Sell GBP	$	6.9	$	0.7	$	(0.7	)
AUD	Sell AUD	$	11.1	$	1.1	$	(1.1	)
CAD	Sell CAD	$	2.3	$	0.2	$	(0.2	)



Currency - option contracts	USD Value of Net Foreign Exchange Contracts		Foreign Exchange Gain From 10% Appreciation of USD		Foreign Exchange Loss From 10% Depreciation of USD
Call options	$	122.0	$	4.9	$	(9.2	)
Put options	$	112.6	$	2.8	$	(0.3	)
Forwards	$	21.0	$	2.1	$	(2.1	)



	Total Number of Shares Purchased ¹		Average Price Paid per Share ²		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs ¹	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs⁶
October 1, 2017 to October 28, 2017	212,580	³	$	45.06	210,370	818,216
October 29, 2017 to November 25, 2017	74,371	⁴	$	47.82	72,678	745,538
November 26, 2017 to December 30, 2017	18,821	⁵	$	50.48	14,606	730,932



Item Number	Page(s)
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements	15	-	34

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	3	-	14

Item 3. Quantitative and Qualitative Disclosures about Market Risk	35	-	37

Item 4. Control and Procedures	37

PART II. OTHER INFORMATION

Item 1. Legal Proceedings	37

Item 1A. Risk Factors	37

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	39

Item 6. Exhibits	40

Signatures	41