PRESS RELEASE
FOR INFORMATION, CONTACT: Greg Klaben Vice President of Investor Relations (831) 458-7533 | FOR RELEASE at 1 P.M. PST January 26, 2010 |
Plantronics Announces Third Quarter Fiscal 2010 Results
Results Exceed Guidance; Company Achieves Targeted Gross & Operating Margins
SANTA CRUZ, CA – January 26, 2010 - Plantronics, Inc. (NYSE: PLT) today announced third quarter fiscal 2010 net revenues of $165.9 million compared with $152.6 million in the third quarter of fiscal 2009. Net revenues were above the previously provided guidance of $155 million to $160 million. Plantronics' GAAP diluted earnings per share from continuing operations were $0.47 in the third quarter of fiscal 2010, compared with diluted earnings per share from continuing operations of $0.13 in the same quarter of the prior year. Non-GAAP diluted earnings per share from continuing operations for the third quarter of fiscal 2010 were $0.50 compared with $0.14 in the third quarter of fiscal 2009 and were greater than the previously provided non-GAAP guidance of $0.38 to $0.42. The difference between GAAP and non-GAAP earnings per share from continuing operations for the third quarter of fiscal 2010 includes stock-based compensation charges, purchase accounting amortization and restructuring and other related charges, all net of associated tax benefits along with the release of $1.2 million in tax reserves.
The Company completed the sale of Altec Lansing, its Audio Entertainment Group (“AEG”) segment, effective as of December 1, 2009. All results of operations related to AEG including the loss on the sale are classified as discontinued operations for all periods presented.
Plantronics also announced that its Board of Directors declared a quarterly dividend of $0.05 per share. The dividend is payable on March 10, 2010 to stockholders of record at the close of business on February 19, 2010.
“Revenues were above expectations as we experienced better than expected demand in our Office & Contact Center product group, including Unified Communications solutions,” stated Ken Kannappan, President & CEO. “Our margins improved as the result of prior cost reduction efforts combined with higher revenues.”
Business Results (Non-GAAP from Continuing Operations)
Comparisons are to the Same Quarter in the Prior Year
Third quarter fiscal 2010 net revenues of $165.9 million increased 9% compared with $152.6 million in the prior year quarter. Improved economic conditions led to increases in net revenues both year over year and sequentially in Office and Contact Center, Mobile, and Gaming & Computer Audio, while revenues from the Clarity group declined compared with the same quarter of the prior year. Geographically, all regions grew year over year and sequentially, except for EMEA which declined year over year but grew by 34% from the previous quarter.
Office and Contact Center net revenues were $103.1 million, an increase of 1% from $101.7 million in the third quarter of fiscal 2009 and a sequential increase of 10% from $93.5 million in the second quarter of fiscal 2010. Mobile headset net revenues were $47.0 million, an increase of 30% from the year ago quarter of $36.0 million, and a sequential increase of 35% from $34.7 million.
Gross margin in the third quarter of fiscal 2010 was 48.9% compared with 40.1% in the third quarter of the prior year and 48.7% in the second quarter of fiscal 2010. The increase in the current quarter as compared to the same period in the prior year is primarily driven by the improved Bluetooth profitability as a result of outsourcing our manufacturing in fiscal 2010. The sequential improvement was primarily driven by an improved product mix.
Operating expenses declined by 6% from $52.2 million in the prior year quarter to $49.2 million in the current quarter. Operating income in the current quarter was $31.8 million compared with guidance of $26 million to $29 million, resulting in an operating margin of 19.2% as compared to operating income of $9.0 million and an operating margin of 5.9% in the prior year quarter.
Business Outlook
The following statements are based on our current expectations and many of these statements are forward-looking. Actual results are subject to a variety of risks and uncertainties and may differ materially from our expectations.
Plantronics has a “book and ship” business model whereby it ships most orders to customers within 48 hours of its receipt of those orders and, therefore, the level of backlog does not provide reliable visibility into potential future revenues. The Company’s business is inherently difficult to forecast, and there can be no assurance that the incoming orders it expects to receive over the balance of the quarter will materialize. With continuing uncertainty resulting from the global economic conditions, the Company’s business remains difficult to forecast. In addition, our incoming order rate tends to be low during the last two weeks of December and the first half of January and then rises significantly into February and March. This pattern may be affected due to uncertainty of the strength of the economic recovery. We have experienced a slow start to this quarter and we therefore must realize an increased incoming order flow for the balance of the quarter in order to achieve the revenue range we are projecting.
Net revenues in the fourth quarter of fiscal 2010 are expected to be lower than the third quarter of fiscal 2010 and higher than the fourth quarter of fiscal 2009.
Subject to the foregoing, we are currently expecting the following range of financial results for continuing operations for the fourth quarter of fiscal 2010:
| · | Net revenues of $150 million - $155 million; |
| · | Non-GAAP operating income of $27 million to $30 million; |
| · | Non-GAAP earnings per share of $0.40 - $0.44; |
| · | Non-GAAP tax rate to be approximately 26%; |
| · | GAAP earnings per share of $0.35 to $0.39. |
If these results are achieved, the performance compared with fourth quarter of fiscal 2009 would be revenue growth of approximately 17% to 21%.
Plantronics does not intend to update these targets during the quarter or to report on its progress toward these targets. Plantronics will not comment on these targets to analysts or investors except by its next press release announcing its fourth quarter fiscal 2010 results or by other public disclosure. Any statements by persons outside Plantronics speculating on the progress of the fourth quarter fiscal 2010 will not be based on internal Company information and should be assessed accordingly by investors.
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Conference Call Scheduled to Discuss Actual Financial Results
Plantronics has scheduled a conference call to discuss third quarter fiscal 2010 results. The conference call will take place Tuesday, January 26th at 2:00 PM (PST). All interested investors and potential investors in Plantronics stock are invited to participate. To listen to the call, please dial in five to ten minutes prior to the scheduled starting time and refer to the "Plantronics Conference Call." Participants from North America should call (888) 301-8736 and other participants should call (706) 634-7260.
A replay of the call with the conference ID #40971882 will be available for 72 hours at (800) 642-1687 for callers from North America and at (706) 645-9291 for all other callers. The conference call will also be simultaneously web cast at www.plantronics.com under Investor Relations, and the web cast of the conference call will remain available at the Plantronics website for thirty days.
Use of Non-GAAP Financial Information
Plantronics excludes non-recurring transactions and non-cash expenses and charges such as restructuring and other related charges, the release of certain tax reserves, stock-based compensation expenses related to stock options, awards and employee stock purchases, purchase accounting amortization and impairment of goodwill and long-lived assets from non-GAAP income from continuing operations, non-GAAP earnings per diluted share from continuing operations, non-GAAP operating income, non-GAAP gross margin, non-GAAP operating margin and non-GAAP effective tax rate on continuing operations. Plantronics excludes these expenses from its non-GAAP measures primarily because Plantronics does not believe they are reflective of ongoing operating results and are not considered as part of its target operating model. Plantronics believes that the use of non-GAAP financial measures provides meaningful supplemental information regarding its performance and liquidity, and helps investors compare actual results to its long-term target operating model goals. Plantronics believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing its performance and when planning, forecasting and analyzing future periods.
Safe Harbor
This release contains forward-looking statements within the meaning of Section 27A of the Securities Exchange Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements relating to (i) our estimates of GAAP and non-GAAP financial results for the fourth quarter of fiscal 2010, including revenue and earnings per share; (ii) our estimated tax rate for the fourth quarter of fiscal 2010; (iii) our estimated stock-based compensation expense for the fourth quarter of fiscal 2010, as well as other matters discussed in this press release that are not purely historical data. Plantronics does not assume any obligation to update or revise any such forward-looking statements, whether as the result of new developments or otherwise.
Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those contemplated by such statements. Among the factors that could cause actual results to differ materially from those contemplated are:
| · | economic conditions in both the domestic and international markets; |
| · | fluctuations in foreign exchange rates; |
| · | the bankruptcy or financial weakness of distributors or key customers, or the bankruptcy of or reduction in capacity of our key suppliers; |
| · | the effect of restructuring actions on GAAP results; |
| · | our ability to realize our Unified Communications (“UC”) plans and to achieve the financial results projected to arise from UC adoption could be adversely affected by the following factors: (i) as UC becomes more widely adopted, the risk that competitors will offer solutions that will effectively commoditize our headsets which, in turn, will reduce the sales prices for our headsets; (ii) our plans are dependent upon adoption of our UC solution by major platform providers such as Microsoft, Avaya, IBM and Cisco, and we have a limited ability to influence such providers with respect to the functionality of their platforms, their rate of deployment, and their willingness to integrate their platforms with our solutions; (iii) the development of UC solutions is technically complex and this may delay or obstruct our ability to introduce solutions to the market on a timely basis and that are cost effective, feature rich, stable and attractive to our customers; (iv) as UC becomes more widely adopted we anticipate that competition for market share will increase, and some competitors may have superior technical and economic resources; (v) UC solutions may not be adopted with the breadth and speed in the marketplace that we currently anticipate, and (vi) our support expenditures may substantially increase over time due to the complex nature of the platforms developed by the major UC providers as these platforms continue to evolve and become more commonly adopted; |
| · | failure to match production to demand given long lead times and the difficulty of forecasting unit volumes and acquiring the component parts to meet demand without having excess inventory or incurring cancellation charges; |
| · | further impairment losses on the carrying value of our intangible assets and goodwill could be recognized if it is determined the value is not recoverable which would adversely affect our financial results; |
| · | volatility in prices from our suppliers, including our manufacturers located in China, have and could negatively affect our profitability and/or market share; |
| · | the effects of the sale of AEG, including the level of cash flow and the timing of the receipt of any cash flow resulting from such sale are uncertain; and |
| · | additional risk factors including: interruption in the supply of sole-sourced critical components, continuity of component supply at costs consistent with our plans, the inherent risks of our substantial foreign operations, and problems which might affect our manufacturing facilities in Mexico, and unexpected delays and uncertainties affecting our ability to realize targeted expense reductions and annualized savings by outsourcing the manufacturing of our Bluetooth products in China to GoerTek, Inc. |
For more information concerning these and other possible risks, please refer to the Company’s Annual Report on Form 10-K filed May 26, 2009, quarterly reports filed on Form 10-Q and other filings with the Securities and Exchange Commission as well as recent press releases. These filings can be accessed over the Internet at http://www.sec.gov/edgar/searchedgar/companysearch.html.
Financial Summaries
The following related charts are provided:
About Plantronics
Plantronics is a world leader in personal audio communications for professionals and consumers. From unified communication solutions to Bluetooth headsets, Plantronics delivers unparalleled audio experiences and quality that reflect our nearly 50 years of innovation and customer commitment. Plantronics is used by every company in the Fortune 100 and is the headset of choice for air traffic control, 911 dispatch and the New York Stock Exchange. For more information, please visit www.plantronics.com or call (800) 544-4660.
Plantronics, the logo design, Clarity and Savi are trademarks or registered trademarks of Plantronics, Inc. The Bluetooth name and the Bluetooth trademarks are owned by Bluetooth SIG, Inc. and are used by Plantronics, Inc. under license. All other trademarks are the property of their respective owners.
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PLANTRONICS, INC. / 345 Encinal Street / P.O. Box 1802 / Santa Cruz, California 95061-1802
831-426-6060 / Fax 831-426-6098
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| SUMMARY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||||||||||||
| (in thousands, except per share data and percentages) | ||||||||||||
| UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS | | |||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||
| December 31, | December 31, | |||||||||||
| 2008 | 2009 | 2008 | 2009 | |||||||||
| Net revenues | $ | 152,616 | $ | 165,935 | $ | 546,492 | $ | 451,555 | ||||
| Cost of revenues | 92,199 | 85,566 | 304,159 | 238,251 | ||||||||
| Gross profit | 60,417 | 80,369 | 242,333 | 213,304 | ||||||||
Gross profit % | 39.6 | % | 48.4% | 44.3 | % | 47.2 | % | |||||
| Research, development and engineering | 16,645 | 14,780 | 50,721 | 41,991 | ||||||||
| Selling, general and administrative | 38,579 | 37,502 | 123,887 | 103,599 | ||||||||
| Restructuring and other related charges | 288 | 332 | 288 | 1,767 | ||||||||
Total operating expenses | 55,512 | 52,614 | 174,896 | 147,357 | ||||||||
Operating income | 4,905 | 27,755 | 67,437 | 65,947 | ||||||||
Operating income % | 3.2 | % | 16.7 | % | 12.3 | % | 14.6 | % | ||||
| Interest and other income (expense), net | (1,499 | ) | 1,422 | (3,129 | ) | 3,653 | ||||||
| Income from continuing operations before income taxes | 3,406 | 29,177 | 64,308 | 69,600 | ||||||||
| Income tax expense (benefit) from continuing operations | (2,748 | ) | 5,974 | 11,464 | 17,562 | |||||||
Income from continuing operations, net of tax | 6,154 | 23,203 | 52,844 | 52,038 | ||||||||
| Discontinued operations: | ||||||||||||
Loss from operations of discontinued AEG segment (including loss on sale of AEG) | (124,418 | ) | (515 | ) | (137,221 | ) | (30,292 | ) | ||||
Income tax benefit on discontinued operations | (26,255 | ) | (562 | ) | (30,510 | ) | (11,408 | ) | ||||
Income (loss) on discontinued operations | (98,163 | ) | 47 | (106,711 | ) | (18,884 | ) | |||||
Net income (loss) | $ | (92,009 | ) | $ | 23,250 | $ | (53,867 | ) | $ | 33,154 | ||
% of net revenues | (60.3) | % | 14.0 | % | (9.9) | % | 7.3 | % | ||||
| Earnings (loss) per common share: | ||||||||||||
Basic | ||||||||||||
Continuing operations | $ | 0.13 | $ | 0.48 | $ | 1.09 | $ | 1.07 | ||||
Discontinued operations | $ | (2.03 | ) | $ | 0.00 | $ | (2.19 | ) | $ | (0.39 | ) | |
Net income (loss) | $ | (1.90 | ) | $ | 0.48 | $ | (1.11 | ) | $ | 0.68 | ||
Diluted | ||||||||||||
Continuing operations | $ | 0.13 | $ | 0.47 | $ | 1.08 | $ | 1.06 | ||||
Discontinued operations | $ | (2.02 | ) | $ | 0.00 | $ | (2.17 | ) | $ | (0.38 | ) | |
Net income (loss) | $ | (1.90 | ) | $ | 0.47 | $ | (1.10 | ) | $ | 0.67 | ||
| Shares used in computing earnings (loss) per share: | ||||||||||||
Basic | 48,449 | 48,632 | 48,641 | 48,632 | ||||||||
Diluted | 48,522 | 49,625 | 49,113 | 49,304 | ||||||||
| Tax rate from continuing operations | (80.7) | % | 20.5 | % | 17.8 | % | 25.2 | % | ||||
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| PLANTRONICS, INC. | ||||||||
| SUMMARY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||||||||
| (in thousands, except per share data and percentages) | ||||||||
| UNAUDITED CONSOLIDATED BALANCE SHEETS | ||||||||
| March 31, | December 31, | |||||||
| 2009 | 2009 | |||||||
| ASSETS | ||||||||
| Cash and cash equivalents | $ | 158,193 | $ | 283,503 | ||||
| Short-term investments | 59,987 | 33,222 | ||||||
| Total cash, cash equivalents, and short-term investments | 218,180 | 316,725 | ||||||
| Accounts receivable, net | 83,657 | 113,291 | ||||||
| Inventory, net | 119,296 | 70,914 | ||||||
| Deferred income taxes | 12,486 | 10,097 | ||||||
| Other current assets | 29,936 | 33,219 | ||||||
| Assets held for sale | - | 8,926 | ||||||
| Total current assets | 463,555 | 553,172 | ||||||
| Long-term investments | 23,718 | - | ||||||
| Property, plant and equipment, net | 95,719 | 67,866 | ||||||
| Intangibles, net | 26,575 | 3,758 | ||||||
| Goodwill | 14,005 | 14,005 | ||||||
| Other assets | 9,548 | 3,168 | ||||||
| Total assets | $ | 633,120 | $ | 641,969 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Accounts payable | $ | 32,827 | $ | 31,397 | ||||
| Accrued liabilities | 53,143 | 56,993 | ||||||
| Total current liabilities | 85,970 | 88,390 | ||||||
| Deferred tax liability | 8,085 | 58 | ||||||
| Long-term income taxes payable | 12,677 | 13,506 | ||||||
| Other long-term liabilities | 1,021 | 958 | ||||||
| Total liabilities | 107,753 | 102,912 | ||||||
| Stockholders' equity | 525,367 | 539,057 | ||||||
| Total liabilities and stockholders' equity | $ | 633,120 | $ | 641,969 | ||||
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| UNAUDITED GAAP TO NON-GAAP RECONCILIATION | |||||||||||||||||||||||
| (in thousands, except per share data and percentages) | |||||||||||||||||||||||
| UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS | | | |||||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| December 31, 2009 | December 31, 2009 | ||||||||||||||||||||||
| GAAP | Excluded | Non-GAAP | GAAP | Excluded | Non-GAAP | ||||||||||||||||||
| Net revenues | $ | 165,935 | $ | - | $ | 165,935 | $ | 451,555 | $ | - | $ | 451,555 | |||||||||||
| Cost of revenues | 85,566 | (698 | ) | (1) | 84,868 | 238,251 | (7,202 | ) | (2) | 231,049 | |||||||||||||
| Gross profit | 80,369 | 698 | 81,067 | 213,304 | 7,202 | 220,506 | |||||||||||||||||
| Gross profit % | 48.4 | % | 48.9 | % | 47.2 | % | 48.8 | % | |||||||||||||||
| Research, development and engineering | 14,780 | (825 | ) | (1) | 13,955 | 41,991 | (2,453 | ) | (1) | 39,538 | |||||||||||||
| Selling, general and administrative | 37,502 | (2,219 | ) | (1) | 35,283 | 103,599 | (6,435 | ) | (1) | 97,164 | |||||||||||||
| Restructuring and other related charges | 332 | (332 | ) | (3) | - | 1,767 | (1,767 | ) | (3) | - | |||||||||||||
| Total operating expenses | 52,614 | (3,376 | ) | 49,238 | 147,357 | (10,655 | ) | 136,702 | |||||||||||||||
| Operating income | 27,755 | 4,074 | 31,829 | 65,947 | 17,857 | 83,804 | |||||||||||||||||
| Operating income % | 16.7 | % | 19.2 | % | 14.6 | % | 18.6 | % | |||||||||||||||
| Interest and other income (expense), net | 1,422 | - | 1,422 | 3,653 | - | 3,653 | |||||||||||||||||
| Income from continuing operations before income taxes | 29,177 | 4,074 | 33,251 | 69,600 | 17,857 | 87,457 | |||||||||||||||||
| Income tax expense from continuing operations | 5,974 | 2,303 | (4) | 8,277 | 17,562 | 4,826 | (4) | 22,388 | |||||||||||||||
| Income from continuing operations, net of tax | $ | 23,203 | $ | 1,771 | $ | 24,974 | $ | 52,038 | $ | 13,031 | $ | 65,069 | |||||||||||
| % of net revenues | 14.0 | % | 15.1 | % | 11.5 | % | 14.4 | % | |||||||||||||||
| Diluted earnings per common share from continuing operations | $ | 0.47 | $ | 0.50 | $ | 1.06 | $ | 1.32 | |||||||||||||||
| Shares used in diluted per share calculations | 49,625 | 49,625 | 49,304 | 49,304 | |||||||||||||||||||
| (1) Excluded amount represents stock-based compensation and purchase accounting amortization. | ||||||||||||||||||||||||
| (2) Excluded amount represents stock-based compensation, purchase accounting amortization and $5,205 of accelerated depreciation on assets related to restructuring activity. | ||||||||||||||||||||||||
| (3) Excluded amount represents restructuring and other related charges. | ||||||||||||||||||||||||
| (4) Excluded amount represents tax benefit from stock-based compensation, purchase accounting amortization and restructuring and other related charges and $1,156 related to a tax benefit from expiration | ||||||||||||||||||||||||
of certain statutes of limitations. | ||||||||||||||||||||||||
| Use of Non-GAAP Financial Information | ||||||||||||||||||||||||
| To supplement our consolidated financial statements presented on a GAAP basis, Plantronics uses non-GAAP measures of operating results from continuing operations, which are adjusted to exclude non-recurring and non-cash expenses and charges, such as restructuring and other related charges, certain tax credits and the release of certain tax reserves, stock-based compensation expenses related to stock options, awards and employee stock purchases, purchase accounting amortization and impairment of goodwill and long-lived assets. Plantronics does not believe these expenses and charges are reflective of ongoing operating results and are not part of our target operating model. We have presented non-GAAP statements that only show our results to the income from continuing operations after tax line. The non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and the reconciliations to those financial statements should be carefully evaluated. The non-GAAP financial measures used by Plantronics may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. | ||||||||||||||||||||||||
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| PLANTRONICS, INC. | ||||||||||||||||||||||||
| UNAUDITED GAAP TO NON-GAAP RECONCILIATION | ||||||||||||||||||||||||
| (in thousands, except per share data and percentages) | ||||||||||||||||||||||||
| UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
| December 31, 2008 | December 31, 2008 | |||||||||||||||||||||||
| GAAP | Excluded | Non-GAAP | GAAP | Excluded | Non-GAAP | |||||||||||||||||||
| Net revenues | $ | 152,616 | $ | - | $ | 152,616 | $ | 546,492 | $ | - | $ | 546,492 | ||||||||||||
| Cost of revenues | 92,199 | (758 | ) | (1) | 91,441 | 304,159 | (2,549 | ) | (1) | 301,610 | ||||||||||||||
| Gross profit | 60,417 | 758 | 61,175 | 242,333 | 2,549 | 244,882 | ||||||||||||||||||
| Gross profit % | 39.6 | % | 40.1 | % | 44.3 | % | 44.8 | % | ||||||||||||||||
| Research, development and engineering | 16,645 | (821 | ) | (1) | 15,824 | 50,721 | (2,815 | ) | (1) | 47,906 | ||||||||||||||
| Selling, general and administrative | 38,579 | (2,224 | ) | (1) | 36,355 | 123,887 | (7,389 | ) | (1) | 116,498 | ||||||||||||||
| Restructuring and other related charges | 288 | (288 | ) | (2) | - | 288 | (288 | ) | (2) | - | ||||||||||||||
| Total operating expenses | 55,512 | (3,333 | ) | 52,179 | 174,896 | (10,492 | ) | 164,404 | ||||||||||||||||
| Operating income | 4,905 | 4,091 | 8,996 | 67,437 | 13,041 | 80,478 | ||||||||||||||||||
| Operating income % | 3.2 | % | 5.9 | % | 12.3 | % | 14.7 | % | ||||||||||||||||
| Interest and other income (expense), net | (1,499 | ) | - | (1,499 | ) | (3,129 | ) | - | (3,129 | ) | ||||||||||||||
| Income from continuing operations before income taxes | 3,406 | 4,091 | 7,497 | 64,308 | 13,041 | 77,349 | ||||||||||||||||||
| Income tax expense (benefit) from continuing operations | (2,748 | ) | 3,241 | (3) | 493 | 11,464 | 7,910 | (4) | 19,374 | |||||||||||||||
| Income from continuing operations, net of tax | $ | 6,154 | $ | 850 | $ | 7,004 | $ | 52,844 | $ | 5,131 | $ | 57,975 | ||||||||||||
| % of net revenues | 4.0 | % | 4.6 | % | 9.7 | % | 10.6 | % | ||||||||||||||||
| Diluted earnings per common share from continuing operations | $ | 0.13 | $ | 0.14 | $ | 1.08 | $ | 1.18 | ||||||||||||||||
| Shares used in diluted per share calculations | 48,522 | 48,522 | 49,113 | 49,113 | ||||||||||||||||||||
| (1) Excluded amount represents stock-based compensation and purchase accounting amortization. | ||||||||||||||||||||||||
| (2) Excluded amount represents restructuring and other related charges. | ||||||||||||||||||||||||
| (3) Excluded amount represents tax benefit from stock-based compensation, purchase accounting amortization and restructuring and other related charges and $2,078 related to a tax benefit from expiration | ||||||||||||||||||||||||
of certain statutes of limitations. | ||||||||||||||||||||||||
| (4) Excluded amount represents tax benefit from stock-based compensation, purchase accounting amortization and restructuring and other related charges and $3,813 related to a tax benefit from expiration | ||||||||||||||||||||||||
of certain statutes of limitations. | ||||||||||||||||||||||||
| Use of Non-GAAP Financial Information | ||||||||||||||||||||||||
| To supplement our consolidated financial statements presented on a GAAP basis, Plantronics uses non-GAAP measures of operating results from continuing operations, which are adjusted to exclude non-recurring and non-cash expenses and charges, such as restructuring and other related charges, certain tax credits and the release of certain tax reserves, stock-based compensation expenses related to stock options, awards and employee stock purchases, purchase accounting amortization and impairment of goodwill and long-lived assets. Plantronics does not believe these expenses and charges are reflective of ongoing operating results and are not part of our target operating model. We have presented non-GAAP statements that only show our results to the income from continuing operations after tax line. The non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and the reconciliations to those financial statements should be carefully evaluated. The non-GAAP financial measures used by Plantronics may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. | ||||||||||||||||||||||||
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| (in thousands, except per share data, percentages, DSO, and Inventory turns) | ||||||||||||||||||||||||
| Q109 | Q209 | Q309 | Q409 | FY09 | Q110 | Q210 | Q310 | |||||||||||||||||
| Net revenues | $ | 198,527 | $ | 195,349 | $ | 152,616 | $ | 128,098 | $ | 674,590 | $ | 141,162 | $ | 144,458 | $ | 165,935 | ||||||||
| Cost of revenues | 108,449 | 101,720 | 91,441 | 77,834 | 379,444 | 72,036 | 74,145 | 84,868 | ||||||||||||||||
| Gross profit | 90,078 | 93,629 | 61,175 | 50,264 | 295,146 | 69,126 | 70,313 | 81,067 | ||||||||||||||||
| Gross profit % | 45.4 | % | 47.9 | % | 40.1 | % | 39.2 | % | 43.8 | % | 49.0 | % | 48.7 | % | 48.9 | % | ||||||||
| Research, development and engineering | 16,204 | 15,878 | 15,824 | 12,247 | 60,153 | 12,850 | 12,733 | 13,955 | ||||||||||||||||
| Selling, general and administrative | 40,369 | 39,774 | 36,355 | 29,629 | 146,127 | 31,058 | 30,823 | 35,283 | ||||||||||||||||
| Operating expenses | 56,573 | 55,652 | 52,179 | 41,876 | 206,280 | 43,908 | 43,556 | 49,238 | ||||||||||||||||
| Operating income | 33,505 | 37,977 | 8,996 | 8,388 | 88,866 | 25,218 | 26,757 | 31,829 | ||||||||||||||||
| Operating income % | 16.9 | % | 19.4 | % | 5.9 | % | 6.5 | % | 13.2 | % | 17.9 | % | 18.5 | % | 19.2 | % | ||||||||
| Income from continuing operations before income taxes | 35,045 | 34,807 | 7,497 | 7,973 | 85,322 | 26,565 | 27,641 | 33,251 | ||||||||||||||||
| Income tax expense from continuing operations | 8,763 | 10,118 | 493 | 4,396 | 23,770 | 7,172 | 6,939 | 8,277 | ||||||||||||||||
| Income tax expense as a percent | ||||||||||||||||||||||||
| of income from continuing operations before taxes | 25.0 | % | 29.1 | % | 6.6 | % | 55.1 | % | 27.9 | % | 27.0 | % | 25.1 | % | 24.9 | % | ||||||||
| Income from continuing operations, net of tax | $ | 26,282 | $ | 24,689 | $ | 7,004 | $ | 3,577 | $ | 61,552 | $ | 19,393 | $ | 20,702 | $ | 24,974 | ||||||||
| Diluted EPS - Continuing operations | $ | 0.53 | $ | 0.50 | $ | 0.14 | $ | 0.07 | $ | 1.26 | $ | 0.40 | $ | 0.42 | $ | 0.50 | ||||||||
| Diluted shares outstanding | 49,245 | 49,489 | 48,522 | 48,431 | 48,947 | 48,665 | 49,567 | 49,625 | ||||||||||||||||
| Net revenues from unaffiliated customers: | ||||||||||||||||||||||||
| Office and Contact Center | $ | 122,803 | $ | 119,530 | $ | 101,694 | $ | 85,642 | $ | 429,669 | $ | 95,923 | $ | 93,503 | $ | 103,096 | ||||||||
| Mobile | 59,882 | 60,911 | 36,011 | 30,615 | 187,419 | 32,310 | 34,665 | 46,951 | ||||||||||||||||
| Gaming and Computer Audio | 9,621 | 8,977 | 8,531 | 6,923 | 34,052 | 8,810 | 9,015 | 11,072 | ||||||||||||||||
| Clarity | 6,221 | 5,931 | 6,380 | 4,918 | 23,450 | 4,119 | 7,275 | 4,816 | ||||||||||||||||
| Net revenues by geographic area | ||||||||||||||||||||||||
| from unaffiliated customers: | ||||||||||||||||||||||||
| Domestic | $ | 123,603 | $ | 129,789 | $ | 91,594 | $ | 79,304 | $ | 424,290 | $ | 88,789 | $ | 93,370 | $ | 99,157 | ||||||||
| International | 74,924 | 65,560 | 61,022 | 48,794 | 250,300 | 52,373 | 51,088 | 66,778 | ||||||||||||||||
| Balance Sheet accounts and metrics: | ||||||||||||||||||||||||
Accounts receivable, net 1 | $ | 130,530 | $ | 115,032 | $ | 106,463 | $ | 83,657 | $ | 83,657 | $ | 88,350 | $ | 103,003 | $ | 113,291 | ||||||||
Days sales outstanding (DSO) 1 | 59 | 54 | 63 | 59 | 56 | 64 | 61 | |||||||||||||||||
Inventory, net (2) | $ | 116,379 | $ | 135,736 | $ | 114,423 | $ | 100,171 | $ | 100,171 | $ | 90,258 | $ | 78,026 | $ | 70,914 | ||||||||
Inventory turns (2) | 3.7 | 3.0 | 3.2 | 3.1 | 3.2 | 3.8 | 4.8 | |||||||||||||||||
1 Accounts receivable, net is presented on a consolidated basis including discontinued operations as Plantronics does not maintain balance by segment; DSO is calculated on revenues from continuing operations and consolidated Accounts receivable. | ||||||||||||||||||||||||
2 Inventory, net and inventory turns reflect amounts in continuing operations only. | ||||||||||||||||||||||||
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