Revenue and Earnings per Share Meet Guidance;
Unified Communications Net Revenues Grow 22% Year-over-Year, 36%
Year-to-Date
Plantronics, Inc. (NYSE: PLT) today announced second quarter
fiscal year 2014 results. Highlights of the quarter include the
following (comparisons are against the second quarter of fiscal
year 2013):
- Net revenues were $194.0 million, an
increase of 8% compared with $179.3 million.
- GAAP gross margin was 51.4% compared
with 54.2%; non-GAAP gross margin was 52.3% compared with
54.7%.
- GAAP operating income was $30.8 million
compared with $34.5 million; non-GAAP operating income was $38.0
million compared with $39.9 million.
- GAAP diluted earnings per share (“EPS”)
was $0.53 compared with $0.61, and within our guidance of $0.51 to
$0.57.
- Non-GAAP diluted EPS was $0.64 compared
with $0.70, and within our guidance of $0.62 to $0.68.
Q2 GAAP Results
Q2
2014
Q2
2013
Change
(%)
Net revenues $194.0 million $179.3 million 8.1% Operating income
$30.8 million $34.5 million -10.7% Operating Margin 15.9% 19.3%
Diluted EPS $0.53 $0.61 -13.1%
Q2 Non-GAAP Results
Q2
2014
Q2
2013
Change
(%)
Operating income $38.0 million $39.9 million -4.7% Operating Margin
19.6% 22.3% Diluted EPS $0.64 $0.70 -8.5%
A reconciliation between our GAAP and non-GAAP results is
provided in the tables at the end of this press release.
“We achieved our revenue guidance through continued growth in
Unified Communications (UC) and mobile headset revenues,” said Ken
Kannappan, President & CEO. “Year to date, our UC revenues are
up 36% compared to the first half of the prior year, and are
in-line with our long-term expectations.”
“We generated approximately $23 million in cash flow from
operations in the second quarter of fiscal year 2014, and grew our
cash, cash equivalents and short and long term investments position
to approximately $439 million,” said Pam Strayer, Senior Vice
President and Chief Financial Officer.
OCC net revenues increased 5% to $139.9 million compared with
$133.1 million in the second quarter of fiscal year 2013 driven by
the strength of our UC revenues, a subset of OCC. Net revenues from
UC products grew by 22% to $36.9 million in the second quarter of
fiscal year 2014 compared with $30.1 million in the second quarter
of fiscal year 2013.
Mobile net revenues were $42.7 million in the second quarter of
fiscal year 2014, an increase of 28% compared with $33.3 million in
the second quarter of fiscal year 2013, with growth in all major
geographies.
Ken Kannappan, President & CEO Returns from Temporary
Leave of Absence
Ken Kannappan has returned to his full responsibilities as
President & CEO after taking a medical leave of absence
beginning April 14, 2013 for a treatable form of cancer.
“I would like to thank everyone for their support during my
leave of absence. In particular, I would like to thank Pam Strayer
for her assumption of additional responsibilities as acting CEO,
and her excellence in carrying out those duties. I would also like
to thank the entire management team at Plantronics and all of our
associates, for furthering our progress on our UC strategy and our
corporate goals.”
Dividend Announcement
We also announced that our Board of Directors declared a
quarterly dividend of $0.10 per share. The dividend will be payable
on December 10, 2013 to stockholders of record at the close of
business on November 20, 2013.
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.
We have a “book and ship” business model whereby we fulfill the
majority of orders received within 48 hours of receipt of those
orders. However, our backlog is occasionally subject to
cancellation or rescheduling by our customers on short notice with
little or no penalty. Therefore, there is a lack of meaningful
correlation between backlog at the end of a fiscal period and net
revenues in a succeeding fiscal period.
Our business is inherently difficult to forecast, particularly
with continuing uncertainty in regional economic conditions, and
there can be no assurance that expectations of incoming orders over
the balance of the current quarter will materialize.
Subject to the foregoing, we currently expect the following
range of financial results for the third quarter of fiscal year
2014:
- Net revenues of $202 million to $210
million;
- GAAP operating income of $30 million to
$33 million;
- Non-GAAP operating income of $36
million to $39 million, excluding the impact of $6 million from
stock-based compensation and purchase accounting amortization from
GAAP operating income;
- Assuming approximately 43.8 million
diluted average weighted shares outstanding:
- GAAP diluted EPS of $0.50 to
$0.55;
- Non-GAAP diluted EPS of $0.60 to $0.65;
and
- Cost of stock-based compensation and
purchase accounting amortization to be approximately $0.10 per
diluted share.
Please see our updated Investor Relations Presentation available
on our corporate website at www.plantronics.com/ir.
Conference Call Scheduled to Discuss Financial
Results
We have scheduled a conference call to discuss second quarter
fiscal year 2014 results. The conference call will take place
today, October 29, 2013, at 2:00 PM (Pacific Time). All interested
investors and potential investors in our 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 #65762101 will be
available until December 6, 2013 at (855) 859-2056 for callers from
North America and at (404) 537-3406 for all other callers. The
conference call will also be simultaneously webcast in the Investor
Relations section of our corporate website at
www.plantronics.com/ir, and the webcast of the conference call will
remain available on our website for one month.
Use of Non-GAAP Financial Information
To supplement our condensed consolidated financial statements
presented on a GAAP basis, we use non-GAAP measures of operating
results, which are adjusted to exclude certain non-cash expenses
and charges from non-GAAP operating income, non-GAAP operating
margin and non-GAAP diluted EPS, including stock-based compensation
related to stock options, restricted stock and employee stock
purchases made under our employee stock purchase plan, purchase
accounting amortization and accelerated depreciation, and early
lease termination charges, all net of the associated tax impact,
tax benefits from the release of tax reserves, transfer pricing
adjustments, and the impact of the retroactive reinstatement of the
U.S. federal R&D tax credit. We exclude these expenses from our
non-GAAP measures primarily because Plantronics’ management does
not believe they are part of our target operating model. We believe
that the use of non-GAAP financial measures provides meaningful
supplemental information regarding our performance and liquidity
and helps investors compare actual results with our long-term
target operating model goals. We believe that both management and
investors benefit from referring to these non-GAAP financial
measures in assessing our performance and when planning,
forecasting and analyzing future periods; however, non-GAAP
financial measures are not meant to be considered in isolation or
as a substitute for, or superior to, gross margin, operating
income, operating margin, net income or EPS prepared in accordance
with GAAP.
Safe Harbor
This release 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 (i) our estimates of GAAP and
non-GAAP financial results for the third quarter of fiscal year
2014, including net revenues, operating income and diluted EPS;
(ii) our estimates of stock-based compensation and purchase
accounting amortization and other related charges, as well as the
impact of these non-cash expenses on Non-GAAP operating income and
diluted EPS; and (iii) our estimate of weighted average shares
outstanding for the third quarter of fiscal year 2014, in addition
to other matters discussed in this press release that are not
purely historical data. We do 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:
- Micro and macro economic conditions in
our domestic and international markets;
- our ability to realize our UC plans and
to achieve the financial results projected to arise from UC
adoption could be adversely affected by a variety of factors
including the following: (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 and strategic
partners such as Microsoft Corporation, Cisco Systems, Inc., Avaya,
Inc., Alcatel-Lucent, and IBM, and we have a limited ability to
influence such providers with respect to the functionality of their
platforms or their product offerings, their rate of deployment, and
their willingness to integrate their platforms and product
offerings with our solutions, and our support expenditures may
substantially increase over time due to the complex nature of the
platforms and product offerings developed by the major UC providers
as these platforms and product offerings continue to evolve and
become more commonly adopted; (iii) the development of UC solutions
is technically complex and this may delay or limit 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 on a timely basis; (iv) our development of UC solutions
is dependent on our ability to implement and execute new and
different processes in connection with the design, development and
manufacturing of complex electronic systems comprised of hardware,
firmware and software that must work in a wide variety of
environments and multiple variations, which may in some instances
increase the risk of development delays or errors and require the
hiring of new personnel and/or fourth party contractors which
increases our costs; (v) because UC offerings involve complex
integration of hardware and software with UC infrastructure, our
sales model and expertise will need to continue to evolve; (vi) 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; (vii) UC solutions may not be
adopted with the breadth and speed in the marketplace that we
currently anticipate; and, (viii) UC may evolve rapidly and
unpredictably and our inability to timely and cost-effectively
adapt to those changes and future requirements may impact our
profitability in this market and our overall margins;
- failure to match production to demand
given long lead times and the difficulty of forecasting unit
volumes and acquiring the component parts and materials to meet
demand without having excess inventory or incurring cancellation
charges;
- volatility in prices from our
suppliers, including our manufacturers located in China, have in
the past and could in the future negatively affect our
profitability and/or market share;
- fluctuations in foreign exchange
rates;
- with respect to our stock repurchase
program, prevailing stock market conditions generally, and the
price of our stock specifically;
- the bankruptcy or financial weakness of
distributors or key customers, or the bankruptcy of or reduction in
capacity of our key suppliers;
- additional risk factors including:
interruption in the supply of sole-sourced critical components,
continuity of component supply at costs consistent with our plans,
and the inherent risks of our substantial foreign operations;
and
- seasonality in one or more of our
business segments.
For more information concerning these and other possible risks,
please refer to our Annual Report on Form 10-K filed with the
Securities and Exchange Commission on May 24, 2013 and other
filings with the Securities and Exchange Commission, as well as
recent press releases. The Securities and Exchange Commission
filings can be accessed over the Internet at
http://www.sec.gov/edgar/searchedgar/companysearch.html.
Financial Summaries
The following related charts are provided:
- Summary Unaudited Condensed
Consolidated Financial Statements
- Unaudited Reconciliations of GAAP
Measures to Non-GAAP Measures
- Summary of Unaudited Reconciliations of
GAAP Measures to Non-GAAP Measures and Other Unaudited GAAP
Data
About Plantronics
Plantronics is a global leader in audio communications for
businesses and consumers. We have pioneered new trends in audio
technology for over 50 years, creating innovative products that
allow people to simply communicate.
From Unified Communication solutions to Bluetooth headsets, we
deliver uncompromising quality, an ideal experience, and
extraordinary service. Plantronics is used by every company in the
Fortune 100, as well as 911 dispatch, air traffic control and the
New York Stock Exchange. For more information, please visit
www.plantronics.com or call (800) 544-4660.
Plantronics and the logo design 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.
PLANTRONICS, INC. SUMMARY CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS ($ in thousands, except per share
data) UNAUDITED CONSOLIDATED STATEMENTS OF
OPERATIONS Three Months Ended Six Months
Ended September 30, September 30,
2013 2012 2013
2012 Net revenues $ 193,980 $
179,280 $ 396,798 $ 360,645 Cost of revenues 94,366
82,052 191,552 165,721
Gross profit 99,614 97,228 205,246 194,924 Gross profit % 51.4 %
54.2 % 51.7 % 54.0 % Research, development and engineering
20,447 19,581 41,310 39,277 Selling, general and administrative
48,507 43,130 96,604 89,034 Restructuring and other related charges
(176 ) - 547 - Total operating expenses
68,778 62,711 138,461
128,311 Operating income 30,836 34,517 66,785 66,613
Operating income % 15.9 % 19.3 % 16.8 % 18.5 % Interest and
other income (expense), net 359 275
(127 ) 287 Income before income taxes 31,195
34,792 66,658 66,900 Income tax expense 8,057
8,868 16,567 17,413 Net income $
23,138 $ 25,924 $ 50,091 $ 49,487
% of net revenues 11.9 % 14.5 % 12.6 % 13.7 %
Earnings per common share: Basic $ 0.54 $ 0.62 $ 1.17 $ 1.19
Diluted $ 0.53 $ 0.61 $ 1.15 $ 1.16 Shares used in computing
earnings per common share: Basic 42,810 41,482 42,751 41,571
Diluted 43,597 42,403 43,667 42,521 Effective tax rate 25.8
% 25.5 % 24.9 % 26.0 %
PLANTRONICS, INC. SUMMARY CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS ($ in thousands, except
per share data) UNAUDITED CONSOLIDATED BALANCE
SHEETS September 30, March 31,
2013 2013 ASSETS Cash and cash equivalents $
245,980 $ 228,776 Short-term investments 113,143
116,581 Total cash, cash equivalents and short-term investments
359,123 345,357 Accounts receivable, net 123,748 128,209 Inventory,
net 69,150 67,435 Deferred tax assets 10,065 10,120 Other current
assets 15,289 15,369 Total current assets 577,375
566,490 Long-term investments 79,475 80,261 Property, plant and
equipment, net 118,318 99,111 Goodwill and purchased intangibles,
net 16,265 16,440 Other assets 2,240 2,303 Total
assets $ 793,673 $ 764,605 LIABILITIES AND STOCKHOLDERS'
EQUITY Accounts payable $ 29,500 $ 37,067 Accrued liabilities
60,926 66,419 Total current liabilities 90,426
103,486 Deferred tax liabilities 2,833 1,742 Long-term income taxes
payable 12,685 12,005 Other long-term liabilities 1,686
925 Total liabilities 107,630 118,158 Stockholders' equity
686,043 646,447 Total liabilities and stockholders'
equity $ 793,673 $ 764,605
PLANTRONICS, INC.
SUMMARY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ($ in
thousands, except per share data) UNAUDITED
CONSOLIDATED STATEMENTS OF CASH FLOWS Three Months
Ended Six Months Ended September 30,
September 30, 2013 2012
2013 2012 Cash flows from
operating activities Net income $ 23,138 25,924 $ 50,091 $
49,487 Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation and amortization 3,783 4,094
7,891 7,880 Stock-based compensation 5,965 4,862 10,953 9,482
Provision for excess and obsolete inventories 1,498 649 3,281 899
Deferred income taxes (410 ) (464 ) 5,293 (902 ) Excess tax benefit
from stock-based compensation (513 ) (539 ) (4,086 ) (679 ) Other
operating activities 135 693 1,200 1,265 Changes in assets and
liabilities: Accounts receivable, net (2,834 ) 557 3,082 5,008
Inventory, net (4,780 ) (3,077 ) (4,552 ) (8,230 ) Current and
other assets (1,362 ) 1,463 (659 ) (1,218 ) Accounts payable (3,227
) 608 (7,567 ) (3,854 ) Accrued liabilities 3,392 875 (3,885 ) (559
) Income taxes (1,319 ) (3,817 ) (3,436 )
1,445
Cash provided by operating activities
23,466 31,828 57,606
60,024
Cash flows from investing
activities Proceeds from sales of short-term investments 24,087
9,200 50,118 25,057 Proceeds from maturities of short-term
investments 19,770 33,295 54,970 60,890 Purchase of short-term
investments (7,619 ) (30,349 ) (41,634 ) (65,411 ) Proceeds from
sales of long-term investments 10,228 2,000 15,012 2,000 Purchase
of long-term investments (51,614 ) (25,528 ) (74,720 ) (33,951 )
Acquisitions, net of cash acquired - (1,723 ) - (1,723 ) Capital
expenditures (14,199 ) (4,949 ) (27,213 )
(21,526 )
Cash used for investing activities
(19,347 ) (18,054 ) (23,467 ) (34,664 )
Cash flows from financing activities Repurchase of common
stock (16,547 ) (3,457 ) (27,313 ) (19,930 ) Proceeds from
issuances under stock-based compensation plans 5,474 10,569 18,637
11,888 Employees' tax withheld and paid for restricted stock and
restricted stock units (343 ) (439 ) (4,369 ) (1,729 ) Proceeds
from revolving line of credit - - - 18,000 Repayments of revolving
line of credit - (13,000 ) - (26,000 ) Payment of cash dividends
(4,397 ) (4,243 ) (8,765 ) (8,490 ) Excess tax benefit from
stock-based compensation 513 539
4,086 679
Cash used for financing
activities (15,300 ) (10,031 ) (17,724 )
(25,582 ) Effect of exchange rate changes on cash and
cash equivalents 818 (453 ) 789
(1,184 )
Net increase (decrease) in cash and cash
equivalents (10,363 ) 3,290 17,204 (1,406 ) Cash and cash
equivalents at beginning of period 256,343
204,639 228,776 209,335
Cash
and cash equivalents at end of period $ 245,980 $
207,929 $ 245,980 $ 207,929
PLANTRONICS, INC.
UNAUDITED RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP
MEASURES ($ in thousands, except per share data)
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS DATA
Three Months Ended Six Months Ended September
30, September 30, 2013
2012 2013
2012 GAAP Gross profit $ 99,614 $ 97,228 $
205,246 $ 194,924 Stock-based compensation 638 526 1,173 1,122
Accelerated depreciation 41 318 261 442 Lease termination charges
1,126 - 1,388 -
Non-GAAP Gross profit $ 101,419 $ 98,072 $
208,068 $ 196,488 Non-GAAP Gross profit % 52.3 % 54.7
% 52.4 % 54.5 % GAAP Research, development and engineering $
20,447 $ 19,581 $ 41,310 $ 39,277 Stock-based compensation (1,652 )
(1,256 ) (3,020 ) (2,380 ) Accelerated depreciation (49 ) (226 )
(200 ) (283 ) Lease termination charges (21 ) - (21 ) - Purchase
accounting amortization (50 ) - (100 )
- Non-GAAP Research, development and engineering $
18,675 $ 18,099 $ 37,969 $ 36,614
GAAP Selling, general and administrative $ 48,507 $ 43,130 $
96,604 $ 89,034 Stock-based compensation (3,675 ) (3,080 ) (6,759 )
(5,980 ) Lease termination charges (45 ) - (45 ) - Purchase
accounting amortization (35 ) - (106 )
- Non-GAAP Selling, general and administrative $
44,752 $ 40,050 $ 89,694 $ 83,054
GAAP Operating expenses $ 68,778 $ 62,711 $ 138,461 $
128,311 Stock-based compensation (5,327 ) (4,336 ) (9,779 ) (8,360
) Accelerated depreciation (49 ) (226 ) (200 ) (283 ) Lease
termination charges (66 ) - (66 ) - Purchase accounting
amortization (85 ) - (206 ) - Restructuring and other related
charges 176 - (547 ) -
Non-GAAP Operating expenses $ 63,427 $ 58,149
$ 127,663 $ 119,668
PLANTRONICS, INC.
UNAUDITED RECONCILIATIONS OF GAAP
MEASURES TO NON-GAAP MEASURES
($ in thousands, except per share data)
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS DATA
(CONTINUED) Three Months Ended Six Months
Ended September 30, September 30,
2013 2012
2013 2012 GAAP Operating
income $ 30,836 $ 34,517 $ 66,785 $ 66,613 Stock-based compensation
5,965 4,862 10,952 9,482 Accelerated depreciation 90 544 461 725
Lease termination charges 1,192 - 1,454 - Purchase accounting
amortization 85 - 206 - Restructuring and other related charges
(176 ) - 547 -
Non-GAAP Operating income $ 37,992 $ 39,923 $ 80,405
$ 76,820 GAAP Net income $ 23,138 $ 25,924 $
50,091 $ 49,487 Stock-based compensation 5,965 4,862 10,952 9,482
Accelerated depreciation 90 544 461 725 Lease termination charges
1,192 - 1,454 - Purchase accounting amortization 85 - 206 -
Restructuring and other related charges (176 ) - 547 - Income tax
effect (2,298 )
(1)
(1,648 )
(2)
(5,122 )
(3)
(3,069 )
(2)
Non-GAAP Net income $ 27,996 $ 29,682 $ 58,589
$ 56,625 GAAP Diluted earnings per common share $
0.53 $ 0.61 $ 1.15 $ 1.16 Stock-based compensation 0.14 0.11 0.25
0.22 Accelerated depreciation - 0.01 0.01 0.01 Lease termination
charges 0.02 - 0.03 - Restructuring and other related charges - -
0.02 - Income tax effect (0.05 ) (0.03 ) (0.12
) (0.06 ) Non-GAAP Diluted earnings per common share $ 0.64
$ 0.70 $ 1.34 $ 1.33 Shares used
in diluted earnings per common share calculation 43,597 42,403
43,667 42,521
(1) Excluded amount represents
tax benefits from stock-based compensation, accelerated
depreciation, lease termination charges, purchase accounting
amortization, restructuring and other related charges, and the
release of tax reserves.
(2) Excluded amount represents tax
benefits from stock-based compensation and purchase accounting
amortization.
(3) Excluded amount represents tax benefits
from stock-based compensation, accelerated depreciation, lease
termination charges, purchase accounting amortization,
restructuring and other related charges, the release of tax
reserves, and transfer pricing adjustments.
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, which are adjusted to exclude non-recurring and non-cash
expenses and charges, such as stock-based compensation related to
stock options, restricted stock and employee stock purchases,
accelerated depreciation, lease termination charges, purchase
accounting amortization, restructuring and other related charges,
all net of the associated tax impact, tax benefits from the release
of tax reserves, transfer pricing adjustments, and the impact of
the retroactive reinstatement of the U.S. federal R&D tax
credit. Plantronics does not believe these expenses and charges are
reflective of ongoing operating results and are not part of our
target operating model. 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.
Summary of Unaudited Reconciliations of GAAP Measures to
Non-GAAP Measures and other Unaudited GAAP Data ($ in
thousands, except per share data)
Q113 Q213
Q313 Q413 Q114
Q214 GAAP Gross profit $ 97,696 $ 97,228 $ 102,164 $ 106,093
$ 105,632 $ 99,614 Stock-based compensation 596 526 507 391 535 638
Accelerated depreciation 124 318 318 252 220 41 Lease termination
charges - - - -
262 1,126 Non-GAAP Gross profit
$ 98,416 $ 98,072 $ 102,989 $ 106,736 $
106,649 $ 101,419 Non-GAAP Gross profit % 54.3 % 54.7
% 52.2 % 52.3 % 52.6 % 52.3 % GAAP Operating expenses $
65,600 $ 62,711 $ 67,558 $ 69,215 $ 69,683 $ 68,778 Stock-based
compensation (4,024 ) (4,336 ) (4,185 ) (3,785 ) (4,452 ) (5,327 )
Accelerated depreciation (57 ) (226 ) (223 ) (176 ) (151 ) (49 )
Lease termination charges - - - - - (66 ) Purchase accounting
amortization - - - - (121 ) (85 ) Restructuring and other related
charges - - (1,868 ) (398
) (723 ) 176 Non-GAAP Operating expenses $
61,519 $ 58,149 $ 61,282 $ 64,856 $
64,236 $ 63,427 GAAP Operating income $ 32,096
$ 34,517 $ 34,606 $ 36,878 $ 35,949 $ 30,836 Stock-based
compensation 4,620 4,862 4,692 4,176 4,987 5,965 Accelerated
depreciation 181 544 541 428 371 90 Lease termination charges - - -
- 262 1,192 Purchase accounting amortization - - - - 121 85
Restructuring and other related charges - -
1,868 398 723
(176 ) Non-GAAP Operating income $ 36,897 $ 39,923
$ 41,707 $ 41,880 $ 42,413 $ 37,992
Non-GAAP Operating income % 20.3 % 22.3 % 21.1 % 20.5 % 20.9
% 19.6 % GAAP Income before income taxes $ 32,108 $ 34,792 $
34,783 $ 36,742 $ 35,463 $ 31,195 Stock-based compensation 4,620
4,862 4,692 4,176 4,987 5,965 Accelerated depreciation 181 544 541
428 371 90 Lease termination charges - - - - 262 1,192 Purchase
accounting amortization - - - - 121 85 Restructuring and other
related charges - - 1,868
398 723 (176 ) Non-GAAP Income
before income taxes $ 36,909 $ 40,198 $ 41,884
$ 41,744 $ 41,927 $ 38,351 GAAP Income
tax expense $ 8,545 $ 8,868 $ 6,577 $ 8,033 $ 8,510 $ 8,057 Income
tax effect of stock-based compensation 1,382 1,532 1,342 1,223
1,437 1,838 Income tax effect of accelerated depreciation 39 116
124 90 88 - Income tax effect of lease termination charges - - - -
57 276 Income tax effect of purchase accounting amortization - - -
- 37 24 Income tax effect of restructuring and other related
charges - - 600 103 270 (66 ) Tax benefit from the release of tax
reserves & transfer pricing adjustments - - 2,071 - 935 226 Tax
benefit from the retroactive reinstatement of the R&D tax
credit - - - 1,835
- - Non-GAAP Income tax expense
$ 9,966 $ 10,516 $ 10,714 $ 11,284 $
11,334 $ 10,355 Non-GAAP Income tax expense as
a % of Non-GAAP Income before income taxes 27.0 %
26.2 % 25.6 % 27.0 %
27.0 % 27.0 %
Summary
of Unaudited Reconciliations of GAAP Measures to Non-GAAP Measures
and other Unaudited GAAP Data (Continued) ($ in thousands,
except per share data)
Q113
Q213 Q313 Q413
Q114 Q214 GAAP Net income $ 23,563 $ 25,924 $
28,206 $ 28,709 $ 26,953 $ 23,138 Stock-based compensation 4,620
4,862 4,692 4,176 4,987 5,965 Accelerated depreciation 181 544 541
428 371 90 Lease termination charges - - - - 262 1,192 Purchase
accounting amortization - - - - 121 85 Restructuring and other
related charges - - 1,868 398 723 (176 ) Income tax effect
(1,421 ) (1,648 ) (4,137 ) (3,251 )
(2,824 ) (2,298 ) Non-GAAP Net income $ 26,943 $
29,682 $ 31,170 $ 30,460 $ 30,593 $
27,996 GAAP Diluted earnings per common share $ 0.55
$ 0.61 $ 0.66 $ 0.67 $ 0.62 $ 0.53 Stock-based compensation 0.11
0.11 0.11 0.11 0.11 0.14 Accelerated depreciation - 0.01 0.01 0.01
0.01 - Lease termination charges - - - - 0.01 0.02 Restructuring
and other related charges - - 0.05 - 0.02 - Income tax effect
(0.03 ) (0.03 ) (0.10 ) (0.08 )
(0.07 ) (0.05 ) Non-GAAP Diluted earnings per common share $
0.63 $ 0.70 $ 0.73 $ 0.71 $ 0.70
$ 0.64 Shares used in diluted earnings per common
share calculation 42,570 42,403
42,618 43,119
43,650 43,597
SUMMARY OF UNAUDITED GAAP DATA ($ in thousands)
Net revenues from unaffiliated customers: Office and Contact
Center $ 134,033 $ 133,119 $ 139,449 $ 142,700 $ 151,183 $ 139,945
Mobile 36,157 33,305 44,138 49,860 41,624 42,685 Gaming and
Computer Audio 6,789 7,797 9,024 7,137 6,451 8,156 Clarity
4,386 5,059 4,791 4,482
3,560 3,194
Total net
revenues $ 181,365 $ 179,280 $ 197,402 $
204,179 $ 202,818 $ 193,980
Net
revenues by geographic area from unaffiliated customers:
Domestic $ 104,078 $ 107,513 $ 111,847 $ 113,009 $ 121,318 $
115,795 International 77,287 71,767
85,555 91,170 81,500
78,185
Total net revenues $ 181,365 $
179,280 $ 197,402 $ 204,179 $ 202,818 $
193,980
Balance Sheet accounts and metrics: Accounts
receivable, net $ 108,300 $ 108,070 $ 112,677 $ 128,209 $ 120,903 $
123,748 Days sales outstanding (DSO) 54 54 51 57 54 57 Inventory,
net $ 58,932 $ 61,639 $ 66,905 $ 67,435 $ 65,314 $ 69,150 Inventory
turns 5.7 5.3
5.7 5.8 6.0
5.5
Plantronics, Inc.Greg Klaben, 831-458-7533 (Investor)Vice
President of Investor RelationsGenevieve Haldeman, 831-458-7343
(Media)Vice President of Global Communications
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