SOURCE: Plantronics

Plantronics

May 04, 2010 16:00 ET

Plantronics Announces Fourth Quarter Fiscal 2010 Results

Revenue & Earnings per Share Exceed Guidance; Company Achieves Record Fiscal Year Cash Flow From Operations

SANTA CRUZ, CA--(Marketwire - May 4, 2010) - Plantronics, Inc. (NYSE: PLT) today announced fourth quarter fiscal 2010 net revenues of $162.3 million compared with $128.1 million in the fourth quarter of fiscal 2009. Net revenues were above the guidance provided on January 26, 2010 of $150 million to $155 million. Plantronics' GAAP diluted earnings per share from continuing operations were $0.49 in the fourth quarter of fiscal 2010 compared with a diluted loss per share from continuing operations of $0.15 in the same quarter of the prior year. Non-GAAP diluted earnings per share from continuing operations for the fourth quarter of fiscal 2010 were $0.53 compared with $0.07 in the fourth quarter of fiscal 2009 and were greater than the previously provided non-GAAP guidance of $0.40 to $0.44. The difference between GAAP and non-GAAP earnings per share from continuing operations for the fourth 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 $1.1 million in tax reserves due to the expiration of certain statutes of limitations.

Net revenues for fiscal year 2010 were $613.8 million compared with $674.6 million for fiscal year 2009. Plantronics' GAAP diluted earnings per share from continuing operations were $1.55 for fiscal year 2010 compared with $0.93 in fiscal year 2009. Non-GAAP diluted earnings per share from continuing operations for fiscal 2010 were $1.85 and were $1.26 in fiscal year 2009.

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 June 10, 2010 to stockholders of record at the close of business on May 20, 2010.

"Revenues and profitability exceeded expectations as we experienced better than anticipated demand in our Office & Contact Center product group," stated Ken Kannappan, President & CEO. "We believe we are well positioned to benefit from a further economic recovery and continued adoption of Unified Communications technologies."

"We completed fiscal 2010 with record cash flow from operations and a considerably improved balance sheet from fiscal 2009 including an increase of approximately $151 million in cash, cash equivalents, and short term investments in addition to lower inventory levels. For fiscal 2011, we remain committed to achieving a high return on capital," stated Barbara Scherer, SVP Finance and Administration & CFO.

Business Results (Non-GAAP from Continuing Operations)

Fourth quarter fiscal 2010 net revenues of $162.3 million increased 27% compared with $128.1 million in the prior year quarter and declined by 2% from $165.9 million in the third quarter of fiscal 2010. Geographically, revenues in all regions grew year over year but declined sequentially except for the Asia Pacific region in which revenues grew both year over year and sequentially.

Improved economic conditions led to increases in net revenues both year over year and sequentially in the Office and Contact Center market. Office and Contact Center net revenues were $111.9 million in the fourth quarter of fiscal 2010, an increase of 31% from $85.6 million in the fourth quarter of fiscal 2009 and a sequential increase of 9% from $103.1 million in the third quarter of fiscal 2010.

Mobile and Gaming & Computer Audio net revenues increased year over year and declined sequentially while net revenues from the Clarity group declined both year over year and sequentially. Mobile headset net revenues were $35.8 million in the fourth quarter of fiscal 2010, an increase of 17% from the prior year quarter of $30.6 million but a sequential decrease of 24% from $47.0 million in the third quarter of fiscal 2010.

Gross margin in the fourth quarter of fiscal 2010 was 54.5% compared with 39.2% in the fourth quarter of the prior year and 48.9% in the third quarter of fiscal 2010. The increase in the fourth quarter as compared to the same period in the prior year was primarily driven by lower requirements for excess and obsolete inventory, cost reductions, and higher rates of factory utilization. The sequential improvement was primarily driven by an improved product mix.

Operating income in the fourth quarter was $35.9 million compared with previously provided guidance of $27 million to $30 million, resulting in an operating margin of 22.1% as compared to operating income of $8.4 million and an operating margin of 6.5% in the prior year quarter and operating income of $31.8 million and an operating margin of 19.2% in the third quarter of fiscal 2010.

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, particularly with continuing uncertainty in global economic conditions, and there can be no assurance that the incoming orders it expects to receive over the balance of the current quarter will materialize.

Subject to the foregoing, we are currently expecting the following range of financial results for continuing operations for the first quarter of fiscal 2011:

--  Net revenues of $160 million - $165 million;

--  Non-GAAP operating income of $32.5 million to $35.5 million;

--  Non-GAAP diluted earnings per share of $0.46 - $0.50;

--  Non-GAAP tax rate to be approximately 28%;

--  The EPS cost of stock-based compensation to be approximately $0.06; and

--  GAAP diluted earnings per share of $0.40 to $0.45.

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 press release announcing its first quarter fiscal 2011 results or by other public disclosure. Any statements by persons outside Plantronics speculating on the progress of the first quarter fiscal 2011 will not be based on internal Company information and should be assessed accordingly by investors.

Conference Call Scheduled to Discuss Actual Financial Results

Plantronics has scheduled a conference call to discuss fourth quarter fiscal 2010 results. The conference call will take place Tuesday, May 4th at 2:00 PM (PDT). 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 #55076064 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, stock 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 by management 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 first quarter of fiscal 2011, including revenue, operating income and earnings per share; (ii) our estimated tax rate for the first quarter of fiscal 2011; (iii) our estimated stock-based compensation expense for the first quarter of fiscal 2011; (iv) our long term prospects with respect to the UC opportunities and our market growth opportunities with regard to all of our product lines, 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;
--  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; 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:

--  Summary Unaudited Condensed Consolidated Financial Statements
--  Unaudited GAAP to Non-GAAP Statements of Operations Reconciliations for
    the Three and Twelve Months ended March 31, 2010 and March 31, 2009
--  Summary Unaudited Statements of Operations and Related Data on a
    Non-GAAP Basis

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, and Clarity 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     Twelve Months Ended
                                   March 31,               March 31,
                            ----------------------  ----------------------
                               2009        2010        2009        2010
                            ----------  ----------  ----------  ----------

 Net revenues               $  128,098  $  162,282  $  674,590  $  613,837
 Cost of revenues               78,500      74,516     382,659     312,767
                            ----------  ----------  ----------  ----------
 Gross profit                   49,598      87,766     291,931     301,070
   Gross profit %                 38.7%       54.1%       43.3%       49.0%

 Research, development and
  engineering                   13,119      15,793      63,840      57,784
 Selling, general and
  administrative                31,791      40,185     155,678     143,784
 Restructuring and other
  related charges               10,664         100      10,952       1,867
                            ----------  ----------  ----------  ----------
   Total operating expenses     55,574      56,078     230,470     203,435
                            ----------  ----------  ----------  ----------
     Operating income (loss)    (5,976)     31,688      61,461      97,635
     Operating income (loss) %   (4.7%)      19.5%        9.1%       15.9%

 Interest and other income
  (expense), net                  (415)       (548)     (3,544)      3,105
                            ----------  ----------  ----------  ----------
 Income (loss) from
  continuing operations
  before income taxes           (6,391)     31,140      57,917     100,740
 Income tax expense from
  continuing operations          1,111       6,725      12,575      24,287
                            ----------  ----------  ----------  ----------
   Income (loss) from
    continuing operations,
    net of tax                  (7,502)     24,415      45,342      76,453
 Discontinued operations:
   Income (loss) from
    operations of
    discontinued AEG segment
    (including loss on sale
    of AEG)                     (5,412)        394    (142,633)    (29,898)
   Income tax expense
    (benefit) on
    discontinued operations     (1,882)        228     (32,392)    (11,180)
                            ----------  ----------  ----------  ----------
     Income (loss) on
      discontinued
      operations                (3,530)        166    (110,241)    (18,718)
                            ----------  ----------  ----------  ----------
       Net income (loss)    $  (11,032) $   24,581  $  (64,899) $   57,735
                            ==========  ==========  ==========  ==========

     % of net revenues            (8.6%)      15.1%       (9.6%)       9.4%

Earnings (loss) per common
 share:
  Basic
   Continuing operations    $    (0.15) $     0.51  $     0.93  $     1.58
   Discontinued operations  $    (0.07) $     0.00  $    (2.27) $    (0.39)
                            ----------  ----------  ----------  ----------
     Net income (loss)      $    (0.23) $     0.51  $    (1.34) $     1.19
                            ==========  ==========  ==========  ==========

  Diluted
   Continuing operations    $    (0.15) $     0.49  $     0.93  $     1.55
   Discontinued operations  $    (0.07) $     0.00  $    (2.25) $    (0.38)
                            ----------  ----------  ----------  ----------
     Net income (loss)      $    (0.23) $     0.50  $    (1.33) $     1.17
                            ==========  ==========  ==========  ==========

Shares used in computing
 earnings (loss) per share:
  Basic                         48,431      48,146      48,589      48,504
  Diluted                       48,431      49,562      48,947      49,331

Tax rate from continuing
 operations                      (17.4%)      21.6%       21.7%       24.1%





                            PLANTRONICS, INC.
            SUMMARY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                  ($ in thousands, except per share data)


UNAUDITED CONSOLIDATED BALANCE SHEETS


                                                      March 31,   March 31,
                                                        2009        2010
                                                     ----------  ----------
ASSETS
  Cash and cash equivalents                          $  158,193  $  349,961
  Short-term investments                                 59,987      19,231
                                                     ----------  ----------
    Total cash, cash equivalents, and short-term
     investments                                        218,180     369,192
  Accounts receivable, net                               83,657      88,898
  Inventory, net                                        119,296      70,518
  Deferred income taxes                                  12,486      10,911
  Other current assets                                   29,936      21,568
  Assets held for sale                                        -       8,861
                                                     ----------  ----------
    Total current assets                                463,555     569,948
  Long-term investments                                  23,718           -
  Property, plant and equipment, net                     95,719      65,700
  Intangibles, net                                       26,575       3,449
  Goodwill                                               14,005      14,005
  Other assets                                            9,548       2,605
                                                     ----------  ----------
    Total assets                                     $  633,120  $  655,707
                                                     ==========  ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
  Accounts payable                                   $   32,827  $   23,779
  Accrued liabilities                                    53,143      45,837
                                                     ----------  ----------
    Total current liabilities                            85,970      69,616
  Deferred tax liability                                  8,085         551
  Long-term income taxes payable                         12,677      12,926
  Other long-term liabilities                             1,021         924
                                                     ----------  ----------
    Total liabilities                                   107,753      84,017
  Stockholders' equity                                  525,367     571,690
                                                     ----------  ----------
    Total liabilities and stockholders' equity       $  633,120  $  655,707
                                                     ==========  ==========





                          PLANTRONICS, INC.
              UNAUDITED GAAP TO NON-GAAP RECONCILIATION
               ($ in thousands, except per share data)



UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS


                                               Three Months Ended
                                                 March 31, 2010
                                       -----------------------------------
                                         GAAP     Excluded       Non-GAAP
                                       ---------  ---------      ---------

Net revenues                           $ 162,282  $       -      $ 162,282
Cost of revenues                          74,516       (745) (1)    73,771
                                       ---------  ---------      ---------
Gross profit                              87,766        745         88,511
  Gross profit %                            54.1%                     54.5%

Research, development and engineering     15,793       (951) (1)    14,842
Selling, general and administrative       40,185     (2,364) (1)    37,821
Restructuring and other related charges      100       (100) (3)         -
                                       ---------  ---------      ---------
  Total operating expenses                56,078     (3,415)        52,663
                                       ---------  ---------      ---------
    Operating income                      31,688      4,160         35,848
    Operating income %                      19.5%                     22.1%

Interest and other income (expense),
 net                                        (548)         -           (548)
                                       ---------  ---------      ---------
Income from continuing operations
 before income taxes                      31,140      4,160         35,300
Income tax expense from continuing
 operations                                6,725      2,404  (4)     9,129
                                       ---------  ---------      ---------
  Income from continuing operations,
   net of tax                          $  24,415  $   1,756      $  26,171
                                       =========  =========      =========

  % of net revenues                         15.0%                     16.1%

Diluted earnings per common share
 from continuing operations            $    0.49                 $    0.53
Shares used in diluted per share
 calculations                             49,562                    49,562



                                              Twelve Months Ended
                                                 March 31, 2010
                                       -----------------------------------
                                         GAAP     Excluded       Non-GAAP
                                       ---------  ---------      ---------

Net revenues                           $ 613,837  $       -      $ 613,837
Cost of revenues                         312,767     (7,947) (2)   304,820
                                       ---------  ---------      ---------
Gross profit                             301,070      7,947        309,017
  Gross profit %                            49.0%                     50.3%

Research, development and engineering     57,784     (3,404) (1)    54,380
Selling, general and administrative      143,784     (8,799) (1)   134,985
Restructuring and other related charges    1,867     (1,867) (3)         -
                                       ---------  ---------      ---------
  Total operating expenses               203,435    (14,070)       189,365
                                       ---------  ---------      ---------
    Operating income                      97,635     22,017        119,652
    Operating income %                      15.9%                     19.5%

Interest and other income (expense),
 net                                       3,105          -          3,105
                                       ---------  ---------      ---------
Income from continuing operations
 before income taxes                     100,740     22,017        122,757
Income tax expense from continuing
 operations                               24,287      7,230  (5)    31,517
                                       ---------  ---------      ---------
  Income from continuing operations,
   net of tax                          $  76,453  $  14,787      $  91,240
                                       =========  =========      =========

  % of net revenues                         12.5%                     14.9%

Diluted earnings per common share
 from continuing operations            $    1.55                 $    1.85
Shares used in diluted per share
 calculations                             49,331                    49,331


(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 $1,061 related to a tax benefit from expiration of certain
     statutes of limitations.
(5)  Excluded amount represents tax benefit from stock-based compensation,
     purchase accounting amortization and restructuring and other related
     charges and $2,217 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.





                          PLANTRONICS, INC.
             UNAUDITED GAAP TO NON-GAAP RECONCILIATION
              ($ in thousands, except per share data)



UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS


                                               Three Months Ended
                                                 March 31, 2009
                                       -----------------------------------
                                         GAAP     Excluded       Non-GAAP
                                       ---------  ---------      ---------

Net revenues                           $ 128,098  $       -      $ 128,098
Cost of revenues                          78,500       (666) (1)    77,834
                                       ---------  ---------      ---------
Gross profit                              49,598        666         50,264
  Gross profit %                            38.7%                     39.2%

Research, development and engineering     13,119       (872) (1)    12,247
Selling, general and administrative       31,791     (2,162) (1)    29,629
Restructuring and other related charges   10,664    (10,664) (2)         -
                                       ---------  ---------      ---------
  Total operating expenses                55,574    (13,698)        41,876
                                       ---------  ---------      ---------
    Operating income (loss)               (5,976)    14,364          8,388
    Operating income (loss) %               (4.7%)                     6.5%

Interest and other income (expense),
 net                                        (415)         -           (415)
                                       ---------  ---------      ---------
Income (loss) from continuing
 operations before income taxes           (6,391)    14,364          7,973
Income tax expense from continuing
 operations                                1,111      3,285  (3)     4,396
                                       ---------  ---------      ---------
  Income (loss) from continuing
   operations, net of tax              $  (7,502) $  11,079      $   3,577
                                       =========  =========      =========

  % of net revenues                         (5.9%)                     2.8%

Diluted earnings (loss) per common
 share from continuing operations      $   (0.15)                $    0.07
Shares used in diluted per share
 calculations                             48,431                    48,431



                                              Twelve Months Ended
                                                 March 31, 2009
                                       -----------------------------------
                                         GAAP     Excluded       Non-GAAP
                                       ---------  ---------      ---------

Net revenues                           $ 674,590  $       -      $ 674,590
Cost of revenues                         382,659     (3,215) (1)   379,444
                                       ---------  ---------      ---------
Gross profit                             291,931      3,215        295,146
  Gross profit %                            43.3%                     43.8%

Research, development and engineering     63,840     (3,687) (1)    60,153
Selling, general and administrative      155,678     (9,551) (1)   146,127
Restructuring and other related charges   10,952    (10,952) (2)         -
                                       ---------  ---------      ---------
  Total operating expenses               230,470    (24,190)       206,280
                                       ---------  ---------      ---------
    Operating income (loss)               61,461     27,405         88,866
    Operating income (loss) %                9.1%                     13.2%

Interest and other income (expense),
 net                                      (3,544)         -         (3,544)
                                       ---------  ---------      ---------
Income (loss) from continuing
 operations before income taxes           57,917     27,405         85,322
Income tax expense from continuing
 operations                               12,575     11,195  (4)    23,770
                                       ---------  ---------      ---------
  Income (loss) from continuing
   operations, net of tax              $  45,342  $  16,210      $  61,552
                                       =========  =========      =========

  % of net revenues                          6.7%                      9.1%

Diluted earnings (loss) per common
 share from continuing operations      $    0.93                 $    1.26
Shares used in diluted per share
 calculations                             48,947                    48,947


(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.
(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.





Summary of Unaudited Statements of Operations and Related Data -
Non-GAAP on Income From Continuing Operations
($ in thousands, except per share data)


                       Q109       Q209       Q309       Q409       FY09
Net revenues         $ 198,527  $ 195,349  $ 152,616  $ 128,098  $ 674,590
Cost of revenues       108,449    101,720     91,441     77,834    379,444
Gross profit            90,078     93,629     61,175     50,264    295,146
Gross profit %            45.4%      47.9%      40.1%      39.2%      43.8%

Research, development
 and engineering        16,204     15,878     15,824     12,247     60,153
Selling, general and
 administrative         40,369     39,774     36,355     29,629    146,127
Operating expenses      56,573     55,652     52,179     41,876    206,280

Operating income        33,505     37,977      8,996      8,388     88,866
Operating income %        16.9%      19.4%       5.9%       6.5%      13.2%

Income from continuing
 operations before
 income taxes           35,045     34,807      7,497      7,973     85,322
Income tax expense
 from continuing
 operations              8,763     10,118        493      4,396     23,770
Income tax expense as
 a percent of income
 from continuing
 operations before
 taxes                    25.0%      29.1%       6.6%      55.1%      27.9%

Income from continuing
 operations, net of
 tax                 $  26,282  $  24,689  $   7,004  $   3,577  $  61,552

Diluted EPS -
 continuing
 operations          $    0.53  $    0.50  $    0.14  $    0.07  $    1.26
Diluted shares
 outstanding            49,245     49,489     48,522     48,431     48,947

Net revenues from
 unaffiliated
 customers:
  Office and Contact
   Center            $ 122,803  $ 119,530  $ 101,694  $  85,642  $ 429,669
  Mobile                59,882     60,911     36,011     30,615    187,419
  Gaming and
   Computer Audio        9,621      8,977      8,531      6,923     34,052
  Clarity                6,221      5,931      6,380      4,918     23,450

Net revenues by
 geographic area
 from unaffiliated
 customers:
   Domestic          $ 123,603  $ 129,789  $  91,594  $  79,304  $ 424,290
   International        74,924     65,560     61,022     48,794    250,300

Balance Sheet
 accounts and
 metrics:
Accounts receivable,
 net (1)             $ 130,530  $ 115,032  $ 106,463  $  83,657  $  83,657
Days sales
 outstanding (DSO) (1)      59         53         63         59
Inventory, net (2)   $ 116,379  $ 135,736  $ 114,423  $ 100,171  $ 100,171
Inventory turns (2)        3.7        3.0        3.2        3.1



                       Q110       Q210       Q310       Q410       FY10
Net revenues         $ 141,162  $ 144,458  $ 165,935  $ 162,282  $ 613,837
Cost of revenues        72,036     74,145     84,868     73,771    304,820
Gross profit            69,126     70,313     81,067     88,511    309,017
Gross profit %            49.0%      48.7%      48.9%      54.5%      50.3%

Research, development
 and engineering        12,850     12,733     13,955     14,842     54,380
Selling, general and
 administrative         31,058     30,823     35,283     37,821    134,985
Operating expenses      43,908     43,556     49,238     52,663    189,365

Operating income        25,218     26,757     31,829     35,848    119,652
Operating income %        17.9%      18.5%      19.2%      22.1%      19.5%

Income from continuing
 operations before
 income taxes           26,565     27,641     33,251     35,300    122,757
Income tax expense
 from continuing
 operations              7,172      6,939      8,277      9,129     31,517
Income tax expense as
 a percent of income
 from continuing
 operations before
 taxes                    27.0%      25.1%      24.9%      25.9%      25.7%

Income from continuing
 operations, net of
 tax                 $  19,393  $  20,702  $  24,974  $  26,171  $  91,240

Diluted EPS -
 continuing
 operations          $    0.40  $    0.42  $    0.50  $    0.53  $    1.85
Diluted shares
 outstanding            48,665     49,567     49,625     49,562     49,331

Net revenues from
 unaffiliated
 customers:
  Office and Contact
   Center            $  95,923  $  93,503  $ 103,096  $ 111,875  $ 404,397
  Mobile                32,310     34,665     46,951     35,830    149,756
  Gaming and
   Computer Audio        8,810      9,015     11,072     10,363     39,260
  Clarity                4,119      7,275      4,816      4,214     20,424

Net revenues by
 geographic area
 from unaffiliated
 customers:
   Domestic          $  88,789  $  93,370  $  99,157  $  96,803  $ 378,119
   International        52,373     51,088     66,778     65,479    235,718

Balance Sheet
 accounts and
 metrics:
Accounts receivable,
 net (1)             $  88,350  $ 103,003  $ 113,291  $  88,898  $  88,898
Days sales
 outstanding (DSO) (1)      56         64         61         49
Inventory, net (2)   $  90,258  $  78,026  $  70,914  $  70,518  $  70,518
Inventory turns (2)        3.2        3.8        4.8        4.2


(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.

Contact Information

  • FOR INFORMATION, CONTACT:
    Greg Klaben
    Vice President of Investor Relations
    (831) 458-7533