SOURCE: Plantronics

Plantronics

January 26, 2010 16:00 ET

Plantronics Announces Third Quarter Fiscal 2010 Results

Results Exceed Guidance; Company Achieves Targeted Gross & Operating Margins

SANTA CRUZ, CA--(Marketwire - 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.

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:

--  Summary Unaudited Condensed Consolidated Financial Statements
--  Unaudited GAAP to Non-GAAP Statements of Operations Reconciliations
    for the Three and Nine Months ended December 31, 2009 and December 31, 2008
--  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, 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.

                            PLANTRONICS, INC.
            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%








                            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
                                                  ============ ============







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

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

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

 Net revenues                          $ 165,935  $       -      $ 165,935
 Cost of revenues                         85,566       (698) (1)    84,868
                                       ---------  ---------      ---------
 Gross profit                             80,369        698         81,067
   Gross profit %                           48.4%                     48.9%

 Research, development and engineering    14,780       (825) (1)    13,955
 Selling, general and administrative      37,502     (2,219) (1)    35,283
 Restructuring and other related
  charges                                    332       (332) (3)         -
                                       ---------  ---------      ---------
   Total operating expenses               52,614     (3,376)        49,238
                                       ---------  ---------      ---------
       Operating income                   27,755      4,074         31,829
       Operating income %                   16.7%                     19.2%

 Interest and other income (expense),
  net                                      1,422          -          1,422
                                       ---------  ---------      ---------
 Income from continuing operations
  before income taxes                     29,177      4,074         33,251
 Income tax expense from continuing
  operations                               5,974      2,303  (4)     8,277
                                       ---------  ---------      ---------
     Income from continuing
      operations, net of tax           $  23,203  $   1,771      $  24,974
                                       =========  =========      ========= 

     % of net revenues                      14.0%                     15.1%

 Diluted earnings per common share
  from continuing operations           $    0.47                 $    0.50
 Shares used in diluted per share
  calculations                            49,625                    49,625




                                                Nine Months Ended
                                                December 31, 2009
                                       -----------------------------------
                                         GAAP     Excluded       Non-GAAP
                                       ---------  ---------      ---------

 Net revenues                          $ 451,555  $       -      $ 451,555
 Cost of revenues                        238,251     (7,202) (2)   231,049
                                       ---------  ---------      ---------
 Gross profit                            213,304      7,202        220,506
   Gross profit %                           47.2%                     48.8%

 Research, development and engineering    41,991     (2,453) (1)    39,538
 Selling, general and administrative     103,599     (6,435) (1)    97,164
 Restructuring and other related
  charges                                  1,767     (1,767) (3)         -
                                       ---------  ---------      ---------
   Total operating expenses              147,357    (10,655)       136,702
                                       ---------  ---------      ---------
       Operating income                   65,947     17,857         83,804
       Operating income %                   14.6%                     18.6%

 Interest and other income (expense),
  net                                      3,653          -          3,653
                                       ---------  ---------      ---------
 Income from continuing operations
  before income taxes                     69,600     17,857         87,457
 Income tax expense from continuing
  operations                              17,562      4,826  (4)    22,388
                                       ---------  ---------      ---------
     Income from continuing
      operations, net of tax           $  52,038  $  13,031      $  65,069
                                       =========  =========      =========

     % of net revenues                      11.5%                     14.4%

 Diluted earnings per common share
  from continuing operations           $    1.06                 $    1.32
 Shares used in diluted per share
  calculations                            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.







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

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

                                               Three Months Ended
                                                December 31, 2008
                                       -----------------------------------
                                         GAAP     Excluded       Non-GAAP
                                       ---------  ---------      ---------

 Net revenues                          $ 152,616  $       -      $ 152,616
 Cost of revenues                         92,199       (758) (1)    91,441
                                       ---------  ---------      ---------
 Gross profit                             60,417        758         61,175
   Gross profit %                           39.6%                     40.1%

 Research, development and engineering    16,645       (821) (1)    15,824
 Selling, general and administrative      38,579     (2,224) (1)    36,355
 Restructuring and other related
  charges                                    288       (288) (2)         -
                                       ---------  ---------      ---------
   Total operating expenses               55,512     (3,333)        52,179
                                       ---------  ---------      ---------
       Operating income                    4,905      4,091          8,996
       Operating income %                    3.2%                      5.9%

 Interest and other income (expense),
  net                                     (1,499)         -         (1,499)
                                       ---------  ---------      ---------
 Income from continuing operations
  before income taxes                      3,406      4,091          7,497
 Income tax expense (benefit) from
  continuing operations                   (2,748)     3,241  (3)       493
                                       ---------  ---------      ---------
     Income from continuing
      operations, net of tax           $   6,154  $     850      $   7,004
                                       =========  =========      =========

     % of net revenues                       4.0%                      4.6%

 Diluted earnings per common share
  from continuing operations           $    0.13                 $    0.14
 Shares used in diluted per share
  calculations                            48,522                    48,522




                                                Nine Months Ended
                                                December 31, 2008
                                       -----------------------------------
                                         GAAP     Excluded       Non-GAAP
                                       ---------  ---------      ---------

 Net revenues                          $ 546,492  $       -      $ 546,492
 Cost of revenues                        304,159     (2,549) (1)   301,610
                                       ---------  ---------      ---------
 Gross profit                            242,333      2,549        244,882
   Gross profit %                           44.3%                     44.8%

 Research, development and engineering    50,721     (2,815) (1)    47,906
 Selling, general and administrative     123,887     (7,389) (1)   116,498
 Restructuring and other related
  charges                                    288       (288) (2)         -
                                       ---------  ---------      ---------
   Total operating expenses              174,896    (10,492)       164,404
                                       ---------  ---------      ---------
       Operating income                   67,437     13,041         80,478
       Operating income %                   12.3%                     14.7%

 Interest and other income (expense),
  net                                     (3,129)         -         (3,129)
                                       ---------  ---------      ---------
 Income from continuing operations
  before income taxes                     64,308     13,041         77,349
 Income tax expense (benefit) from
  continuing operations                   11,464      7,910  (4)    19,374
                                       ---------  ---------      ---------
     Income from continuing
      operations, net of tax           $  52,844  $   5,131      $  57,975
                                       =========  =========      =========

     % of net revenues                       9.7%                     10.6%

 Diluted earnings per common share
  from continuing operations           $    1.08                 $    1.18
 Shares used in diluted per share
  calculations                            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.






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


                         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         54         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
Net revenues         $ 141,162  $ 144,458  $ 165,935
Cost of revenues        72,036     74,145     84,868
Gross profit            69,126     70,313     81,067
Gross profit %            49.0%      48.7%      48.9%

Research,
 development and
 engineering            12,850     12,733     13,955
Selling, general and
 administrative         31,058     30,823     35,283
Operating expenses      43,908     43,556     49,238

Operating income        25,218     26,757     31,829
Operating income %        17.9%      18.5%      19.2%

Income from continuing
 operations before
 income taxes           26,565     27,641     33,251
Income tax expense
 from continuing
 operations              7,172      6,939      8,277
Income tax expense
 as a percent of
 income from
 continuing
 operations before
 taxes                    27.0%      25.1%      24.9%

Income from
 continuing
 operations, net of
 tax                 $  19,393  $  20,702  $  24,974

Diluted EPS -
 Continuing
 operations          $    0.40  $    0.42  $    0.50
Diluted shares
 outstanding            48,665     49,567     49,625

Net revenues from
 unaffiliated
 customers:
  Office and Contact
   Center            $  95,923  $  93,503  $ 103,096
  Mobile                32,310     34,665     46,951
  Gaming and
   Computer Audio        8,810      9,015     11,072
  Clarity                4,119      7,275      4,816

Net revenues by
 geographic area
 from unaffiliated
  customers:
   Domestic          $  88,789  $  93,370  $  99,157
   International        52,373     51,088     66,778

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

Contact Information

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