SOURCE: Plantronics, Inc.

Plantronics Logo

October 28, 2014 16:00 ET

Plantronics Announces Second Quarter Fiscal 2015 Financial Results

Revenue & Earnings Per Share Meet Guidance; 11% Revenue Growth, 23% EPS Growth

SANTA CRUZ, CA--(Marketwired - October 28, 2014) - Plantronics, Inc. (NYSE: PLT) today announced second quarter fiscal year 2015 results. Highlights of the quarter include the following (comparisons are against the second quarter of fiscal year 2014):

  • Net revenues were $215.8 million compared with $194.0 million.
  • GAAP gross margin was 54.6% compared with 51.4%
    • Non-GAAP gross margin was 54.9% compared with 52.3%.
  • GAAP operating income was $37.9 million compared with $30.8 million
    •  Non-GAAP operating income was $45.3 million compared with $38.0 million
  • GAAP diluted earnings per share ("EPS") was $0.65 compared with $0.53, and within our guidance of $0.60 to $0.68.
    • Non-GAAP diluted EPS was $0.77 compared with $0.64, and within our guidance of $0.72 to $0.80.
 
 
Q2 Fiscal Year 2015 GAAP Results
    
 Q2 2015Q2 2014Change (%)
Net revenues$215.8 million$194.0 million11.3%
Operating income$37.9 million$30.8 million23.1%
Operating Margin17.6%15.9% 
Diluted EPS$0.65$0.5322.6%
    
Q2 Fiscal Year 2015 Non-GAAP Results
    
 Q2 2015Q2 2014Change (%)
Operating income$45.3 million$38.0 million19.2%
Operating Margin21.0%19.6% 
Diluted EPS$0.77$0.6420.3%
    
    

A reconciliation between our GAAP and non-GAAP results is provided in the tables at the end of this press release.

"Strength in our Enterprise portfolio, including both Core and Unified Communications product groups contributed to solid revenue growth and stronger earnings per share growth," stated Ken Kannappan, President & CEO. "We believe new products are positioning us well for continued leadership in all of our major markets. We're especially pleased with industry reception to our first significant product introduction for the Contact Center category in 10 years."

"We are managing the company with a focus on improving our operating margins and are pleased with the improvement year over year. While our gross margins were very strong this quarter, we continue to expect long-term Non-GAAP gross margins to be in the 50% to 52% range as UC grows to represent a larger portion of the revenue mix," said Pam Strayer, Senior Vice President and Chief Financial Officer. "We're also pleased with our improved inventory levels and collections results." 

Enterprise net revenues increased 12% to $156.7 million in the second quarter of fiscal year 2015 compared with $139.9 million in the second quarter of fiscal year 2014 driven by the strength of Enterprise Core and UC revenues. Net revenues from UC products, a subset of Enterprise, grew by 30% to $47.8 million in the second quarter of fiscal year 2015 compared with $36.9 million in the second quarter of fiscal year 2014. 

Consumer net revenues were $59.1 million in the second quarter of fiscal year 2015, up 9% from $54.0 million in the second quarter of fiscal year 2014, driven by both the mono and stereo Bluetooth product categories.

Dividend Announcement
We are also announcing that we have declared a quarterly dividend of $0.15 per common share, to be paid on December 10, 2014 to all shareholders of record as of the close of business on November 20, 2014. 

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 2015:

  • Net revenues of $220 million to $230 million; 
  • GAAP operating income of $37 million to $42 million;
  • Non-GAAP operating income of $45 million to $50 million, excluding the impact of $8 million from stock-based compensation and purchase accounting amortization from GAAP operating income;
  • Assuming approximately 42.5 million diluted average weighted shares outstanding:
    • GAAP diluted EPS of $0.64 to $0.72; 
    • Non-GAAP diluted EPS of $0.77 to $0.85; and
    • Cost of stock-based compensation and purchase accounting amortization to be approximately $0.13 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 2015 results. The conference call will take place today, October 28, 2014, 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 #10462931 will be available until November 28, 2014 at (855) 859-2056 or (800) 585-8367 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.

A reconciliation between our GAAP and non-GAAP results is provided in the tables at the end of this press release.

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 including stock-based compensation related to stock options, restricted stock and employee stock purchases made under our employee stock purchase plan, purchase accounting amortization, accelerated depreciation, and early lease termination charges, all net of the associated tax impact, tax benefits from the release of tax reserves, transfer pricing, tax deduction and tax credit adjustments, and the impact of tax law changes from non-GAAP operating income, non-GAAP gross margin and non-GAAP diluted EPS,. 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 leadership position in our markets (ii) our long-term gross margins (iii) UC and our revenue mix (iv) our expectations regarding earnings and revenue growth, (v) our estimates of GAAP and non-GAAP financial results for the second quarter of fiscal year 2015, including net revenues, operating income and diluted EPS; (vi) 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 for the second quarter of fiscal year 2015; and (vii) our estimate of weighted average shares outstanding for the second quarter of fiscal year 2015, 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:

  • Adverse or uncertain economic conditions;
  • The volume and timing of orders we receive during each quarter;
  • Competition;
  • New product introductions and product transitions;
  • Changes in product mix and geographic sales mix
  • 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., and Alcatel-Lucent, 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 second 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;
  • fluctuations in customer demand and 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;
  • the impact of accounting changes, including changes in revenue recognition as a result of incorporating software features and functionality in our products;
  • 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, the inherent risks of our substantial foreign operations, litigation or other contingencies and fluctuations in our corporate tax rate; 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 16, 2014, 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 byBluetooth 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
September 30,
  Six Months Ended
September 30,
 
   
   2014   2013   2014   2013  
Net revenues  $215,805   $193,980   $432,467   $396,798  
Cost of revenues   97,978    94,366    199,930    191,552  
Gross profit   117,827    99,614    232,537    205,246  
 Gross profit %   54.6 %  51.4 %  53.8 %  51.7 %
                      
Research, development and engineering   23,769    20,447    46,289    41,310  
Selling, general and administrative   60,350    48,507    116,779    96,604  
Gain from litigation settlement   (4,150 )  -    (6,150 )  -  
Restructuring and other related charges   -    (176 )  -    547  
 Total operating expenses   79,969    68,778    156,918    138,461  
  Operating income   37,858    30,836    75,619    66,785  
  Operating income %   17.5 %  15.9 %  17.5 %  16.8 %
                      
Interest and other income (expense), net   (685 )  359    335    (127 )
Income before income taxes   37,173    31,195    75,954    66,658  
Income tax expense   9,752    8,057    19,861    16,567  
  Net income  $27,421   $23,138   $56,093   $50,091  
                      
  % of net revenues   12.7 %  11.9 %  13.0 %  12.6 %
                      
Earnings per common share:                     
 Basic  $0.66   $0.54   $1.35   $1.17  
 Diluted  $0.65   $0.53   $1.32   $1.15  
                      
Shares used in computing earnings per common share:                     
 Basic   41,765    42,810    41,692    42,751  
 Diluted   42,505    43,597    42,560    43,667  
                      
Effective tax rate   26.2 %  25.8 %  26.1 %  24.9 %
                 
                 
 
 
PLANTRONICS, INC.
SUMMARY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
($ in thousands)
UNAUDITED CONSOLIDATED BALANCE SHEETS
   September 30,
2014
 March 31,
2014
   
ASSETS        
 Cash and cash equivalents  $268,229  $232,704
 Short-term investments   90,290   102,717
  Total cash, cash equivalents and short-term investments   358,519   335,421
 Accounts receivable, net   140,427   138,301
 Inventory, net   63,551   57,132
 Deferred tax assets   11,255   11,776
 Other current assets   18,420   13,657
  Total current assets   592,172   556,287
 Long-term investments   111,720   100,342
 Property, plant and equipment, net   138,324   134,402
 Goodwill and purchased intangibles, net   16,204   16,165
 Other assets   2,929   4,619
  Total assets  $861,349  $811,815
LIABILITIES AND STOCKHOLDERS' EQUITY        
 Accounts payable  $38,914  $30,756
 Accrued liabilities   56,129   66,851
  Total current liabilities   95,043   97,607
 Long-term income taxes payable   13,776   12,719
 Other long-term liabilities   5,010   2,825
  Total liabilities   113,829   113,151
 Stockholders' equity   747,520   698,664
  Total liabilities and stockholders' equity  $861,349  $811,815
       
       
   
   
PLANTRONICS, INC.
SUMMARY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
($ in thousands, except per share data)
 
   
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS  
   
   Three Months Ended
September 30,
  Six Months Ended
September 30,
 
   
   2014   2013   2014   2013  
Cash flows from operating activities                     
 Net Income  $27,421   $23,138   $56,093   $50,091  
 Adjustments to reconcile net income to net cash provided by operating activities:                     
  Depreciation and amortization   4,464    3,783    9,088    7,891  
  Stock-based compensation   7,387    5,965    13,692    10,953  
  Provision for excess and obsolete inventories   186    1,498    565    3,281  
  Deferred income taxes   (946 )  (410 )  1,769    5,293  
  Excess tax benefit from stock-based compensation   (692 )  (513 )  (1,684 )  (4,086 )
  Other operating activities   (1,685 )  135    (1,104 )  1,200  
 Changes in assets and liabilities:                     
  Accounts receivable, net   10,999    (2,834 )  (1,632 )  3,082  
  Inventory, net   (1,136 )  (4,780 )  (5,119 )  (4,552 )
  Current and other assets   (1,961 )  (1,362 )  (2,931 )  (659 )
  Accounts payable   2,163    (3,227 )  8,158    (7,567 )
  Accrued liabilities   (3,251 )  3,392    (7,771 )  (3,885 )
  Income taxes   (456 )  (1,319 )  2,907    (3,436 )
   Cash provided by operating activities   42,493    23,466    72,031    57,606  
                      
Cash flows from investing activities                     
 Purchase of investments   (44,358 )  (59,233 )  (99,225 )  (116,354 )
 Proceeds from maturities of investments   30,375    19,770    81,275    54,970  
 Proceeds from sale of investments   15,937    34,315    20,951    65,130  
 Acquisitions, net of cash acquired   (150 )  -    (150 )  -  
 Capital expenditures   (6,107 )  (14,199 )  (13,419 )  (27,213 )
  Cash provided by (used for) investing activities   (4,303 )  (19,347 )  (10,568 )  (23,467 )
                      
Cash flows from financing activities                     
 Repurchase of common stock   (6,479 )  (16,547 )  (18,917 )  (27,313 )
 Proceeds from issuances under stock-based compensation plans   8,592    5,474    11,424    18,637  
 Employees' tax withheld and paid for restricted stock and restricted stock units   (448 )  (343 )  (6,235 )  (4,369 )
 Proceeds from revolving line of credit   -    -    -    -  
 Repayments of revolving line of credit   -    -    -    -  
 Payment of cash dividends   (6,447 )  (4,397 )  (12,836 )  (8,765 )
 Excess tax benefit from stock-based compensation   692    513    1,684    4,086  
  Cash used for financing activities   (4,090 )  (15,300 )  (24,880 )  (17,724 )
Effect of exchange rate changes on cash and cash equivalents   (1,121 )  818    (1,058 )  789  
 Net increase (decrease) in cash and cash equivalents   32,979    (10,363 )  35,525    17,204  
Cash and cash equivalents at beginning of period   235,250    256,343    232,704    228,776  
Cash and cash equivalents at end of period  $268,229   $245,980   $268,229   $245,980  
                 
                 
   
   
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
September 30,
  Six Months Ended
September 30,
 
   
   2014   2013   2014   2013  
GAAP Gross profit  $117,827   $99,614   $232,537   $205,246  
 Stock-based compensation   668    638    1,203    1,173  
 Accelerated depreciation   -    41    -    261  
 Lease termination charges   -    1,126    -    1,388  
Non-GAAP Gross profit  $118,495   $101,419   $233,740   $208,068  
Non-GAAP Gross profit %   54.9 %  52.3 %  54.0 %  52.4 %
                      
GAAP Research, development and engineering  $23,769   $20,447   $46,289   $41,310  
 Stock-based compensation   (2,115 )  (1,652 )  (3,866 )  (3,020 )
 Accelerated depreciation   -    (49 )  -    (200 )
 Lease termination charges   -    (21 )  -    (21 )
 Purchase accounting amortization   (61 )  (50 )  (111 )  (100 )
Non-GAAP Research, development and engineering  $21,593   $18,675   $42,312   $37,969  
                      
GAAP Selling, general and administrative  $60,350   $48,507   $116,779   $96,604  
 Stock-based compensation   (4,604 )  (3,675 )  (8,623 )  (6,759 )
 Lease termination charges   -    (45 )  -    (45 )
 Purchase accounting amortization   -    (35 )  -    (106 )
Non-GAAP Selling, general and administrative  $55,746   $44,752   $108,156   $89,694  
                      
GAAP Operating expenses  $79,969   $68,778   $156,918   $138,461  
 Stock-based compensation   (6,719 )  (5,327 )  (12,489 )  (9,779 )
 Accelerated depreciation   -    (49 )  -    (200 )
 Lease termination charges   -    (66 )  -    (66 )
 Purchase accounting amortization   (61 )  (85 )  (111 )  (206 )
 Restructuring and other related charges   -    176    -    (547 )
Non-GAAP Operating expenses  $73,189   $63,427   $144,318   $127,663  
                 
                 
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
September 30,
  Six Months Ended
September 30,
 
2014   2013   2014   2013  
GAAP Operating income  $37,858   $30,836   $75,619   $66,785  
 Stock-based compensation   7,387    5,965    13,692    10,952  
 Accelerated depreciation   -    90    -    461  
 Lease termination charges   -    1,192    -    1,454  
 Purchase accounting amortization   61    85    111    206  
 Restructuring and other related charges   -    (176 )  -    547  
Non-GAAP Operating income  $45,306   $37,992   $89,422   $80,405  
                      
GAAP Net income  $27,421   $23,138   $56,093   $50,091  
 Stock-based compensation   7,387    5,965    13,692    10,952  
 Accelerated depreciation   -    90    -    461  
 Lease termination charges   -    1,192    -    1,454  
 Purchase accounting amortization   61    85    111    206  
 Restructuring and other related charges   -    (176 )  -    547  
 Income tax effect of above items   (2,250 )  (2,072 )  (4,050 )  (3,961 )
 Income tax effect of unusual tax items   (74 )  (226 )  (347 )  (1,161 )
Non-GAAP Net income  $32,545   $27,996   $65,499   $58,589  
                      
GAAP Diluted earnings per common share  $0.65   $0.53   $1.32   $1.15  
 Stock-based compensation   0.17    0.14    0.32    0.25  
 Accelerated depreciation   -    -    -    0.01  
 Lease termination charges   -    0.02    -    0.03  
 Restructuring and other related charges   -    -    -    0.02  
 Income tax effect   (0.05 )  (0.05 )  (0.10 )  (0.12 )
Non-GAAP Diluted earnings per common share  $0.77   $0.64   $1.54   $1.34  
                      
Shares used in diluted earnings per common share calculation   42,505    43,597    42,560    43,667  
   
   
Summary of Unaudited Reconciliations of GAAP Measures to Non-GAAP Measures and other Unaudited GAAP Data
($ in thousands, except per share data)
 
  
   Q114   Q214   Q314   Q414   Q115   Q215  
GAAP Gross profit  $105,632   $99,614   $110,327   $111,055   $114,710   $117,827  
 Stock-based compensation   535    638    686    695    535    668  
 Accelerated depreciation   220    41    -    -    -    -  
 Lease termination charges   262    1,126    -    -    -    -  
Non-GAAP Gross profit  $106,649   $101,419   $111,013   $111,750   $115,245   $118,495  
Non-GAAP Gross profit %   52.6 %  52.3 %  52.2 %  53.5 %  53.2 %  54.9 %
                                
GAAP Operating expenses  $69,683   $68,778   $72,485   $75,558   $76,949   $79,969  
 Stock-based compensation   (4,452 )  (5,327 )  (5,357 )  (5,490 )  (5,770 )  (6,719 )
 Accelerated depreciation   (151 )  (49 )  -    -    -    -  
 Lease termination charges   -    (66 )  -    -    -    -  
 Purchase accounting amortization   (121 )  (85 )  (50 )  (50 )  (50 )  (61 )
 Restructuring and other related charges   (723 )  176    -    -    -    -  
Non-GAAP Operating expenses  $64,236   $63,427   $67,078   $70,018   $71,129   $73,189  
                                
GAAP Operating income  $35,949   $30,836   $37,842   $35,497   $37,761   $37,858  
 Stock-based compensation   4,987    5,965    6,043    6,185    6,305    7,387  
 Accelerated depreciation   371    90    -    -    -    -  
 Lease termination charges   262    1,192    -    -    -    -  
 Purchase accounting amortization   121    85    50    50    50    61  
 Restructuring and other related charges   723    (176 )  -    -    -    -  
Non-GAAP Operating income  $42,413   $37,992   $43,935   $41,732   $44,116   $45,306  
Non-GAAP Operating income %   20.9 %  19.6 %  20.7 %  20.0 %  20.4 %  21.0 %
                                
GAAP Income before income taxes  $35,463   $31,195   $38,028   $36,453   $38,781   $37,173  
 Stock-based compensation   4,987    5,965    6,043    6,185    6,305    7,387  
 Accelerated depreciation   371    90    -    -    -    -  
 Lease termination charges   262    1,192    -    -    -    -  
 Purchase accounting amortization   121    85    50    50    50    61  
 Restructuring and other related charges   723    (176 )  -    -    -    -  
Non-GAAP Income before income taxes  $41,927   $38,351   $44,121   $42,688   $45,136   $44,621  
                                
GAAP Income tax expense  $8,510   $8,057   $3,645   $8,510   $10,109   $9,752  
 Income tax effect of above items   1,889    2,072    1,799    1,738    1,800    2,250  
 Income tax effect of unusual tax items   935    226    5,621    650    273    74  
Non-GAAP Income tax expense  $11,334   $10,355   $11,065   $10,898   $12,182   $12,076  
Non-GAAP Income tax expense as a % of Non-GAAP Income before income taxes   27.0 %  27.0 %  25.1 %  25.5 %  27.0 %  27.1 %
                                
                         
                         

 

   
   

Summary of Unaudited Reconciliations of GAAP Measures to Non-GAAP Measures and other Unaudited GAAP Data (Continued)
($ in thousands, except per share data)
 
   Q114   Q214   Q314   Q414   Q115   Q215  
GAAP Net income  $26,953   $23,138   $34,383   $27,943   $28,672   $27,421  
 Stock-based compensation   4,987    5,965    6,043    6,185    6,305    7,387  
 Accelerated depreciation   371    90    -    -    -    -  
 Lease termination charges   262    1,192    -    -    -    -  
 Purchase accounting amortization   121    85    50    50    50    61  
 Restructuring and other related charges   723    (176 )  -    -    -    -  
 Income tax effect of above items   (1,889 )  (2,072 )  (1,799 )  (1,738 )  (1,800 )  (2,250 )
 Income tax effect of unusual tax items   (935 )  (226 )  (5,621 )  (650 )  (273 )  (74 )
Non-GAAP Net income  $30,593   $27,996   $33,056   $31,790   $32,954   $32,545  
                                
GAAP Diluted earnings per common share  $0.62   $0.53   $0.80   $0.65   $0.68   $0.65  
 Stock-based compensation   0.11    0.14    0.14    0.14    0.15    0.17  
 Accelerated depreciation   0.01    -    -    -    -    -  
 Lease termination charges   0.01    0.02    -    -    -    -  
 Restructuring and other related charges   0.02    -    -    -    -    -  
 Income tax effect   (0.07 )  (0.05 )  (0.18 )  (0.05 )  (0.05 )  (0.05 )
Non-GAAP Diluted earnings per common share  $0.70   $0.64   $0.76   $0.74   $0.78   $0.77  
                                
Shares used in diluted earnings per common share calculation   43,650    43,597    43,228    42,697    42,466    42,505  
                                
SUMMARY OF UNAUDITED GAAP DATA  
($ in thousands)  
                              
                             
Net revenues from unaffiliated customers:                               
 Enterprise  $151,183   $139,945   $146,636   $150,501   $152,353   $156,680  
 Consumer   51,635    54,035    66,103    58,569    64,309    59,125  
  Total net revenues  $202,818   $193,980   $212,739   $209,070   $216,662   $215,805  
Net revenues by geographic area from unaffiliated customers:                               
 Domestic  $121,318   $115,795   $113,042   $125,123   $124,467   $123,697  
 International   81,500    78,185    99,697    83,947    92,195    92,108  
  Total net revenues  $202,818   $193,980   $212,739   $209,070   $216,662   $215,805  
                                
                                
Balance Sheet accounts and metrics:                               
Accounts receivable, net  $120,903   $123,748   $133,379   $138,301   $150,765   $140,427  
Days sales outstanding (DSO)   54    57    56    60    63    59  
Inventory, net  $65,314   $69,150   $66,569   $57,132   $60,968   $63,551  
Inventory turns   6.0    5.5    6.2    6.9    6.7    6.2  
                         

Contact Information

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

    MEDIA CONTACT:
    Terry Anderson
    Corporate Communications
    (831) 420-3021