SOURCE: Plantronics, Inc.

Plantronics Logo

January 26, 2015 16:00 ET

Plantronics Announces Third Quarter Fiscal 2015 Financial Results

Revenue Exceeds & Earnings Per Share Meets Guidance; 10% Enterprise Revenue Growth, Record Operating Income

SANTA CRUZ, CA--(Marketwired - January 26, 2015) -  Plantronics, Inc. (NYSE: PLT) today announced third quarter fiscal year 2015 results. Highlights of the quarter include the following (comparisons are against the third quarter of fiscal year 2014):

  • Net revenues were $231.8 million compared with $212.7 million.
  • GAAP gross margin was 51.7% compared with 51.9%
    • Non-GAAP gross margin was 52.0% compared with 52.2%.
  • GAAP operating income was $40.6 million compared with $37.8 million
    • Non-GAAP operating income was $48.1 million compared with $43.9 million
  • GAAP diluted earnings per share ("EPS") was $0.71 compared with $0.80, and within our guidance of $0.64 to $0.72.
    • Non-GAAP diluted EPS was $0.79 compared with $0.76, and within our guidance of $0.77 to $0.85.
 
Q3 Fiscal Year 2015 GAAP Results
          
   Q3 2015  Q3 2014  Change (%)
Net revenues  $231.8 million  $212.7 million  9.0%
Operating income  $40.6 million  $37.8 million  7.4%
 Operating Margin  17.5%  17.8%   
Diluted EPS  $0.71  $0.80  -11.3%
          
Q3 Fiscal Year 2015 Non-GAAP Results
          
   Q3 2015  Q3 2014  Change (%)
Operating income  $48.1 million  $43.9 million  9.6%
 Operating Margin  20.8%  20.7%   
Diluted EPS  $0.79  $0.76  3.9%
          

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

"Strength in both Enterprise & Consumer contributed to another quarter of solid top line growth," stated Ken Kannappan, President & CEO. "We believe our overall competitive position is as strong as ever; our recently introduced products are getting an enthusiastic reaction and we have an excellent portfolio to launch throughout the year."

"We achieved record operating income, and our operating margins were solidly in our long-term target range. We are pleased to meet our earnings per share guidance despite a material impact from an unfavorable currency headwind," said Pam Strayer, Senior Vice President and Chief Financial Officer. "We'll continue to manage the company with a focus on strengthening our operating margins and strategically investing for growth." 

Enterprise net revenues increased 10% to $161.6 million in the third quarter of fiscal year 2015 compared with $146.6 million in the third 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 24% to $53.5 million in the third quarter of fiscal year 2015 compared with $43.2 million in the third quarter of fiscal year 2014. 

Consumer net revenues were $70.2 million in the third quarter of fiscal year 2015, up 6% from $66.1 million in the third quarter of fiscal year 2014, driven by strong Bluetooth headset sales.

Dividend Announcement
We are also announcing that we have declared a quarterly dividend of $0.15 per common share, to be paid on March 10, 2015 to all shareholders of record as of the close of business on February 20, 2015.

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 fourth quarter of fiscal year 2015:

  • Net revenues of $205 million to $215 million; 
  • GAAP operating income of $32 million to $37 million;
  • Non-GAAP operating income of $40 million to $45 million, excluding the impact of $8 million from stock-based compensation and purchase accounting amortization from GAAP operating income;
  • Assuming approximately 43 million diluted average weighted shares outstanding:
    • GAAP diluted EPS of $0.55 to $0.63; 
    • Non-GAAP diluted EPS of $0.67 to $0.75; and
    • Cost of stock-based compensation and purchase accounting amortization to be approximately $0.12 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 third quarter fiscal year 2015 results. The conference call will take place today, January 26, 2015, 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 #46306125 will be available until February 28, 2015 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) the strength of our competitive position, (ii) expectations regarding product introductions throughout the year, (iii) our management of the company including our focus on operating margins and strategic investments, (iv) our expectations regarding earnings and revenue growth, (v) our estimates of GAAP and non-GAAP financial results for the fourth 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 fourth quarter of fiscal year 2015, and (vii) our estimate of weighted average shares outstanding for the fourth 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, except as required by applicable law.

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 third 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 our 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 theBluetooth 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   Nine Months Ended  
   December 31,   December 31,  
   2014   2013   2014   2013  
Net revenues  $231,781   $212,739   $664,248   $609,537  
Cost of revenues   111,865    102,412    311,795    293,964  
Gross profit   119,916    110,327    352,453    315,573  
 Gross profit %   51.7 %  51.9 %  53.1 %  51.8 %
                      
Research, development and engineering   22,991    21,018    69,280    62,328  
Selling, general and administrative   57,977    51,467    174,756    148,071  
Gain from litigation settlements   (1,666 )  -    (7,816 )  -  
Restructuring and other related charges   -    -    -    547  
 Total operating expenses   79,302    72,485    236,220    210,946  
  Operating income   40,614    37,842    116,233    104,627  
  Operating income %   17.5 %  17.8 %  17.5 %  17.2 %
                      
Interest and other income (expense), net   (2,018 )  186    (1,683 )  59  
Income before income taxes   38,596    38,028    114,550    104,686  
Income tax expense   8,212    3,645    28,073    20,212  
  Net income  $30,384   $34,383   $86,477   $84,474  
                      
  % of net revenues   13.1 %  16.2 %  13.0 %  13.9 %
                      
Earnings per common share:                     
 Basic  $0.73   $0.81   $2.07   $1.98  
 Diluted  $0.71   $0.80   $2.03   $1.94  
                      
Shares used in computing earnings per common share:                     
 Basic   41,901    42,441    41,780    42,647  
 Diluted   42,700    43,228    42,674    43,554  
                      
Effective tax rate   21.3 %  9.6 %  24.5 %  19.3 %
   
                      
PLANTRONICS, INC.
SUMMARY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
($ in thousands)
 
UNAUDITED CONSOLIDATED BALANCE SHEETS
   December 31,  March 31,
   2014  2014
ASSETS        
 Cash and cash equivalents  $280,350  $232,704
 Short-term investments   90,647   102,717
  Total cash, cash equivalents and short-term investments   370,997   335,421
 Accounts receivable, net   157,322   138,301
 Inventory, net   57,724   57,132
 Deferred tax assets   11,349   11,776
 Other current assets   25,597   13,657
  Total current assets   622,989   556,287
 Long-term investments   112,796   100,342
 Property, plant and equipment, net   139,292   134,402
 Goodwill and purchased intangibles, net   16,140   16,165
 Other assets   3,173   4,619
  Total assets  $894,390  $811,815
LIABILITIES AND STOCKHOLDERS' EQUITY        
 Accounts payable  $33,151  $30,756
 Accrued liabilities   65,598   66,851
  Total current liabilities   98,749   97,607
 Deferred tax liabilities   -   -
 Long-term income taxes payable   13,814   12,719
 Other long-term liabilities   5,662   2,825
  Total liabilities   118,225   113,151
 Stockholders' equity   776,165   698,664
  Total liabilities and stockholders' equity  $894,390  $811,815
 
         
PLANTRONICS, INC.  
SUMMARY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  
($ in thousands, except per share data)  
   
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS  
                  
   Three Months Ended   Nine Months Ended  
   December 31,   December 31,  
   2014   2013   2014   2013  
Cash flows from operating activities                     
 Net Income  $30,384   $34,383   $86,477   $84,474  
 Adjustments to reconcile net income to net cash provided by operating activities:                     
 Depreciation and amortization   4,887    3,780    13,975    11,671  
 Stock-based compensation   7,430    6,043    21,122    16,996  
 Provision for excess and obsolete inventories   427    1,138    992    4,419  
 Deferred income taxes   (115 )  (4,763 )  1,654    530  
 Excess tax benefit from stock-based compensation   (1,304 )  (348 )  (2,988 )  (4,434 )
 Other operating activities   1,588    145    484    1,345  
Changes in assets and liabilities:                     
 Accounts receivable, net   (16,847 )  (9,621 )  (18,479 )  (6,539 )
 Inventory, net   4,199    1,417    (920 )  (3,135 )
 Current and other assets   (1,749 )  1,485    (4,680 )  826  
 Accounts payable   (5,763 )  (2,772 )  2,395    (10,339 )
 Accrued liabilities   11,235    5,273    3,464    1,388  
 Income taxes   (6,027 )  (1,644 )  (3,120 )  (5,080 )
  Cash provided by operating activities   28,345    34,516    100,376    92,122  
                      
Cash flows from investing activities                     
 Purchase of investments   (73,532 )  (65,482 )  (172,757 )  (181,836 )
 Proceeds from maturities of investments   20,900    40,240    102,175    95,210  
 Proceeds from sale of investments   51,613    24,552    72,564    89,682  
 Acquisitions, net of cash acquired   -    -    (150 )  -  
 Capital expenditures   (5,795 )  (10,444 )  (19,214 )  (37,657 )
  Cash provided by (used for) investing activities   (6,814 )  (11,134 )  (17,382 )  (34,601 )
                      
Cash flows from financing activities                     
 Repurchase of common stock   (8,526 )  (29,441 )  (27,443 )  (56,754 )
 Proceeds from issuances under stock-based compensation plans   6,397    962    17,821    19,599  
 Employees' tax withheld and paid for restricted stock and restricted stock units   (1,071 )  (1,645 )  (7,306 )  (6,014 )
 Proceeds from revolving line of credit   -    -    -    -  
 Repayments of revolving line of credit   -    -    -    -  
 Payment of cash dividends   (6,460 )  (4,340 )  (19,296 )  (13,105 )
 Excess tax benefit from stock-based compensation   1,304    348    2,988    4,434  
  Cash used for financing activities   (8,356 )  (34,116 )  (33,236 )  (51,840 )
Effect of exchange rate changes on cash and cash equivalents   (1,054 )  288    (2,112 )  1,077  
  Net increase (decrease) in cash and cash equivalents   12,121    (10,446 )  47,646    6,758  
Cash and cash equivalents at beginning of period   268,229    245,980    232,704    228,776  
Cash and cash equivalents at end of period  $280,350   $235,534   $280,350   $235,534  
                      
                      
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   Nine Months Ended  
   December 31,   December 31,  
   2014   2013   2014   2013  
GAAP Gross profit  $119,916   $110,327   $352,453   $315,573  
 Stock-based compensation   685    686    1,888    1,859  
 Accelerated depreciation   -    -    -    261  
 Lease termination charges   -    -    -    1,388  
Non-GAAP Gross profit  $120,601   $111,013   $354,341   $319,081  
Non-GAAP Gross profit %   52.0 %  52.2 %  53.3 %  52.3 %
                      
GAAP Research, development and engineering  $22,991   $21,018   $69,280   $62,328  
 Stock-based compensation   (2,068 )  (1,688 )  (5,934 )  (4,708 )
 Accelerated depreciation   -    -    -    (200 )
 Lease termination charges   -    -    -    (21 )
 Purchase accounting amortization   (64 )  (50 )  (175 )  (150 )
Non-GAAP Research, development and engineering  $20,859   $19,280   $63,171   $57,249  
                      
GAAP Selling, general and administrative  $57,977   $51,467   $174,756   $148,071  
 Stock-based compensation   (4,677 )  (3,669 )  (13,300 )  (10,428 )
 Lease termination charges   -    -    -    (45 )
 Purchase accounting amortization   -    -    -    (106 )
Non-GAAP Selling, general and administrative  $53,300   $47,798   $161,456   $137,492  
                      
GAAP Operating expenses  $79,302   $72,485   $236,220   $210,946  
 Stock-based compensation   (6,745 )  (5,357 )  (19,234 )  (15,136 )
 Accelerated depreciation   -    -    -    (200 )
 Lease termination charges   -    -    -    (66 )
 Purchase accounting amortization   (64 )  (50 )  (175 )  (256 )
 Restructuring and other related charges   -    -    -    (547 )
Non-GAAP Operating expenses  $72,493   $67,078   $216,811   $194,741  
                      
  
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   Nine Months Ended  
   December 31,   December 31,  
   2014   2013   2014   2013  
GAAP Operating income  $40,614   $37,842   $116,233   $104,627  
 Stock-based compensation   7,430    6,043    21,122    16,995  
 Accelerated depreciation   -    -    -    461  
 Lease termination charges   -    -    -    1,454  
 Purchase accounting amortization   64    50    175    256  
 Restructuring and other related charges   -    -    -    547  
Non-GAAP Operating income  $48,108   $43,935   $137,530   $124,340  
                      
GAAP Net income  $30,384   $34,383   $86,477   $84,474  
 Stock-based compensation   7,430    6,043    21,122    16,995  
 Accelerated depreciation   -    -    -    461  
 Lease termination charges   -    -    -    1,454  
 Purchase accounting amortization   64    50    175    256  
 Restructuring and other related charges   -    -    -    547  
 Income tax effect of above items   (2,204 )  (1,799 )  (6,254 )  (5,760 )
 Income tax effect of unusual tax items   (2,028 )  (5,621 )  (2,375 )  (6,782 )
Non-GAAP Net income  $33,646   $33,056   $99,145   $91,645  
                      
GAAP Diluted earnings per common share  $0.71   $0.80   $2.03   $1.94  
 Stock-based compensation   0.18    0.14    0.49    0.39  
 Accelerated depreciation   -    -    -    0.01  
 Lease termination charges   -    -    -    0.03  
 Restructuring and other related charges   -    -    -    0.02  
 Income tax effect   (0.10 )  (0.18 )  (0.20 )  (0.29 )
Non-GAAP Diluted earnings per common share  $0.79   $0.76   $2.32   $2.10  
                      
Shares used in diluted earnings per common share calculation   42,700    43,228    42,674    43,554  
   

Use of Non-GAAP Financial Information
To supplement our condensed consolidated financial statements presented on a GAAP basis, we use non-GAAP measures of operating results, which are adjusted to exclude certain non-cash expenses and charges from non-GAAP operating income, non-GAAP operating margin and non-GAAP diluted EPS, including stock-based compensation related to stock options, restricted stock and employee stock purchases made under our employee stock purchase plan, purchase accounting amortization, 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. 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.

       
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  Q315
GAAP Gross profit  $105,632  $99,614  $110,327  $111,055  $114,710  $117,827  $119,916
 Stock-based compensation   535   638   686   695   535   668   685
 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  $120,601
Non-GAAP Gross profit %   52.6 %   52.3 %   52.2 %   53.5 %   53.2 %   54.9 %   52.0 %
                             
GAAP Operating expenses  $69,683  $68,778  $72,485  $75,558  $76,949  $79,969  $79,302
 Stock-based compensation   (4,452)   (5,327)   (5,357)   (5,490)   (5,770)   (6,719)   (6,745)
 Accelerated depreciation   (151)   (49)   -   -   -   -   -
 Lease termination charges   -   (66)   -   -   -   -   -
 Purchase accounting amortization   (121)   (85)   (50)   (50)   (50)   (61)   (64)
 Restructuring and other related charges   (723)   176   -   -   -   -   -
Non-GAAP Operating expenses  $64,236  $63,427  $67,078  $70,018  $71,129  $73,189  $72,493
                             
GAAP Operating income  $35,949  $30,836  $37,842  $35,497  $37,761  $37,858  $40,614
 Stock-based compensation   4,987   5,965   6,043   6,185   6,305   7,387   7,430
 Accelerated depreciation   371   90   -   -   -   -   -
 Lease termination charges   262   1,192   -   -   -   -   -
 Purchase accounting amortization   121   85   50   50   50   61   64
 Restructuring and other related charges   723   (176)   -   -   -   -   -
Non-GAAP Operating income  $42,413  $37,992  $43,935  $41,732  $44,116  $45,306  $48,108
Non-GAAP Operating income %   20.9 %   19.6 %   20.7 %   20.0 %   20.4 %   21.0 %   20.8 %
                             
GAAP Income before income taxes  $35,463  $31,195  $38,028  $36,453  $38,781  $37,173  $38,596
 Stock-based compensation   4,987   5,965   6,043   6,185   6,305   7,387   7,430
 Accelerated depreciation   371   90   -   -   -   -   -
 Lease termination charges   262   1,192   -   -   -   -   -
 Purchase accounting amortization   121   85   50   50   50   61   64
 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  $46,090
                             
GAAP Income tax expense  $8,510  $8,057  $3,645  $8,510  $10,109  $9,752  $8,212
 Income tax effect of above items   1,889   2,072   1,799   1,738   1,800   2,250   2,204
 Income tax effect of unusual tax items   935   226   5,621   650   273   74   2,028
Non-GAAP Income tax expense  $11,334  $10,355  $11,065  $10,898  $12,182  $12,076  $12,444
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 %   27.0 %
                             
                      
Summary of Unaudited Reconciliations of GAAP Measures to Non-GAAP Measures and other Unaudited GAAP Data (Continued)
($ in thousands, except per share data)
                      
   Q114  Q214  Q314  Q414  Q115  Q215  Q315
GAAP Net income  $26,953  $23,138  $34,383  $27,943  $28,672  $27,421  $30,384
 Stock-based compensation   4,987   5,965   6,043   6,185   6,305   7,387   7,430
 Accelerated depreciation   371   90   -   -   -   -   -
 Lease termination charges   262   1,192   -   -   -   -   -
 Purchase accounting amortization   121   85   50   50   50   61   64
 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)   (2,204)
 Income tax effect of unusual tax items   (935)   (226)   (5,621)   (650)   (273)   (74)   (2,028)
Non-GAAP Net income  $30,593  $27,996  $33,056  $31,790  $32,954  $32,545  $33,646
                             
GAAP Diluted earnings per common share  $0.62  $0.53  $0.80  $0.65  $0.68  $0.65  $0.71
 Stock-based compensation   0.11   0.14   0.14   0.14   0.15   0.17   0.18
 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)   (0.10)
Non-GAAP Diluted earnings per common share  $0.70  $0.64  $0.76  $0.74  $0.78  $0.77  $0.79
                             
Shares used in diluted earnings per common share calculation   43,650   43,597   43,228   42,697   42,466   42,505   42,700
                             
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  $161,591
 Consumer   51,635   54,035   66,103   58,569   64,309   59,125   70,190
  Total net revenues  $202,818  $193,980  $212,739  $209,070  $216,662  $215,805  $231,781
Net revenues by geographic area from unaffiliated customers:                            
 Domestic  $121,318  $115,795  $113,042  $125,123  $124,467  $123,697  $123,092
 International   81,500   78,185   99,697   83,947   92,195   92,108   108,689
  Total net revenues  $202,818  $193,980  $212,739  $209,070  $216,662  $215,805  $231,781
                             
                             
Balance Sheet accounts and metrics:                            
Accounts receivable, net  $120,903  $123,748  $133,379  $138,301  $150,765  $140,427  $157,322
Days sales outstanding (DSO)   54   57   56   60   63   59   61
Inventory, net  $65,314  $69,150  $66,569  $57,132  $60,968  $63,551  $57,724
Inventory turns   6.0   5.5   6.2   6.9   6.7   6.2   7.8

Contact Information

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

    MEDIA CONTACT:
    George Gutierrez
    Corporate Communications
    (831) 458-7537