Plantronics Announces First Quarter Fiscal Year 2013 Results
Plantronics Announces First Quarter Fiscal Year 2013 Results
Financial Results In Line with Guidance; Company Announces New One Million
Share Repurchase Authorization
Business Wire
SANTA CRUZ, Calif. -- August 06, 2012
Plantronics, Inc. (NYSE: PLT) today announced first quarter fiscal year 2013
net revenues of $181.4 million, a 3% increase compared with net revenues of
$175.6 million in the first quarter of fiscal year 2012. Net revenues were
within our guidance range of $177 million - $182 million provided on May 1,
2012. Our GAAP diluted earnings per share (“EPS”) decreased to $0.55 in the
first quarter of fiscal year 2013 compared with $0.56 in the same quarter of
the prior year and was at the high end of our May 2012 guidance range of $0.50
to $0.55. Non-GAAP diluted EPS for the first quarter of fiscal year 2013
increased slightly to $0.63 from $0.62 in the same quarter of the prior year
and was also at the high end of our guidance range of $0.58 to $0.63. The
difference between GAAP and non-GAAP EPS for the first quarter of fiscal year
2013 consists of stock-based compensation and accelerated depreciation, both
net of the associated tax impact.
Office and Contact Center (“OCC”) product strength in the U.S. and the Asia
Pacific region offset slight weakness in the Europe and Africa region,
resulting in a 2% increase in OCC net revenues to $134.0 million in the first
quarter of fiscal year 2013 compared with $131.0 million in the first quarter
of fiscal year 2012. Net revenues from Unified Communications (“UC”) products
grew by 48% to $27.8 million in the first quarter of fiscal year 2013 compared
with $18.8 million in the first quarter of fiscal year 2012.
Mobile net revenues were up $4.0 million to $36.2 million in the first quarter
of fiscal year 2013, an increase of 12% from $32.2 million in the first
quarter of fiscal year 2012, primarily as a result of increased market share
in the U.S. in both mono and stereo headsets and growth in Asia Pacific led by
favorable market acceptance of our new BackBeat® GO wireless stereo Bluetooth
headset.
GAAP operating income was $32.1 million in the first quarter of fiscal year
2013, resulting in an operating margin of 17.7%, compared with $35.0 million
and an operating margin of 20.0% in the same period in the prior year. GAAP
operating income was above our guidance range of $29 million to $31.5 million.
Non-GAAP operating income was $36.9 million in the first quarter of fiscal
year 2013 resulting in a non-GAAP operating margin of 20.3% compared with
$39.4 million and an operating margin of 22.4% in the same period in the prior
year. Non-GAAP operating income was slightly above our guidance range of $34
million to $36.5 million.
“Continued strength in UC resulted in year over year OCC net revenue growth,”
said Ken Kannappan, President & Chief Executive Officer. “Our growing
capabilities in providing rich contextual intelligence to UC applications are
providing noteworthy product differentiation. One example of this is the
Plantronics Developer Connection, launched during the first quarter of fiscal
year 2013, which gives third party developers the ability to integrate our
contextual data into unique applications and is being well received.”
“We continued to invest strategically in our long-term UC opportunity in the
first quarter and achieved an operating margin within our long-term target
range while meeting our guidance for the quarter,” said Pam Strayer, Senior
Vice President & Chief Financial Officer. “Our financial position remains
strong, and we repurchased 529,000 shares of our common stock during the
quarter. Today we are announcing a new one million share repurchase program to
continue delivering on our commitment to return cash in excess of our
operating needs to our stockholders.”
Share Repurchase Program and Dividend Announcements
Plantronics today announced a new one million share repurchase program
following the recent completion of its prior one million share repurchase
program announced in March 2012.
Plantronics also announced that our Board of Directors declared a quarterly
dividend of $0.10 per share. The dividend will be payable on September 10,
2012 to stockholders of record at the close of business on August 20, 2012.
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 ship most orders to
customers within 48 hours of receipt of those orders, and, therefore, the
level of backlog does not provide reliable visibility into potential future
revenues.
Subject to the foregoing, we currently expect the following range of financial
results for the second quarter of fiscal year 2013:
* Net revenues of $175 million to $180 million;
* GAAP operating income of $31 million to $34 million;
* Non-GAAP operating income of $36 million to $39 million, excluding the
impact of $5 million from both stock-based compensation and accelerated
depreciation from GAAP operating income;
* Assuming approximately 42.2 million diluted average weighted shares
outstanding:
* GAAP diluted EPS of $0.54 to $0.59;
* Non-GAAP diluted EPS of $0.63 to $0.68; and
* Cost of stock-based compensation and accelerated depreciation to be
approximately $0.09 per diluted share.
Please see our new 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 first quarter fiscal year 2013
results. The conference call will take place today, August 6, 2012, at 2:00 PM
(Pacific Time). 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 # 85386735 will be available for
72 hours at (855) 859-2056 for callers from North America and at (404)
537-3406 for all other callers. The conference call will also be
simultaneously webcast in the Investor Relations section of our corporate
website at www.plantronics.com/ir, and the webcast of the conference call will
remain available on the Plantronics website for 30 days.
Use of Non-GAAP Financial Information
For the periods presented, we have excluded certain non-cash expenses and
charges, net of tax, including stock-based compensation related to stock
options, restricted stock and employee stock purchases, purchase accounting
amortization and accelerated depreciation from non-GAAP operating income,
non-GAAP operating 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 to 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, the effective tax rate, 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 commitment to return cash in excess of operating needs to investors
through our stock repurchase program; (ii) our estimates of GAAP and non-GAAP
financial results for the second quarter of fiscal year 2013, including net
revenues, operating income and diluted EPS; (iii) our estimates of stock-based
compensation and accelerated depreciation, as well as the impact of these
non-cash expenses on Non-GAAP diluted EPS; and (iv) our estimate of weighted
average shares outstanding for the second quarter of fiscal year 2013, in
addition to 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:
* Micro and macro economic conditions in our domestic and international
markets;
* our ability to realize our UC plans and to achieve the financial results
projected to arise from UC adoption could be adversely affected by 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) UC solutions may not be adopted with the breadth and speed in the
marketplace that we currently anticipate; (iii) the development of UC
solutions is technically complex and this may delay or inhibit 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; and, (v) our plans are dependent upon adoption of our
UC solution by major platform providers such as Microsoft Corporation,
Cisco Systems, Inc., Avaya, Inc., Alcatel-Lucent, and IBM, and we have a
limited ability to influence such providers with respect to the
functionality of their platforms, their rate of deployment, and their
willingness to integrate their platforms with our solutions, and 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
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 and could negatively affect our profitability
and/or market share;
* fluctuations in foreign exchange rates;
* with respect to our stock repurchase program, prevailing stock market
conditions generally, and the price of our stock specifically;
* the bankruptcy or financial weakness of distributors or key customers, or
the bankruptcy of or reduction in capacity of our key suppliers; 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 that might affect our manufacturing facilities in
Mexico.
For more information concerning these and other possible risks, please refer
to Plantronics’ Annual Report on Form 10-K filed with the Securities and
Exchange Commission on May 25, 2012 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 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, the logo design, Simply Smarter Communications, BackBeat® GO and
Clarity are trademarks or registered trademarks of Plantronics, Inc. The
Bluetooth name and the Bluetooth trademarks are owned by Bluetooth SIG, Inc.
and are used by Plantronics, Inc. under license. All other trademarks are the
property of their respective owners.
PLANTRONICS, INC.
SUMMARY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
($ in thousands, except per share data)
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended
June 30,
2012 2011
Net revenues $ 181,365 $ 175,600
Cost of revenues 83,669 81,542
Gross profit 97,696 94,058
Gross profit % 53.9% 53.6%
Research, development and engineering 19,696 16,906
Selling, general and administrative 45,904 42,116
Total operating expenses 65,600 59,022
Operating income 32,096 35,036
Operating income % 17.7% 20.0%
Interest and other income, net 12 641
Income before income taxes 32,108 35,677
Income tax expense 8,545 8,946
Net income $ 23,563 $ 26,731
% of net revenues 13.0% 15.2%
Earnings per common share:
Basic $ 0.57 $ 0.57
Diluted $ 0.55 $ 0.56
Shares used in computing earnings per common share:
Basic 41,660 46,688
Diluted 42,570 48,060
Effective tax rate 26.6% 25.1%
PLANTRONICS, INC.
SUMMARY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
($ in thousands, except per share data)
UNAUDITED CONSOLIDATED BALANCE SHEETS
June 30, March 31,
2012 2012
ASSETS
Cash and cash equivalents $ 204,639 $ 209,335
Short-term investments 150,734 125,177
Total cash, cash equivalents and short-term 355,373 334,512
investments
Accounts receivable, net 108,300 111,771
Inventory, net 58,932 53,713
Deferred tax asset 10,669 11,090
Other current assets 15,854 13,088
Total current assets 549,128 524,174
Long-term investments 29,310 55,347
Property, plant and equipment, net 88,750 76,159
Goodwill and purchased intangibles, net 14,318 14,388
Other assets 2,491 2,402
Total assets $ 683,997 $ 672,470
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 29,664 $ 34,126
Accrued liabilities 50,604 51,845
Income tax payable 4,929 222
Total current liabilities 85,197 86,193
Deferred tax liability 2,074 8,673
Long-term income taxes payable 12,714 12,150
Revolving line of credit 42,000 37,000
Other long-term liabilities 1,199 1,210
Total liabilities 143,184 145,226
Stockholders' equity 540,813 527,244
Total liabilities and stockholders' equity $ 683,997 $ 672,470
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
June 30,
2012 2011
GAAP Gross profit $ 97,696 $ 94,058
Stock-based compensation 596 546
Accelerated depreciation 124 -
Purchase accounting amortization - 125
Non-GAAP Gross profit $ 98,416 $ 94,729
Non-GAAP Gross profit % 54.3% 53.9%
GAAP Research, development and engineering 19,696 16,906
Stock-based compensation (1,124 ) (947 )
Accelerated depreciation (57 ) -
Non-GAAP Research, development and engineering $ 18,515 $ 15,959
GAAP Selling, general and administrative $ 45,904 $ 42,116
Stock-based compensation (2,900 ) (2,686 )
Purchase accounting amortization - (71 )
Non-GAAP Selling, general and administrative $ 43,004 $ 39,359
GAAP Operating expenses $ 65,600 $ 59,022
Stock-based compensation (4,024 ) (3,633 )
Accelerated depreciation (57 ) -
Purchase accounting amortization - (71 )
Non-GAAP Operating expenses $ 61,519 $ 55,318
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
June 30,
2012 2011
GAAP Operating income $ 32,096 $ 35,036
Stock-based compensation 4,620 4,179
Accelerated depreciation 181 -
Purchase accounting amortization - 196
Non-GAAP Operating income $ 36,897 $ 39,411
GAAP Net income $ 23,563 $ 26,731
Stock-based compensation 4,620 4,179
Accelerated depreciation 181 -
Purchase accounting amortization - 196
Income tax effect (1,421 ) ^(1) (1,356 ) ^(2)
Non-GAAP Net income $ 26,943 $ 29,750
GAAP Diluted earnings per common share $ 0.55 $ 0.56
Stock-based compensation 0.11 0.09
Accelerated depreciation - -
Income tax effect (0.03 ) (0.03 )
Non-GAAP Diluted earnings per common $ 0.63 $ 0.62
share
Shares used in diluted earnings per 42,570 48,060
common share calculation
^(1) Excluded amount represents tax benefit from stock-based compensation
and accelerated depreciation.
^(2) Excluded amount represents tax benefit from stock-based compensation
and purchase accounting amortization.
Use of Non-GAAP Financial Information
To supplement our consolidated financial statements presented on a GAAP basis,
Plantronics uses non-GAAP measures of operating results, which are adjusted to
exclude non-recurring and non-cash expenses and charges, such as stock-based
compensation related to stock options, restricted stock and employee stock
purchases, purchase accounting amortization, restructuring and other related
charges, impairment of goodwill and long-lived assets, accelerated
depreciation and tax benefits from the expiration of certain statutes of
limitations. Plantronics does not believe these expenses and charges are
reflective of ongoing operating results and are not part of our target
operating model. The non-GAAP financial measures should not be considered a
substitute for, or superior to, financial measures calculated in accordance
with GAAP, and the financial results calculated in accordance with GAAP and
the reconciliations to those financial statements should be carefully
evaluated. The non-GAAP financial measures used by Plantronics may be
calculated differently from, and therefore may not be comparable to, similarly
titled measures used by other companies.
Summary of Unaudited Reconciliations of GAAP Measures to Non-GAAP Measures and
other Unaudited GAAP Data
($ in
thousands,
except per
share data)
Q112 Q212 Q312 Q412 Q113
GAAP Gross $ 94,058 $ 98,966 $ 96,212 $ 95,115 $ 97,696
profit
Stock-based 546 559 559 548 596
compensation
Accelerated - - - - 124
depreciation
Purchase
accounting 125 62 - - -
amortization
Non-GAAP $ 94,729 $ 99,587 $ 96,771 $ 95,663 $ 98,416
Gross profit
Non-GAAP
Gross profit 53.9% 56.3% 52.8% 53.9% 54.3%
%
GAAP
Operating $ 59,022 $ 62,069 $ 58,805 $ 63,102 $ 65,600
expenses
Stock-based (3,633 ) (3,949 ) (4,020 ) (3,667 ) (4,024 )
compensation
Accelerated - - - - (57 )
depreciation
Purchase
accounting (71 ) (71 ) - - -
amortization
Non-GAAP
Operating $ 55,318 $ 58,049 $ 54,785 $ 59,435 $ 61,519
expenses
GAAP
Operating $ 35,036 $ 36,897 $ 37,407 $ 32,013 $ 32,096
income
Stock-based 4,179 4,508 4,579 4,215 4,620
compensation
Accelerated - - - - 181
depreciation
Purchase
accounting 196 133 - - -
amortization
Non-GAAP
Operating $ 39,411 $ 41,538 $ 41,986 $ 36,228 $ 36,897
income
Non-GAAP
Operating 22.4% 23.5% 22.9% 20.4% 20.3%
income %
GAAP Income
before $ 35,677 $ 36,839 $ 37,813 $ 32,273 $ 32,108
income taxes
Stock-based 4,179 4,508 4,579 4,215 4,620
compensation
Accelerated - - - - 181
depreciation
Purchase
accounting 196 133 - - -
amortization
Non-GAAP
Income $ 40,052 $ 41,480 $ 42,392 $ 36,488 $ 36,909
before
income taxes
GAAP Income $ 8,946 $ 9,318 $ 6,915 $ 8,387 $ 8,545
tax expense
Income tax
effect of 1,282 1,441 1,448 1,292 1,382
stock-based
compensation
Income tax
effect of - - - - 39
accelerated
depreciation
Income tax
effect of
purchase 74 50 - - -
accounting
amortization
Tax benefit
from the
expiration - - 1,507 - -
of certain
statutes of
limitations
Non-GAAP
Income tax $ 10,302 $ 10,809 $ 9,870 $ 9,679 $ 9,966
expense
Non-GAAP
Income tax
expense as a
% of 25.7% 26.1% 23.3% 26.5% 27.0%
Non-GAAP
Income
before
income taxes
Summary of Unaudited Reconciliations of GAAP Measures to Non-GAAP Measures and
other Unaudited GAAP Data (Continued)
($ in
thousands,
except per
share data)
Q112 Q212 Q312 Q412 Q113
GAAP Net $ 26,731 $ 27,521 $ 30,898 $ 23,886 $ 23,563
income
Stock-based 4,179 4,508 4,579 4,215 4,620
compensation
Accelerated - - - - 181
depreciation
Purchase
accounting 196 133 - - -
amortization
Income tax (1,356 ) (1,491 ) (2,955 ) (1,292 ) (1,421 )
effect
Non-GAAP Net $ 29,750 $ 30,671 $ 32,522 $ 26,809 $ 26,943
income
GAAP Diluted
earnings per $ 0.56 $ 0.60 $ 0.71 $ 0.55 $ 0.55
common share
Stock-based 0.09 0.10 0.11 0.10 0.11
compensation
Income tax (0.03 ) (0.03 ) (0.07 ) (0.03 ) (0.03 )
effect
Non-GAAP
Diluted $ 0.62 $ 0.67 $ 0.75 $ 0.62 $ 0.63
earnings per
common share
Shares used
in diluted
earnings per 48,060 45,717 43,640 43,329 42,570
common share
calculation
SUMMARY OF UNAUDITED GAAP DATA
($ in thousands)
Net revenues
from
unaffiliated
customers:
Office and $ 130,999 $ 136,395 $ 133,335 $ 130,980 $ 134,033
Contact Center
Mobile 32,164 28,341 36,024 35,296 36,157
Gaming and 7,395 8,381 9,209 6,870 6,789
Computer Audio
Clarity 5,042 3,831 4,668 4,438 4,386
Total net $ 175,600 $ 176,948 $ 183,236 $ 177,584 $ 181,365
revenues
Net revenues by
geographic area
from
unaffiliated
customers:
Domestic $ 100,291 $ 101,196 $ 99,070 $ 105,676 $ 104,078
International 75,309 75,752 84,166 71,908 77,287
Total net $ 175,600 $ 176,948 $ 183,236 $ 177,584 $ 181,365
revenues
Balance Sheet
accounts and
metrics:
Accounts $ 108,516 $ 103,026 $ 109,677 $ 111,771 $ 108,300
receivable, net
Days sales
outstanding 56 52 54 57 54
(DSO)
Inventory, net $ 57,697 $ 60,717 $ 57,799 $ 53,713 $ 58,932
Inventory turns 5.7 5.1 6.0 6.1 5.7
Contact:
Plantronics, Inc.
Greg Klaben, 831-458-7533 (Investors)
Vice President of Investor Relations
Karen Auby, 831-458-7814 (Media)
Senior Manager of Public Relations
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