Continued Strong Growth in Unified Communications Revenues; Office and Contact Center Grows 11% Compared with Strong Prior Year Results
Plantronics, Inc. (NYSE: PLT) today announced first quarter fiscal year
2012 net revenues of $175.6 million compared with net revenues of $170.7
million in the first quarter of fiscal year 2011 and above the guidance
range of $168 million - $173 million provided on May 3, 2011.
Plantronics’ GAAP diluted earnings per share was $0.56 in the first
quarter of fiscal year 2012 compared with $0.52 in the same quarter of
the prior year and guidance of $0.46 to $0.50. Non-GAAP diluted earnings
per share for the first quarter of fiscal year 2012 was $0.62, up 7%
compared with $0.58 in the same quarter of the prior year and higher
than previously provided guidance of $0.52 to $0.56. The difference
between GAAP and non-GAAP diluted earnings per share for the first
quarter of fiscal year 2012 includes stock-based compensation charges
and purchase accounting amortization, both net of the associated tax
impact.
“We started fiscal 2012 with strong year over year growth in our Office
and Contact Center (‘OCC’) business in all geographies, in part driven
by Unified Communications (‘UC’),” stated Ken Kannappan, President &
CEO. ”Product revenues related to UC deployments grew by 91% compared
with the prior year quarter and we remain very optimistic about the UC
market and continue to invest accordingly.”
“We finished the quarter with $386.3 million in cash, cash equivalents
and short & long term investments after spending $110 million on
repurchases of our common stock, inclusive of $100 million paid under
the accelerated share repurchase program we announced in May. We
generated approximately $19 million in cash flow from operations in the
first quarter of fiscal year 2012 and continue to have a very strong
financial position,” stated Barbara Scherer, SVP Finance and
Administration & CFO.
Improved economic conditions and the market trend toward UC products
drove an 11% increase in net revenues of OCC products in the first
quarter of fiscal 2012 compared to the same period in the prior year.
OCC net revenues were $131 million in the first quarter of fiscal 2012
compared with $117.6 million in the first quarter of fiscal year 2011.
Revenues of UC products were $18.8 million for the first quarter of
fiscal year 2012 compared with $9.8 million in the first quarter of
fiscal year 2011.
Mobile net revenues were $32.2 million in the first quarter of fiscal
year 2012, a decrease of 17% from $38.7 million in the first quarter of
fiscal year 2011 as a result of some market share loss in the U.S. and
overall weakness in the product category offset in part by international
revenue growth.
GAAP operating income in the first quarter of fiscal year 2012 was $35.0
million resulting in an operating margin of 20.0%. This compares to GAAP
operating income of $35.9 million and an operating margin of 21.0% in
the prior year quarter. Non-GAAP operating income in the first quarter
of fiscal year 2012 was $39.4 million which resulted in a non-GAAP
operating margin of 22.4% compared to previously provided guidance of
non-GAAP operating income of $34 million to $37 million.
On May 9, 2011, Plantronics announced that it entered into two separate
accelerated share repurchase agreements with Goldman, Sachs & Co.
(”Goldman”) to repurchase an aggregate of $100 million of Plantronics’
common stock under an accelerated share repurchase program (”ASR”), as
part of a 7 million share repurchase authorization announced on May 3,
2011. During the current quarter, Plantronics received approximately 2.1
million shares from Goldman and may receive additional shares or may be
required to make an additional payment or deliver shares to Goldman at
the completion of the program, which we expect to be in January 2012,
but may be sooner. Plantronics’ diluted shares outstanding declined by
1.4 million shares sequentially, primarily as a result of the ASR, and
actual diluted shares outstanding were 48.1 million compared with
guidance of approximately 49 million. The guidance estimate for the
first quarter of fiscal 2012 did not include the benefit of shares
received under the ASR.
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.
The September quarter tends to be characterized by a slowdown in
incoming purchase orders during July which intensifies in August, but
historically, the level of incoming orders picks up strongly at the
beginning of September. This pattern tends to be particularly true in
our higher margin OCC business. This historical September quarter trend
is included in our model for forecasting the second quarter net revenues.
Plantronics’ business is inherently difficult to forecast, particularly
with continuing uncertainty in global economic conditions, and there can
be no assurance that the incoming orders it expects to receive over the
balance of the current quarter will materialize.
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.
Subject to the foregoing, we are currently expecting the following range
of financial results for the second quarter of fiscal year 2012:
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Net revenues of $172 million - $177 million;
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GAAP operating income of $32 million to $35 million;
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Non-GAAP operating income of $37 million to $40 million;
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Assuming approximately 47.4 million diluted average weighted shares
outstanding:
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GAAP diluted earnings per share of $0.51 to $0.56;
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Non-GAAP diluted earnings per share of $0.58 - $0.63; and
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Diluted earnings per share cost of stock-based compensation to be
approximately $0.07.
Plantronics does not intend to update these targets during the quarter
or to report on its progress toward these targets. Plantronics will not
comment on these targets to analysts or investors except by its press
release announcing its second quarter fiscal year 2012 results or by
other public disclosure. Any other statements speculating on the
progress of the second quarter fiscal year 2012 will not be based on
internal information and should be assessed accordingly by investors.
Dividend Announcement
Plantronics also announced that its Board of Directors declared a
quarterly dividend of $0.05 per share. The dividend will be payable on
September 9, 2011 to stockholders of record at the close of business on
August 19, 2011.
Conference Call Scheduled to Discuss Financial Results
Plantronics has scheduled a conference call to discuss first quarter
fiscal year 2012 results. The conference call will take place today,
August 1, 2011 at 2:00 PM (PDT). All interested investors and potential
investors in Plantronics stock are invited to participate. To listen to
the call, please dial in five to ten minutes prior to the scheduled
starting time and refer to the “Plantronics Conference Call.”
Participants from North America should call (888) 301-8736 and other
participants should call (706) 634-7260.
A replay of the call with the conference ID #76926828 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 webcast at www.plantronics.com
under Investor Relations, and the webcast of the conference call will
remain available on the Plantronics website for 30 days.
Use of Non-GAAP Financial Information
Plantronics has excluded non-recurring transactions and non-cash
expenses and charges including stock-based compensation expenses related
to stock options, restricted stock and employee stock purchases and
purchase accounting amortization from non-GAAP net income, non-GAAP
earnings per diluted share, non-GAAP operating income, non-GAAP gross
profit, non-GAAP operating margin and the non-GAAP effective tax rate.
Plantronics excludes these expenses from its non-GAAP measures primarily
because Plantronics does not believe they are reflective of ongoing
operating results and are not considered by management as part of
Plantronics’ 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,
but non-GAAP financial measures are not meant to be considered in
isolation or as a substitute for, or superior to, operating income, net
income or earnings per share 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 outlook for the UC market (ii) our estimates of GAAP
and non-GAAP financial results for the second quarter of fiscal 2012,
including net revenues, operating income and diluted earnings per share;
(iii) our estimated diluted earnings per share cost of stock-based
compensation for the second quarter of fiscal 2012; (iv) our estimate of
the diluted weighted average shares outstanding in the second quarter of
fiscal 2012, (v) trends and our predictions regarding ordering patterns
for the second quarter of fiscal 2012, 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:
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economic conditions in both the domestic and international markets;
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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 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) 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; and (vi) the results and timing of our
accelerated share repurchase program;
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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;
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volatility in prices from our suppliers, including our manufacturers
located in China, have and could negatively affect our profitability
and/or market share;
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fluctuations in foreign exchange rates;
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the bankruptcy or financial weakness of distributors or key customers,
or the bankruptcy of or reduction in capacity of our key suppliers;
and,
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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.
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 31, 2011, 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:
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Summary Unaudited Condensed Consolidated Financial Statements
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Unaudited GAAP to Non-GAAP Consolidated Statements of Operations
Reconciliations for the Three Months ended June 30, 2011 and June 30,
2010
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Summary Unaudited Statements of Operations and Related Data on a
Non-GAAP Basis
View
all
About Plantronics
Plantronics is a global leader in audio communications for businesses
and consumers. We have pioneered new trends in audio technology for 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 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.
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