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Plantronics Announces New Return of Capital Target and Capital Structure Policy

March 04, 2015

Board of Directors Approves 3,000,000 Share Additional Stock Buyback Authorization and Updates Fourth Quarter Guidance

SANTA CRUZ, CA--(Marketwired - March 04, 2015) - Plantronics, Inc. (NYSE: PLT) today announced that its board of directors has approved a new return of capital policy that will return more cash flow to shareholders, balance cash return between regular dividends and consistent stock buybacks, and utilize a prudent amount of leverage to enhance shareholder returns.

Plantronics has updated its capital structure policy to increase its intended return of cash to stockholders to approximately 60% of total free cash flow, defined as total operating cash flow less capital expenditures. The company will retain its current cash distribution target of 2/3rds in the form of common stock repurchases and 1/3rd in the form of quarterly dividends. 

In addition to this new commitment to return approximately 60% of free cash flow on an ongoing basis, Plantronics intends to opportunistically buy back common stock with the proceeds of future debt issuance, while maintaining a target corporate debt rating near the high end of the non-investment grade range; such future debt issuance may consist of long term or short term notes, term loans or draws on Plantronics' revolving line of credit.

Plantronics board of directors intends to regularly reevaluate its return of capital policy and update it when appropriate based on business performance, and domestic and foreign tax policies. In particular, if there is a material change in the geographic distribution of Plantronics' cash flows, or a change in relative tax rates between jurisdictions, Plantronics may increase or decrease its return of capital targets.

To facilitate Plantronics anticipated increased stock buybacks pursuant to this new policy, Plantronics' board of directors announced it has approved a new 3,000,000 share repurchase authorization, increasing its total repurchase authorization to 4,000,000. These share repurchases will be executed based on then-current business and market factors, so the actual return of capital in any single quarter may be significantly more or less than the long-term goal of 60% of free cash flow.

"Today's announcement reflects our confidence in Plantronics' ability to generate consistent free cash flow in the years ahead, which enables us to continue investing in growth, while enhancing the return of capital to shareholders." stated Ken Kannappan, President & CEO. "The shift in our capital structure is intended to be achieved over time with the use of our line of credit and other forms of longer-term debt." 

Plantronics is also updating its previously announced guidance. Plantronics expects fourth quarter fiscal 2015 revenues and earnings to be close to the low end of guidance. A stop shipment on some EncorePro headsets will adversely impact revenues and guidance in the quarter. The Company anticipates renewing shipments in the latter part of the first quarter of fiscal year 2016.

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 (i) the return of capital policy will return more cash flow to shareholders, balance cash returns between dividends and stock buybacks, and enhance shareholder returns utilizing leverage, (ii) the updated capital structure policy will increase return of cash to stockholders, (iii) approximately 60% of total free cash flow will be returned to stockholders on an ongoing basis, (iv) that returns to stockholders will be targeted to 2/3rds in the form of common stock repurchases and 1/3rd to quarterly dividends, (v) the Company may opportunistically buy back common stock with the proceeds of future debt issuance, (vi) that the Company will maintain a target corporate debt rating near the high end of non-investment grade, (vii) that future debt issuances may consist of long or short-term notes, term loans or draws on revolving lines of credit, (viii) that the board will regularly reevaluate its return of capital policy and update it based on business performance and foreign and domestic tax policies, (ix) the Company may increase or decrease its return of capital targets, including in connection with geographic distribution of cash flows and jurisdictional tax rates, (x) the Company will repurchase all or any portion of 4 million shares of common stock under the new share repurchase authorization, (xi) the Company will generate consistent free cash flow in the future, (xii) the Company will continue to invest in growth while enhancing return of capital to shareholders, (xiii) the shift in the Company's capital structure will be achieved over time, (xiv) the Company's fourth quarter fiscal 2015 revenues and earnings will be close to the low end of previously announced guidance; and (xv) the Company anticipates renewing shipments of the Encore Pro in the latter part of the first quarter of fiscal year 2016.

This press release is neither an offer to purchase nor a solicitation of an offer to sell any securities.

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.

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 Bluetoothheadsets, 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 visitwww.plantronics.com or call (800) 544-4660.

Plantronics and the logo design are trademarks or registered trademarks of Plantronics, Inc. All other trademarks are the property of their respective owners.

INVESTOR CONTACT: Greg Klaben Vice President of Investor Relations (831) 458-7533 MEDIA CONTACT: George Gutierrez Corporate Communications (831) 458-7537

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