SANTA CRUZ, Calif.,
Nov. 5, 2019 /PRNewswire/
-- Plantronics, Inc. (NYSE: PLT) ("Poly" or the "Company")
today announced second quarter fiscal year 2020 results for the
period ending September 30, 2019. Highlights of the second
quarter include the following:
($ Millions, except
percent and per-share data)1
|
Q2
FY20
|
Q2
FY19
|
|
YTD
FY20
|
YTD
FY192
|
GAAP
Revenue
|
$462
|
|
$483
|
|
|
$909
|
|
$704
|
|
GAAP Gross
Margin
|
44.6
|
%
|
31.6
|
%
|
|
46.0
|
%
|
37.3
|
%
|
GAAP Operating
Income
|
($6)
|
|
($86)
|
|
|
($34)
|
|
($65)
|
|
GAAP Diluted
EPS
|
($0.65)
|
|
($2.21)
|
|
|
($1.80)
|
|
($2.01)
|
|
Cash Flow from
Operations
|
$25
|
|
$40
|
|
|
$34
|
|
$73
|
|
|
|
|
|
|
|
Non-GAAP
Revenue
|
$470
|
|
$520
|
|
|
$930
|
|
$741
|
|
Non-GAAP Gross
Margin
|
52.4
|
%
|
53.2
|
%
|
|
54.1
|
%
|
52.3
|
%
|
Non-GAAP Operating
Income
|
$81
|
|
$96
|
|
|
$167
|
|
$132
|
|
Non-GAAP Diluted
EPS
|
$1.24
|
|
$1.51
|
|
|
$2.55
|
|
$2.31
|
|
Adjusted
EBITDA3
|
$93
|
|
$108
|
|
|
$191
|
|
$149
|
|
|
|
1
|
For further
information on supplemental non-GAAP metrics refer to the Use Of
Non-GAAP And Comparative Financial Information and Unaudited
Reconciliations Of GAAP Measures To Non-GAAP Measures sections
below.
|
2
|
YTD FY19 results
shown here do not reflect Polycom results for the three months
ended June 30, 2018 due to the completion of the Polycom
acquisition on July 2, 2018.
|
3
|
Trailing twelve
months Adjusted EBITDA of $399 million.
|
"In light of the challenges of the past two quarters we are
aggressively taking steps to drive long-term profitable growth,"
said Joe Burton, President and Chief
Executive Officer. "Over the last few months we have announced a
record number of new products that are just beginning to ship now
with the full rollout over the next few quarters."
Results Compared
to August 6, 2019 Guidance
|
|
|
Q2 FY20
Results
|
Q2 FY20 Guidance
Range3
|
GAAP Net
Revenue
|
$462M
|
$456M -
$496M
|
Non-GAAP Net
Revenue
|
$470M
|
$465M -
$505M
|
Adjusted
EBITDA
|
$93M
|
$94M -
$110M
|
Non-GAAP Diluted
EPS
|
$1.24
|
$1.20 -
$1.50
|
|
|
3
|
The non-GAAP
revenue guidance ranges shown here exclude the $8.5 million impact
of purchase accounting related to recording deferred revenue at
fair value at the time of the acquisition.
|
"During the second quarter, we made further progress reducing
our debt and managing corporate spend," said Chuck Boynton, Executive Vice President and
Chief Financial Officer. "As we analyze inventory levels across our
value chain, in light of the evolving macroeconomic conditions and
significant product transitions underway, we believe it is prudent
to reduce channel inventory at this time by reducing sales to
channel partners. This reduction will primarily impact our fiscal
Q3 results and is incorporated into the guidance we are providing
today."
Highlights for the Second Quarter and Fiscal Year
2020
- At Zoom's annual user conference, Poly announced the Studio X
family, two new purpose-built all-in-one video bars designed to
dramatically simplify the video conferencing experience. Combined
with the Poly Studio and Poly G7500 the Company now has a full
portfolio of software-driven video endpoints positioned to capture
the rapid growth in the video conferencing market.
- At Microsoft Ignite, Poly announced the CCX line of business
desk phones, combining Microsoft Teams with premium voice quality.
All CCX phones integrate Teams contact lists, calendars, meetings,
and a dedicated Teams button for activating Cortana skills. The
Company also announced that Poly Studio, Trio family, CCX phones,
Calisto speakerphones, and Voyager 4200/5200 are now certified for
Microsoft Teams.
- Tata Communications and Poly will offer a range of managed
services to support enterprises on their entire Microsoft Teams
transition.
- 8x8, ScanSource, and Poly are joining forces to launch
CloudFuel, a program designed to accelerate and simplify the
process of transitioning from legacy on-premise communication
systems to cloud-based solutions.
- Poly introduced the next generation of the Company's lineup of
popular Savi wireless headsets. The enhanced Savi Office and UC Series offer more wearing
styles, a unique close conversation limiting feature and active
noise canceling (ANC).
- Poly announced that multiple headsets are now certified to work
with Google Voice for G Suite, the new cloud-based business
telephony service built for G Suite customers.
- Amazon Alexa for Business is now built into the Voyager 5200
and Voyager 4200 UC Series. Tile is also now integrated into these
headsets, allowing users to "ring" and locate the headset when its
been misplaced.
- Poly introduced an all-new true wireless lineup to its
award-winning BackBeat line. These true wireless earbuds are
extremely lightweight, and each pair comes with a compact carrying
case, which includes additional charging capabilities.
- The Company made a debt repayment of $25
million against its outstanding Term Loan B.
- Poly Investor Day is scheduled for November 20, 2019. The morning event is
specifically designed for institutional investors and equity
analysts.
For the full lineup of product announcements in the quarter,
please see Poly's corporate blog at poly.blog.com.
Poly Announces Quarterly Dividend of $0.15
The Poly Board of Directors has declared a quarterly cash
dividend of $0.15 per common share,
to be paid on December 10, 2019, to all shareholders of record
as of the close of market on November 20, 2019.
Business Outlook
The following statements are based on the Company's 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 the Company's expectations.
In its fiscal third quarter, the Company expects to reduce
channel inventory by approximately $65
million by reducing sales to channel partners, and has
adjusted its financial guidance accordingly. The following
represents the expected range of financial results for the third
quarter and full fiscal year of 2020 (all amounts assuming currency
rates remain stable):
|
Q3 FY20
Guidance
|
FY20 Annual
Guidance
|
GAAP Net
Revenue
|
$383M -
$423M
|
$1.72B -
1.81B
|
Non-GAAP Net
Revenue1
|
$390M -
$430M
|
$1.76B -
$1.84B
|
Adjusted
EBITDA2
|
$33M -
$53M
|
$283M -
$323M
|
Non-GAAP Diluted
EPS2,3
|
$0.01 -
$0.31
|
$2.94 -
$3.74
|
|
|
1
|
Q3 and full year FY20
non-GAAP revenue guidance excludes anticipated purchase accounting
adjustments of $7.1 million and $34.0 million,
respectively.
|
2
|
Q3 and full year FY20
Adjusted EBITDA and non-GAAP diluted EPS excludes estimated
intangibles amortization expense of $45.8 million and $182.8
million, respectively. With respect to adjusted EBITDA and diluted
EPS guidance, the Company has determined that it is unable to
provide quantitative reconciliations of these forward-looking
non-GAAP measures to the most directly comparable forward-looking
GAAP measures with a reasonable degree of confidence in their
accuracy without unreasonable effort, as items including stock
based compensation, acquisition and integration costs, litigation
gains and losses, and impacts from discrete tax adjustments and tax
laws are inherently uncertain and depend on various factors, many
of which are beyond the Company's control.
|
3
|
EPS guidance assumes
approximately 40 million diluted average weighted shares and a
non-GAAP effective tax rate of 16% to 18%.
|
Conference Call and Earnings Presentation
Poly is providing an earnings presentation in combination with
this press release. The presentation is offered to provide
shareholders and analysts with additional detail for analyzing
results. The presentation will be available in the Investor
Relations section of our corporate website at investor.poly.com
along with this press release. A reconciliation of our GAAP to
non-GAAP and historical combined comparative results is provided at
the end of this press release.
We have scheduled a conference call to discuss second quarter
fiscal year 2020 financial results. The conference call will take
place today, November 5, 2019, at 2:00
PM (Pacific Time). All interested investors and potential
investors in Poly 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 "Poly Conference Call." The
dial-in from North America is
(888) 301-8736 and the international dial-in is (706) 634-7260.
The conference call will also be simultaneously webcast and can
be accessed from the Investor Relations section of our website. A
replay of the call with the conference ID #4337595 will be
available until January 5, 2020 at
(855) 859-2056 for callers from North
America and at (404) 537-3406 for all other callers.
Use of Non-GAAP and Combined Comparative Financial
Information
To supplement our condensed consolidated financial statements
presented on a GAAP basis, we use non-GAAP, and where applicable,
combined comparative measures of operating results, including
non-GAAP net revenues, non-GAAP gross profit, non-GAAP operating
expenses, non-GAAP operating income, non-GAAP net income, adjusted
EBITDA, and non-GAAP diluted EPS, which exclude certain unusual or
non-cash expenses and charges that are included in the most
directly comparable GAAP measure. These unusual or non-cash
expenses and charges include the effect, where applicable, of
purchase accounting on deferred revenue and inventory, stock-based
compensation, acquisition related expenses, purchase accounting
amortization and adjustments, restructuring and other related
charges and credits, asset impairments, executive transition
charges, rebranding costs, gains or losses from litigations
settlements, unusual and/or irregular gains or losses from the sale
of investments, and the impact of participating securities, all net
of any associated tax impact. We also exclude tax benefits from the
release of tax reserves, discrete tax adjustments including
transfer pricing, tax deduction and tax credit adjustments, and the
impact of tax law changes. We exclude these amounts from our
non-GAAP and combined comparative measures primarily because
management does not believe they are consistent with the
development of our target operating model. Combined comparative
results refer to the results for periods prior to the acquisition
of Polycom, which were prepared by combining the non-GAAP results
of as if they had been combined during that period. These prior
period results are presented on a non-GAAP as-reported basis, with
immaterial adjustments to align the treatment of non-GAAP
adjustments for comparative purposes. We believe that the use of
non-GAAP and combined comparative financial measures provides
meaningful supplemental information regarding our performance and
liquidity and helps investors compare actual results with our
historical and long-term target operating model goals as well as
our performance as a combined company. We believe presenting
non-GAAP net revenue provides meaningful supplemental information
regarding how management views the performance of the business and
underlying performance of our individual product categories. We
believe that both management and investors benefit from referring
to these non-GAAP and combined comparative financial measures in
assessing our performance and when planning, forecasting and
analyzing future periods; however, non-GAAP and combined
comparative financial measures are not meant to be considered in
isolation of, or as a substitute for, or superior to, net revenues,
gross margin, operating expenses, operating income, operating
margin, net income or EPS prepared in accordance with GAAP.
Forward Looking Statements 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 efforts to drive
long-term profitable growth; (ii) our expectations for new products
launches, the timing of their releases and their expected impact on
future growth; (iii) our expectations to reduce channel inventory
materially in third quarter of Fiscal Year 2020; (iv) our
expectations for operating cash flow and debt; (v) estimates of
GAAP and non-GAAP financial results for the third quarter and full
year Fiscal Year 2020, including net revenues, purchase accounting
adjustments, adjusted EBITDA, tax rates, intangibles amortization,
and diluted weighted average shares outstanding and diluted EPS, 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:
- Regarding the Polycom acquisition: (i) we may be unable to
integrate Polycom's business within our own in a timely and
cost-efficient manner or do so without adversely impacting
operations, including new product launches; (ii) expected synergies
or operating efficiencies may fail to materialize in whole or part
or may not occur within expected time-frames; (iii) the acquisition
and our subsequent integration efforts may adversely impact
relationships with customers, suppliers and strategic partners and
their operating results and businesses generally (including the
diversion of management time on transaction-related issues); (iv)
we may be unable to retain and hire key personnel; (v) our
increased leverage as a result of the transaction is substantially
greater than prior to the acquisition which may pose risks,
including reduced flexibility to make changes in our operations in
response to business or economic conditions, increased borrowing
costs, as well as penalties or costs should we fail to comply with
terms of the financial agreements such as debt ratios and financial
and operation performance targets; (vi) negative effects on the
market price of our common stock as a result of the transaction,
particularly in light of the issuance of our stock in the
transaction; (vii) our financial reporting including those
resulting from the adoption of new accounting pronouncements and
associated system implementations in the context of the
transaction, our ability to forecast financial results of the
combined company and that we may be unable to successfully
integrate our reporting system causing an adverse impact to our
ability to make timely and accurate filings with the SEC and other
domestic and foreign governmental agencies; (viii) the potential
impact of the transaction on our future tax rate and payments based
on our global entity consolidation efforts and our ability to
quickly and cost effectively integrate foreign operations; (ix) the
challenges of integrating the supply chains of the two companies;
and (x) the potential that our due diligence did not uncover risks
and potential liabilities of Polycom;
- Micro and macro-economic conditions in our domestic and
international markets;
- the nature and extent of competition we face, particularly
subsequent to the acquisition of Polycom as it relates to our
ability to adapt to new competitors and changing markets;
- the impact of product transitions underway which are replacing
or upgrading nearly every major product in our product
portfolio;
- the impact of customer brand preferences on Consumer and
Enterprise market demands;
- the impact of our adoption of a new corporate branding
identity, including any confusion or harm to our reputation
resulting therefrom;
- the impact of ongoing integration, restructuring and
disaggregation activities on our operations, including on
employees, suppliers and customers from the Polycom
acquisition;
- our ability to realize and achieve positive financial results
projected to arise in the our key markets from UC&C adoption
could be adversely affected by a variety of factors including the
following: (i) as UC&C becomes more widely adopted, the risk
that competitors will offer solutions that will effectively
commoditize our products which, in turn, will reduce the sales
prices for those products; (ii) our plans are dependent upon
adoption of our UC&C solution by major platform providers and
any proprietary solutions of competitors, and our influence over
such providers and the marketing in general 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 is limited;
(iii) delays or limitations on our ability to timely introduce
solutions that are cost effective, feature-rich, stable, and
attractive to our customers within forecasted development budgets;
(iv) our successful implementation and execution of new and
different processes involving the design, development, and
manufacturing of complex electronic systems composed of hardware,
firmware, and software that works seamlessly and continuously in a
wide variety of environments and with multiple devices; (v) failure
of UC&C solutions generally, or our solutions in particular, to
be adopted with the breadth and speed we anticipate; (vi) our sales
model and expertise must successfully evolve to support complex
integration of hardware, software, and services with UC&C
infrastructure consistent with changing customer purchasing
expectations; (vii) as UC&C becomes more widely adopted we
anticipate that competition for market share will increase,
particularly given that some competitors may have superior
technical and economic resources; (viii) sales cycles for UC&C
deployments are longer and becoming more complex; (ix) our
inability to timely and cost-effectively adapt to changing business
requirements may impact our profitability in this market and our
overall margins; and (x) our failure to expand our technical
support capabilities to support the complex and proprietary
platforms in which our UC&C products are and will be
integrated;
- risks associated with our channel partners' sales reporting,
product inventories, and product sell-through since we sell a
significant amount of products to channel partners who maintain
their own inventory of our products;
- 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;
- forecasting sales and procurement demands is inherently
difficult, particularly with continuing uncertainty in regional and
global economic conditions as well as currency fluctuations, and
there can be no assurance that expectations of incoming orders over
the balance of the current quarter will materialize;
- volatility in prices and availability of components from our
suppliers, including our manufacturers located in APAC, have in the
past and could in the future negatively affect our profitability
and/or market share;
- fluctuations in foreign exchange rates;
- new or greater tariffs on our products;
- 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, and the inherent risks of our
substantial foreign operations; and
- seasonality in one or more of our product categories.
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 17, 2019 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
- Unaudited Reconciliations of GAAP Measures to Trailing Twelve
Months EBITDA
- Unaudited Reconciliations of GAAP Measures to Non-GAAP Combined
Comparative Measures
About Poly
Poly is a global communications company that powers meaningful
human connection and collaboration. Poly combines legendary audio
expertise and powerful video and conferencing capabilities
to overcome the distractions, complexity and distance
that make communication in and out of the workplace challenging.
Poly believes in solutions that make life easier when they work
together and with our partner's services. Our headsets, software,
desk phones, audio and video conferencing, analytics and services
are used worldwide and are a leading choice for every kind of
workspace. For more information, please
visit: www.poly.com.
Poly and the propeller design are trademarks of Plantronics,
Inc. All other trademarks are the property of their respective
owners.
INVESTOR CONTACT:
Mike Iburg
Vice President, Investor Relations
(831) 458-7533
MEDIA CONTACT:
Edie Kissko
Senior Director and Head of Corporate Communications
(213) 369-3719
PLANTRONICS,
INC.
|
SUMMARY CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
|
($ in thousands,
except per share data)
|
|
UNAUDITED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
September
30,
|
|
September
30,
|
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
Net
revenues:
|
|
|
|
|
|
|
|
|
|
Net product
revenues
|
|
$
|
395,137
|
|
|
$
|
435,262
|
|
|
$
|
777,882
|
|
|
$
|
656,571
|
|
|
Net services
revenues
|
|
66,572
|
|
|
47,807
|
|
|
131,594
|
|
|
47,807
|
|
|
Total net
revenues
|
|
461,709
|
|
|
483,069
|
|
|
909,476
|
|
|
704,378
|
|
|
Cost of
revenues:
|
|
|
|
|
|
|
|
|
|
Cost of product
revenues
|
|
229,323
|
|
|
305,477
|
|
|
437,939
|
|
|
416,943
|
|
|
Cost of service
revenues
|
|
26,315
|
|
|
24,963
|
|
|
52,820
|
|
|
24,963
|
|
|
Total cost of
revenues
|
|
255,638
|
|
|
330,440
|
|
|
490,759
|
|
|
441,906
|
|
|
Gross
profit
|
|
206,071
|
|
|
152,629
|
|
|
418,717
|
|
|
262,472
|
|
|
Gross profit
%
|
|
44.6
|
%
|
|
31.6
|
%
|
|
46.0
|
%
|
|
37.3
|
%
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Research,
development, and engineering
|
|
57,415
|
|
|
57,047
|
|
|
116,939
|
|
|
80,748
|
|
|
Selling, general, and
administrative
|
|
148,419
|
|
|
174,297
|
|
|
312,027
|
|
|
238,500
|
|
|
(Gain) loss, net from
litigation settlements
|
|
—
|
|
|
—
|
|
|
(1,162)
|
|
|
(30)
|
|
|
Restructuring and
other related charges
|
|
5,847
|
|
|
7,261
|
|
|
25,372
|
|
|
8,581
|
|
|
Total operating
expenses
|
|
211,681
|
|
|
238,605
|
|
|
453,176
|
|
|
327,799
|
|
|
Operating
income
|
|
(5,610)
|
|
|
(85,976)
|
|
|
(34,459)
|
|
|
(65,327)
|
|
|
Operating income
%
|
|
(1.2)
|
%
|
|
(17.8)
|
%
|
|
(3.8)
|
%
|
|
(9.3)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(23,797)
|
|
|
(23,893)
|
|
|
(47,729)
|
|
|
(31,220)
|
|
|
Other non-operating
income, net
|
|
(625)
|
|
|
1,610
|
|
|
(292)
|
|
|
3,606
|
|
|
Income before income
taxes
|
|
(30,032)
|
|
|
(108,259)
|
|
|
(82,480)
|
|
|
(92,941)
|
|
|
Income tax expense
(benefit)
|
|
(4,122)
|
|
|
(21,550)
|
|
|
(11,699)
|
|
|
(20,703)
|
|
|
Net income
(loss)
|
|
$
|
(25,910)
|
|
|
$
|
(86,709)
|
|
|
$
|
(70,781)
|
|
|
$
|
(72,238)
|
|
|
|
|
|
|
|
|
|
|
|
|
% of net
revenues
|
|
(5.6)
|
%
|
|
(17.9)
|
%
|
|
(7.8)
|
%
|
|
(10.3)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.65)
|
|
|
$
|
(2.21)
|
|
|
$
|
(1.80)
|
|
|
$
|
(2.01)
|
|
|
Diluted
|
|
$
|
(0.65)
|
|
|
$
|
(2.21)
|
|
|
$
|
(1.80)
|
|
|
$
|
(2.01)
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
computing earnings per common share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
39,584
|
|
|
39,281
|
|
|
39,411
|
|
|
35,938
|
|
|
Diluted
|
|
39,584
|
|
|
39,281
|
|
|
39,411
|
|
|
35,938
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax
rate
|
|
(13.7)
|
%
|
|
(19.9)
|
%
|
|
(14.2)
|
%
|
|
(22.3)
|
%
|
|
PLANTRONICS,
INC.
|
SUMMARY CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
|
($ in
thousands)
|
|
UNAUDITED
CONSOLIDATED BALANCE SHEETS
|
|
|
September
30,
|
|
March
31,
|
|
|
|
2019
|
|
2019
|
|
ASSETS
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
186,442
|
|
|
$
|
202,509
|
|
|
Short-term
investments
|
|
14,378
|
|
|
13,332
|
|
|
Total cash, cash
equivalents, and short-term investments
|
|
200,820
|
|
|
215,841
|
|
|
Accounts receivable,
net
|
|
337,077
|
|
|
337,671
|
|
|
Inventory,
net
|
|
228,363
|
|
|
177,146
|
|
|
Other current
assets
|
|
55,160
|
|
|
50,488
|
|
|
Total current
assets
|
|
821,420
|
|
|
781,146
|
|
|
Property, plant, and
equipment, net
|
|
186,638
|
|
|
204,826
|
|
|
Purchased
intangibles, net
|
|
734,355
|
|
|
825,675
|
|
|
Goodwill
|
|
1,279,897
|
|
|
1,278,380
|
|
|
Deferred tax and
other assets
|
|
89,704
|
|
|
26,508
|
|
|
Total
assets
|
|
$
|
3,112,014
|
|
|
$
|
3,116,535
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Accounts
payable
|
|
$
|
169,701
|
|
|
$
|
129,514
|
|
|
Accrued
liabilities
|
|
427,647
|
|
|
398,715
|
|
|
Total current
liabilities
|
|
597,348
|
|
|
528,229
|
|
|
Long-term debt, net
of issuance costs
|
|
1,619,015
|
|
|
1,640,801
|
|
|
Long-term income
taxes payable
|
|
92,831
|
|
|
83,121
|
|
|
Other long-term
liabilities
|
|
143,713
|
|
|
142,697
|
|
|
Total
liabilities
|
|
2,452,907
|
|
|
2,394,848
|
|
|
Stockholders'
equity
|
|
659,107
|
|
|
721,687
|
|
|
Total liabilities and
stockholders' equity
|
|
$
|
3,112,014
|
|
|
$
|
3,116,535
|
|
|
|
|
|
|
|
|
PLANTRONICS,
INC.
|
SUMMARY CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
|
($ in thousands,
except per share data)
|
|
UNAUDITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
September
30,
|
|
September
30,
|
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
Cash flows from
operating activities
|
|
|
|
|
|
|
|
|
|
Net Income
|
|
$
|
(25,910)
|
|
|
$
|
(86,709)
|
|
|
$
|
(70,781)
|
|
|
$
|
(72,238)
|
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
57,376
|
|
|
82,398
|
|
|
115,074
|
|
|
87,646
|
|
|
Amortization of debt
issuance cost
|
|
1,361
|
|
|
1,407
|
|
|
2,722
|
|
|
1,769
|
|
|
Stock-based
compensation
|
|
14,693
|
|
|
10,840
|
|
|
27,597
|
|
|
18,990
|
|
|
Deferred income
taxes
|
|
(15,657)
|
|
|
(22,688)
|
|
|
(48,802)
|
|
|
(18,056)
|
|
|
Provision for excess
and obsolete inventories
|
|
1,844
|
|
|
2,196
|
|
|
3,604
|
|
|
2,808
|
|
|
Restructuring
charges
|
|
5,847
|
|
|
7,261
|
|
|
25,372
|
|
|
8,581
|
|
|
Cash payments for
restructuring charges
|
|
(5,291)
|
|
|
(6,560)
|
|
|
(22,949)
|
|
|
(7,395)
|
|
|
Other operating
activities
|
|
6,929
|
|
|
9,284
|
|
|
8,894
|
|
|
9,010
|
|
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts receivable,
net
|
|
(17,667)
|
|
|
(29,165)
|
|
|
3,778
|
|
|
(23,863)
|
|
|
Inventory,
net
|
|
(13,275)
|
|
|
16,780
|
|
|
(55,584)
|
|
|
16,380
|
|
|
Current and other
assets
|
|
(6,146)
|
|
|
(5,674)
|
|
|
9,352
|
|
|
(2,693)
|
|
|
Accounts
payable
|
|
(1,482)
|
|
|
14,939
|
|
|
34,910
|
|
|
20,627
|
|
|
Accrued
liabilities
|
|
14,168
|
|
|
46,805
|
|
|
(29,616)
|
|
|
39,505
|
|
|
Income
taxes
|
|
8,427
|
|
|
(646)
|
|
|
29,995
|
|
|
(8,521)
|
|
|
Cash provided by
operating activities
|
|
$
|
25,217
|
|
|
$
|
40,468
|
|
|
$
|
33,566
|
|
|
$
|
72,550
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities
|
|
|
|
|
|
|
|
|
|
Proceeds from sale of
investments
|
|
—
|
|
|
—
|
|
|
170
|
|
|
124,640
|
|
|
Proceeds from
maturities of investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
131,017
|
|
|
Purchase of
investments
|
|
(155)
|
|
|
(142)
|
|
|
(806)
|
|
|
(536)
|
|
|
Acquisitions, net of
cash acquired
|
|
—
|
|
|
(1,616,692)
|
|
|
—
|
|
|
(1,650,242)
|
|
|
Capital
expenditures
|
|
(4,753)
|
|
|
(3,667)
|
|
|
(9,260)
|
|
|
(7,535)
|
|
|
Proceeds from sale of
property and equipment
|
|
2,142
|
|
|
|
—
|
|
|
2,142
|
|
|
—
|
|
|
Cash provided by
(used for) investing activities
|
|
$
|
(2,766)
|
|
|
$
|
(1,620,501)
|
|
|
$
|
(7,754)
|
|
|
$
|
(1,402,656)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
|
|
|
|
|
|
Employees' tax
withheld and paid for restricted stock and restricted stock
units
|
|
(660)
|
|
|
(307)
|
|
|
(9,281)
|
|
|
(13,342)
|
|
|
Proceeds from
issuances under stock-based compensation plans
|
|
6,027
|
|
|
4,314
|
|
|
6,616
|
|
|
14,872
|
|
|
Repayments of
long-term debt
|
|
(25,000)
|
|
|
—
|
|
|
(25,000)
|
|
|
—
|
|
|
Proceeds from debt
issuance, net
|
|
—
|
|
|
1,244,713
|
|
|
—
|
|
|
1,244,713
|
|
|
Payment of cash
dividends
|
|
(5,982)
|
|
|
(5,968)
|
|
|
(11,922)
|
|
|
(10,982)
|
|
|
Cash used for
financing activities
|
|
$
|
(25,615)
|
|
|
$
|
1,242,752
|
|
|
$
|
(39,587)
|
|
|
$
|
1,235,261
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
(2,298)
|
|
|
(2,675)
|
|
|
(2,292)
|
|
|
(4,730)
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
|
(5,462)
|
|
|
(339,956)
|
|
|
(16,067)
|
|
|
(99,575)
|
|
|
Cash and cash
equivalents at beginning of period
|
|
191,904
|
|
|
631,042
|
|
|
202,509
|
|
|
390,661
|
|
|
Cash and cash
equivalents at end of period
|
|
$
|
186,442
|
|
|
$
|
291,086
|
|
|
$
|
186,442
|
|
|
$
|
291,086
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
Six Months
Ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
GAAP Net
revenues
|
$
|
461,709
|
|
|
$
|
483,069
|
|
|
$
|
909,476
|
|
|
$
|
704,378
|
|
|
Deferred revenue
purchase accounting
|
8,524
|
|
|
36,585
|
|
|
20,683
|
|
|
36,585
|
|
|
Non-GAAP Net
revenues
|
$
|
470,233
|
|
|
$
|
519,654
|
|
|
$
|
930,159
|
|
|
$
|
740,963
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Gross
profit
|
$
|
206,071
|
|
|
$
|
152,629
|
|
|
$
|
418,717
|
|
|
$
|
262,472
|
|
|
Purchase accounting
amortization
|
30,716
|
|
|
55,668
|
|
|
60,716
|
|
|
55,668
|
|
|
Inventory valuation
adjustment
|
—
|
|
|
30,395
|
|
|
—
|
|
|
30,395
|
|
|
Deferred revenue
purchase accounting
|
8,524
|
|
|
36,585
|
|
|
20,683
|
|
|
36,585
|
|
|
Acquisition and
integration fees
|
88
|
|
|
217
|
|
|
1,010
|
|
|
217
|
|
|
Stock-based
compensation
|
997
|
|
|
1,073
|
|
|
1,975
|
|
|
2,036
|
|
|
Rebranding
costs
|
23
|
|
|
—
|
|
|
59
|
|
|
—
|
|
|
Non-GAAP Gross
profit
|
$
|
246,419
|
|
|
$
|
276,567
|
|
|
$
|
503,160
|
|
|
$
|
387,373
|
|
|
Non-GAAP Gross
profit %
|
52.4
|
%
|
|
53.2
|
%
|
|
54.1
|
%
|
|
52.3
|
%
|
|
|
|
|
|
|
|
|
|
|
GAAP Research,
development, and engineering
|
$
|
57,415
|
|
|
$
|
57,047
|
|
|
$
|
116,939
|
|
|
$
|
80,748
|
|
|
Stock-based
compensation
|
(4,213)
|
|
|
(2,768)
|
|
|
(7,932)
|
|
|
(4,990)
|
|
|
Acquisition and
integration fees
|
(560)
|
|
|
(56)
|
|
|
(1,901)
|
|
|
(56)
|
|
|
Other
adjustments
|
(542)
|
|
|
—
|
|
|
(542)
|
|
|
—
|
|
|
Non-GAAP Research,
development, and engineering
|
$
|
52,100
|
|
|
$
|
54,223
|
|
|
$
|
106,564
|
|
|
$
|
75,702
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Selling,
general, and administrative
|
$
|
148,419
|
|
|
$
|
174,297
|
|
|
$
|
312,027
|
|
|
$
|
238,500
|
|
|
Acquisition and
integration fees
|
(10,009)
|
|
|
(25,980)
|
|
|
(28,181)
|
|
|
(31,783)
|
|
|
Purchase accounting
amortization
|
(15,278)
|
|
|
(15,279)
|
|
|
(30,556)
|
|
|
(15,279)
|
|
|
Stock-based
compensation
|
(9,483)
|
|
|
(6,999)
|
|
|
(17,690)
|
|
|
(11,964)
|
|
|
Rebranding
costs
|
(649)
|
|
|
—
|
|
|
(6,068)
|
|
|
—
|
|
|
Non-GAAP Selling,
general, and administrative
|
$
|
113,000
|
|
|
$
|
126,039
|
|
|
$
|
229,532
|
|
|
$
|
179,474
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Operating
expenses
|
$
|
211,681
|
|
|
$
|
238,605
|
|
|
$
|
453,176
|
|
|
$
|
327,799
|
|
|
Acquisition and
integration fees
|
(10,569)
|
|
|
(26,036)
|
|
|
(30,082)
|
|
|
(31,839)
|
|
|
Purchase accounting
amortization
|
(15,278)
|
|
|
(15,279)
|
|
|
(30,556)
|
|
|
(15,279)
|
|
|
Stock-based
compensation
|
(13,696)
|
|
|
(9,767)
|
|
|
(25,622)
|
|
|
(16,954)
|
|
|
Restructuring and
other related charges
|
(5,847)
|
|
|
(7,261)
|
|
|
(25,372)
|
|
|
(8,581)
|
|
|
Rebranding
costs
|
(649)
|
|
|
—
|
|
|
(6,068)
|
|
|
—
|
|
|
Other
adjustments
|
(542)
|
|
|
—
|
|
|
620
|
|
|
—
|
|
|
Non-GAAP Operating
expenses
|
$
|
165,100
|
|
|
$
|
180,262
|
|
|
$
|
336,096
|
|
|
$
|
255,146
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
Six Months
Ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
GAAP Operating
income
|
$
|
(5,610)
|
|
|
$
|
(85,976)
|
|
|
$
|
(34,459)
|
|
|
$
|
(65,327)
|
|
|
Purchase accounting
amortization
|
45,994
|
|
|
70,947
|
|
|
91,272
|
|
|
70,947
|
|
|
Inventory valuation
adjustment
|
—
|
|
|
30,395
|
|
|
—
|
|
|
30,395
|
|
|
Deferred revenue
purchase accounting
|
8,524
|
|
|
36,585
|
|
|
20,683
|
|
|
36,585
|
|
|
Acquisition and
integration fees
|
10,657
|
|
|
26,253
|
|
|
31,092
|
|
|
32,056
|
|
|
Stock-based
compensation
|
14,693
|
|
|
10,840
|
|
|
27,597
|
|
|
18,990
|
|
|
Restructuring and
other related charges
|
5,847
|
|
|
7,261
|
|
|
25,372
|
|
|
8,581
|
|
|
Rebranding
costs
|
672
|
|
|
—
|
|
|
6,127
|
|
|
—
|
|
|
Other
adjustments
|
542
|
|
|
—
|
|
|
(620)
|
|
|
—
|
|
|
Non-GAAP Operating
income
|
$
|
81,319
|
|
|
$
|
96,305
|
|
|
$
|
167,064
|
|
|
$
|
132,227
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Net
income
|
$
|
(25,910)
|
|
|
$
|
(86,709)
|
|
|
$
|
(70,781)
|
|
|
$
|
(72,238)
|
|
|
Purchase accounting
amortization
|
45,994
|
|
|
70,947
|
|
|
91,272
|
|
|
70,947
|
|
|
Inventory valuation
adjustment
|
—
|
|
|
30,395
|
|
|
—
|
|
|
30,395
|
|
|
Deferred revenue
purchase accounting
|
8,524
|
|
|
36,585
|
|
|
20,683
|
|
|
36,585
|
|
|
Acquisition and
integration fees
|
10,657
|
|
|
26,253
|
|
|
31,092
|
|
|
32,056
|
|
|
Stock-based
compensation
|
14,693
|
|
|
10,840
|
|
|
27,597
|
|
|
18,990
|
|
|
Restructuring and
other related charges
|
5,847
|
|
|
7,261
|
|
|
25,372
|
|
|
8,581
|
|
|
Rebranding
costs
|
672
|
|
|
—
|
|
|
6,127
|
|
|
—
|
|
|
Other
adjustments
|
542
|
|
1
|
—
|
|
1
|
(620)
|
|
1,
2
|
—
|
|
|
Income tax effect of
above items
|
(12,511)
|
|
|
(34,032)
|
|
|
(27,994)
|
|
|
(38,898)
|
|
|
Income tax effect of
unusual tax items
|
499
|
|
3
|
(1,260)
|
|
4
|
(1,519)
|
|
3
|
(1,359)
|
|
4
|
Non-GAAP Net
income
|
$
|
49,006
|
|
|
$
|
60,280
|
|
|
$
|
101,229
|
|
|
$
|
85,059
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Diluted earnings
per common share
|
$
|
(0.65)
|
|
|
$
|
(2.21)
|
|
|
$
|
(1.80)
|
|
|
$
|
(2.01)
|
|
|
Purchase accounting
amortization
|
1.16
|
|
|
1.78
|
|
|
2.30
|
|
|
1.93
|
|
|
Inventory valuation
adjustment
|
—
|
|
|
0.76
|
|
|
—
|
|
|
0.83
|
|
|
Deferred revenue
purchase accounting
|
0.21
|
|
|
0.92
|
|
|
0.52
|
|
|
0.99
|
|
|
Stock-based
compensation
|
0.37
|
|
|
0.27
|
|
|
0.70
|
|
|
0.52
|
|
|
Acquisition and
integration fees
|
0.27
|
|
|
0.66
|
|
|
0.78
|
|
|
0.87
|
|
|
Restructuring and
other related charges
|
0.15
|
|
|
0.18
|
|
|
0.64
|
|
|
0.23
|
|
|
Rebranding
costs
|
0.02
|
|
|
—
|
|
|
0.15
|
|
|
—
|
|
|
Other
adjustments
|
0.01
|
|
|
—
|
|
|
(0.02)
|
|
|
—
|
|
|
Income tax
effect
|
(0.32)
|
|
|
(0.89)
|
|
|
(0.75)
|
|
|
(1.09)
|
|
|
Effect of
participating securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Effect of
anti-dilutive securities
|
0.02
|
|
|
0.04
|
|
|
0.03
|
|
|
0.04
|
|
|
Non-GAAP Diluted
earnings per common share
|
$
|
1.24
|
|
|
$
|
1.51
|
|
|
$
|
2.55
|
|
|
$
|
2.31
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
diluted earnings per common share calculation:
|
GAAP
|
39,584
|
|
|
39,281
|
|
|
39,411
|
|
|
35,938
|
|
|
non-GAAP
|
39,664
|
|
|
39,920
|
|
|
39,653
|
|
|
36,795
|
|
|
|
|
1
|
Includes Executive
transition costs and losses due to litigation
settlements.
|
2
|
Excluded amounts
represent immaterial gains from litigation.
|
3
|
Excluded amounts
represent changes in tax law and the release of tax
reserves.
|
4
|
Excluded amounts
represent tax benefits resulting from the release of tax reserves
and tax return true-ups.
|
PLANTRONICS,
INC.
|
UNAUDITED
RECONCILIATIONS OF GAAP OPERATING INCOME TO ADJUSTED
EBITDA
|
($ in
thousands)
|
|
UNAUDITED
CONSOLIDATED STATEMENTS OF OPERATIONS DATA
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
|
September
30,
|
|
December
31,
|
|
March
31,
|
June
30,
|
|
September
30,
|
|
September
30,
|
|
|
|
2018
|
|
2018
|
|
2019
|
2019
|
|
2019
|
|
2019
|
|
GAAP operating
income
|
|
$
|
(85,976)
|
|
|
$
|
(24,707)
|
|
|
$
|
(19,259)
|
|
$
|
(28,849)
|
|
|
$
|
(5,610)
|
|
|
$
|
(78,425)
|
|
|
Deferred revenue
purchase accounting
|
|
36,585
|
|
|
28,923
|
|
|
19,316
|
|
12,159
|
|
|
8,524
|
|
|
68,922
|
|
|
Inventory valuation
adjustment
|
|
30,395
|
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Acquisition and
integration fees
|
|
26,253
|
|
|
22,274
|
|
|
14,323
|
|
20,435
|
|
|
10,657
|
|
|
67,689
|
|
|
Stock-based
compensation
|
|
10,840
|
|
|
11,719
|
|
|
11,225
|
|
12,904
|
|
|
14,693
|
|
|
50,541
|
|
|
Restructuring and
other related charges
|
|
7,261
|
|
|
12,130
|
|
|
11,983
|
|
19,525
|
|
|
5,847
|
|
|
49,485
|
|
|
Rebranding
costs
|
|
—
|
|
|
—
|
|
|
5,192
|
|
5,455
|
|
|
672
|
|
|
11,319
|
|
|
Other
adjustments
|
|
—
|
|
|
—
|
|
|
1,005
|
|
(1,162)
|
|
|
542
|
|
|
385
|
|
|
Depreciation and
amortization
|
|
82,398
|
|
|
55,117
|
|
|
58,606
|
|
57,698
|
|
|
57,376
|
|
|
228,797
|
|
|
Adjusted
EBITDA
|
|
$
|
107,756
|
|
|
$
|
105,456
|
|
|
$
|
102,391
|
|
$
|
98,165
|
|
|
$
|
92,701
|
|
|
$
|
398,713
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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SOURCE Plantronics, Inc.