Plantronics 1999 Annual Report Download - page 27

CERTAIN FORWARD-LOOKING INFORMATION:
This Annual Report contains forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934.These statements include, without
limitation, the statements that (i) we expect interest expenses in future periods to be minimal discussed in
the last sentence of the paragraph below titled “Interest Expense” under Annual Results of Operations;
(ii) cash from operations and available borrowings will be sufficient to fund operations for the next 12 months
discussed in the final paragraph of the section titled “Liquidity” under Financial Condition; (iii) we expect
that the repurchase of Senior Notes will increase diluted earnings per share by approximately $0.10 on
an annual pro forma basis discussed in the final paragraph in the section titled “Financing Activities” under
Financial Condition; and (iv) the Year 2000 readiness statements set out in various paragraphs under Year 2000,
including the expected Year 2000 compliance of our information systems and applications by June 1999,
the expected Year 2000 certifications from our principal suppliers and customers by July 1999 and August 1999,
respectively, our belief that there will be no material impact of Year 2000 problems due to failures of our
systems or those of third parties with whom we do business, and the expectation that we will substantially
complete our contingency planning by July 1999. In addition, the Company may from time to time make
oral forward-looking statements.These forward-looking statements are based on current expectations and
entail various risks and uncertainties. Our actual results could differ materially from those anticipated in
these forward-looking statements as a result of a number of factors, including those set forth below under
“Risk Factors Affecting Future Operating Results” set forth in the Company’s Annual Report on Form 10-K
filed with the Securities Exchange Commission on or before June 25, 1999.The following discussions titled
“Results of Operations” and “Financial Condition” should be read in conjunction with those risk factors,
the consolidated financial statements and related notes included elsewhere herein, and the discussion and
additional disclosures in our Annual Report on Form 10-K.
ANNUAL RESULTS OF OPERATIONS
Net Sales Net sales in fiscal 1999 increased 21.2% to $286.3 million compared to $236.1 million in fiscal 1998,
which in turn increased 20.9% compared to fiscal 1997 net sales of $195.3 million. Both domestic and
international sales contributed to the growth in net sales. Domestic sales increased 21.2% to $198.9 million
in fiscal 1999, compared to an increase of 20.9% to $164.1 million in fiscal 1998 compared to the prior
year. Domestic sales growth occurred in all our sales channels, with the largest percentage increases coming
in the retail and Original Equipment Manufacturer (“OEM”) channels.
International sales in fiscal 1999 increased 21.3% to $87.4 million compared to $72.0 million in fiscal 1998,
which in turn increased 20.8% compared to the prior year. Most of the growth in fiscal 1999 occurred in
Europe, with sales in the Asia Pacific/ Latin America region and Canada growing at a slower rate. International
sales in fiscal 1999, 1998 and 1997 have accounted for approximately 30.5% of total net sales in each of
these periods.
Gross Profit Gross profit in fiscal 1999 increased 25.8% to $160.6 million (56.1% of net sales), compared to
$127.6 million (54.0% of net sales) in fiscal 1998. Gross profit in fiscal 1998 increased 21.8% compared to
gross profit of $104.7 million (53.6% of net sales) in fiscal 1997.The increases in gross profit as a percent
of net sales in the last two fiscal years mainly reflect reductions in product costs through design and manu-
facturing efficiencies and by obtaining lower costs from our suppliers.
PLANTRONICS ANNUAL REPORT 1999 page 25
Management’s discussion and analysis of
financial condition and results of operations