Plantronics 1999 Annual Report Download - page 29

We have a $30.0 million revolving credit facility, including a $10.0 million letter-of-credit subfacility, with
a major bank, both of which expire in November 1999. As of March 31, 1999, we had no cash borrowings
under the revolving credit facility and $2.3 million outstanding under the letter-of-credit subfacility.The
amounts outstanding under the letter-of-credit subfacility were principally associated with purchases of
inventory.The terms of the credit facility contain covenants that materially limit our ability to incur debt,
make capital expenditures and pay dividends, among other matters.
After giving effect to the redemption of the Senior Notes, we believe that our current cash balance and
cash to be provided by operations, together with available borrowing capacity under our revolving credit
facility and letter-of-credit subfacility, will be sufficient to fund operations for at least the next 12 months.
Investing Activities Capital expenditures of $3.8 million in the fiscal year ended March 31, 1999 were incurred
principally in tooling to expand manufacturing capacity and investments in computer and telephone equipment.
Financing Activities In the fiscal year ended March 31, 1999, we sold 29,301 shares of our treasury stock for
approximately $1.3 million and repurchased 735,593 shares of our Common Stock for approximately
$46.4 million.As of March 31, 1999, we remained authorized to repurchase approximately 452,407 shares
under all repurchase plans.
We received $5.1 million in proceeds from the exercise of stock options during the fiscal year ended
March 31, 1999. In July 1998, our stockholders approved an increase of 1,300,000 shares of Common Stock
issuable under our 1993 Stock Plan (the “1993 Stock Plan”).This increased the maximum aggregate
number of shares that may be optioned and sold under the 1993 Stock Plan to 5,459,242 shares.
Effective January 15, 1999, we repurchased all of our Senior Notes.The transaction resulted in a net extra-
ordinary charge of approximately $1.0 million, or approximately $0.06 per diluted share, in the fourth
quarter of fiscal 1999. Based on current interest rates and the alternative of investing the cash, we expect
the transaction to increase diluted earnings per share by approximately $0.10 on an annual pro forma basis.
YEAR 200 0
State of Readiness Many existing electronic systems, including computer systems, use only the last two
digits to refer to a year.Therefore, these systems may recognize a date using “00” as 1900 rather than the
year 2000. If not corrected, many computer and other electronic applications and systems could fail or
create erroneous results when addressing dates on and after January 1, 2000. Our products do not address
or utilize dates in their operation, and, accordingly, our products should not fail due to the year 2000
problem. However, we use and depend on information technology systems (including business information
computer systems and design and manufacturing computer systems) and other machinery and equipment
that include embedded date sensitive technology.We also depend on the proper functioning of date sensitive
electronic systems of third parties, such as customers and suppliers.The failure of any of these systems to
appropriately interpret the year 2000 could have a material adverse effect on our business, financial condition
and results of operations.We are undertaking efforts to ensure that our business systems and those of our
suppliers and customers are compliant with the requirements of the year 2000.
PLANTRONICS ANNUAL REPORT 1999 page 27
Management’s discussion and analysis of
financial condition and results of operations