Plantronics 2008 Annual Report Download - page 38

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Net Revenues
Audio Communications Group
(in thousands)
Net revenues from unaffiliated customers:
Office and Contact Center $ 446,524 $ 475,323 $ 28,799 6.4% $ 475,323 $ 519,958 $ 44,635 9.4%
Mobile 119,333 146,859 27,526 23.1% 146,859 171,880 25,021 17.0%
Gaming and Computer Audio 35,656 30,162 (5,494) (15.4)% 30,162 33,612 3,450 11.4%
Other Specialty Products 28,212 24,170 (4,042) (14.3)% 24,170 22,485 (1,685) (7.0)%
Total segment net revenues $ 629,725 $ 676,514 $ 46,789 7.4% $ 676,514 $ 747,935 $ 71,421 10.6%
Fiscal Year Ended Fiscal Year Ended
March 31, March 31, Increase March 31, March 31, Increase
2006 2007 (Decrease) 2007 2008 (Decrease)
Audio Entertainment Group
(in thousands)
Revenues from unaffiliated customers:
Docking audio $ 70,878 $ 61,068 $ (9,810) (13.8)% $ 61,068 $ 55,399 $ (5,669) (9.3)%
PC audio 40,515 52,922 12,407 30.6% 52,922 46,652 (6,270) (11.8)%
Other 9,276 9,650 374 4.0% 9,650 6,300 (3,350) (34.7)%
Total segment net revenues $ 120,669 $ 123,640 $ 2,971 2.5% $ 123,640 $ 108,351 $ (15,289) (12.4)%
Fiscal Year Ended Fiscal Year Ended
March 31, March 31, Increase March 31, March 31,
2006 2007 (Decrease) 2007
Increase
(Decrease)2008
Our consolidated net revenues increased in fiscal 2008 as compared to fiscal 2007 entirely due to growth in ACG net revenues,
which accounted for approximately 87% of consolidated net revenues in fiscal 2008. The increase in ACG net revenues is
primarily due to increased sales of our office wireless headset systems and mobile Bluetooth headsets. ACG unit volumes
increased from fiscal 2007 to 2008 primarily as a result of increased mobile Bluetooth sales. In fiscal 2008, we also benefited
from the weaker dollar as a portion of our sales are denominated in Euros and Great British Pounds. AEG net revenues accounted
for approximately 13% of consolidated net revenues in fiscal 2008. In comparison to fiscal 2007, AEG net revenues decreased as
we are in a product transition phase and have not yet introduced our new product portfolio. We have been working on the next
generation of products for AEG with the goal of creating a competitive portfolio which would increase revenues, profitability and
market share.
Our consolidated net revenues increased in fiscal 2007 as compared to fiscal 2006 primarily due to growth in ACG net revenues,
which accounted for approximately 85% of consolidated net revenues in fiscal 2007. The increase in ACG net revenues is
entirely due to growth from cordless products such as wireless office headset systems and mobile Bluetooth headsets. Unit
volumes decreased from fiscal 2006 to 2007 primarily due to decreased sales of mobile corded products, partially offset by
increased sales of mobile Bluetooth products. AEG net revenues accounted for approximately 15% of consolidated net revenues
in fiscal 2007. The increase in AEG net revenues in fiscal 2007 compared to fiscal 2006 was primarily attributable to the fiscal
2007 results reflecting a full year of operations while the fiscal 2006 results reflect only net revenues from the time of acquisition
in August 2005 through fiscal year end, approximately seven and one-half months.
Net revenues may vary due to the timing of the introduction of new products, seasonality, discounts and other incentives and
channel mix.
ACG
The Office and Contact Center (“OCC”) products represent our largest source of revenues while the Mobile products represent our
largest unit volumes. There has been a growing trend toward wireless products and a corresponding shift away from our corded
products. As a percentage of net revenues, wireless products represented 40%, 51% and 55% for fiscal 2006, 2007 and 2008,
respectively.
Fluctuations in the net revenues of ACG in fiscal 2008 compared to fiscal 2007 were as follows:
·OCC product net revenues increased as a result of growth of $35.8 million in cordless products and $8.8 million from