Plantronics 2010 Annual Report Download - page 3

Dear Fellow Stockholders,
Fiscal 2010 was a transformational year for Plantronics. As we ended fiscal 2009, global economic challenges prompted us
to modify our cost structure and to focus our resources on the most significant market opportunity in the Company’s nearly
50-year history: Unified Communications (“UC”).
We vigilantly monitored expenses throughout fiscal 2010 and took substantial actions to improve our profitability. The most
significant of these actions were the outsourcing of manufacturing of our Bluetooth headsets during the first half of the fiscal
year and the sale of our Altec Lansing consumer business in December 2009.
In the second half of fiscal 2010, we began to see signs of improving business conditions. During this period, we experienced
year over year improvements in our core Office & Contact Center market. As a result of prior cost reduction activities, our
gross and operating margins improved significantly compared to fiscal 2009. We made progress in our development efforts in
the Office & Contact Center product lines and introduced new products in the spring of 2010. Also, during this period, our
Bluetooth headset business achieved profitability, primarily due to successful high-end product introductions and the
outsourcing of product manufacturing. We believe our competitive position in both the Office & Contact Center and
Bluetooth markets improved in fiscal 2010, particularly in the U.S.
Looking ahead, we are confident that our pipeline of yet to be announced products in the Office & Contact Center product
lines will enable us to maintain our market leading position. Our focus in the Bluetooth headset market will be to maintain
market share and to continue to develop and introduce innovative and market leading headsets with superior consumer value.
The opportunity created by the deployment of UC technologies is the most significant in our history. The adoption of UC
technologies by enterprises drives central deployment of headsets and other audio devices subsequently increasing headset
usage in the enterprise accordingly. We estimate that this opportunity may double our addressable market in the next five
years.
The deployment of UC technologies is not a question of “if” but rather of “when.” Virtually all of the Global 2000 largest
companies (and an increasing number of mid-size companies) are in some stage of planning or deployment of UC solutions.
Incentives to deploy this technology range from significant cost savings to dramatically improved collaboration. We are
continuing to work with the leading developers of UC technologies as well as many new systems integrators, and the
majority of our research and development investment and marketing expenditures are targeting this opportunity. Additional
information about UC and our solutions are available on our corporate web site.
In last year’s letter, I stated that our long-term prospects for revenue and earnings growth were brighter than ever. We
continue to believe this is true, particularly given the increasing proportion of revenue that our UC products have the
potential to generate and the high levels of enterprise interest in and adoption of UC technologies.
In fiscal 2011, we are focused on the following key corporate goals to maximize long-term stockholder value:
1. Invest for UC leadership and a high return on investment.
2. Maintain profitability in consumer Bluetooth products.
3. Earn a return on invested capital in excess of our cost of capital.
On behalf of everyone at Plantronics, I want to thank you for your continued support.
Sincerely,
Ken Kannappan
President, Chief Executive Officer