Plantronics 2011 Annual Report Download - page 44

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In fiscal 2011, we reported operating income of $140.7 million compared to $97.6 million in fiscal 2010 due to increased revenues
and higher margins resulting mostly from a favorable product mix consisting of a greater proportion of OCC revenues which
generally have higher gross margins than other product categories. In addition, we experienced improved Bluetooth margins
resulting primarily from lower costs as a result of outsourcing our manufacturing facility in China which began in July 2009.
In fiscal 2010, we had an operating income of $97.6 million compared to $61.5 million in fiscal 2009 due to higher margins on
lower revenues as a result of our fiscal 2009 restructuring actions in which we reduced our worldwide workforce and outsourced
our Bluetooth manufacturing in China along with lower costs as a result of cost savings programs.
Operating margins may vary based on product mix shifts, product life cycles, and seasonality. We believe our operating income
will increase in fiscal 2012 due to growth in revenues driven primarily as a result of capitalizing on the UC opportunity as well
as expected continued moderate economic growth.
Interest and Other Income (Expense), Net
(in thousands)
Interest and other income
(expense), net
% of total net revenues
Fiscal Year Ended
March 31,
2011
$ (56)
—
March 31,
2010
$ 3,105
0.5%
Increase
(Decrease)
$(3,161)
(0.5)
(101.8)%
ppt.
Fiscal Year Ended
March 31,
2010
$ 3,105
0.5%
March 31,
2009
$ (3,544)
(0.5)%
Increase
(Decrease)
$ 6,649
1.0
187.6%
ppt.
Interest and other income (expense), net in fiscal 2011 decreased from fiscal 2010 due primarily to greater foreign currency
exchange gains in the prior year as a result of a weaker U.S. Dollar in fiscal 2010 than in fiscal 2011 in addition to penalties and
interest recorded in fiscal 2011 related to the settlement of an indirect tax matter in Brazil. In addition, included in the prior year
was income from a one-time government stimulus program in Mexico.
In comparison to fiscal 2009, interest and other income (expense), net in fiscal 2010 increased due primarily to foreign exchange
gains in fiscal 2010 as compared to foreign currency losses in the prior year as a result of the strength of the U.S. Dollar, a stimulus
grant received from the Mexican government and reimbursement from Altec Lansing for routine expenses incurred on their behalf
under the Transition Service Agreement entered into in conjunction with the sale of the AEG business in December 2009. These
increases were offset in part by lower interest income as a result of declining interest rates despite higher average cash and
investment balances in fiscal 2010.
Income Tax Expense
(in thousands)
Income from continuing
operations before income
taxes
Income tax expense from
continuing operations
Income from continuing
operations, net of tax
Effective tax rate
Fiscal Year Ended
March 31,
2011
$140,656
31,413
$109,243
22.3%
March 31,
2010
$100,740
24,287
$ 76,453
24.1%
Increase
(Decrease)
$ 39,916
7,126
$ 32,790
(1.8)
39.6%
29.3%
42.9%
ppt.
Fiscal Year Ended
March 31,
2010
$100,740
24,287
$ 76,453
24.1%
March 31,
2009
$ 57,917
12,575
$ 45,342
21.7%
Increase
(Decrease)
$ 42,823
11,712
$ 31,111
2.4
73.9%
93.1%
68.6%
ppt.
In comparison to fiscal 2010, the decrease in the effective tax rate for fiscal 2011 was due primarily to the increased benefit from
the U.S. federal research tax credit in fiscal 2011 as the credit was reinstated in December 2010 retroactively to January 1, 2010;
therefore, the effective tax rate in fiscal 2011 includes the impact of credits earned in our fourth quarter of fiscal 2010.
In comparison to fiscal 2009, the increase in the effective tax rate for fiscal 2010 was due primarily to the incremental benefit
associated with the release of a higher amount of tax reserves resulting from the lapse of the statute of limitations in certain
jurisdictions in fiscal 2009. In addition, the effective tax rate for fiscal 2009 included the impact of credits earned in the fourth
quarter of fiscal 2008 because the U.S. federal research tax credit was reinstated in October 2008 retroactively to January 1, 2008.
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