Plantronics 2015 Annual Report Download - page 38

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following discussion and analysis is intended to help you understand our results of operations and financial condition. It is
provided as a supplement to, and should be read in conjunction with, our Consolidated Financial Statements and related notes
thereto included elsewhere in this report. This discussion contains forward-looking statements. Please see the sections entitled
"Certain Forward Looking Information" and "Risk Factors" above for discussions of the uncertainties, risks, and assumptions
associated with these statements. Our fiscal year-end financial reporting periods end on the Saturday closest to March 31st. Fiscal
years 2015, 2014, and 2013 each had 52 weeks and ended on March 28, 2015, March 29, 2014, and March 30, 2013,
respectively. For purposes of presentation, we have indicated our accounting fiscal year as ending on March 31.
OVERVIEW
We are a leading designer, manufacturer, and marketer of lightweight communications headsets, telephone headset systems, other
communication endpoints, and accessories for the worldwide business and consumer markets under the Plantronics brand. In
addition, we manufacture and market specialty telephone products under our Clarity brand, such as telephones for the hearing
impaired, and other related products for people with special communication needs. Our major product categories are Enterprise,
which includes headsets optimized for Unified Communications (“UC”), other corded and cordless communication headsets,
audio processors, and telephone systems; and Consumer, which includes Bluetooth® and corded products for mobile phone
applications, personal computer ("PC") and gaming headsets, and specialty products marketed for hearing impaired individuals.
Our priorities during fiscal year 2015 were to deliver profitable growth, extend our brand, expand our consumer reach, scale for
growth, and optimize our culture.
Despite macroeconomic headwinds in some of our key markets, we achieved solid financial results. Compared to the prior year,
net revenues increased 5.7% to $865.0 million, while operating profit grew 6.4% to $149.1 million. We delivered $112.3 million
in net income, representing approximately 13% of our net revenues. UC product revenues, which we believe represent our key
long-term growth driver, increased 18.4% over the prior year to $196.2 million.
To extend our brand in the Enterprise market, we continued to build strategic alliances with major UC vendors and increased our
investments in future products targeted at the UC and contact center categories. We enhanced our Channel-facing go-to-market
programs and achieved important milestones, including cumulative sales of more than 5 million audio devices optimized for
Microsoft Lync. This achievement demonstrates that businesses trust Plantronics to deliver high-quality audio for voice and video
communications, enabling end-users to collaborate, anytime and anywhere. In addition, our current portfolio of solutions qualified
on Lync 2013 is fully compatible and certified for use with Microsoft's new Skype for Business (formerly Lync) UC client.
To expand our consumer reach, our fiscal year 2015 product development roadmap included new product launches such as the
BackBeat Pro, targeted toward the fastest-growing subset of the consumer headset market, the stereo Bluetooth market. Additionally,
we strengthened our leading position in the mono Bluetooth category with the release of the Voyager Edge. We also accelerated
development efforts for additional new Consumer products to be launched in fiscal year 2016 and beyond, including a refresh of
our PC and Entertainment product line planned for the coming year. We have followed our business customer into the mobile
world with the goal of becoming the indispensable interface users turn to for connected experiences throughout their day. During
fiscal year 2015 we gained share in the mono Bluetooth category and achieved strong growth in the stereo Bluetooth category. In
fiscal year 2015, we were presented with four International Forum (iF) product design awards for both Enterprise and Consumer
products and two Consumer Electronics Show (CES) innovation awards. We anticipate that planned investments in the Consumer
category will help position us to maintain or grow market share as opportunities in these consumer product categories continue
to expand.
To scale for growth, we implemented global process improvements, resulting in increased operational efficiencies. This was made
possible by major capital investments in our infrastructure with the reimplementation of our global enterprise resource planning
("ERP") system. We optimized our culture through investments in our workspaces around the world to enable smarter working
and promote innovation, productivity, and employee well-being. As a result of these continued investments, our Tijuana
manufacturing facility was voted the best company to work for in Mexico for the fifth consecutive year.
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