Plantronics 2002 Annual Report Download - page 32

F I N A N C I A L C O N D I T I O N
Operating Activities. During the fiscal year ended March 31, 2002, we generated $76.8
million of cash from operating activities, due primarily to $36.2 million in net income, an
income tax benefit of $1.1 million associated with the exercise of stock options, decreases
of $12.6 and $14.5 million in accounts receivable and inventory, respectively, and an increase
of $2.5 million in accounts payable. In comparison, we generated $68.3 million in cash from
operating activities for the fiscal year ended March 31, 2001, due mainly to $73.6 million in
net income, an income tax benefit of $16.6 million associated with the exercise of stock
options, offset by increases of $8.1 and $14.5 million in accounts receivable and inventory,
r e s p e c t i v e l y.
Investing Activities. During fiscal 2002, we purchased marketable securities of $27.3
million and received proceeds from maturities of marketable securities of $23.1 million.
Expenditures for capital assets of $11.4 million were incurred principally in tooling for
new products, furniture and fixtures, and leasehold improvements for facilities expansion.
In January 2002, we purchased Ameriphone, a leading supplier of amplified telephones
and other solutions to address the needs of individuals with hearing impairment and other
special needs. T he net cash expended for this acquisition was $10.4 million.
F inancing Activities. In the fiscal year ended March 31, 2002, we repurchased 3,581,421
shares of our Common Stock for $72.1 million at an average price of $20.10 per share, and
reissued through employee benefit plans 133,110 shares of our Treasury Stock for $2.5
million. As of March 31, 2002, we remained authorized to repurchase approximately
140,200 shares under all repurchase plans. We received $1.2 million in proceeds from the
exercise of stock options during the fiscal year ended March 31, 2002.
L iquidity and Capital Resources. Our primary cash requirements have been and will
continue to be to fund capital expenditures, mainly for tooling for new products and
leasehold improvements for facilities improvements and expansion, and for the repurchase
of our Common Stock. As of March 31, 2002, we had working capital of $96.7 million,
including $60.3 million of cash and cash equivalents and marketable securities, compared
with working capital of $136.8 million, including $73.9 million of cash and cash equivalents
and marketable securities, as of March 31, 2001.
In November 2001, we renewed our revolving credit facility with a major bank at $75
m i l l i o n , including a $10 million letter of credit subfacility. T he renewed facility and
subfacility both expire on January 15, 2003. As of March 31, 2002, we had no cash
borrowings under the revolving credit facility or under the letter of credit subfacility.
T he terms of the credit facility contain covenants that materially limit our ability to
incur debt, make capital expenditures and pay dividends, among other matters. T hese
covenants may adversely affect our financial position to the extent we cannot comply
with them. We are currently in compliance with the covenants under this agreement.
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management ’s discussion and analysis of financial condition and
results of operations