Plantronics 2006 Annual Report Download - page 111

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part ii
purposes of making operating decisions and assessing financial performance. Financial information
reviewed by management includes not only revenues by product line, but also gross profit analysis and
operating income for the Audio Communications Group and Audio Entertainment Group. The Audio
Communications Group represents the original Plantronics business as operated prior to the acquisition
of Altec Lansing in the second quarter of fiscal 2006. The Audio Entertainment Group represents the
Altec Lansing business, and certain research, development, and engineering initiatives, which com-
menced at the beginning of the first quarter of 2006. Only the results of the Altec Lansing business from
the acquisition date of August 18, 2005 to March 31, 2006 are included in the Audio Entertainment
Group segment, together with the above-mentioned research, development and engineering initiatives
for which an entire year of expenses are included.
The results of the reportable segments are derived directly from our internal management reporting
system. The accounting policies used to derive operating segment results are substantially the same as
those used by the consolidated Company.
Audio Communications Group
The Audio Communications Group designs, manufactures, markets and sells headsets for business and
consumer applications, and other specialty products for the hearing impaired. With respect to headsets, it
makes products for office and contact center use, use with mobile and cordless phones, and use with
computers and gaming consoles. The following table presents net revenues by product group within the
Audio Communications Group:
Fiscal Year Ended March 31, (in thousands) 2004 2005 2006
Net revenues from customers:
Office and contact center $273,888 $366,335 $446,524
Mobile 92,330 125,262 119,333
Gaming and computer audio 23,701 39,804 35,656
Other specialty products 27,046 28,594 28,212
$416,965 $559,995 $629,725
Audio Entertainment Group
The Audio Entertainment Group is engaged in the design, manufacture, sales and marketing of audio
solutions and related technologies. It offers computer and digital audio systems, digital radio frequency
audio systems, and portable audio products as well as headphones and microphones for personal digital
media. Major product categories include portable audio, which is defined as all speakers whether AC or
battery-powered that work with portable digital players, such as iPod or MP3 players; powered audio,
which is defined as self-powered speaker systems used for computers and other multi-media application
systems; and personal audio (headphones) and interactive audio (headsets). Currently, all the revenues in
the Audio Entertainment Group are derived from Altec Lansing products. Net revenues in the Audio
Entertainment Group since the acquisition on August 18, 2005 were $120.7 million.
AR 2006 ⯗105