Plantronics 2006 Annual Report Download - page 64

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Consolidated
Fiscal Year Ended Fiscal Year Ended
March 31, March 31, Increase March 31, March 31, Increase
($ in thousands) 2004 2005 (Decrease) 2005 2006 (Decrease)
Consolidated
Selling, general and
administrative $95,756 $116,621 $ 20,865 21.8% $116,621 $153,094 $ 36,473 31.3%
% of total consolidated
net revenues 23.0% 20.8% (2.2) ppt. 20.8% 20.4% (0.4) ppt.
In comparison to fiscal 2005, the significant increase in consolidated selling, general and administrative
expenses in fiscal 2006 can be attributed to the following:
)costs associated with our national branding and advertising campaign;
)the impact of the one-time benefit from the legal settlement in the comparable period a year ago;
)higher compensation related charges and costs associated with a larger global sales presence;
)additional expenses associated with the acquisition of the Audio Entertainment Group, of which
$2.6 million relates to amortization charges for the intangible assets acquired in the purchase of
Altec Lansing; and
)expenditures relating to the acquisition of Volume Logic.
In comparison to fiscal 2004, our fiscal 2005 selling, general and administrative expenses increased
primarily for the following reasons:
)an increase in global sales and marketing programs designed to generate demand for our wireless
office, gaming, VoIP products, and other new products;
)new marketing programs to leverage hands-free regulatory laws, especially in the Japanese
market, launch new products, and start a national brand awareness program;
)costs related to work performed for our Sarbanes Oxley Section 404 compliance and attestation
fees; and
)an adverse impact from higher foreign exchange rates, particularly with the Great British Pound
and the Euro against the dollar.
These expenses were partially offset by a one-time benefit of approximately $2.8 million from a favorable
court ruling, which ended a lawsuit filed by one of our competitors during the quarter ended
September 30, 2004.
We anticipate our consolidated selling, general and administrative expenses will continue to increase in
the next fiscal year. We also plan to continue our office demand generation campaign in fiscal 2007 and
expect to spend approximately $19 million on this campaign over the next fiscal year.
58 ⯗Plantronics