Plantronics 2007 Annual Report Download - page 99

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part ii
95A R 2 0 0 7
Plantronics’ President and Chief Executive Officer (“the CEO”) is considered the Company’s chief
operating decision maker. The CEO reviews financial information presented on a consolidated basis
accompanied by information about revenues by product line and revenues by geographic region for
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 ACG and AEG. ACG represents the original Plantronics business as operated
prior to the acquisition of Altec Lansing in the second quarter of fiscal 2006. AEG represents the Altec
Lansing business since the date of acquisition on August 18, 2005, and certain research, development, and
engineering initiatives, which commenced at the beginning of the first quarter of fiscal 2006.
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
ACG 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 ACG:
Fiscal Year Ended March 31, (in thousands) 2005 2006 2007
Net revenues from unaffiliated customers:
Office and contact center $366,335 $446,524 $475,323
Mobile 125,262 119,333 146,859
Gaming and computer audio 39,804 35,656 30,162
Other specialty products 28,594 28,212 24,170
Total segment net revenues $559,995 $629,725 $676,514
Audio Entertainment Group
AEG is engaged in the design, manufacture, sales and marketing of audio solutions and related
technologies. Major product categories include Docking Audio, which is defined as all speakers whether
AC or battery-powered that work with portable digital players, such as iPod or MP3 players; and PC
Audio, which is defined as self-powered speaker systems used for computers and other multi-media
application systems. Other includes PC headsets, headphones and professional speakers. Currently, all
the revenues in AEG are derived from sales of Altec Lansing products. The following table presents net
revenues by product group within AEG:
Fiscal Year Ended March 31, ($ in thousands) 2006 2007
Revenues from unaffiliated customers:
Docking audio $ 80,998 $ 74,551
PC audio 46,136 63,066
Other 10,406 11,463
Less revenue reserves (16,871) (25,440)
Total segment net revenues $120,669 $123,640