Plantronics 2008 Annual Report Download - page 45

Download and view the complete annual report

Please find page 45 of the 2008 Plantronics annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 104

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104

39
Operating Income (Loss)
Consolidated
(in thousands)
Operating income $ 110,362 $ 57,449 $ (52,913) (47.9)% $ 57,449 $ 79,383 $ 21,934 38.2%
% of total consolidated net revenues 14.7% 7.2% (7.5) ppt. 7.2% 9.3% 2.1 ppt.
Fiscal Year Ended Fiscal Year Ended
March 31, March 31, Increase March 31, March 31, Increase
2006 2007 (Decrease) 2007 2008 (Decrease)
Audio Communications Group
Operating income $ 99,851 $ 84,677 $ (15,174) (15.2)% $ 84,677 $ 115,166 $ 30,489 36.0%
% of total segment net revenues 15.9% 12.5% (3.4) ppt. 12.5% 15.4% 2.9 ppt.
Audio Entertainment Group
Operating income (loss) $ 10,511 $ (27,228) $ (37,739) (359.0)% $ (27,228) $ (35,783) $ (8,555) 31.4%
% of total segment net revenues 8.7% (22.0)% (30.7) ppt. (22.0)% (33.0)% (11.0) ppt.
In fiscal 2008, compared to fiscal 2007, consolidated operating income increased due to higher net revenues and the 2.3 percentage
point increase in gross profit in ACG, despite the absence of the $2.6 million gain on sale of land recognized in the first quarter of
fiscal 2007 and restructuring and other related charges of $3.6 million recognized in the third and fourth quarters of fiscal 2008. The
improved operating results in ACG were partially offset by increased operating losses in AEG, primarily due to lower net revenues
and gross profit and restructuring and other related charges.
In comparison to fiscal 2006, fiscal 2007 consolidated operating income decreased due to the 2.2 percentage point decrease in gross
profit in ACG and increase in consolidated operating expenses of 2.6 percentage points as a percentage of revenue, primarily resulting
from stock-based compensation charges of $16.9 million. The increased expenses were partially offset by a $2.6 million pre-tax gain
in the first quarter of fiscal 2007 due to the sale of land in Frederick, Maryland.
Operating margins may vary based on product mix shifts, product life cycles, and seasonality. Until the product refresh in AEG is
completed, we anticipate that the operating results for the AEG segment will reflect operating losses as the anticipated revenues will
be insufficient to cover costs.
Interest and Other Income, Net
Consolidated
(in thousands)
Interest and other income (expense), net $ 2,192 $ 4,089 $ 1,897 86.5% $ 4,089 $ 5,854 $ 1,765 43.2%
% of total net revenues 0.3% 0.5% 0.2 ppt. 0.5% 0.7% 0.2 ppt.
Fiscal Year Ended Fiscal Year Ended
March 31, March 31, Increase March 31, March 31, Increase
2006 2007 (Decrease) 2007 2008 (Decrease)
In comparison to fiscal 2007, interest and other income (expense), net in fiscal 2008 increased primarily due to higher interest income
as a result of higher average cash balances and higher average yields, and lower interest expense resulting from the repayment of our
line of credit in the fourth quarter of fiscal 2007.
In comparison to fiscal 2006, interest and other income (expense), net in fiscal 2007 increased primarily due to a $2.3 million foreign
exchange gain net of hedging, compared to a net foreign exchange loss of $1.2 million in fiscal 2006, due to strengthening of the Euro
and Great British Pound against the U.S. dollar. Partially offsetting this gain was a reduction in interest income as a result of lower
average cash balances following the acquisition of Altec Lansing in fiscal 2006.